HOME Technology Nov 2008
Digital download dilemma
Copyright Act challenges
 Legitimate music and movie downloads continue to gain mainstream momentum amid growing claims that copyright control and digital rights management (DRM) are curbing freedom of expression.

Locally the new Copyright (New Technologies) Amendment Act, which passed into law in April is facing a backlash as Internet Service Providers (ISPs) buck against the requirement to police and remove potentially offending content from their networks.

ISPs were to have been held directly responsible for such content but a last minute revision absolves them from liability only if they take ‘appropriate action’, notify offenders and if action is not taken, forcibly remove their content.

The Recording Industry Association wants stronger measures but ISPs and other industry groups met in September to express their concerns at being made liable if they don’t act on all complaints.
They want the law to be amended so they’re not forced to take down legitimate content based on complaints they don’t have resources to verify.

The law change does however mean sound recordings can now legally be ‘format shifted’ from a CD to an MP3 player for example as long as the owner maintains the original source material. The same does not apply to films on DVD or VCR.

Digital sales up

Digital music sales in New Zealand contribute directly to compiling top 40 singles charts. The move to treat every song as a candidate for the charts, and slowing sales of CDs, has seen the virtual disappearance of albums as a chartable entity.

Digital downloads is a growth industry driven by the proliferation of devices that can store and play music and the growing access to fixed, mobile and wireless broadband. Contenders in New Zealand include Vodafone and Telecom’s Music Store for mobile devices, Amplifier the pioneer of downloadable Kiwi content, Digirama, and iTunes which services the Apple market. All report significant growth this year.

Ever since 1999 when the runaway MP3 format and file sharing technology opened the door for widespread digital downloads the recording industry has been in a spin. Through to 2007, annual US CD sales spiraled from $13 billion to $7.5 billion. Attempts to develop legitimate online alternatives were too little, too late. The record companies wouldn’t work together and no-one could agree on a common delivery system.

Overall paid digital downloads, including ringtones, only bring in 25 percent of current record industry revenue. According to the International Federation of the Phonographic Industry, illegal music downloads still outnumber paid tracks by 20 to 1.

Consumers confused

Digital rights management (DRM) technology, designed to prevent format shifting or copying, may be part of the problem. The messy mix of formats across different resellers has divided the industry and confused consumers.

Ovum analyst Tim Renowden says the legal downloading industry has taken far too long to realise the futility of restricting fair use of content, describing the situation as a confusing nightmare. Removing DRM would make music more accessible and portable and give consumers a wider choice of retailers to buy online music from without the worry of which devices it would play on.

The recording industry continues to moan about slowing CD sales but there’s obviously a lot of life left in the business when the Australasian Performing Right Association (APRA), reports 7.4 percent growth in revenue this year to $200 million. New Zealand songwriters’ share of music sales, broadcasting and general licensing revenues grew by 32 percent to $3m.

Meanwhile former rivals in the digital music download debacle — a founder of peer-to-peer site Kazaa and his industry nemesis who headed the legal challenge that shut him down — have developed software for ISPs that will instantly redirect user requests for pirated songs to legitimate content they can buy.

The purchase would be added to their monthly ISP bill. The software currently being trialed in Australia is expected to attract global interest.


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