BPI to sue 'major filesharers' : 7:10:2004

British record companies trade association the BPI (British Phonographic Industry) has announced it is to begin a rolling programme of legal action against ‘major filesharers’ who illegally make copyright music available to millions of people across the world on peer-to-peer networks.

Today the BPI is beginning the process of legal action against 28 UK filesharers. More cases are expected to follow. The BPI will seek damages and injunctions to stop these filesharers illegally uploading recordings on to filesharing networks.

The large-scale uploaders subject to legal action include users of the KaZaA, Imesh, Grokster, Bearshare and WinMX networks.

Breakthrough for legal music

The announcement comes against the background of a breakthrough year for legal online music services in the UK, with the launch of high-profile services like Mycokemusic, iTunes and Napster and the launch on September 1 of an Official UK Download Chart.

BPI chairman Peter Jamieson says, “We have been warning for months that unauthorized file-sharing is illegal. These are not people casually downloading the odd track. They are uploading music on a massive scale, effectively stealing the livelihoods of thousands of artists and the people who invest in them.”

After months of attempting to raise awareness about the dangers of unauthorized file-sharing, the BPI issued a final warning in March 2004, saying if the problem did not improve legal action would follow.

Since then it has sent out over 350,000 instant messages to uploaders’ computers warning them of the consequences if they continue.

“We have resisted legal action as long as we could,” says Jamieson. “We have done everything we can to raise awareness of this problem.  We have encouraged legal services and launched an Official Download Chart.

“But we would be derelict in our duty to protect and promote British music were we not to take action to demonstrate that this activity is illegal and harmful to every aspect of the creative British music industry. We believe we have no alternative other than to enforce our rights through the courts.”

The announcement of the first actions in the UK forms part of an announcement from international record companies’ trade body the IFPI of a total of 459 new legal actions against illegal filesharers across six European countries.

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View the speakers' presentations here:

Peter Jamieson, BPI

Jason Berman, IFPI

Geoff Taylor, BPI

For further information on filesharing, visit the Illegal Filesharing page in the anti-piracy section of our website.

A full transcript of Peter Jamieson’s speech is available here.

Industry says no to illegal filesharing

"I find it extraordinary, given the fact that 60% of musicians in the UK earn less than £10,000 per year and 94% of songwriters, composers receive less than £10,000 per year in royalty payments that we are prepared to ask musicians and songwriters, to turn up to work everyday and not get paid for it.  Especially since all that many of those musicians and songwriters are trying to do, is to make the world the rest of us live in, a much more valuable, much brighter place."

Feargal Sharkey

“I hate what’s happening with illegal downloading. People who love music shouldn’t do this. The music industry provides huge choice. By stealing music you deny other people that choice in the future. Some may say it does not affect new and eclectic music. The fact is that it is precisely this kind of music which gets displaced. For small businesses it’s particularly tough. Most of us came into this business not to get rich but because we love music. No one who loves music would steal it.” 

Paul Birch, Managing Director, Revolver Records

"Piracy is theft - pure and simple. Whether it's Jamelia or a jobbing musician, the artist suffers. We owe it to them to make sure they get a fair return for their creativity, flair and inspiration.  "The Government supports the principle of proportionate legal action against the worst offending uploaders. I hope it will stop in their tracks the habitual offender who uploads to make a quick buck out of other people's talent."

UK Arts Minister, Estelle Morris

 “We know that there are millions of illegal files circulating on the Internet at any given time.  In the European Parliament we have dealt with this by passing effective laws to legislate for the Internet age.  There is no upside to illegal uploading – it undermines jobs and creativity.  The law is there to be respected and enforced.”

Arlene McCarthy, UK MEP

"The serial uploaders who post thousands of music files free of charge onto the Internet are stealing this product in exactly the same way as a shoplifter in a Music store. Theft on this scale cannot be allowed to continue unchecked."

Steve Knott, Managing Director, HMV Europe, and Chairman, British Association of Record Dealers

"Alongside other record companies we have put a huge investment into making music available for legal downloading in a way which is convenient, easy and above all safe. Not only is there no excuse for unauthorised file-sharing, it simply doesn't make any sense any more."

David Steele, Managing Director V2 Records UK

"The internet has changed all our lives. It is revolutionising the way music is consumed. What it doesn't change are the fundamentals of the concept of intellectual property. Unauthorised filesharing is against the law. After several years of seeing it eat into our livelihoods, we reluctantly and finally have to resort to the law to protect our business."

Tony Wadsworth, Chairman & CEO, EMI Recorded Music UK & Ireland

“Once upon a time there was a shortage of fully working legal download sites. Now that’s gone. There are enough outlets for people to buy their music online and I mean buy their music online. I am always amazed the people who profess to love music are prepared to pay their council tax to politicians they don’t like, their bank charges to bankers they despise, but choose to rip-off and steal from the musicians who are supposedly the great influences in their lives.”

Tony Wilson, founder of Factory Records and the In The City music convention

"Illegal filesharing has been a tremendous threat to our creative community and our industry overall.  We feel we now have no choice but to resort to taking legal action to the worst offenders."

Nick Phillips Warner Music UK

“There is a worrying lack of understanding of the value and meaning and intellectual property. We need to move very swiftly from a climate of ignorance to one in which people understand that illegal uploading is fundamentally no different from shoplifting.”

Jeremy Lascelles, Chief Executive, Chrysalis Music

“Illegal uploading and downloading is theft.  Independents lead in music. We must also lead the way in fighting copyright theft on the internet”

John Craig, Managing Director, First Night Records

“GERA-Europe remains supportive of litigation in the case of large scale uploading.  It hopes that this second wave of litigation will continue to serve as a tool to educate music users and to render the legitimate sale of music online more viable and contribute to the revival of music sales through traditional channels.  The latest move by the recording industry to stamp out what is essentially theft of copyright material is considered positive provided that the move continues to be accompanied by consumer education and other methods to promote the legitimate sale of music.”

Simon Wright, CEO Virgin Entertainment, President GERA 

“We are pleased that Coca-Cola Great Britain, alongside other legal download sites, are able to support the UK music industry in its efforts to prevent illegal downloading. Mycokemusic.com was the first major legal branded download site which launched in January 2004 and provided consumers with a simple to use site from a brand they trusted.”

Rafael McDonnell, Head of Strategic Marketing Alliances, Coca-Cola

"Record companies are the biggest investors in new music in the UK.  In return for their investment copyright law gives them the right to authorise what happens to that music. People who take music without that permission are damaging future investment in music."

Martin Mills, Chairman, Beggars Group

"It's crucial people fully understand the dangers of sharing music illegally. MSN fully supports the IFPI's campaign to raise awareness of these dangers, and of the benefits of legal digital music services like our own MSN Music. Legal music sites, with high levels of security and rigorous digital rights management, are the best solution for both parties - artists and the music industry have their intellectual properties fully protected while consumers can enjoy all their favourite music, free from the dangers of illegal downloads, like viruses, and safe in the knowledge that they are not committing a crime."

Geoff Sutton, Regional General Manager, MSN Europe

“I firmly believe that over time, physical formats for delivering music will be replaced by digital delivery of music.  There will be a number of new business models to go alongside the current a la carte download, subscription and streaming businesses of today.  All of these businesses must generate revenue as well as offer a great value proposition for consumers, in order for the industry to maintain its health and so consumers can continue receiving songs from the wide range of artists creating music around the world.  I am against businesses or individuals that monetize file sharing without compensating rights holders, and I fully support any system that helps create the new digital business models.”

Scott Cohen. Founder and Vice President, International, The Orchard

Comment is also available from:

John Whittingdale MP (Con) Con Shadow Secretary of State for Culture, Media & Sport can be contacted on pager No: 07626801686

Kevin  Brennan MP (Lab), Member of MP4 - can be contacted on:  02920 223207

Frequently Asked Questions

WHAT IS FILESHARING?

Filesharing is the activity of making music files available to other users to download over the internet. It usually follows the peer-to-peer (known as p2p) model, in which files are uploaded and downloaded using the personal computers of the users.

Although the technology itself could offer lots of potential for the development of legal services, the vast majority of songs currently available on file-sharing networks are copyrighted works that are being distributed illegally.

Users download software from the internet to gain access to a filesharing network. The best-known unauthorized filesharing network is KaZaA, but others include Bearshare, WinMX, iMesh and BitTorrent. When the software is in use, and the user’s connection to the internet is open, the filesharer can trade music files (by uploading or downloading) with others who are online.

This phenomenon effectively creates an enormous illegal library of stolen music.

IS ALL FILESHARING ILLEGAL?

Any file-sharing of copyrighted music without the permission of the copyright holder is illegal.  In effect, this means the vast majority of all the songs that are available on peer-to-peer networks today. 

This is absolutely clear in UK copyright law, as it is in virtually every other country as well.

And it is illegal for good reason.  Record companies invest money in new artists, and recoup that by having the exclusive right to authorise copying and distribution of their recordings. The Copyright, Designs & Patents Act 1988 protects these rights, and people who distribute copyrighted recordings without permission are breaking the law by infringing those rights.

More specifically unauthorised file-sharing runs counter to:

> Section 16, which reserves to a copyright owner exclusive rights to copy and to communicate their works to the public;

> Section 20, which says communication to the public includes ‘the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them”.

WHO WILL FACE LEGAL ACTION?

The more files that are uploaded to the internet – the easier it is for others to steal and the greater the damage to the music industry.

This act of distribution, or uploading, is illegal. The 15% minority that upload 75% of the illegal files are what we call ‘major uploaders’.

It is our aim to both remove the infringing files through litigation, and set down a marker to other major uploaders as a deterrent.

The 28 UK citizens who face legal action include some with thousands of files they are offering to others to download.

HOW DOES ILLEGAL FILESHARING DAMAGE MUSIC SALES?

Research from a range of respected research organisations such as TNS, Jupiter, Forrester, Enders Analysis, Edison, NPD and Informa all demonstrate that illegal filesharing has a negative effect on music sales.

For example, the TNS report (March 2004) indicated that year-on-year music downloaders spent 32% less on albums and 59% less on singles.

Research from Forrester suggests that while 10% of downloaders buy more music having sampled it via unauthorised filesharing, 36% buy less. The people who buy more buy a little more; the people who buy less, buy a lot less.

Simply put, any promotional or positive effect of sampling is massively outweighed by the huge numbers of filesharers who have stopped buying music.

WHAT ABOUT STUDIES THAT HAVE FOUND TO THE CONTRARY?

Very few studies suggest that unauthorised filesharing sells more music or has a minimal effect. The best-known, the Oberholzer & Strumph report, also known as the “Harvard Study”, concluded that filesharing’s effect on music sales is “statistically indistinguishable from zero”.

This often-quoted study is contradicted by virtually all other research. It was subsequently heavily criticised in an academic study (known as a peer review) by the Marshall Business School, which stated that its use of data was “highly suspect”, that its methodology was highly questionable, that its conclusions were the “most problematic of all” and that “at best, the study could say that it does not know if download piracy and sales are related”.

The “Harvard Study” has been seized on by apologists for unauthorised downloading. Otherwise it has been comprehensively dismissed.

WHAT DO YOU HOPE TO ACHIEVE THROUGH LITIGATION?

Our main objective is to discourage illegal uploading.

With litigation elsewhere in the world we have seen the number of music files accessible using the most popular network, Kazaa, fall by 40% since the beginning of 2004.

In June 2004 an estimated 700 million music files were illegally available on filesharing networks, a decline from a 1 billion high in June 2003.  The number of users has declined 40% from its peak in April 2003 and 20% this year alone.

We are confident that our rolling programme of litigation in the UK will achieve similar results.

WHERE DO PEOPLE FIND LEGAL MUSIC TO DOWNLOAD?

The good news is that the UK is fast emerging as a leader in digital music.

There are already at least 30 legal online music services in the UK from MyCokeMusic, to Napster, iTunes and Download@Woolworths. Around 160,000 single downloads are being sold in the UK each week, but add in ‘bundles’ and complete albums and the weekly total is nearer 300,000. Over 1m different tracks are available to download legally in the UK, and often tracks are released for download before they appear on CD.  Plus, the UK’s Official Download Chart launched in September.

Legal downloading has clearly entered the public consciousness remarkably quickly

The result is that the internet can now provide access to the equivalent of a megastore of music choices via every computer in the land.

Quick facts

< On illegal filesharing >

> An estimated 15% minority of individuals are responsible for 75% of the music files illegally uploaded to the internet.

> More than 6,000 lawsuits against illegal filesharers have been launched worldwide.

> The industry’s long-running education campaign about illegal filesharing has successfully raised awareness. Seven out ten UK consumers are now aware that unauthorised uploading is illegal (IFPI, June 2004).

> Litigation elsewhere in the world has successfully deterred major uploaders. The number of files illegally available on file-sharing networks has declined by 30%; from 1 billion in June 2003 to 700 million in June 2004. Meanwhile, the number of Fast Track users (the most popular p2p network - accessed using Kazaa) fell by 40% - from June 2003 to September 2004 (IFPI).

> It damages sales. After one year a TNS sample of music downloaders bought 32% less albums and 59% less singles.

> This trend is reflected in sales figures. When Napster, in its previous incarnation as an illegal filesharing network, launched in 1999, 80.1 million singles were sold in the UK. This market has more than halved, with 36.4 million sold in 2003.

< UK music fans want to download legally >

> At the beginning of the year, weekly download sales were around the 15,000 mark. Today, together with permanent downloads and album bundles, over 300,000 are being sold.

> After launching in January, MyCokeMusic sold more than 100,000 downloads in its first three months, while iTunes reported 450,000 first week sales after its launch in June.

> There are now more than 30 high-profile legal services in the UK.

> Even more high profile service launches are due to arrive – with UK launches of Real’s Rhapsody, Virgin Download and Microsoft’s MSN Music service expected to arrive. Countless artist and label sites offer downloads as well as numerous internet radio services.

> There are over 1 million different tracks available to download legally in the UK today. This figure has more than doubled in less than a year.

> More than 2 ¼ million single tracks have been downloaded legally to date in the UK.

> On average, 40,000 different individual titles are downloaded each week in the UK, this compares with 7,000 at the beginning of the year.

> The first Official UK Download Chart was launched on September 1 with a weekly chart rundown at 6pm on Scott Mills’ Radio One Show. Westlife claimed the top spot with Flying Without Wings (Live)