A UK MP has spoken up in the online copyright enforcement debate, urging that the policy-makers look into the possibilities for new business models before imposing draconian measures such as automated suspension of Internet access and throttling of peer-to-peer users. To which I have added a few suggestions for the beleagured chaps at the Department for Business, Innovation and Skills.
Tom Watson, the Labour Member of Parliament for West Bromwich East, and Civil Service Minister, has entered the 3-strikes debate. He suggests that instead of consulting on how to punish Internet users, the government's resources would be better spent on helpingcompanies to set up viable alternative distribution structures for online music and entertainment. The way to begin, he says, is by asking the right questions.
Mr Watson argues that ‘technical measures' are, to all intents and purposes protectionist measures, for an industry that is resisting change. The government should be looking at how to promote innovation, and understand the real business drivers for online entertainment.
I have a few suggestions of my own to help BIS come up with the questions:
1. A public examination of the financial results of the music and entertainment companies that are lobbying to get Internet users cut off. Since they are asking for measures which will entail the surveillance of the entire population, they should be prepared to lay open their accounts for public inspection. (Several of the relevant companies are subsidiaries, and published accounts are not available)
2. Obtain and publish an analysis of the cash flows and revenue models of these companies, so that it will be possible to establish the correct starting point for a discussion. For example, it may be possible to find areas for cost-savings, which would improve their profitability. From a societal perspective, this may be more desirable than asking others to carry out sanctions on their behalf,
3. The next step is to map out possible new business models in the appropriate level of detail. If BIS are unsure where to begin, then I suggest the classic marketing quadruple of Product, Place, Price and Promotion.
4 Followed by NPV calculations based on a range of scenarios, using agreed and public assumptions. This is tool to aid decision-making regarding which new business models may prove most effective.
5 And finally ... the European Commission needs to grasp the Collecting Socities nettle and sort out a way to get multi-territory rights for online distribution.
If BIS are unclear where to start, I can highly recommend Harold Vogel, Entertainment Industry Economics: a guide for financial analysis
It is written in such a way that an industry outsider can easily follow it, and will enable them to ask the right questions.
Incidentally, the company asking Lord Peter Mandelson for technical measures to cut off Internet users - Steven Spielberg's Dreamworks Studio - has just raised $825 million in funding - quite a coup in today's hard times!
This article is licensed under a Creative Commons Attribution Non-commercial-Share Alike 2.5 UK:England and Wales License. http://creativecommons.org/licenses/by-nc-sa/2.0/uk/ It may be used for non-commercial purposes only, and the author's name should be attributed. The correct attribution for this article is: Monica Horten (2009)UK 3-trikes - MP urges consultancy not censorship, http://www.iptegrity.com 4 May 2009.