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Virgin Media anti-piracy: who’s the crook now, eh?!

Virgin Media is looking to emulate the ‘French model’ of anti-piracy, big-label protective measures, which sees persistent (three strikes) offenders warned and then kicked off the network. This is old hat stuff but a complex issue. In the post below I make the case that society needs to be wary/cynical towards this announcement – moreso than our castrate mainstream media. Here’s why:

Firstly, I take issue with the deliberately misleading, but unfortunately mainstream, assumption that music pirates are costing the music industry (as opposed to major music labels) serious amounts of cash. Many (not all!) music pirates spend vast amounts of money on music – you can see the results of my ad hoc study as they come in, here and here. These pirates just don’t spend it on the big releases from major labels, mainly because having access to vast (shared) libraries of music means you can find the obscure records you REALLY like. They also spend a lot of money on concerts, merchandise, and within specialist distribution platforms that big labels have yet to get into bed with, like eMusic. An argument could be made that the iPod and the iTunes Music Store have destroyed just as much big label revenue as piracy, as I’ve argued before on this blog (it relates to falling single prices and the death of the album format).

The second issue to consider is whether protecting music labels really is Virgin Media’s concern. Its role in society, as an ISP, is to serve up internet connectivity, and obey our democratic government. Until the elected government specifically deputises ISPs as an extension of the policing infrastructure of the state, Virgin Media should not be policing certain uses of its connectivity, but not others – if it is the ISP’s legal requirement to police its traffic for infringement of our democratically asserted laws, then it should do so. But this measure only covers ONE potential illegal use of the IS (internet service) – and it just so happens to be the only one that lies counter to the commercial interests of the traditional media industry.

So, having established that this reeks of commercially-motivated hypocrisy, briefly mentioning the moral point of whether the ISP should be looking at what a person’s internet is being used for (this isn’t the first time Virgin Media has demonstrated extremely loose morals regarding its users’ privacy – it is as an early adopter of Phorm, which reports our browsing habits to an external company so that it can serve targeted ads), one should ask – what IS the commercial motivation? Virgin Media risks losing customers because of this, so what’s in it for the corporation? Here are some possibilities:

It is being blackmailed by the music / assorted media companies that supply it with content for its On-Demand IPTV/cable platform; they could pull all the music videos, films and TV that stock VM’s VOD service
It is being blackmailed by music labels who are threatening to sue (and VM feels they have a case to make or that it would be too costly to fight them)
It is sucking up to the government. Remember, the government said in February that it would implement legislation by April next year unless ISPs came to a voluntary agreement with the music and film industries. The Department for Business, Enterprise and Regulatory Reform is apparently due to publish a consultation paper in April outlining legal measures. Maybe by being the ‘goodie two-shoes’ by jumping in first, Virgin Media is earning OFCOM favours that could really help it in the upcoming spectrum auction (after analog TV switchoff in 2011), or in the government’s plans for a refresh of the UK’s internet backbone evolution.
It could be commercially beneficial to kick pirates off its network to free up bandwidth for more moderate users (i.e. free up VM from its infrastructure commitments to its ‘all you can eat’ subscribers). This policy gives it the wherewithal to do so. With that said, I wonder if pirate movies are a bigger drain on bandwidth – so why the focus on music? Or is that just a press misconstrual of VM’s specific targets

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This entry was posted on Monday, March 31st, 2008 at 2:24 pm and is filed under Musings. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Seamus McCauley

If Virgin is really going to war with file sharers I can't make any business sense of the move at all.

Virgin can't compete with Sky for content. It already tried and, famously, Lost. What remains on Virgin's VOD service is a shadow of the packages Sky offers.

What it *can* compete on is unmoderated bandwidth. Sky (and BT, who run their own VOD service in the form of Vision) have plausible business reasons for kicking file sharers off their networks - they'll do it so they can sell them the content instead. So if Virgin can just give up trying to sell their weak content package they can compete by selling unmoderated bandwidth to file sharers.

I don't see "freeing up bandwidth" as a plausible motive. Bandwidth utilisation follows the standard power laws. If they want to kick the very heaviest users off to free up bandwidth the standard trick is a "fair use" clause. They don't need to threaten most of their users to achieve that. But if they ban everyone from even moderate file-sharing the demand for anything but the smallest pipe seems likely to dry up - who's going to pay for a 10meg pipe just to check email?

So it must be fear of a court case or a change in the laws. That sucks - that a business decision to sell your customers the thing they want is made impossible by a barely-plausible legislative / litigious threat. Yet alas that seems to be where we are.