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Cost To British Economy Of Free Downloads Is Revealed

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http://www.guardian.co.uk/technology/2009/...-downloads-cost

At least 7 million people in Britain use illegal downloads, costing the economy billions of pounds and thousands of jobs, according to a report.

Shared content on one network was worth about £12bn a year according to the research commissioned by the Strategic Advisory Board for Intellectual Property.

The peer-to-peer network had 1.3 million users sharing files at midday on a weekday. If each of them downloaded only one file a day this would amount to 4.73bn items being consumed free each year.

The ability to download or share content is getting easier with faster technologies and greater storage space.

The new 50 megabytes-per-second broadband access can deliver 200 MP3 music files in five minutes, a DVD of Star Wars in three minutes and the complete digitalised works of Charles Dickens in less than 10 minutes.

David Lammy, minister for intellectual property, said: "Illegal downloading robs our economy of millions of pounds every year and seriously damages business and innovation throughout the UK.

"It is something that needs tackling, and we are serious about doing so."

Ministers privately accept the difficulty attached to criminalising millions of people who now apparently see little wrong with stealing online content.

The International Federation of the Phonographic Industry estimates that there were 890m illegal free music downloads through file-sharing in the UK in 2007 compared with 140m paid downloads. This puts unauthorised access at a ratio of six to one, before offline sharing like disk burning is even considered.

The SABIP report found music downloading had "become part and parcel of the social fabric of our society despite its illegal status". Creative industries provide about 8% of British GDP. Digital copying of their products resulted in the estimated loss of 4,000 jobs in 2004.

Lammy said: "The report helps put the scale of the problem into context and highlights the gaps in the evidence which need to be filled.

"It is important that we understand how online consumer behaviour impacts on the UK economy and the future sustainability of our copyright industries."

SABIP warned that it may be difficult to change attitudes to free downloading as there was "huge confusion" about what is and is not legal.

It claimed that 70% of those aged 15 to 24 did not feel guilty about downloading music for free from the internet and 61% of the age group did not feel they should have to pay for the music they listen to, according to a survey.

Lammy said: "We can't expect 12-year-olds to become copyright lawyers before they can switch on a computer, but we can educate people on enforcement and work towards getting the right people caught and punished, wherever they live."

The problem with VI reports like this is that they assume every download equals one lost sale. Trouble is it doesn't.

Some content is download so people can listen / watch before they buy, undoubtedly some content is only listened to several times before being discarded. My mate downloads gb of stuff but what he likes he'll go out and buy the album/film.

This is not to say some people aren't downloading specifically because it is free, clearly a lot of people do.

In reports like this you also never see any serious questions asked of people who download illegally, such as if you could subscribe to a P2P for say £5 a month and download and share what you like would you pay? I certainly would pay that but I'm not paying 79p for one track of music.

It appears that the entertainment industry doesn't want to tackle the issue that perhaps it's it own pricing policy that's at fault and not the consumer.

Although VI don't want to do this because it might mean real change, instead we get crap like this produced.

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Whats a few billion downloads in comparison to the Governments fraud and corruption ?

Even the Chancellor of the Exchequer has fiddled his taxes!!!

The people are speaking, and we are going to be taking their examples and doing the same.

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Ministers privately accept the difficulty attached to criminalising millions of people who now apparently see little wrong with stealing online content.

Hence the reason they've been trying to pressure ISPs into doing their dirty work for them, i.e. terminating the home broadband connection of serial downloaders. But of course the ISPs will fight this tooth and nail, because downloading GBs of illegal content is about the only reason (apart from playing online games) why anyone would want to buy a fast, bandwidth-unlimited and premium priced broadband account in the first place.

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Hence the reason they've been trying to pressure ISPs into doing their dirty work for them, i.e. terminating the home broadband connection of serial downloaders. But of course the ISPs will fight this tooth and nail, because downloading GBs of illegal content is about the only reason (apart from playing online games) why anyone would want to buy a fast, bandwidth-unlimited and premium priced broadband account in the first place.

Porn?

Although admittedly some of that content will be in breach of copyright too.

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Creative industries provide about 8% of British GDP. Digital copying of their products resulted in the estimated loss of 4,000 jobs in 2004.

They can always download more jobs.

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Apparently, it's a loss of copyright income now when your mates sing "Happy birthday to you". Warner Brothers hold the copyright. Oh, and don't think of doing it in the pub, unless the landlord has an entertainment license, and you've paid the necessary fees to the performing rights society. Landlords have been fined for this!

Also, see the Kwikfit Motors vs The performing rights society case. Kwikfit were fined because their workers were listening to their own (licensed) radios in the workplace. Apparently, if another member of the pubic can hear it, it's copyright infringment, akthough it's a public broadcast FFS. If you were to wind down your car windows with the radio on, that's technically copyright infringment (a member of the public may be able to hear it, thus it becomes a "public entertainment".)

4000 jobs lost. Yeah, right.

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Maybe if they stopped churning out shit films and music people would be more interested in paying for them.

Cant think of a single song released in the last year that was worth buying.

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The problem with VI reports like this is that they assume every download equals one lost sale. Trouble is it doesn't.

That is the part I most agree with, in fact I have often argued that downloading INCREASES sales. It is certainly true in my case.

I occasionally download music that I have heard on the radio, or been advised to listen to - Albums from bands I normally have not heard of or new bands. If after a few listens I like it, then I will go and buy the CD, so that given hard drive failures, computer changes, in the car etc. I have a copy. Hence, 1 sale.

If however, I had not been given the chance to listen on my terms, I would not have bought it. Full stop.

I also have the same philosophy with films, TV box sets etc. If I like them, I will pick them up, I have more DVD players in the house than PC's. However, if I see it on the shelf and don't know if its any good, I won't buy.

OK, so only in my case - but illegal downloads increase revenue! :P

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Guest มร หล&#3
Maybe if they stopped churning out shit films and music people would be more interested in paying for them.

Cant think of a single song released in the last year that was worth buying.

Off-topic forum, film thread.

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I found an old CD the other day with the price label still on - £15. £15 for a plastic disc that costs pennies to get on the shelf. Typical releases now are half that - there is the 'cost' of piracy, music distributors can no longer rip people off for an ultimately worthless commodity that is transmitted over the airwaves for free.

F*ck 'em. Woe betide if Simon Cowell was unable to buy a new black jumper.

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As pointed out, one download does not mean one less sale.

I would say 1000 downloads might equal one lost sale at best.

That means perhaps £10 per person or some £600m at the very very most in the UK!! and that is before you take into account the potential of increased sales due to downloads. It may be very very close to a net neutral in sales.

As for jobs. Yes it might destroy some jobs in that industry but not on the whole. After all the money is spent on something else which creates a job in that industry.

In fact why don't they show statistics of yearly CD sales from 1995 to 2008. if they are correct that downloads are impacting on their sales then there would be a noticeable sharp drop off starting 2002 but I would bet a huge sum that their film and music sales have gone up thanks to internet shops like play.com

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i regularly watch films on the internet. im not into films that much but i use them when stimulated by the noisey neigbours so i have noise to drown them out, but my point is really that i watch movies before they are released. This became apparent when i saw an advert on a bus a while back for Bangkok Dangerous, OPENS on Such and Such a day, but i had seen it 2 weeks before!!! Im not a film buff, i just down load a film when ever the noise from my neighbour is too much. I also drown them out with Live From Parliament, lol, 40W and W amps playing Gordon Brown and 404040404 decibels, then the retard next door has the audacity to bang on the wall because he cant hear his LOUD DANCE music over the dolcit sounds of members of parliament talking crap. lol.

The main reason i mentio all this is because i dont think anyone cares, i know i have no intention of buying films on DVD. I download anything, pawn, parliament, films, even DVD's. I download royalyty free audio books, classical music (its long play) and it all gets jumbled up. I think its only the DVD's that have the copyright issues, I know the pawn doesn't, lol.

So all this stuff about the industry loosing money is rubbish. people download anything and the fact that people do that means they will go with the easiest route.

I went through a stage of watching Bloomburg live, its all free content.

the fact is, poelpe will watch anything. Inthe days of old people would flip between BBC1, BBC2, ITV and Channel 4 and watch whatever was least boring. They do the same, the fact that they watch copyright stuff is incidental. New movies are not that inspiring. Seen Terminator Salvation yet? yawn.......

etc etc etc

what the govt are really concerned about is loss of total control over the media and what people watch, which is why they have launched BBC IPLAYER, to get those eyeballs back. Provide people with virus free, reliable content for free. does tht make financial sense? Does that fit in with the licencing fee conditions? Can they stop people over seas watching the BBC? If so, thats proof that they can curtina the UK on the internet, if not then licence payers are paying for everyone to get free content. Its a power play, not a financialy driven business venture. They want control of the media.

etc etc etc

apologies if im boring you, im very boring.

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The industry needs to get its act together and offer music downloads at £0.10p a track (0.50p an album) and film downloads at £0.40 a go (50p for HD). The cost in bandwidth (especially for music) is minimal and at 10p a track they would increase on-line music sales 50x.

Film sales would also go through the roof from an estimated (nearly zero) to an estimated 1.0-1.5 BILLION films per year downloaded legally just in the UK!! and some 15 billion films per year worldwide.

they should work with the internet and get rid of all the overheads.

A DVD needs to be produced, its casing produced, transported to a warehouse, transported to stores, sit on the shelves for weeks or months, then bought by someone who travels to the store. Each step has someone taking a piece of the pie. Just host it on a good server and let people download it. Although your selling DVDs at 50p a go the margin is some 98% (the cost of bandwidth is tiny and goes down every year)

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Twelve billion? Don't make me laugh.

It's like houses - they're worth whatever someone is ready to pay for them. If you insist your house is worth 250k, but there's nobody willing to give you more than 150k, it's worth 150k.

If you insist your data is worth twelve billion, but there's nobody willing to pay that for it, you're just fibbing to yourself.

Edited by JJJ

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Hence the reason they've been trying to pressure ISPs into doing their dirty work for them, i.e. terminating the home broadband connection of serial downloaders. But of course the ISPs will fight this tooth and nail, because downloading GBs of illegal content is about the only reason (apart from playing online games) why anyone would want to buy a fast, bandwidth-unlimited and premium priced broadband account in the first place.

Works agaisnt the poor people who use torrents.

What about people who use newsgroups with SSL connections?

Who said you even have to pay for your internet connection?

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Look the internet is only used by pedofiles, terrorists and now people robbing the mejia blind !

Think i'll go claim on my tax return that i've spent £20 protecting myself much like our MP's are doing at tax payers exspence.

Twelve billion? Don't make we laugh.

It's like houses - they're worth whatever someone is ready to pay you for them. If you insist your house is worth 250k, but there's nobody willing to give you more that 150k, it's worth 150k.

If you insist your data is worth twelve billion, but there's nobody willing to pay that for it, you're just fibbing to yourself.

You have a good point

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I found an old CD the other day with the price label still on - £15. £15 for a plastic disc that costs pennies to get on the shelf. Typical releases now are half that - there is the 'cost' of piracy, music distributors can no longer rip people off for an ultimately worthless commodity that is transmitted over the airwaves for free.

F*ck 'em. Woe betide if Simon Cowell was unable to buy a new black jumper.

Declare VI: I am in the music business.

Why do people forget the cost of making the content? The equipment, the studio time, the investment of somebodies creative effort and time? The marketing so people know it exists?

However, I agree that much needs to change and companies like Spotify may be leading the way, but it is arguable that ad sales will pay the upkeep.

I am at the retail end now, selling downloads, and selling downloads alone is just not profitable enough to pay for the staff and site maintainance. A large label recently increased it's dealer prices to more than what I would wish to sell a download for. I am obviously looking to get out of this bit of the business entirely, but I do hope it will be into helping bands own and sell their content themselves. Then we can set the prices :)

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I've never been a fan iTunes.. the quality of the music isn't very good & I personally wouldn't spend £8 on a virtual album. You can get the physical thing for that sort of price from CD-WOW. The vast majority of mainstream music nowadays is utter dross (admittedly there are the odd jems) & I wouldn't normally spend 5p buying their stuff.

I think the middle area is something like Spotify or MySpace, where you can stream stuff from most of the bigger bands or the smaller bands, if you so wish.

I buy second hand albums etc from ebay or somewhere like music magpie (for instance I got 2 Suede albums from ebay for two quid each the other day)..I also use places like normanrecords.com..I rarely buy anything from the likes of HMV anymore, unless I get christmas vouchers from them. I try & support independents where I can.

Edited by zagreb78

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You have 50 Mb broadband now?!

Technically, yes. Having said that it's only available thru that notoriously reliable* outfit known as Virgin Media. This means that it may work if you're lucky in an ex-Blueyonder area, but ex-NTL will probably be better off on dial-up. There's also the matter of £50/month. I tend to pay a premium for broadband since I rely on it to a certain extent for work but £50 is a lot.

There's also the fact that there are currently no services I know of that make use of 50Mb in this country. The only use I can think of right now would be to pull down Hi-def video (a 40Gb Blu-ray straight rip would take just under 2 hours, a 4.7Gb 720p re-encode of just the main feature 15 minutes) but the only way to do that at the moment is illegally.

*Sarcasm, in case you're detector is playing up

Edited by impatient_mug

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Technically, yes. Having said that it's only available thru that notoriously reliable* outfit known as Virgin Media. This means that it may work if you're lucky in an ex-Blueyonder area, but ex-NTL will probably be better off on dial-up. There's also the matter of £50/month. I tend to pay a premium for broadband since I rely on it to a certain extent for work but £50 is a lot.

There's also the fact that there are currently no services I know of that make use of 50Mb in this country. The only use I can think of right now would be to pull down Hi-def video (a 40Gb Blu-ray straight rip would take just under 2 hours, a 4.7Gb 720p re-encode of just the main feature 15 minutes) but the only way to do that at the moment is illegally.

*Sarcasm, in case you're detector is playing up

Nobody really needs more than 15mb/s (well 99.99% of people do not)

That is enough to stream three channels 720p video. So two people at homes could be watching two 720p videos and plus some.

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Hence the reason they've been trying to pressure ISPs into doing their dirty work for them, i.e. terminating the home broadband connection of serial downloaders. But of course the ISPs will fight this tooth and nail, because downloading GBs of illegal content is about the only reason (apart from playing online games) why anyone would want to buy a fast, bandwidth-unlimited and premium priced broadband account in the first place.

That might have been true before Iplayer

It certainly isn't true now

tim

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problem is these paid downloads COST TOO MUCH

instead of 79p it should be more like 25p , cut out the middle men , who cares about the jobs losses - 4,000 a year is nothing compared to what is being lost in manufacturing.

you don't get a physical product , it cuts out transport , production , media and many store overheads yet isn't really much cheaper than buying from a real life store.

(by definition illegal downloading is not causing job losses as such as the money these people save not buying music/dvds they spend in other areas instead anyway but all this is forgotten by big brother)

Edited by Ruffneck

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Twelve billion? Don't make me laugh.

It's like houses - they're worth whatever someone is ready to pay for them. If you insist your house is worth 250k, but there's nobody willing to give you more than 150k, it's worth 150k.

If you insist your data is worth twelve billion, but there's nobody willing to pay that for it, you're just fibbing to yourself.

Exactly. The assumption is that if they turned of the Net tomorrow, that every person (including suckling babes and geriatrics) in the country would spend £200 on media in the coming year!

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