Record labels and other rights holders will have to shoulder much of the financial burden of the UK’s upcoming graduate response program to curb illegal file sharing, also known as “three strikes.” Digital Britain minister Stephen Timms said this week that rights holders will have to pay 75 percent of the costs associated with the new anti-piracy measures, according to a report from paidContent: UK. Previous plans called for rights holders and ISPs splitting these expenses 50-50.
How much this will impact the bottom line of record companies depends largely on how vigorous they’ll be in pursuing file sharers — and that seems to be very much the idea behind shifting the costs. Lord Clement-Jones put it this way while introducing an amendment to the original Digital Economy bill this week: “We need an incentive for creative copyright owners to make jolly sure that they get their facts right when they start prosecuting subscribers.” In other words: Making the process expensive could help to reduce the amount of questionable infringement notices.
The UK’s Digital Economy Bill is meant to reduce P2P piracy by booting infringers off the Net after a number of warnings issued by rights holders. Details of the bill are still up for debate, with paidContent counting close to 300 proposed amendments.
One issue that has been hotly contested are the costs related to this type of enforcement, which is also known as “three strikes and you’re out.” An executive of BT recently complained that the enforcement would cost ISPs £365 million ($589 million) a year – a number that raised some eyebrows, given the fact that the country’s music industry only claims to lose £200 million a year to piracy.
However, the music industry is disputing those estimates. Trade group BPI published the results of a study it commissioned this week, estimating that the measure will cost ISPs merely £13.85 million during the first year, with costs going down to £3.45 million during the third year. Of course, those estimates were based on the originally proposed idea of ISPs and rights holders splitting the costs 50-50. We’ll have to wait and see whether BPI’s perspective will change now that it might have to cover the majority of these costs.