an interesting report of the digital economy and a bit about 3 strikes

bealtine

http://www.lgi.com/pdf/080904Booz_english.pdf

Here is a report from management consultancy firm Booz and Company. They have analysed the situation and have come to the economic conclusion that the losses to the telecomunications industry from a 3 strikes or any form of graduated response, would be much higher than any potential gains to the music industry.

The report called Digital Confidence, securing the next wave of digital growth, does up a calculation for a hypothetical scenario of terminating internet access to persistent filesharers in the UK.
In essence the report says :

"One aspect often overlooked in public discussions on the merits of “three strikes” is the damage to the overall digital economy as the result of disconnecting significant numbers of users from the Internet. Implications of “three strikes” would need to be understood more holistically. A high-level sensitivity calculation, for the UK as an example, estimates “three strikes” to result in the disconnection of 500,000 users and a revenue loss of €180 million for the network operators . In comparison, the music industry assesses an upside of only €33 million in revenue—this total revenue loss of about €150 million is likely to be only a minor share of the downside for other stakeholders, for example, through the reduction of e-Commerce volume. In addition to the fact that users would be disconnected from digital life, the potential economic damage caused across the digital economy value chain makes “three strikes” a challenging concept in terms of finding a proportional remedy to combat piracy."


Also that cutting people off will create knockon effects in the digital economy. losses to ISPs, ecommerce and so on on down the line.

The report is not only about only about the hypothetical three strikes policy, it is also an analysis of issues that are likely to effect the digital economy.

watty

And the €33million is pure fantasy. The best the Music industry could hope for is maybe €3million extra, if that.

Music download quantity is obviously NOT lost sales as the quantiity consumed for a "free" product is 100s times more that if you buy it.

I'm against copyright infringing downloads
I'm against a blanket tax on ISP to the labels (unfair to many users and bad for Music).

The Labels need to reduce hard media prices by 50% and make quality DRM free online content available at about 1/4 price of CDs. I and many others would still buy the CDs to have archival quality. They can't win the war on "piracy" directly. The present collision course of "Rights Holders" and "Copyright Infringers" can only result in damage to the music industry and less choice, less new music. The Labels need a new strategy that is Positive rather than "finger in Dyke" negative.

Read about Tor and Shell Proxies to see why you can't even beat file servers never mind encrypted P2P with Darknet distributed trackers (Pirate Bay is old tech )

A music Tax and free music for all will kill fresh music faster than anything.