By now, the important role that legitimate online distributors play in reducing piracy is well documented. Just last year, in a study released by two professors at Carnegie Mellon University it was determined that the removal of NBC content from Apple’s iTunes store for a period of nine months resulted in an 11.4 percent increase in piracy. The researchers also observed a 30 percent decline in piracy when ABC decided to add its content to Hulu in July of 2009. Such findings aren’t limited to the online pirating of movies or television shows.
In a 2010 UK-based study evaluating the relationship between illegal P2P file-sharing and Internet radio services, researchers found that over half of the survey’s participants reported stopping illegal downloading activity due to the presence of online music streaming services. A US-based study due out later this year is expected to report similar findings.
Despite the clear benefit that online distributors offer in reducing infringement, Congress has been slow to modernize the licensing process in a way that responds to the current needs of the digital age. Indeed, it’s been nearly a decade since Congress last attempted to update the statutory provisions that online music stores rely upon to make music downloads available for sale; and even longer since meaningful consideration has been given to the provisions that Internet radio service providers rely upon to operate online streaming services.
The failure on the part of Congress to modernize such laws – and possibly create new ones – has ramifications beyond the direct harms imposed on online music stores, Internet radio service providers, and services that allow for the online streaming or rental of digital movies. Such failures also end up subjecting consumers to a diminished online experience, stifle the continued growth of a vibrant part of the United States economy, and as mentioned earlier, bolster online piracy rates.
The good news is that it is not too late to stem the current tide. Congress can easily take this opportunity to press ‘pause’ on the current legislative approach, in favor of pursuing new legislative strategies that seek to increase the amount of entertainment content that’s made available for legitimate online consumption. A good starting point for accomplishing this objective would be by establishing a new licensing regime that guarantees greater efficiency, flexibility and timely access to music and movies for purposes of legitimate online distribution.
By harnessing the strength of legitimate online service providers, Congress would truly be creating a win-win situation. Consumer demand for online content would be satisfied, artists would be fairly compensated for the creative endeavors and most importantly, online piracy would be dealt a meaningful, and perhaps a knock-out, blow.
To a large extent, legitimate distributors of entertainment content have already demonstrated that they can effectively compete against online pirates in the day-to-day battle to reduce online infringement. Now, it’s up to Congress to help us win the war.
Barnes is senior counsel for the Digital Media Association.