@ MidemNet: ISP Music Accord ‘Weeks Away’, But Will It Be Fee Or Free?

UK ISPs are lurching awkwardly toward launching next-generation music services – but, typically for the tail-chasing music business, splits remain about the best way forward. Last summer’s accord struck between labels and service providers seemed to pave the way for new offerings including unlimited downloads bundled with broadband and perhaps even legal P2P – but many of the key players grumbled that obtaining necessary licenses is still too complex…

— UK Music body CEO Fergal Sharkey told a panel: “In the UK, we are potentially weeks from some of these new services being rolled out for the first time. In the next few weeks, some representative from UK Music will be sitting down with representatives from ISPs about getting some of these services.”

— But the ISPs and music orgs continue to mix like oil and water. “It would be nice if some ISPs came to MidemNet and actually had the conversations with you,” Internet Service Providers Alliance secretary general Nicholas Lansman said. “You’re not going to change this within a year. We’re talking about several years here, we possibly should have started earlier.”

image— British Phonographic Industry CEO Geoff Taylor said ISPs, in an increasingly crowded market, would want to differentiate themselves by bundling music with broadband, as Denmark’s TDC has done. But Lansman, while calling on the music biz to make it easier for ISPs to gain the necessary licenses, cautioned: “Not everyone using the internet wants music.”

BSkyB (NYSE: BSY) plans to launch such an unlimited subscription offering with Universal and is seeking other labels, while technologies like Playlouder present ISPs the opportunity to pay labels for the remaining illegal P2P downloads that take place on their networks. Though “media futurist” Gerd Leonhard on stage advocated abandoning legal controls and formal music stores in favour of licensing the widespread existing P2P activity, neither the BPI, UK Music nor ISPA appeared fully convinced.

image— But Billy Bragg manager and International Music Managers’ Forum secretary general Peter Jenner was in full agreement with Leonhard: “Let’s face up to it – this is the music industry, which is in the f***ing dumper. The reality is we’ve got to compete with free (but) i can’t see anything that’s going on at the moment with the record business that is going to solve anything.”

Revenue from legitimate stores like iTunes is still not replacing that lost to pilfering, Jenner said, so licensing P2P activity could create “some kind of floor providing income”. “We have to do it because, if we don’t, we’re going to have a world where there’s not enough revenue to create content at the end.”

Though Sharkey and Lansman yesterday warned government against regulating ISPs’ illegal download commitments (reported to be recommended in Lord Carter’s upcoming Digital Britain report – Jenner took another contrary view: “It is naive to think that government hasn’t got a role. If government continues to have a hands-off attitude, then it will witness the collapse of its content industries.”

(Peter Jenner photo: Johann Paul Kellner)