Piracy on

the high seas

of
the Internet
 Introduction
In 2006, according to the music industry, twenty billion music files were illegally downloaded
and that for every legal download there are 20 illegal ones. Sales of sound recordings in the Irish
market fell from €146m in 2001 to €102m in 2007. Clearly, the music industry is in trouble.
People are shifting away from physical formats like CDs (vinyl still has it's hardcore fans)
towards digital formats that they can listen to on their iPods, computers, phones and MP3 players.
Unfortunately, the music industry does not want to provide the product that consumers are demanding.
They try to limit innovation in the technology industry. For example; when one of the first MP3 players
(the Diamond Rio) was launched in 1998, the RIAA (Record Industry Association of America) sued the
manufacturer.
 History/Background

Early Copyright
Copyright has been around for about 500 years in one form
or another. The printing press was invented in 1436 by Johann
Gutenberg. Authors and their patrons gave the right to certain press
houses to copy their books. The monarchs of Europe also granted
exclusive publication right to publishers for a certain amount of
time, usually 10-15 years. So really, the first copyrights were given
to publishers rather than the authors.
Laws were passed in the 18th Century (particularly in the
United Kingdom) gave the authors the rights to their work for a
period of 30 years.

International Copyright Law

16th Century printing press
Up to the end of the 19th Century, many countries had their
own copyright laws that only applied within it's own territory. This meant that an author in France
could have their work copied and sold outside of France. To solve this problem, an international
copyright treaty was proposed.
The Berne Convention states that signatories must treat the copyrights of foreign works equally
to their own. This also meant that countries had to change their laws to meet an international standard.
Most countries today have signed up to the convention

Digital Millenium Copyright Act

The DMCA is one of the most important laws in regard to copyright and the Internet. It
criminalizes the bypassing of digital restrictions that the Music and Film Associations of America place
on DVDs and digital downloads even if no actual copyright infringement is taking place. It also
protects owners of websites to avoid legal challenges if they remove copyrighted material when
requested. Websites like YouTube receive hundreds of 'takedown' notices a day because of the amount
of copyrighted material that is uploaded by users.
 Technology

DRM

Anti-DRM illustration
Digital Rights Management is a system used by the Music and Film Associations of America to
restrict the usage of digital copyrighted files. Content locked by DRM includes DVDs and (legal)
digital music downloads. For example, it is impossible to copy a DVD to your computer for backup or
to watch it later; music downloaded from the iTunes Store cannot be played on anything other than an
Apple iPod and people who use the Linux computer system cannot play DVDs on their machines at all.
All of these protections have quickly been cracked by programmers in order to use content they buy in
whatever way they please. This means that a paying consumer cannot save a DVD to their computer (or
play it at all if they use Linux) whilst a 'pirate' can download an ad-free copy from the Internet for free
and use it whichever way they want.

The protection used on the new HD-DVD discs was cracked and it was
discovered that all that was needed to decode the video files was a number,
here represented by a string of 32 characters: 09 F9 11 02 9D 74 E3 5B D8
41 56 C5 63 56 88 C0. This key was posted on many websites around the
Internet. In April-May of 2007, the companies backing the HD-DVD
format threatened to sue websites that carried this number. They said that “Free Speech Flag”
the possession of this number was illegal. One of the sites threatened with
legal action was the extremely popular user-submitted news website The HD-DVD key encoded into
Digg.com. The owners decided to pull any story that contained the number an image.
off the site and to ban those users in order to avoid a lawsuit. The users quickly discovered this and
began a backlash by only submitting the number in huge amounts, faster than the owners could pull
them off. The number was encoded into colors, printed on t-shirts, songs were made about it, poems
were written and some people went as far as getting tattoos of the number! In the end, the owners gave
up and decided to allow the number to be posted. The creator of the Digg, Kevin Rose wrote “If we
lose, then what the hell, at least we died trying.”
Peer-to-peer
Peer-to-peer (or P2P) is a decentralised way of sharing files over the Internet. It differs from
traditional websites where you are on a one-way connection downloading content from the one server.
Peer-to-peer networks mean that you are downloading content from multiple sources at the same time
and also uploading the same content to multiple sources.
 Attitudes

Consumers
Most

Music and film industries (Big Content)

RIAA
• Sues college students, grandmothers, 10-year-old girls, dead people.
• Ignores huge pirating cartels that are the real pirates.

MPAA
• Ironically infringes copyright for it's copyright infringement detection tool
• Represents US movie industry.

Music

Napster
Napster was one of the earliest well known peer-to-peer music sharing services. It was created
by college student Shawn Fanning in early 2000. He wanted to create an easy way for people to share
music and other files. By February 2001, Napster had a global membership of 26 million. It faced many
lawsuits from artists and records, most notably Metalicca and Madonna, who found their music being
shared months before release. The records accused Napster of facilitating copyright infringement and
not removing material when instructed. Napster lost the case and shut down the network in July 2001.
Not all artists saw Napster as an attack on their property. Indeed, many independent, unsigned
artists used Napster to promote their music and reach new fans. The English rock band Radiohead had
their album 'Kid A' leaked onto the network three months before its release. Radiohead had never made
it onto the top 20 US charts and this album received very little radio play. It was, however, dowloaded
millions of times on Napster and when it was released it went straight to number 1 in the US charts.
Napster is now a legal paying online music store.

OiNK
OiNK was a popular music sharing and discussion community. It was shut down on the 31st of
October 2007 by the IFPI (International Federation of Phonographic Industries) and British police. The
shutdown was surrounded by false information being fed to the media and police by the IFPI.
 Film

The Pirate Bay

The Pirate Bay is the largest BitTorrent tracker in the world. It is hosted in Sweden , where it is
legal to operate. It was set up by Piratbyrån (The Piracy Bureau, a play on the name of the Swedish
industry group Antipiratbyrån), a Swedish organisation that wishes to change current ideas about
copyright law. As I am writing this, 9 million people are sharing a million files by using the website.
Among the most popular content shared are: pre-releases of films, HD versions of films and TV-shows,
pre-release music, computer programmes and games.
On the 31st of May 2006, police raided the website's host. They seized all the electrical
equipment they could find, including: servers belonging to unrelated websites, phones and blank CDs.
The site was back up and running in three days from the Netherlands. The MPAA (Motion Picture
Association of America) issued a press release stating that they had been working closely with US and
Swedish officials to shut down The Pirate Bay. There is evidence to suggest that the US pressured Dan
Eliasson, the Swedish State Secretary, to take action against the site. Eliasson asked the state prosecutor
if they had a case against the Pirate Bay, he was told they didn't. However, fearing trade sanctions, the
minister directly ordered the police to raid the website, an act illegal under Swedish law. Public opinion
in Sweden is in support of the Pirate Bay because they dislike seeing American companies dictating to
their government what to do. Demonstrators took to the streets in Stockholm after the raid. The
documentary 'Steal This Film' covers the events surrounding the raid.

Software

The Scene
The Scene is a collection of different groups that release pirated music and software. They are
probably
A PROPOSAL FOR THE MONETIZATION OF THE FILE SHARING OF MUSIC FROM THE
SONGWRITERS AND RECORDING ARTISTS OF CANADA

Summary of proposal:

Most Canadians are aware that the Internet and mobile phone networks have become major sources of
music. What they may not know is that songwriters and performers typically receive no compensation
of any kind when their music is shared or illegally downloaded.

We believe the time has come to put in place a reasonable and unobtrusive system of compensation for
creators of music in regard to this popular and growing use of their work.

The plan we propose would not change or interfere with the way Canadians receive their music. No one
would be sued for the online sharing of songs. On the contrary, the sharing of music on Peer-to-Peer
networks and similar technologies would become perfectly legal. In addition, Music Publishers and
Record Labels would be fairly compensated for the crucial role they play in supporting Canadian music
creators.

Canada has given the world some of the greatest music ever produced. We believe that implementing a
fair way of compensating Canada’s music creators for the online sharing of their music will usher in a
new Golden Age of creativity.

DETAILS OF PROPOSAL

1. Whereas:

* An estimated 1.6 billion music files are shared online in Canada each year. 1
* The total number of purchased downloads in Canada was 38 million in 2005. 2
* The proportion between these two is 98 to 2 – 98% shared file and 2% purchased downloads.

We Therefore Believe:
Consumers have clearly demonstrated their wish to access music by file sharing.

2. Whereas:

* Virtually every song ever recorded is available through P2P file sharing 3 (more than 79 million
recordings) 4
* Only 3 million songs are available on legal sites. 5
We Therefore Believe:File sharing is both a revolution in music distribution and a very positive
phenomenon. The volunteer efforts of millions of music fans creates a much greater choice of
repertoire for consumers while allowing songs - both new and old, well known and obscure - to be
heard.

All that’s needed to fulfill this revolution in distribution is a way for Creators and rights holders to be
paid.

OUR PROPOSAL

3. We propose an amendment to the Copyright Act which would establish a new right: The Right to
Equitable Remuneration for Music File Sharing.

4. We define Music File Sharing as the sharing of a copy of a copyrighted musical work without motive
of financial gain.

Since the new right is limited to activities that take place without motive of financial gain, parties who
receive compensation for file sharing would not be covered by this right. Therefore, this new right is
distinct from rights licensed by legal music sites like iTunes and PureTracks.

5. The new right would make it legal to share music between two or more parties, whether over Peer to
Peer networks, wireless networks, email, CD, DVD, hard drives etc. Distinct from private copying, this
new right would authorize the sharing of music with other individuals.

6. In exchange for this sharing of their work, Creators and rights holders would be entitled to receive a
monthly license fee from each internet and wireless account in Canada.

7. We propose a licence fee of $5.00 per internet subscription, per month. Payment of this fee would
remove the stigma of illegality from file sharing. In addition, it would represent excellent value to the
consumer, since this fee would grant access to the majority of the world’s repertoire of music. Existing
download subscription services generally charge considerably more than $5.00 per month, while
offering a mere fraction of the file-sharing repertoire. 6

8. In addition, this would present a major financial improvement for the music industry. Since the
license fee would be paid by all internet and wireless accounts, the amount of income generated
annually could adequately compensate the industry for years of declining sales and lost revenues, and
would dramatically enhance current legal digital music income. Sales of physical product would
continue to earn substantial amounts, albeit gradually decreasing. Masters would continue to be
licensed to movies and television. Radio would continue to sell advertising and pay royalties on music.
7
We believe strongly that by giving Canadian music Creators a solid business model for the 21st
century, this endeavor would initiate a golden era for music in Canada. Ultimately, we see this model
being adopted internationally, and we are working with Creators groups around the world to effect a
global system of remuneration for the sharing of music files.

9. Existing music sites like iTunes and PureTracks would continue to be licenced directly by Creators
and rights holders and would continue to develop the attractive “value added” services and security
features that keep them distinct from file sharing activities.

10. The collective would track internet and wireless file sharing activity on a census basis. Virtually all
sharing on the internet and wireless devices would be tracked. Companies who currently do this type of
tracking have prepared themselves and are “waiting in the wings”. Creators and rights holders will be
paid with a level of speed and accuracy never before possible.

11. CANADIAN COPYRIGHT AND LEGISLATIVE ISSUES

Regarding WIPO implementation, we are not opposed to the legal protection of Technical Protection
Measures (TPM) or “digital locks”, however we believe the obvious economic benefits of the $5.00 per
month model make such protection measures obsolete. Given the consumer aversion to TPM’s, we
believe their use will inhibit the success of recordings in which they are embedded, and they will
simply fall out of use.

We support Rights Management Information (RMI) protection since RMIs will assist in the
identification of files and the attribution of rights without posing any problems for consumers.

The Songwriters and Recording Artists of Canada are in the process of consultation with the broader
music industry, as well as consumer groups and Internet Service Providers, in order to gather support
both in Canada and internationally for this proposal. We look forward to discussions with all concerned
to make this proposal a reality that will be of great benefit to all.

The Songwriters’ Association of Canada (SAC)

To see what some music creators have to say. Click here.

1 CRIA news article March 02/2006. This is not an indication of how many illegal downloads take
place every year, but only of how many files are shared. A particular file of a popular song could have
been shared many times. Therefore the number of P2P downloads per year in Canada would likely be
considerably more than 1.7 billion.
According to Big Champagne (Big Champagne tracks music use on the internet both P2P and legal) a
minimum of 12 billion P2P downloads per year happen in the US. If Canada is a tenth of that the
number, the P2P downloads per year in Canada would number 1.2 billion. This agrees roughly with
CRIA’s estimate.
2 PricewaterhouseCoopers LLB, Global Entertainment and Media Outlook 2006-2010. PWC reports
that in 2005 there were 33 million singles and 200 thousand albums downloaded. If albums average 14
songs each, then albums downloaded would represent roughly 2.8 million downloads of songs. The
total song downloads would therefore be 35.8 million. In addition there were an unspecified amount of
paid downloads by 10 thousand subscribers. The following could be a proxy for calculating the number
of subscriber downloads.

According to a Pollara survey published in February 2006 approximately 7.5 million Canadians
Download music from the internet. ( 33 million [population Canada] X 63% [percentage of Canadians
with access to a PC] X 36% [the percentage who’ve downloaded music] = 7.5 million people). If as
CRIA states, 1.6 billion downloads take place each year, then each of those 7.5 million downloaders
downloaded on average 213 songs. If one assumes that a subscriber to a download service would act
similarly, then one could estimate that the number of downloads by subscribers was 10 thousand X 213
which would equal 2.13 million. That would bring the total number of legal downloads to
approximately 38 million. And that is how this figure of 38 million was derived.
3 "Virtually every title that has ever been popular with any audience, no matter how small, is available
at one time or another on P2P networks…the variety of titles is limited only by the imaginations of
every one of the tens of millions of P2P users." Eric Garland – Big Champagne in MacNewsWorld
article June 16, 2004.

4 This figure is from a company called Gracenote. “Gracenote provides critical embedded software
and metadata to businesses that enable their consumers to better manage, enjoy and discover digital
media” Gracenote has created metadata for over 79 million distinct recordings.

Also, “The GDDN (the Global Documentation and Distribution Network) now provides access to more
than 28 million works to the FastTrack Shareholders. It incorporates international standards such as the
ISWC (International Standard musical Works Code) identifier.” Quote from the website of FastTrack
the digital copyright network. www.fasttrackdcn.net/index.php?page=what-we-do

The FastTrack network contains little outside of the Anglo-American and European repertoire of music.
So in addition to the 28 million works the network has on it’s database, (many of which have several
different recordings by different artists) there are the vast repertoires of China, India, Japan, the middle
east, aboriginal music of numerous countries etc.

5 There are now more than 360 legal digital music services offering over three million songs to
consumers in over 40 countries. IFPI (international Federation of Phonograph Industries) Press
Release. July 31/2006.
6 The major subscription download services generally charge in the $12 to $15 per month area and
have limited repertoire, the largest being about 2 million songs. Music downloads reviews:
www.consumersearch.com/www/internet/music-downloads/index.html

7 The PricewaterhouseCoopers LLB, Global Entertainment and Media Outlook 2006-2010 report
projects a physical music sales market of $644 million in Canada in 2010. Their hard data for 2005 has
the physical music total at 743. Though this does indicate a decline over the five years, when the file
sharing income is added in, overall earnings will have increased substantially.

Eircom taken to court over illegal music downloads

Irish Times

Four major record companies have brought a High Court action aimed at compelling Eircom to take
measures to prevent its networks being used for the illegal downloading of music.
The case is the first in Ireland aimed at internet service providers, rather than individual illegal
downloaders.

Eircom is the largest broadband internet service provider in the State.

Latest figures available, for 2006, indicate that 20 billion music files were illegally downloaded
worldwide that year. The music industry estimates that for every single legal downloaded, there are 20
illegal ones.

Due to illegal downloading and other factors, the Irish music industry is experiencing "a dramatic and
accelerating decline" in income, with the Irish market suffering a decline in total sales from €146
million in 2001 to €102 million last year, said Willie Kavanagh, managing director of EMI records
(Ireland) and chairman of the Irish Recorded Music Association (IRMA).

Mr Kavanagh told the High Court he would attribute a substantial portion of that decline to illegal peer-
to-peer downloading services and the increasing availability of broadband internet access.

The record companies are also challenging Eircom's refusal to use filtering technology or other
measures to voluntary block, or filter, material from its network that is being used to download music
in violation of the companies' copyright and/or licensing rights.

Eircom's lawyers said the company was not on notice of specific illegal activity that infringed the rights
of the companies and had no legal obligation to monitor traffic on its network.

Mr Kavanagh said that, "with the greatest of respect" to Eircom, it was "well aware" its facilities were
being used to violate the property rights of record companies "on a grand scale".

Mr Justice Peter Kelly today admitted the proceedings - brought by EMI Records (Ireland), Sony BMG
Music Entertainment (Ireland), Universal Music (Ireland) and Warner Music (Ireland) against Eircom -
into the list of the Commercial Court.

In the action, the companies want orders - under the Copyright and Related Rights Acts 2000 -
restraining Eircom from infringing copyright in the sound recordings owned by, or exclusively licensed
to them, by making available (through Eircom's internet service facilities) copies of those recordings to
the public without the companies' consent.