The Blog

The Piracy Problem - The Hunt for an Effective Solution

The new legislation can be effective, but it needs to be coupled with improved relations and co-operation between industry and streaming companies. This - I believe - may be the key to stamping out online piracy once and for all.

In a move lauded by the creative industries, the government have announced that they're discussing the possibility of increasing jail sentences for online piracy from two years to ten years.

Ten years may seem disproportionate to some people - after all the theft of a car only carries with it a sentence of 6-24 months. However, it just goes to show how seriously authorities are taking the war on piracy (a war which they are currently losing).

In the wake of the announcement, the police were keen to stress that this law is not aimed at small-time downloaders of content, but at those who serially distribute content online for others to download, in many cases before the new content has even been officially released.

This, in itself, is interesting. It feels like not so long ago that the government and the creative industries were rallying together, threatening to punish, jail, and impose hefty fines on everyone who illegally downloads content. However, very quickly it became clear that this was not only slightly draconian, but actually impossible to police. Now, it seems that the creative industries, police, and government alike are wise to the fact that such a policy is unenforceable, instead deciding to try and stamp out the problem at its source by targeting the content distributors.

Whilst creative industries are jubilant about the new proposals, for such a law to have effect, the authorities first need to prove that it is enforceable. Online piracy has always proved to be a tricky issue for rights holders and authorities alike. Evidence shows that it's so widespread that punishing everyone involved would literally be impossible. For example, the finale of the latest season of HBO's Game of Thrones was downloaded by 1.5 million people in the UK within 8 hours of its initial broadcast in the USA. Recent government statistics from July 2015 counted the British prison population at 86,300. Hypothetically, if we were to imprison everyone who acquired an illicit copy of Thrones that day, we'd have to increase the British prison capacity by seventeen times.

So, stamping out those who distribute the content would seem like the most sensible option. But - as with any illicit market - when you remove one distributor, another will pop up in their place. So how do we deal with this? In my view, a crackdown on distributors needs to be coupled with an increased emphasis on paid-for streaming services.

Seemingly the reason that people download content illegally is the instant access it allows - more than one million Game of Thrones fans downloaded the aforementioned episode so that they didn't have to wait for it to appear on Sky Atlantic in the UK (which typically broadcasts episodes the following evening). In this information age, where potential spoilers lurk around every corner, people want to be there first.

Of course, in recent years, streaming services have developed to offer this. Netflix, NOW TV, and others will frequently upload copies of hit US dramas for their users to view mere minutes after they've finished airing on the other side of the pond. However, not all hit shows are covered by such services, which is why the pirate market continues to boom.

It's not just the film and TV industries that are problematic either. The music industry is - if anything - even more so. In recent years - while cinemas still manage to pull in decent crowds, and TV shows that get good ratings can claw in ad revenue, the music industry has arguably been hit the hardest. With music available from a range of legal free sources including YouTube and Spotify, and illegal sources like the Pirate Bay, album sales have plummeted.

Taylor Swift had a high profile spat with Spotify last year when she pulled the entirety of her back catalogue from the service in a dispute over royalties. This was no small setback for the Swedish tech firm; 25% of their users had streamed at least one of Swift's tracks. The small subscription fees paid to use Spotify and similar services often results in artists getting a raw deal.

And Swift was far from the only artist angered by the current state of affairs, as evidenced by the launch of the much-derided streaming service, Tidal. Launched earlier this year by a star-studded roster of partners including Jay-Z, Kanye West, and Coldplay's Chris Martin, the service offered higher audio quality than its competitors while offering a fairer deal for musicians thanks to its higher subscription fee and no free option. However, the wheels soon began to fall off as media commentators, Twitter users, and even other musicians began to point out that the partners had a combined wealth of $2.8bn. Jay-Z, the owner, is worth $560m. The service was quickly labelled a cash-grab by people who were already very well off. In May, it was reported that Tidal had 800,000 users; at the last count Spotify had 15 million paying users.

Until now, Spotify has gone more or less unchallenged in the music streaming market, but that could be set to change. Google, Apple, and Facebook have all announced their own music services, and you wouldn't bet against any of them carving out a significant slice of the market for themselves. Will any of these offer a fairer deal for rights holders? Only time will tell.

So, as the new sentencing proposals look set to crack down on illegal distributors, it may be the right time for a competitive streaming market to take centre stage. Spotify's low subscription fee has proven a hit with consumers, but annoyed certain sectors of the music industry. Tidal on the other hand proved popular with artists, but the high subscription fee means that it's remained largely unsuccessful so far. Spotify and Tidal can be viewed as two extremes on a spectrum. To please both consumers and creators, a middle ground must be found, which offers an affordable alternative to pirating content for free - while at the same time offering sufficient royalties to rights holders in order to keep them onside.

Rights holders may well see the latest crackdown on illegal downloading as a chance to recoup some of the losses suffered through piracy, but it seems likely that they will be forced to embrace the changing media landscape and the lower royalty rates that go with it. After all, if consumers decide that content is priced too high, history tells us that they will find a way to get their hands on it for free. The new legislation can be effective, but it needs to be coupled with improved relations and co-operation between industry and streaming companies. This - I believe - may be the key to stamping out online piracy once and for all.

Wayne Beynon is an IP lawyer at Cardiff and London based law firm Capital Law: