According to this story in the Globe and Mail, the music industry is keen on getting Internet service providers (ISPs) to block traffic for users who sharing copyrighted music files. Canadian ISPs like Bell and Rogers already shape traffic to some extent by limiting the amount of bandwidth available to file sharing (and you couldn’t figure out why your torrents don’t work like they used to). But analysts say they are unlikely, at least for now, to follow ISPs in the US who are experimenting with content blocking – apparently for fear of a public backlash.

Nevertheless, at least one commentator isn’t overruling the possibility that Canadian ISPs might be open to content blocking if it didn’t cost them any customers in doing so. Any such possibility might become more likely if the government goes along with the idea. The much-awaited copyright reform probably won’t change things significantly on this front, but we’ll only know for certain when the new legislation comes out. It’s still no comfort that the market for Internet services is dominated by so few big players who could, well, conveniently agree to shut out illegal file-sharers.

A more likely possibility in Canada, but not any less scary, is that the new copyright act will have provisions requiring ISPs to identify and filter content that infringes copyright. In Michael Geist’s words, this ‘would be an enormous threat to the free flow of information online, it would curtail consumer rights, place new burdens on education and research, and create great harm to personal privacy.  Mandatory filtering sounds better suited to China rather than Canada…’ Internet content filtering would also be potentially unconstitutional , since right now ISPs cannot filter pirated content without also blocking fair use and legal file-sharing – posing problems for freedom of speech and freedom of access to information.

On another note, the same story mentions how while the recording industry’s overall revenue fell 10% in 2007, global digital music sales went up by 40%. This underscores the point I made in an earlier post and that I’m sure has been made elsewhere. The music and entertainment industry needs to stop looking for ways to stifle consumers through lawsuits, levies, and now filtering or blocking Internet content, and instead should look for new ways of generating business. Digital sales are obviously one lucrative means that can be further harnessed (e.g. digital movie rentals now available through iTunes).

Posted in Copyright, Internet Sharing, IP, Music Industry
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Warner Music Group’s recent announcement about wider losses in the third quarter, due to an increasing trend of consumers switching to digital downloads, highlights the changing nature of the music industry.

Even as Warner posted higher overall losses due largely to the decline in CD sales, its digital revenues were up 29% from the same period last year. The sharp increase in digital downloads at the expense of CDs presents significant challenges to both recording companies and artists.

First, digitally downloaded music makes peer-to-peer file sharing far easier compared to music on a CD. However, the file sharing problem has been around for a while and, according to a recent column by Michael Geist, law professor at the University of Ottawa, it is only a minor reason for the decline in sales. Record labels have a far greater reason to worry, because in the digital information era artists are increasingly bypassing the traditional record deal in favour of new, innovative ways of marketing themselves to fans and generating income.

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Posted in Copyright, Digital Downloads, IP, Music Industry, Technology
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