UK could have flooded world with iPods - Sir Humphrey
Copyright law was/is the only obstacle. No, really
Analysis Britain could have invented the iPod – if it wasn't for a copyright law that everyone ignores. So says the UK government in a remarkable economic justification of the so-called "Google Review", the Review of IP and Growth led by Ian Hargreaves. The document was written for the government by civil servants at the IPO, part of the business department BIS.
"UK firms were unable to initiate this type of innovation because of the private copying restraints," the bureaucrats assert. They go on to predict that lots of innovation will instantly materialise if the format-shifting exemption is introduced without compensation, and that British consumer electronics companies will once again rule the world – bringing in unimaginable wealth.
"The potential size of new markets would increase as applications expand, and as the number of internet users continues to grow. If this exception enables firms to create new products and markets over the next decade of up to half the size of the iPod market over the last decade, this could grow the economy by up to £2bn per annum at the upper end of possible outcomes."
There are several flaws to this claim.
One is that UK courts have expressly set the precedent that format-shifting machines do not infringe. The only copyright case fought over a consumer electronics device (CBS vs Amstrad) ruled that the manufacturer marketing a device capable of infringing uses – in this case a double-speed twin cassette deck – was not liable. You would expect the civil servants at the IPO to know this.
The Amstrad decision cleared the way for a very liberal trading marketplace – and millions of DVRs. Not a single consumer has ever been prosecuted for format-shifting, either. The argument hinges on a "chilling effect" that exists entirely between the IPO civil servants' ears, and has no precedent.
The second flaw is that British technology companies have come close to launching iPods, and were deterred not by obscure copyright provision, but by something much more familiar to British entrepreneurs.
The first hard-disk MP3 player was almost British, in fact, and I told the story here. Psion was approached in 1999 with a clever design for a digital music player. Exploratory work was conducted on it by top engineers including Ken McAlpine (later Apple's head of portable engineering) and David Tupman (later Apple's head of iPod engineering). But management felt it was too risky, and possibly too early. At no point was format-shifting a factor in the decision. (Psion did go on to launch an innovative DAB radio, the WaveFinder.)
It is worth recalling too that Apple's own iPod, launched in October 2001, was a flop for a considerable time. It only began to gain traction when Apple launched the music acquisition part of the system, and ported iTunes to Windows, in 2003.
A third assumption is that the legal status of the exemption has a bearing on consumer behaviour. But as we've seen, no attempt has ever been made to prosecute anyone for home-taping a radio broadcast, making a tape of a CD, or shifting a ripped CD to an iPod.
And finally, the IPO assumes that UK consumer electronics companies would gain all the "benefits": not Apple, Toshiba or Panasonic. That would be nice. But British consumer electronics companies don't just pop out of the ether overnight, and if they were to, it would be not be thanks to obscure copyright exemptions.
Think of a number
The "economic justification" is full of such dubious calculations – many numbers have been plucked out of the air at random – and loaded statements. One example is an astronomical saving attributed to the creation of a single Europe-wide patent system. UK businesses would see a "saving", the bureaucrats reckon, of €13,192 per UK patent filed – assuming automatic renewal, no UK legal fees and no further legal fees for the applicant anywhere in the process. A computer model was used to estimate UK growth under optimal single market conditions, a subset was attributed to IP businesses, and the handle of the computer model was then cranked to produce another figure. This comes out to a "£2.1bn per annum" saving to the UK's GDP. Yet no other reform of the system is recommended, and the bureaucrats (somewhat grudgingly) accept that with longer delays to the process, costs to business would actually go up, not down.
The IPO (Tooting Office) gets down to the maths
In his report, Hargreaves called for more reliable empirical economic evidence. This certainly isn't it. It's an insult to the intelligence.
It is a mystery why our bureaucrats, who here show themselves to be anything but impartial, are driving policy. But this appears to be the rule now, rather than the exception. In an article by James Forsyth, political editor of The Spectator, in the magazine's current issue, he writes:
"I know of one Cabinet member who estimates that only four of his 22 colleagues actually lead their departments: the rest just represent the views of their officials to Cabinet and Prime Minister."
Britain's unelected government appears to be more powerful than its elected one. And without political oversight, and left to their own
prejudices devices, they don't half come out with some rubbish. ®
IPO: Economic Impacts (PDF/450KB)
Leading the blind
I have a friend who was in the MoD and his explanation for the lack of leadership from the Ministers is simple: they are stupid and lazy. They don't WANT to know how the department works, they don't care about anything except their next step up the cabinet ladder and even when they do take an interest they rarely have anything to contribute one way or another other than blithering and guessing. And then they're gone after a year or two. They have no qualifications and no rational basis for agreeing with or refuting the civil servants' advice. It's an insane way to run a country.
Seriously, Andrew, have you not been watching politicians over the last few years? Surely their reactions to the economic crisis and the War on Terror(TM) have cleared away any misconception that these people are pro-active thinkers able to deftly steer the ship of state on to clear waters and new horizons?
We are a nation - nay, a world - run by idiots without a plan except to listen to advice - from civil servants, special interest groups, "experts", the markets, anything that gives them some fig leaf for their decisions because THEY DON'T HAVE ANY BETTER IDEAS THEMSELVES and that's because their only skills are in getting elected. The vast majority are quite unemployable in any real world capacity. Gordon Brown was chancellor for 10 years yet can barely add up properly. Harold Wilson preached the white-heat of technology but thought a giant spider was following him. Margaret Thatcher approved arms sales to Argentina while they were clearly making threats to invade the Falklands.
Don't go speechifying about unelected government power until you can tell us where to find anyone we can elect who can do better. Because people who can do, do. Those who can't teach, and those who can't even teach go into politics.
"Britain could have invented the iPod"
Agreed with the article in general, especially the mocking of the idea hardware companies would give consideration to the format-shifting dilemma considering people had been taping from the radio, other cassettes, vinyl and CD for years now.
Though anyone else a bit bored of the assumption Apple were there first with a hard-disk based mp3 player? Or that it was a purely engineering triumph? The iPod (love it or hate it) worked as an overall solution, without iTunes it's practically worthless to the general consumer.
From my memory at the time though, it was Archos or Creative that were churning out the first HD based players.
Posted right here
ASA slaps advert for encouraging unlawful format shifting:
What more evidence of "chilling effect" could you want? Right from this very news source no less.