British Net Firms in Music Piracy Deal

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Carlos Alvarez / Getty

Amy Winehouse

For modern music's biggest headache, a good old-fashioned remedy: British music fans sharing illegal files online can now expect a polite slap on the wrist in the form of a letter through the post from their Internet Service Provider (ISP). The warnings are part of a government-brokered agreement between the British Phonographic Industry (BPI), which represents record labels in the U.K., and the country's six leading ISPs, and aims to stymie online piracy by better educating Internet users about illegal file sharing and by promoting access to legitimate online services. The deal offers "hope of a sustainable future for music," according to U.K. Culture Secretary Andy Burnham.

Signing ISPs up to the fight against unlawful downloads marks a healthy break for Britain's record industry; ISPs have long maintained their role is to deliver the Web, not police it. But with some 6.5 million Britons pirating music online last year — a practice expected to cost the industry more than $2 billion over the next five years — the government's stated intention to protect Britain's creative industries left ISPs with little choice but to act or face new regulations.

Whether written warnings will turn users off illegal music is not clear. The BPI plans to monitor unlawful file sharing sites and pass along to ISPs the individual IP addresses of users it suspects of pirating music. Many of those receiving letters are likely to be the parents of children; just over half of music file sharers in the U.K. are under 25, according to Mark Mulligan, an analyst at JupiterResearch in London. The music industry hopes parents of young music lovers perhaps unaware they are breaking the law, will force their kids to start downloading music legally. But convincing all music scofflaws to change their ways will prove a trickier sell.

If the voluntary code sketched out Thursday fails to curb piracy sufficiently, regulation could still follow. One possibility: the government could force ISPs to install fancy filtering software that blocks illegal file sharing activity. Measures recently proposed in France take an even stricter line: as part of an agreement reached last year — and due before the country's parliament this fall — ISPs could be required to switch off offending accounts for up to a year.

That Britain's approach is less draconian — the BPI, for its part, supports the French approach — reflects the difficult market for the country's ISPs. Internet providers' margins are disappearing, and competition is fierce. ISPs' need to keep customers sweet is "why we have this compromise solution," Mulligan says.

Stricter rules, though, won't do anything to fix the industry's broader problem. "The big, missing piece of this jigsaw is a compelling alternative" to illegal sites, says Mulligan. Credit the industry, though, with getting closer. Granting cell-phone users months of free access to a catalogue of songs, for instance, Nokia will launch its Comes With Music service later this year, reimbursing artists and their labels from expected new sales of its music-compatible phones; a similar service, available through Korea's LG, comes out this summer. Offers like those won't put an end to all illegal file sharing, of course, but for those who go straight it will mean no unwanted mail.