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IPFI chief says it's time to hose down the networks

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You can decrypt a stream if you throw enough computer resources at it, but that leaves you with one or two people you can make examples of. Which is making a moral statement rather than an effective real world deterrent, which you seem to want.

That's not a bad end in itself. It sends the message to people that P2P file-sharing is wrong. I think a large percentage of people will stop.

Certainly parents in the main think, "If this is so easy, then it can't be wrong. I heard that Kennedy guy going on about this, but I'm on AOL, I'm on BT – it must be OK."

Now I accept that this is an arms race, but if we can improve the terrain we will do much better. But frankly, if we don't, it's a disaster for everybody.

Your logic, just to make it clear, is that if P2P goes they will go to legal?

A large percentage of the population will, I think, yes. The damage has been done to the physical market on the way here, and we're in a bad position.

But isn't that the point, it's just accelerating the decline? Even if everyone went to the licensed digital model, iTunes, it's still a smaller pot of money when music's never been so popular.

No, but we can't complain about unbundling. We complain not about technology but about the abuse of technology. What technology has done is give people the ability to take a single rather than an album. But we can't complain about that – that's the law of supply and demand.

I have four jukeboxes in my house, I've always loved singles. I consume almost all my music as singles then dip back into albums. We just have to find ways to make it more attractive.

The model that enables you to buy two tracks and then upgrade to the album and get credit for two tracks is a very good model. I think ten per cent of the album market in the US is now digital, that's a good sign. So the pressure comes back on the artist that you've got to deliver an opus of work that makes people to want it as a whole album.

Unbundling isn't anybody doing anything wrong, we have to accept it.

It's also a fact that some people find all kinds of justification for not paying. People who say they boycott major labels will still avoid paying for a an indie album by downloading it.

The Radiohead example is in some ways even more depressing. They come up with this wonderful, flexible model and people still go onto P2P and BitTorrent to download it. That's scary.

I've had greater brains than me go in there and try to monetise P2P, like Snocap, and there's no indication that it's worked.

There's money in that chain – between producer and the public – you've identified in the IFPI report. If P2P is licensed and legal, then you can get some back, surely.

I've said we're 80 per cent of the way there, but the last 20 per cent is going to be incredibly difficult.

Subscription models are going to come more and more in 2008 and 2009, and if there is a P2P subscription model, then great. But if there is money in the chain it's no good if all these things are going to produce just a billion dollars, and we're replacing an $18bn industry that's going down.

We can meet somewhere in the middle before it concertinas in the one place – but it's got to be a sensible model.

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