Film theft in the UK - Future of Copyright

music consumers are now buying almost twice
as many ‘singles’ in digital form over the
Internet as they are on CDs from retailers.
The success of iTunes really goes hand in hand
with the success of Apple’s iPod personal music
storage device. By leveraging the ‘sexy’
desirable brand of the iPod, on which
downloaded music can be listened to on the
move, Apple has single-handedly created an
environment in which people are prepared to
pay for downloading music simply because of
the ‘must-have’ status of the iPod technology
amongst young demographics. By 20
December 2003, 1.32 million iPod devices had
been sold since the device’s launch in 2002.
iTunes brought with it an important change in
attitude: the music industry has had to come to
terms with the fact that it will never completely
control the digital domain, but has to work
within it. Moreover, by doing nothing at the
outset, by sitting back and observing, the
opportunity to build online music services has
been lost to the gatekeepers they most feared; in
iTunes’ case, Apple, whilst Microsoft is planning
to launch its Windows equivalent of iTunes and
the iPod towards the end of 2004. The distrust
of these ventures on the part of the music
industry still lingers. Despite the demonstrable
success of the iTunes service, some record
companies are still holding back their content –
or in some cases, only distributing older titles in
the digital format (leaving new releases only
available legitimately on CD).
Other third party companies are also getting in
on the act. In a bizarre twist, Coca Cola is
throwing its lot into the marketplace. In
January 2004, the myCoke Music 72 site went
live in the UK, with the drinks manufacturer
promising a selection of over 250,000 songs
from 8,500 artists at a cost of 99p each. Like
most of the European services, the myCoke
Music offering is being operated by the ‘white
label’ 73 online music distributor and DRM
supplier OD2. The latter also provides a service
to a range of other operations, including MSN
Music Club, Virgin Downloads, Tiscali Music
Club, HMV Digital Downloads, Fnac, TDC
musik, Karstadt and MTV. According to OD2,
the number of aggregated online users in
Europe has gone from 380,000 at the end of
2002 to 450,000 at the end of 2003.
On the independent front, Warp Records has
launched its popular Bleep.com service, offering
tracks from dance music producers on paid
download. Germany's cross-industry businessto-business
platform Phonoline, another
independent venture, was due to launch in early
2004 with 250,000 tracks available.
In the US, the situation has been no different. In
January 2004, retail chain Wal-Mart began
testing a digital service and Sony announced the
launch of its Connect downloads service for April
2004, featuring 500,000 tracks. As in Europe,
the market is beginning to increasingly see
‘white label’ download stores designed for third
parties to build branded digital music services. 74
It appears that finally, after sustaining heavy
losses, some sort of sea change is taking place
in the music industry’s relationship with the
online business model. According to the IFPI 75 ,
some half a million people are already signed
up to more than 30 different legal websites in
Europe and the trade body predicts this figure
will rise sharply this year as 20 new services
launch worldwide and record companies
continue to license their catalogue for
legitimate distribution online.
As broadband penetration increases, ISPs are
also looking to content to attract and retain
customers. In Europe, T-Online, Tiscali,
Wanadoo, AOL, Spain’s Telefonica, the
Netherlands’ KPN and BT are amongst a host of
companies offering music download services.
Other innovative business models are also
appearing – such as Wippit and PlayLouder
MSP in the UK. Wippit is the world’s first
subscription-based P2P music service to secure
legitimate licences in a bid to offer its 5,000
subscribers (as at end 2003) access to music
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