ISPs and labels ‘must cooperate’
Since broadband providers and music labels have not shown a willingness to cooperate, European consumers are unlikely pay for e-music anytime soon.
That is the finding of a Jupiter Research report, which included a survey of 5,000 European consumers, 43 per cent of whom said they are not convinced that paying for a digital music service was a necessity.
Indeed, the report said that many European broadband users sign up for their high-speed connections so that they can more easily participate in illegal file sharing. Jupiter added that this motivation is not only bad for labels, but will pose an increasing problems for broadband Internet service providers (BSPs), putting their networks under greater strain.
According to the company's numbers, some 18 percent of European Internet users are still using illegal file sharing. Mark Mulligan, Jupiter senior analyst, said that as long as such high numbers are downloading illegal music, the take up of legitimate music services will be hindered. He also said that in order to convince music downloaders to switch to paid models, broadband Internet service providers (BSPs) and music labels must work together.
But this has not yet happened, despite the fact that 29 percent of BSP respondents in Jupiter's survey said that they believe that music downloads will eventually generate significant revenues. Currently, over half of the European BSPs surveyed intend to launch a music service later in this year.
Mulligan said however that any forthcoming e-music schemes from BSPs could face trouble unless broadband penetration broadens and labels must sufficient amounts of content on-line as well as offer less restrictive digital rights.
Still, some progress has been noted in 2003, Jupiter noted, with labels making more of their catalogue music available to on-line distributors. Mulligan added that BSPs and labels in Europe should learn from what's happening in the US, where the Recording Industry Association of America (RIAA) has taken key ISPs to court to handover details of subscribers, and start cooperating.
Mulligan also said there was a huge willingness on the part of BSPs to cooperate with labels but that the strength of labels' focus on licensing was causing problems for the service providers. "Labels should not only see ISPs as a threat but see the potential to work as partners," he told ElectricNews.Net. "ISPs make a perfect distribution channel for digital music."
With respect to the prospects of major progress in the near future Mulligan said, "I don't think so, to be honest, the parties are too far apart. Labels are too concerned with tackling piracy rather than on legitimate alternatives and ISPs are focused on getting new subscribers."