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  • Intellectual Property, News - Written by on Thursday, June 7, 2012 11:34 - 120 Comments

    Secret anti-piracy talks pointless, says iiNet

    news National broadband provider iiNet has fired a full barrage of vitriol at the content industry on the morning on which closed door talks held by the Government on the issue are due to re-commence, arguing in a highly public blog post that discussing a path forward with content industry groups was like “talking to a brick wall”.

    In Sydney this morning, major Australian ISPs will sit down with consumer groups, the representatives of the film, television and music industries and the Federal Attorney-General’s Department, with the aim of discussing behind closed doors a potential industry resolution to the issue of online copyright infringement. The meeting is just the latest in a series of such meetings to be held, after a series of other meetings were held late last year and early this year under similar circumstances.

    However, in a fiery blog post published ahead of the talks this morning, iiNet regulatory chief Steve Dalby was highly critical of the content industry, including the Australian Federation Against Copyright Theft (AFACT), which iiNet has recently won a high-profile High Court victory against in the area. AFACT has been invited to respond to the blog post through its public relations agency.

    “It’s quite clear that finding a new business model for sharing content is a key issue facing the entertainment industry, particularly in light of iiTrial. Copyright legislation needs to change to serve the changing needs of both the rights holders and the expectations of online consumers,” wrote Dalby. “Try telling that to an organisation like the Australian Federation Against Copyright Theft (AFACT) – you might as well be talking to a brick wall.”

    Dalby accused the US entertainment industry of “ignoring” consumer demand for the ability to access content in their preferred content, at a time that was convenient, for “so many years now” that multiple alternatives had been designed, built, adopted and thoroughly commoditised, becoming mainstream in the process.

    “The upcoming Attorney General’s Department forum to discuss online copyright issues will involve rights holders, ISPs, government and consumer representatives,” the iiNet executive wrote. “I don’t need a crystal ball to tell you that the likely conclusion will be negligible change; as has been the situation since the 2005 Australia – US free trade agreement was signed. Little, if anything at all, is to be gained by engaging with rights holders for a commercial solution.”

    The re-commencement of the talks comes as a recent study has found Australia to be the nation which most pirates the popular HBO television series Game of Thrones, with time delays and cable TV lock-in being the primary culprits believed to be behind the nation’s copyright infringing habits.

    “AFACT says that ‘Nothing can compete with free’, but we all know how effective iTunes has been in this space as a viable, paid-for model,” said Dalby. “A late run in the US has seen the likes of Netflix and Hulu also offer paid alternatives to pirated content, but not here.”

    “AFACT and other rights holder bodies don’t care much for consumers. As you may have read, Neil Gane of AFACT thinks consumers are “unreasonable” to tell their suppliers of entertainment what they want. Actually, AFACT don’t have any customers in Australia, they are all in California, which unfortunately means that consumer pressure is unlikely to have much impact on their strategies. iiNet have suggested that they focus on what the market is demanding, but it’s a waste of breath. Their masters have set the agenda and rights holders will only do their bidding.”

    Dalby’s comments also come six months after Australia’s ISP industry proposed the latest in a series of schemes it has put up to handle Internet piracy. The initiative would see Australians issued with warning and educational notices after content holders provided evidence that they had breached their copyright online — and the door opened for ISPs to hand over user details to the content industry if they keep on pirating content online. At the time, AFACT signalled it wasn’t interested in discussing the proposal.

    “Gane has made repeated calls for legislative change over time and that’s where AFACT’s future efforts will focus on, not taking into account consumer demands,” said Dalby. “The attorney general’s departmental forum is not designed to contribute to such legislative change and so I’m not expecting the process to generate any satisfaction for consumers or distributors.”

    “Australia will not get anything useful from the rights holders in 2012 and in that respect, very little has changed since 2005. We did get clear and total rejections of all proposals put to them by the Telco industry to limit infringements, but due to the events of the past seven years, those offers are no longer on the table.”

    “A solution needs to be found but as far as AFACT goes, you might as well be talking to a brick wall.”

    opinion/analysis
    It’s hard to disagree with Dalby’s comments here. The content industry, which has made various moves in the US to make its content available to US residents, has proven remarkably intractable about doing the same in Australia, which has unquestionably led to increased levels of piracy in this country. As Dalby points out, it’s a simple equation; if a product is not available in the way that Australians want to buy it, they will get that product anyway through other means. This ‘black market’ for products has been going on since humanity began, and it’s not about to be halted now in the age of the Internet.

    For my own part, I have usually found AFACT itself fairly reasonable to talk to; they’re nice people in general, and they understand the issues at play. They’re not the evil fearmongers that many people believe them to be.

    However, I think the involvement of groups like AFACT in talks to find an industry solution to Internet piracy is by definition, fairly pointless. The organisation is, after all, named ‘the Australian Federation Against Copyright Theft’. This very title contains a false implication; that Australian consumers are involved in stealing products from AFACT’s membership. The truth is very different; copyright, after all, can’t be stolen. What Australians want most right now is for someone to negotiate with the rights holders for acceptable terms under which we can licence their content. This is a negotiation over licensing terms, not a matter of criminality. But AFACT’s very nature would seem to prohibit this as a basis for discussion.

    Dalby makes a very good point in his article. The bottled water industry does a very good job of competing with existing free alternatives. The content industry has a much more potent product than water. So why is it attempting legal action against those who want to buy its products, rather than re-packaging them in a format which Australians want to buy?

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    1. Brendan.
      Posted 07/06/2012 at 11:50 am | Permalink |

      AFACT might be staffed by “nice people” but they are still the self-regulated arbiters of rights management and justice.

      And they, like every other rights management group before them, have continued to be entirely intractable over rights use. To the point of attempting to have legislation changed; not to improve the overall application and clarity of use, not to make copyright and IP a better system for all (including distributors) but almost exclusively to ensure the continuation of outdated business models.

      Bottled water vendors do not treat the consumer as an enemy, they can’t afford to. I think, over time, rights holders will learn the same thing.

      • feuilly
        Posted 08/06/2012 at 3:41 pm | Permalink |

        i believe your right but I also believe it will get worse before it gets better

    2. Withnail
      Posted 07/06/2012 at 11:58 am | Permalink |

      the fact of the matter is, that without some sort of graduated response regime to deal with piracy, Australia is now out of the step with most of the rest of the civilised world.

      I’d agree with Dalby when he says “Little, if anything at all, is to be gained by engaging with rights holders for a commercial solution” – it’s now time for the government to legislate a quid pro quo: 1) rightsholders will get some form of graduated response system; if 2) they guarantee to bring x number of legit online content services to the market.

      • Adam
        Posted 07/06/2012 at 1:07 pm | Permalink |

        It’s utterly naive to think that will solve the problem. Consumers will find ways to consume timely content until they have a legitimate way to do so.

        Should you be disclosing something?

      • Adam
        Posted 07/06/2012 at 1:09 pm | Permalink |

        Sorry, disregard the last line, I misread the end of your post.

        • Withnail
          Posted 07/06/2012 at 1:48 pm | Permalink |

          indeed you did. The problem will never be ‘solved’ – ie.; there will always be some level of piracy. The real question is whether current levels of piracy (noting that pirate content makes up over 50% of all internet traffic) are beyond those natural, sustainable levels.

          I think they probably are and that this proposition (some sort of graduated repsonse regime AND a requirement that rightsholders bring legitimate services to the online market place) probably represents the best compromise so far.

      • Joakal
        Posted 07/06/2012 at 1:21 pm | Permalink |

        “1) rightsholders will get some form of graduated response system; if 2) they guarantee to bring x number of legit online content services to the market.”

        Utterly unacceptable. Why the fuck should companies get the power to censor and disadvantage those with Internet Access? Internet Access is vital to so many people, that restricting it will oppress those who vote, eat, feel warmth, pay bills, etc: https://auinternetaccess.wordpress.com/summary/

        They’re spoilt children who do not like their middleman distributor business model becoming more obsolete, empowering creators and consumers.

        • Joakal
          Posted 07/06/2012 at 1:26 pm | Permalink |

          I want to point out that they want to remove Internet. They do not wish for them to go to jail. Why? Because they hope these people will go into stores and pay the Australia Tax to get the content instead.

          They have ulterior motives, all point to being anti-Internet plutocrats.

        • Withnail
          Posted 07/06/2012 at 1:33 pm | Permalink |

          and why do consumers have a right to rip off the propeorty of others in a consequence free environment?

          But before you get yourself in a lather. not all graudated repsonse schemese need culminate in access termination – fines, suspensions, community work, are all possible penalties.

          But you’ve got to wonder, if someone is stupid/selfish/ignorant enough, after three warnings, to continue to misapporpiate (in a way that can be detected) the property of others …….

      • Stephen
        Posted 08/06/2012 at 11:27 am | Permalink |

        “…without some sort of graduated response regime to deal with piracy, Australia is now out of the step with most of the rest of the civilised world.”

        Your point being that Australia’s more sensible than the rest of the civilised world? There is absolutely no reason for some of the measures that exist in other jurisdictions. “Three strikes” rules? Fantastic – but based on unproven allegations. “Access to see what the user is doing”? Gross violation of the right to privacy – police would require a court order for the same access, and would need to identify what crime they’re investigating. This is an ad hoc system with very little control.

        Bear in mind these rights holders are not content creators. They’re the remora in the middle – cleaning up as much as they can get away with but in fact doing very little to help the content creators. Artists who have chosen to approach the market directly tend to make more money more easily than going through these leeches.

        I’m fine with buying content, and in fact buy all of my content. What I’m not fine with is giving this industry unprecedented rights that over-rule my rights as a person. Why? Because they demand them. Because the industry says it’s losing money from piracy.

        Is it really piracy that’s hurting so much? No – regardless of industry claims, people who pirate something will not normally have bought it. People who “pirate” Game of Thrones are simply accessing a TV program via an unauthorised method – if it was on Australian TV they’d watch it there.

        Any argument that starts with “The government needs to protect this industry…” must be looked at very seriously. We need to ask who is getting protected, and why. We also need to ask what the industry can do for itself without government intervention, and the content industry is not answering that question. That is where all of its arguments fail – it needs to face the new environment, and make money out of it. There is a lot to be made, but only from fixing outdated business models.

        Just ask indie artists who would have made nothing from their work 20 years ago.

    3. Goku Missile Crisis
      Posted 07/06/2012 at 12:07 pm | Permalink |

      I’ve said it before and I’ll say it again – the biggest obstacle to modernisation of content delivery in this country is Foxtel. The rights holders are too attached to their outdated business models to let go unless they are forced to. In Australia that model is the drip-feed release of content through various providers, with lucrative revenues at each stage. For US TV shows, that means Foxtel is the major bottleneck in the system.

      Of course there are cable companies in the US who serve a similar function, but notice the plural there. In Australia there is no competition and so there is practically no motivation for Foxtel to support a local version of something like Hulu. As long as Foxtel’s business is healthy, they will continue to pay premiums for first-run US content, and Hollywood will do everything in its power to resist change.

      Never underestimate the power of big-money contracts with established corporate partners to trump the interests of mere consumers. Foxtel offering up a guaranteed wad of cash for Game of Thrones beats countless Aussie consumers screaming for a way to individually pay modest sums for access…

      • Posted 07/06/2012 at 1:11 pm | Permalink |

        +1 Goku. Couldn’t have said it better myself. Foxtel and Telstra in this country OWN the content arena. And they make VERY healthy profits on it. Why would they want to change, when they can just run to the government and ask for protection from “horrible greedy pirates” who only want legitimate access to content faster and easier….

    4. Posted 07/06/2012 at 12:10 pm | Permalink |

      The content providers, in my mind, seem to be trying to set a precedent in Australia to cover their perceived “content stealing” problems by legislative change. It puts an unfair amount of responsibility on ISP’s AND blows far out of proportion the nature of the crime. $1.5 Million for sharing 24 songs??? That’s ridiculous. She didn’t rob a bank, she shared some songs!

      They tried changing legislature in the US and it hasn’t worked. So they’re trying here. If they can manage it somewhere, the precedent is set for the rest of the world.

      I sincerely hope our Government holds its’ ground over this. It is petty, childish and greedy. ALL they would have to do is allow solutions like Netflix and Hulu and the problem would DRAMATICALLY decrease.

      Instead, we’re stuck dealing with companies, through organisations like AFACT, that have only 1 thing on their agenda- how to make the most money regardless of the consumer demand.

    5. muso1
      Posted 07/06/2012 at 12:16 pm | Permalink |

      Oh my… where to start.
      At the beginning of this article Renai talks about ‘the content industries’, but the rest of the article focusses ONLY on AFACT. Steve Dalby’s ire is solely focussed on AFACT, at least in his quotes in this article and on his posts at Delimiter yesterday.
      Is this because the other content representatives are not present? Or they have less controversial views on piracy?
      It’s not clear which.
      Second, the bottled water thing is painful to read, especially coming from apparently experienced business people.
      The basic law of the market (globally) is you cannot survive as a business, while the market is flooded with under priced (under cost) or free products of the same nature. This is how supermarkets and big box stores eliminate competition. They offer the same product under cost and kill their rivals. Music and movies are offered free (illegally) on the internet, and it’s no surprise the consumer consumes the free goods, especially as there are no negative consequences. The consumer isn’t the enemy of content creators, but web based business is making A LOT of money off of unauthorized filesharing.
      I have business experience in music software. Music software is heavily shared without payment via pirate and filesharing sites. The vast majority of music software companies are privately owned by young tech savvy entrepreneurs. In other words they aren’t old, money hungry dinosaurs, as the entertainment industry is often portrayed.
      The music software industry has come to the party on consumer demands.
      !) Music software is a very competitive market and as such music software is often as cheap as it can be sold while remaining sustainable.
      2) Music software is available 24/7/365 for immediate download.
      3) Many music software products are available for instant, free demo in your home.
      4) Music software companies have active user forums, and have clearly evolved and improved products based directly on user feedback.
      Music software companies have connected with the customer, improved products year on year, and cut costs. And yet music software is a major target for pirates.
      Why? I have to conclude because many people would rather access music software for $0, than pay $30, or $200 (at the upper end).
      I don’t blame iiNet for any of this, but I’m sorry they continue to talk about content creators in such a dismissive and negative way. And as companies like iiNet are going to be relying on quality content for years to come, it would serve them best to protect and nurture the content creators, rather than standing on the sidelines as they are exploited in the online arena.

      • Joakal
        Posted 07/06/2012 at 1:35 pm | Permalink |

        “The basic law of the market (globally) is you cannot survive as a business, while the market is flooded with under priced (under cost) or free products of the same nature.”

        Actually, we’re talking about intangible products. So virtually, the cost of it is zero. Using free market won’t help your view, sorry. The reason is because artificial scarcity is introduced from the government-granted temporary monopoly and other reasons: http://www.cracked.com/article_18817_5-reasons-future-will-be-ruled-by-b.s..html

        “The consumer isn’t the enemy of content creators, but web based business is making A LOT of money off of unauthorized filesharing.”

        Then why not support the Pirate Party? They’re against commercial copyright infringement.

        “I have business experience in music software. Music software is heavily shared without payment via pirate and filesharing sites. The vast majority of music software companies are privately owned by young tech savvy entrepreneurs. In other words they aren’t old, money hungry dinosaurs, as the entertainment industry is often portrayed.”

        What is music software? You mean music production software? I’m not sure what it is.

        “I don’t blame iiNet for any of this, but I’m sorry they continue to talk about content creators in such a dismissive and negative way. And as companies like iiNet are going to be relying on quality content for years to come, it would serve them best to protect and nurture the content creators, rather than standing on the sidelines as they are exploited in the online arena.”

        Why are you entitled to restricting and invading privacy of Internet Access at the expense of everyone else in the world? It’s not fair, it’s also unjust.

      • Muso2
        Posted 08/06/2012 at 1:51 am | Permalink |

        “I have to conclude because many people would rather access music software for $0, than pay $30, or $200 (at the upper end).”

        I’m not sure where you got that figure…the total amount for the software I use comes to over $1000. Generally out of the reach of most amateur musicians. Not to mention my outboard costs (we’re talking over $5000 I’d say). It’s taken a while to accumulate professional gear to get professional results. If kids want to screw around with pirated copies, let ‘em I say!

        Studios and professional musicians will benefit from tech support, while teens can cut their teeth on stuff they couldn’t afford anyway. No one loses, except maybe an amateur can cross the line into the pro realm (you know, like pirate radio DJs did in the 1990s?) and end up buying a proper license.

        • Muso1
          Posted 08/06/2012 at 8:05 am | Permalink |

          All you need is free or low cost.
          Professional quality Reaper is $60.
          You don’t NEED $1000 of music software, you WANTED $1000 of music software.
          I got my figures correct because I work with music software producers.

      • Bruce
        Posted 09/06/2012 at 12:15 am | Permalink |

        “The basic law of the market (globally) is you cannot survive as a business, while the market is flooded with under priced (under cost) or free products of the same nature.”

        Have to disagree with this one: branding, segmentation and differentiation are core tools of the market. That is why so many people wait for an S3 or an iPhone5 when a Lumia would do much the same job. The content industry could offer speedy downloads, peace of mind, various quality settings and by working with ISP’s to make content unmetered, possible cost savings or cost equivalence – win win win.

        The content industry are not interested in such a solution because the long term game is control of all new content – indie or their own. They just have to find a country stupid enough to sell out their creative future and they have a perpetual business model for little additional effort. Given Australia’s recent bipartisan support for international data sharing despite senate concerns, the governments love of things like filtering and OzLog and the fact that DFAT likes ACTA and TPP – Australia just might be that country. Lets hope big content overplay their hand.

        • Posted 09/06/2012 at 2:41 am | Permalink |

          ^This.

          Exactly. It’s all about control.

        • Posted 09/06/2012 at 9:10 am | Permalink |

          “The content industry could offer speedy downloads, peace of mind, various quality settings and by working with ISP’s to make content unmetered, possible cost savings or cost equivalence – win win win.”

          Nooooo.
          That’s exactly why I gave the example of the music software industry.
          The music software companies are small, independent and run by young, tech savvy entrepreneurs.
          They’ve done what you’ve asked, their products are still heavily pirated.
          A product has a development cost. Companies have to abide by competition laws, employees rights etc.
          You can’t compete with the identical product offered free of charge by entities that are outside the law, and don’t have to abide by any company regulation, or employee welfare (pensions, sick pay, maternity leave etc).
          What the pirate sites are doing is EXACTLY what is detailed in every business education document I’ve ever read:
          “In business and economics, predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. If competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. The predatory merchant then has fewer competitors or is even a de facto monopoly, and hypothetically could then raise prices above what the market would otherwise bear.
          http://en.wikipedia.org/wiki/Predatory_pricing

    6. Myke
      Posted 07/06/2012 at 1:01 pm | Permalink |

      Woohaa people buy water? In Bottles? That’ll never work. We should pipe it through the internet to make it more cost effective and reach more people.

      • Joakal
        Posted 07/06/2012 at 2:15 pm | Permalink |

        Not sure if joking, but you don’t need the Internet. ;)

        • Posted 07/06/2012 at 2:16 pm | Permalink |

          WHAT?? You mean I have access to water IN MY HOUSE??!

          What IS this new devilry!?!?

          Next you’ll be telling me I can watch moving pictures without going to the cinematorium…..utter nonsense….

      • Bruce
        Posted 09/06/2012 at 12:28 am | Permalink |

        Thanks for the idea Myke, but water over IP would never work. Once people found out how to copy it the market would collapse. Imagine carrying all the water you could ever drink in your Cell Phone or on your USB key. There would be no further incentive for people to search for new water or bring it to market. Young water divination trainees would find themselves without compensation for their efforts. Entire industries would go bust. A tax on storage devices would go some way to assuage the damage but the future would not be bright for the industry (piped or bottled). On a global level all the new water created by copying would pose serious ecological challenges.

        On the plus side, taking your cell phone with you into the shower would no longer be quite so creepy.

    7. Posted 07/06/2012 at 1:08 pm | Permalink |

      Muso1

      While I can see your point of view…

      “Music software companies have connected with the customer, improved products year on year, and cut costs. And yet music software is a major target for pirates.”

      Do you have any reports of HOW much of the music downloaded every day/month/year whatever, is pirated? Is it 50%? 10% 1%? I don’t know, but from what I’ve read, I’d have to say closer to the 10% target than 50%.

      In other words, what I’m saying is: Napster/Kazza/etc. used to be so prolific, I’d say close to 50% of the online music market was pirated. Now, with iTunes, Bigpond, Google Music et al, I would say that pirated % has dropped markedly, especially with services such as iTunes match which ENCOURAGES people to convert to legal copies. Now I’m not saying piracy ISN’T a factor in Music, it is, but it is much less so than 7 or 8 years ago thanks to the business models.

      Convert this to movies and TV and you’ve got an industry that is STILL pre-iTunes, refusing to budge, primarily because of the healthy profits the film studios and networks can make off DVD/Blu-Ray and payTV subscriptions. They are not interested in following an iTunes/Netflix type approach, because it lowers margins, even if those margins are stil 10-12%, that’s lower than the 20 or 30% they make now. It’s plain greed in my eyes.

      I don’t think artists should not be paid for their work; far from it. But the record labels and film studios are so content to suckle at the big returns from the old system and whinge about how piracy is affecting their huge profits, they have no interest in changing business models. The artists get the raw deal, because they already have measly (in comparison) contractual arrangements that garner them relatively modest profit from their productivity and the studios get the big bucks. And when the big bucks start drooping because of piracy, they pull the contracts away from the artists to save the margins.

      It’s not right and it needs to change. If mass piracy is the only way to get the film industry to change, even slowly as it has done, to the same as the music industry then so be it.

      • GongGav
        Posted 07/06/2012 at 1:34 pm | Permalink |

        To use round numbers for simplicity.

        A playstyation 3 game costs $10 to burn and package. It costs $100 by the time it hits our store shelves. Where does that 1000% markup come from?

        The studio and/or developer takes a cut, the distributor(s) takes a cut, the store takes a cut. Each one adding a dollar amount on top of what they paid, as their profit margin. Buy that very same game electronically, there isnt much difference.

        Example: Diablo 3. I was one of the unfortunates that had D3 on preorder at GAME, and lost out the $10 deposit I put down for the CE. No problems, I absorbed that and went and bought it at EB, where they pricematched JB HiFi for $70. Net cost to me, $80 – the lost deposit and what I paid.

        Meanwhile, Blizzard did a very good PR job of offering refunds of that lost deposit. Nice of them, until you look into what they actually offer. You had to buy the digital version. Which costs… $80.

        For $10 MORE than the physical copy on the shelf, I had the luxury of having to download it, just to get that $10 back. I didnt get the physical backup, I didnt get the extras in the box, nothing.

        But I still would have paid $80. Why?

        The media industry as a whole doesnt do themselves any favors, and the unfortunate side effect to that is that people like muso1 get caught up because of the big players attitude.

        • Posted 07/06/2012 at 2:26 pm | Permalink |

          “A playstyation 3 game costs $10 to burn and package. It costs $100 by the time it hits our store shelves. Where does that 1000% markup come from?”

          This one gets trotted out all the time. Don’t. It’s a ridiculous argument that does nothing to help the “universal releases at a universal price” cause.

          It costs many millions of dollars to create a AAA title – programmers, artists, producers, marketing, we’re talking hundreds – sometimes thousands – of staff that needed to be paid (let’s not forget super, sick leave, annual leave, etc.), working in a building that had electricity, rental, insurance costs.

          Jobs in the videogame industry don’t pay well either – most of these people could get jobs at commercial companies being paid more to do less work – so it’s not like we’re looking at a glamorous industry full of rich people.

          Most major videogame publishers are one poor product away from insolvency – you’ve only got to look at companies like THQ that have taken a real battering due to single mistakes. There is a *lot* of money invested in most cases with far from a guaranteed outcome.

          I guess what I’m saying here is that there’s a lot more to that price than the cost of burning and shipping. A LOT more. Games have not gotten cheaper to produce over the past decade, they’ve gotten more expensive – and the price hasn’t really shifted to match that. Any business needs to adapt and move with change, I’m in complete agreement with anyone who states that. But anyone hinting at “ridiculous markups” on games is flat out wrong. (“Australia Tax” aside, of course :-) )

          • Dean
            Posted 07/06/2012 at 2:44 pm | Permalink |

            But that doesn’t explain a 100% markup on the same game between the U.S. and Australia. Even when those games are being distributed digitally and from exactly the same servers.

            • Posted 07/06/2012 at 3:18 pm | Permalink |

              I think you missed the part where I referenced the “Australia Tax”. I agree that it’s bullshit. But that wasn’t the point I was addressing.

          • GongGav
            Posted 07/06/2012 at 2:54 pm | Permalink |

            Yes, it does cost many millions of dollars to make a product, but you miss the point.

            It costs $80 to buy Diablo 3 off the shelf. It costs $80 to buy the game digitally. Why are those prices the same?

            I get the markup, and while I may not agree with it, I understand how it works. But 3 levels of that markup shouldnt be there for digital copies.

            Lets expand on that.

            $10 to get the game to sellable status. $30 to give the makers their cut, another $30 to give the distributors their cut, another $30 for the retailers. Thats a basic $100, split amongst 4 points to get each their profit.

            Those numbers are random, almost guaranteed to be wrong in the real world, but easy enough to work with here.

            You buy the product online, that retailer, distributor, and original manufacturer are no longer part of the process – the only point of those 4 that are involved is the maker. All a digital copy should cost is whatever portion made up their profit margin. In the example above, $30.

            To make it simpler, that profit margin is what covers the millions of dollars it cost to make the damn thing in the first place. Every other markup point is money going to other people. There is nothing more to it than basic maths.

            So yes, you’re right, these cost millions to make. I have friends that work in the industry myself, i get that there are plenty of costs, and they are often 1 failure away from closure. But when you look at the money grabbing that happens along the way with a physical product vs a digital version, there is no justification for the digital copy being anywhere near the price of the physical one.

            The website and servers for the distribution wont be free of course, but they arent expensive – the server cost comes from playing the game, not selling it. Which is a different situation alltogether.

            Blizzard pulled a fast one with the GAME fiasco, and came out shining thanks to it. But at the end of the day, all it did was make THEIR profit margin bigger, simply because the cost of the digital version was the same as the physical copy RRP.

            • Posted 07/06/2012 at 3:00 pm | Permalink |

              Agree in general GongGav.

              There is no reason for price parity on physical and digital copies. I don’t expect the digital copy to be half the price or anything, but I’d CERTAINLY expect a decent cut off.

              But the profits must rise after all…..

            • Posted 07/06/2012 at 3:17 pm | Permalink |

              A retailer is lucky to make $10 off a standard console game release at full price (anywhere that’s selling a console game for $79-89 is doing so as a loss leader – to get you into the store and then upsell you on a product that actually has margin). That’s before other costs are included like wages, etc.

              For distributors the margin is thin as well. Here’s another fun fact: when you purchase a console from a retailer, often they are *losing money* on the purchase, thus the push for product that actually contains margin (memory cards, accessories, etc.). I know this from having worked in game retail many many years ago, and things have gotten *worse*, not better, from a retail margin perspective.

              If people are expecting a massive decrease in price purely because of “going digital”, it is an unrealistic expectation. The costs involved (to the final price point) in the whole shipping/retail process are a lot less than most people think (and why I’ve always balked at it being used as an excuse for the “Australia Tax” on entertainment product). The lions share of the sales goes to the publisher (who often finances the original game as well) – this role still exists in the digital world for AAA titles.

              A realistic expectation is digital parity to the digital sales cost in the USA. (which is a perfectly reasonable expectation – there’s zero reason why Australia pays so much more on digital product than the USA). The “Australia Tax” has to go.

              • GongGav
                Posted 07/06/2012 at 3:31 pm | Permalink |

                Yeah, I was just tossing numbers out there to make a point – as I said, I knew they didnt reflect reality. But when a digital copy costs twice as much to buy here as it does in the US, something stinks. This is the reality for PS3 games.

                Specifically with Diablo 3 though, I believe the actual cost of the digital version in the US was $60 so it wasnt as bad as it usually is. But it still doesnt explain why there is any difference at all, outside of exchange rates.

                It also doesnt explain why the digital cost is the same as the physical cost anyhow. Regardless of how low the burner, distributor and retailer markups are, they are STILL a markup. For the physical copy, Blizzard was NOT taking $80 per copy. Nothing near it. For the digital version they are.

                We’re pretty much on the same page on this, I see that. But I’ll always ask why there is parity in cost between a digital and physical version, when what drives the price of the physical version up isnt relevant to the digital world.

                In years past, I played Everquest. I buy an expansion at a store, I paid $50. I buy it online, I paid $20. Big difference, testament to what the company was really making on the product. Now, the store and online price are the same. Thats straight up gouging, and theres not much people can do about it.

              • Noddy
                Posted 07/06/2012 at 5:43 pm | Permalink |

                Hey, Matthew. Just wondering, is that the Ex-Melbourne House Matthew Jones?

                • Posted 07/06/2012 at 8:25 pm | Permalink |

                  There sure are a lot of us. Sadly, I’m not the one you’re looking for. :-)

                  • Noddy
                    Posted 08/06/2012 at 2:33 pm | Permalink |

                    OK, I noticed you were linked. As soon as I saw that you were in Uni that told me you weren’t the same guy. He was in the UK working on the Burnout series last I knew. I could chase him up on my Facebook, but just wondered if by some chance he’d posted here.

    8. Muso1
      Posted 07/06/2012 at 4:22 pm | Permalink |

      Folks.
      I gave an example that I have actual experience in.
      Again, despite all the nonsense about ‘intangible’ products etc, it costs small private companies thousands of dollars to record, code, edit and market a music software product – like a vintage synth sample library, or a drum kit sample library. We rely on customers buying the product to recoup those costs. When people pirate the product, it’s another instance where we wont be recouping anything.
      By the way, just about everyone in Australia pays for tap water. In my case, I pay Sydney Water quite a bit, whether I consume the water or not.
      It sticks in my throat just a little when Steve Dalby says the music industry doesn’t care about it’s customers. First, I think it’s a terrible generalisation, second I don’t think it’s accurate. The music industry is extremely diverse. It’s a lot more than Sony and Universal these days. It’s independents and self releasers.
      Regarding listening to customers, when I lived in London I had high speed broadband and unlimited data. I was shocked to find data contracts were common when i arrived in Australia. Are the Aussie ISP’s listening to their customers, who I’m sure would love to do away with data allowances and throttling when you go over quota, which is not something the Americans and Brits ever have to think about?
      And it’s also unsurprising iiNet say anti-piracy talks are a waste of time, as they sell 20gig ($40 a month) to 400gig ($100 a month) broadband packages and will make good money off the larger data plans as Delimiter recently noted Australians were top of the pile when it came to pirating Game Of Thrones.

      • Joakal
        Posted 07/06/2012 at 4:53 pm | Permalink |

        “Again, despite all the nonsense about ‘intangible’ products etc, it costs small private companies thousands of dollars to record, code, edit and market a music software product – like a vintage synth sample library, or a drum kit sample library.”

        For your information; Intangible means the consumer can easily duplicate it. Tangible means something that the consumer can’t readily recreate.

        “It sticks in my throat just a little when Steve Dalby says the music industry doesn’t care about it’s customers. First, I think it’s a terrible generalisation, second I don’t think it’s accurate. The music industry is extremely diverse. It’s a lot more than Sony and Universal these days. It’s independents and self releasers.”

        My biggest problem is that they’re legalising thuggery, imposing asinine rules, etc, on consumers. In fact, some of these rules can come back to bite your company: http://www.techdirt.com/articles/20120302/05420517946/uk-government-pressuring-search-engines-to-censor-results-favor-copyright-industries.shtml It would be a shame if Hollywood started selling music software. You would appear much lower in the results.

        Personally, I believe in Internet as the greatest thing to humanity that those who try to abridge access due to ‘piracy bogeyman’ are in fact wishing to control people.

        “We rely on customers buying the product to recoup those costs. When people pirate the product, it’s another instance where we wont be recouping anything.”

        But you are able to recoup costs, aren’t you? Maybe you have some service issues? Honestly, no one thinks commercial copyright infringement is right. In fact, not any Pirate Party in the world supports that. I’m gathering that you sell music production software which is commercial. Game of thrones infringements had largely been non-commercial.

        “By the way, just about everyone in Australia pays for tap water. In my case, I pay Sydney Water quite a bit, whether I consume the water or not.”

        I.. don’t.. even.. Okay, if you’re not joking. It sounds like you need a plumber to fix leaks because Sydney Water does in fact, charge you for consuming it.

        “It sticks in my throat just a little when Steve Dalby says the music industry doesn’t care about it’s customers. First, I think it’s a terrible generalisation, second I don’t think it’s accurate. The music industry is extremely diverse. It’s a lot more than Sony and Universal these days. It’s independents and self releasers.”

        Unfortunately, they are legally restricting consumer’s access to what they paid for. The pirated version gives more freedom for people to consume the content. As well, there’s pissed off customers paying ‘Australia Tax’ despite lower prices in USA, China, etc, for same thing.

        “Regarding listening to customers, when I lived in London I had high speed broadband and unlimited data. I was shocked to find data contracts were common when i arrived in Australia. Are the Aussie ISP’s listening to their customers, who I’m sure would love to do away with data allowances and throttling when you go over quota, which is not something the Americans and Brits ever have to think about?”

        I’m not with them but here: http://www.iinet.net.au/broadband/terms.html Maybe you’re with Telstra or Optus, both are Internet censorship companies and have poor customer service.

        “And it’s also unsurprising iiNet say anti-piracy talks are a waste of time, as they sell 20gig ($40 a month) to 400gig ($100 a month) broadband packages and will make good money off the larger data plans as Delimiter recently noted Australians were top of the pile when it came to pirating Game Of Thrones.”

        If games of thrones provided a good service, then the same data usage will still apply. If Hollywood had their way, they could prevent consumers from reaching even your business. That’s a myopic argument.

        • Muso1
          Posted 07/06/2012 at 5:43 pm | Permalink |

          The Pirate Party support access to sites like The Pirate Bay, which enables people to copyright infringe.
          The Pirate Party position on copyright is political spin, nothing more.
          Here’s a quote from a recent Pirate Party Congress in America:
          “‘Copy and Paste what thou wilt’ shall be the whole of the law.”
          http://arstechnica.com/tech-policy/2012/04/vote-pirate-notes-from-a-pirate-party-conference/

          As for the Telcos caring more for their customers than the big bad entertainment industry. Please spare me. They all presided over stagnation of broadband for a decade until Labor finally took the bull by the horns with the NBN.
          iiNet, Telstra, Optus, whatever…. according to the NBN website:
          “OECD statistics confirm that Australia has fallen behind for fixed broadband download speeds.
          As of September 2011 we are four places below the OECD average in advertised download speeds across all fixed line technologies and even worse for fastest available advertised cable speeds (6th slowest) and DSL speeds (13th slowest).
          The OECD statistics also demonstrate that Australia is generally amongst the most expensive countries for broadband.
          For example, as of September 2011, Australia is the fifth most expensive country in the OECD for low speed, low data cap broadband plans.”

          How about they show how much they care by charging the OECD average and allowing much more data?

          • Posted 07/06/2012 at 6:21 pm | Permalink |

            “As for the Telcos caring more for their customers than the big bad entertainment industry. Please spare me. They all presided over stagnation of broadband for a decade until Labor finally took the bull by the horns with the NBN.
            iiNet, Telstra, Optus, whatever…. according to the NBN website:”

            Muso, you need to be careful what you’re stating as fact. As you may or may not have read the many Delimiter articles on the NBN, here’s a quick recap:

            - There is only 1 ISP that has presided over the stagnation of Broadband in this country- Telstra. They own the copper AND their own HFC, which services 100% of Australians in total. The only other ISP to even make an inroad is Optus and when Telstra rolled out their HFC over the top of their 25% coverage, it essentially neutered any possible competition. So once again, it was Telstra’s fault. Iinet, Internode, TPG, iPrimus etc. have little to nothing to do with the state of Broadband in the country- in fact in many cases, ISP’s like iinet INNOVATED the market with VOIP and gaming servers. They are held hostage by paying wholesale fees to Telstra. They can have their own hardware in exchanges (DSLAM’s) which, if you’ve been following broadband development, you would’ve seen showed a BIG jump in quota and speed with a corresponding drop in price. But they are STILL constrained by the copper, which Telstra owns. Hence the NBN.

            - The reason Australia has no unlimited Quota’s is 2 fold:

            1- We do not have the speed for it. The average Australian uses about 15%-20% of their allocated quota a month. Partly because of slow broadband uptake (high prices, again, because of the copper and Telstra) and partly, because the copper can’t handle any faster than 24Mbps MAX. And few people get anywhere near that speed. The HFC market CAN get higher speeds, but because it is dominated by Telstra, they price their plans such that if you want higher quota, you pay a much higher price (because they control the market, who will stop them?). This is Telstra’s fault, no one elses- they have no access to HFC. There is no need to have unlimited quotas, when the vast majority of us can’t get the speed and the applications for high quota for average Australians, are only JUST emerging. Applications such as cloud computing, movie and TV streaming and HD conferencing. This will be GREATLY enhanced by the NBN.

            2- You’ll find if you look at the market in the US, Telco’s are now slowly and gingerly removing their unlimited plans, because they CANNOT keep the bandwidth up and revenue up when streaming from things like Netflix is over 35% of ALL internet traffic. They STARTED with unlimited, before the advent of FTTN and FTTH as well as little access to streaming services. Now that they’re ubiquitous, they’re struggling to keep quality of service up and profits too. On the flip side, Australia has never had the high speeds the US has (unfortunately) and as such, the quotas weren’t necessary. Most people rarely get through more than 50Gb a month. Those that do are probably half the reason for this article- rampant piraters. But that is speculation. There are still business and commercial applications for high quotas. We went through a few years where quotas were too low, again, because Telstra had not enabled ADSL2+ (or even ADSL at all) on exchanges, meaning competitors couldn’t give competing services with their own hardware, but we are much better off now than 5 years ago. The NBN is STILL desperately needed, but our situation with quotas is not because of ISP price gouging. It is simply because people don’t use it.

            Don’t be fooled by the US market. We have trends that are similar in some cases, but in some sphere’s we’re VERY different.

            • Muso1
              Posted 07/06/2012 at 9:17 pm | Permalink |

              “The NBN is STILL desperately needed, but our situation with quotas is not because of ISP price gouging. It is simply because people don’t use it.”

              I disagree.
              I came here from the UK in 2005. My net connection in the UK was 1Mbps (roughly) Broadband with unlimited data. Before that I had slow dial up with unlimited data. It was the norm in Europe and America, but apparently not here.
              If you look at iiNet’s RESIDENTIAL plans, they start at 20gigs a month and go up to 400gigs a month.
              You don’t use 20 to 400 gigs a month using Facebook and Twitter.
              I’m not saying it’s iiNet’s fault, or that it’s all unauthorized, but as I said, Delimiter revealed Australia was the number one country pirating Game Of Thrones.

              • Posted 07/06/2012 at 9:42 pm | Permalink |

                “Before that I had slow dial up with unlimited data. It was the norm in Europe and America, but apparently not here.”

                That;s because Dial-up was almost exclusively, to begin with at least, a Telstra domain. When Dial-up was popular, Telecom Australia had just become Telstra, being privatised. It wasn’t until DSL came along that ISP’s could really start to compete. Until then, Telstra controlled the lines and they decreed time limits on dial-up. That was the thing back then, time-limits. A certain number of hours, because quota meant little at 56Kbps.

                When DSL came along, because it was always connected, quotas became the standard. Again, ISP’s, like iinet, had yet to gain major traction and HAD to follow Telstra’s rein of charging up the wazoo for quota. Once they could get their own DSLAM’s in, we saw an EXPLOSION in the amount of quota allowed and Telstra had to follow suit or risk losing larger market share. They STILL charge more than most ISP’s but then again, they STILL have 60% of the market.

                “If you look at iiNet’s RESIDENTIAL plans, they start at 20gigs a month and go up to 400gigs a month.
                You don’t use 20 to 400 gigs a month using Facebook and Twitter.
                I’m not saying it’s iiNet’s fault, or that it’s all unauthorized, but as I said, Delimiter revealed Australia was the number one country pirating Game Of Thrones.”

                Of course they start at 20gigs. I know people who wouldn’t even use that. And in fact, they go MUCH higher than 400Gb (up to 1Tb). But ONLY if you’re on iinet network. Because outside of that Telstra charge huge amounts for data throughput, hence the lower quotas. I’d LOVE to be on iinet network, but I’m stuck paying $69.96 for 200Gb and 6Mbps average because Telstra refuse to do anything about the copper and iinet can’t afford to in regional areas with only 11% market share.

                Yes, we WERE the largest pirated of Game of Thrones, with 3 Million. But it was MASSIVELY pirated worldwide. 12 Million copies total. And the reason given, in all cases, was it was VERY popular and with the forums in the US talking about the newest episodes, people refused to wait 10-12 days to watch it legitimately AND having to wade through ads to so ( if you’re here anyway). This is an EXCELLENT case of “provide it and they will buy it”. But these organisations don’t care. They want the money from the licence deals they have with our broadcasters, as they pay top dollar. Whereas if they licensed it to Quickflix, they’d get substantially less overall.

                • Muso1
                  Posted 07/06/2012 at 9:54 pm | Permalink |

                  “They want the money from the licence deals they have with our broadcasters, as they pay top dollar. Whereas if they licensed it to Quickflix, they’d get substantially less overall.”

                  Don’t you think Game Of Thrones was a very expensive programme to make?

                  I don’t think people are wasting money in the TV industry. Budgets are super tight.

                  • Posted 07/06/2012 at 10:32 pm | Permalink |

                    “Don’t you think Game Of Thrones was a very expensive programme to make?

                    I don’t think people are wasting money in the TV industry. Budgets are super tight.”

                    Mmmm, sorry, but I’d have to disagree. Here’s an example I’ve followed:

                    Stargate was and still is my favourite series. It is the longest running consecutive Sci-Fi series, also, obviously enough, produced by the Sci-Fi channel (MGM). Stargate the movie grossed $200 Million in 1994. Stargate SG-1 was the first series, begun in 1996. Towards the middle to end of its’ run, it had a budget of roughly $1 Million an episode. Sounds alot, but you’re right, it wasn’t. They made 22-24 episodes in a series. Which meant it cost roughly $25 Million to make a series. Alot? Hardly

                    They had licensing deals with EVERY major broadcaster in most Western AND most non-western countries for both original airing and syndication rights; the re-runs. I can’t say how much they earned off those deals, but I’ll tell you RIGHT now it was a HELL of a lot more than $1 Million an episode. Hell, they got $500 out of me for the box-sets and they STILL cost over $50 most of the newer series. Any commentary and analysis of the whole Stargate franchise showed it was always profitable. It was often seen as a cash cow. You can’t download them though. They haven’t allowed it, because they’re still so popular. How popular? About 30 Million viewers in the US alone. Estimated over 100 Million worldwide.

                    Stargate Atlantis came along. Not as popular, but still well over 15 Million viewers in the US, and many more worldwide. Stargate SG-1 was cancelled partially because Richard Dean Anderson didn’t want to do it (produce or star) anymore and partly because the storyline was beginning to repeat. They were able to finish the series with a direct-to-DVD movie. Atlantis was cancelled sighting “slow-down of ratings”. They were still over 10 Million when cancelled in the US. The story-line was brought forward a season so they could cancel it in the 6th rather than the 7th. It shows in the last 4 episodes- very rushed. They had a budget of about $2 Million an episode. But it was still very profitable.

                    And then we have Stargate Universe. 2 Seasons. Started with a reasonable 1.8 Million in the US, dropped to 400 000 by mid-season 1 because it was VERY different from the other 2 series. But by 1/3 of the way through season 2 numbers picked up up to near a million. Then they up and cancelled it AS Brad Wright was writing the beginning of season 3. They scrambled to end it decently, but it failed. It was essentially left hanging…..and the final episode was watched by nearly 2 million viewers in the US. It’s budget was $3 Million US. I’m not sure why though. But it was STILL profitable.

                    What happened then? MGM was on the verge of bankruptcy after the financial crisis. It had made bad decisions on investments on ridiculous TV shows no one wanted. It was even threatening to cancel James Bond. James BOND for goodness sake! It was only programs like Stargate that kept it going, through syndication. Which of course meant they wouldn’t allow anyone to download them and still don’t.

                    That was long winded, so for the TL;DR version- Budgets on movies/tv shows may be “super-tight” for the makers and producers….but the PROFITS on those are not super-tight. Best example?

                    Highest grossing film of all time? Avatar (unfortunately). Cost to produce? About $300 Million. Tight budget for a largely state-of-the-art, high resolution CG film. Total Gross income? $2.8…..BILLION DOLLARS. Even taking into account DVD and film production, that’s a HUGE amount of money.

                    Seinfeld, remember it? It finished in 1998. I don’t know what it grossed DURING its’ run, but since it’s stopped? $2.7 BILLION DOLLARS. In syndication rights for goodness sake!! Jerry was offered $3 MILLION dollars AN EPISODE to do ONE MORE SERIES!!! Now WHY would they have done that I wonder?…..oh that’s right the $150 MILLION a series PROFIT NBC got from it…..

                    Yeah, go ahead and tell me the studio’s margins are “slim”…..

                    • Posted 08/06/2012 at 1:26 pm | Permalink |

                      This is the wrong argument.

                      Any project based venture need the hits to counter the misses. Some will be up, many will be down. Same with venture capital funding projects.

              • Psychaotix
                Posted 08/06/2012 at 11:42 am | Permalink |

                @Muso1
                “If you look at iiNet’s RESIDENTIAL plans, they start at 20gigs a month and go up to 400gigs a month.
                You don’t use 20 to 400 gigs a month using Facebook and Twitter.”

                I can comfortably chew through my 200Gb that I get for nearly $90 per month from Internode, without touching an illegal torrent or download.

                From that connection, I have to accomodate both Windows and OSX Updates, which on a bad month can be a total reinstall, then there’s Steam content updates, Linux ISO downloads, Bigpond movies, Playstation Store and XBOX Live downloads (XBOX Live isn’t unmetered for Internode customers) as well as iTunes downloads, Youtube HD and then general browsing. I also share my connection with 5 other people in the household, hence why the large quota.

        • Muso1
          Posted 07/06/2012 at 5:50 pm | Permalink |

          “I.. don’t.. even.. Okay, if you’re not joking. It sounds like you need a plumber to fix leaks because Sydney Water does in fact, charge you for consuming it.”

          Nope.
          My bill states ‘Fixed Charges’
          Water Service – Wastewater (sewerage) – Stormwater Drainage.
          Total due $151.85
          If I’m not there for a month and don’t flush the toilet, cook or drink water – Total due $151.85 (the same)

          Neither bottled or tap water are FREE.

          • Joakal
            Posted 07/06/2012 at 6:11 pm | Permalink |

            Oh I see, I thought you were talking about usage. That part makes sense because they also do drainage in your area. Even if you’re not there, they probably fixed your pipes.

            “Neither bottled or tap water are FREE.”

            Agreed. The water service here is neat. :D

      • Posted 07/06/2012 at 8:39 pm | Permalink |

        “And it’s also unsurprising iiNet say anti-piracy talks are a waste of time, as they sell 20gig ($40 a month) to 400gig ($100 a month) broadband packages and will make good money off the larger data plans as Delimiter recently noted Australians were top of the pile when it came to pirating Game Of Thrones.”

        It’s not necessarily true that “higher quota plans == more profit”, not by a long shot. That bandwidth still has to be paid for at a wholesale level, and an ISP purchases in a very different manner to the consumer.

        A consumer pays $X for Y GB’s of data over a month. (eg. 20GB per month)
        An ISP pays $X for Y amount of bandwidth per second at all times. (eg. 100Gbps)

        … which makes setting the price point rather challenging, because you’re dealing with two different measurements – bandwidth versus data used. Without going into tremendous amounts of detail, an ISP will often make more profit when you don’t use your allocated data for the month, and very little to none when you do use your full allocation.

        Higher usage networks are also (by their nature) far more difficult to manage.

        What I’m trying to say here is that the “higher usage users are more profitable” line is not necessarily true. Especially in the fixed line market where “new” users are hard to come by and more often than not gained via “churn” – that is, switching from another ISP. High quota plan users are far, far more likely to use up as much of their quota for the month than the smaller level counterparts.

        Of course, then you introduce other factors like “small quota users are more likely to call for tech support” and it all gets rather messy.

        tl;dr – just because one consumer pays a business more for their service than another consumer, doesn’t mean the consumer paying more is a more profitable one! :-)

        • Muso1
          Posted 07/06/2012 at 8:47 pm | Permalink |

          “It’s not necessarily true that “higher quota plans == more profit”, not by a long shot. That bandwidth still has to be paid for at a wholesale level, and an ISP purchases in a very different manner to the consumer.”

          Yes, I completely agree.
          However I’m just pointing out that while piracy continues more or less unabated, the Telcos are making good money from all these fast and large net plans. And I agree that’s not their fault, but it’s also a little rich to say negotiations are ‘pointless’, while their business model benefits from devalued content.

          • Posted 07/06/2012 at 8:53 pm | Permalink |

            Muso, I think you’re over-generalising.

            Piracy is a problem, yes. But Does anyone have any numbers (preferably independent, not from people like AFACT) as to it’s pervasiveness? Yes, many people pirated Game of Thrones, but that’s a single TV series. I think piracy is a large problem, but smaller than many think. I’m gonna have a look for some numbers after dinner.

            Secondly, as Matthew said, the Telco’s are not making huge money off these “fast and large net plans”. Telstra is though. They get a cut from pretty much everyone, including other ISP’s. But the other ISP’s actually discourage P2P sharing. I get throttled when I do it on iinet. (legal of course) It doesn’t help their margins to allow huge downloads, the opposite in fact. They’re making money, but it’s far from huge and mostly it’s from people who are legitimately using the net’s services.

    9. Joakal
      Posted 07/06/2012 at 6:00 pm | Permalink |

      “The Pirate Party support access to sites like The Pirate Bay, which enables people to copyright infringe.”

      Where does PPAU support that, I’m curious? Without knowing their response, I gather they’re against blocking access to The Pirate Bay on grounds of censorship.

      “The Pirate Party position on copyright is political spin, nothing more.”

      Where is it political spin? They’re very clear. Decriminalise non-commercial copyright infringement. They believe the current copyright law is too radical and oppressive for society.

      “Here’s a quote from a recent Pirate Party Congress in America:
      “‘Copy and Paste what thou wilt’ shall be the whole of the law.”
      http://arstechnica.com/tech-policy/2012/04/vote-pirate-notes-from-a-pirate-party-conference/

      They’re talking about Kopism. I’m not terribly familiar with the religion, but I gather that it’s about copying stuff relating to private non-commercial stuff at home. For example, copying a human and pasting birth. That’s as much, a religion. If the Pirate Party Australia is a Kopist party, then the Liberal Party is a Christian party.

      “Entertainment industry is horrible, but telco is more horrible!”

      The telcos had let it stagnate for a long time before the government stepped in with NBN? You’re practically saying that the government should set up their own content delivery services since we’re on the topic of better service?

      I support the NBN by the way. :)

      • Posted 07/06/2012 at 6:46 pm | Permalink |

        The Pirate Parties stance is interesting. I’m not sure I agree with it, but it essentially goes like this (you’ll have probably seen the, I think it’s College Humour, Meme):

        - The whole spiel at the front of DVD’s about “You wouldn’t steal a car, you wouldn’t steal a purse” etc. etc. They say, “well, actually, we’re not. Think about it, by pirating a car, I’m actually copying that car, leaving it in exactly the same place as it was, and driving my copy away. Same with the purse. I’m copying it exactly. The owner loses nothing, I gain an item”. Now, this is all well and good in principle and is actually quite funny when you think about it, but it DOESN’T take into account that the person who MADE the car and purse and was subsequently paid by those original owners, doesn’t get an opportunity to charge a price for the “copies”, which are technically their property under copyright laws.

        Now, their stance is, these laws are draconian and don’t make sense in today’s world. I, myself, don’t know what the answer is, but the fact of the matter is AFACT and organisations similar are NOT interested in coming to an “agreement” with anyone. They want laws that brutally penalise people who do this to their clients “intellectual property”, so they can be free to charge what they like and make plenty of money. They are NOT supporting the artists, as they would have us believe. THAT is a load of bollocks. If they could get away WITHOUT paying the artists, they would. But their vaunted IP rights law protects that. So instead they try and transfer that onto people who refuse to pay $25 for an album online, when it’s $25 in store on a CD. Price parity makes NO sense in a digital world. There are MASSIVE overheads not required in the digital world and the price should reflect that. Even small studios can save a significant amount of money selling digitally, apart from anything, because a master stamp of a CD can cost up to $35 000 or more. Plus distribution and copying costs.

        There are much better ways in a digital world to produce content, but the studios aren’t interested, not because it isn’t possible or even likely to succeed. But because they KNOW they would have to charge less to make a decent go at it. This would undermine large profit margins and hurt shareholders returns. That’s all they care about. There are ways they could guard against this:

        - Proportionally reduce payments to artists (royalties)- Some of them are paid RIDICULOUSLY for an album and then AGAIN for all the concerts, promos and everything else. It’s called pop culture and I think it has to simmer down a bit in a digital world to be viable. It worked in the 60′s, 70′s, 80′s and 90′s, but we had no CHOICE then about how we consumed the content. Now we do.

        - Charge proportionally less, but use business models that encourage multiple purchases. Woolworths and Coles do it and make a go of it, why not the studios? (charge $1.49 for the song instead of $2.99, but have specials, where you get 5 for $7.50- margins improve. Same with movies and TV)

        - Work out subscriptions, but DON’T make them unlimited. The US companies are OBSESSED with unlimited subscriptions because it garners market share. but it becomes untenable very quickly. Already Netflix are feeling the squeeze and they’ve only been streaming for 4 years. Organise subscriptions with content providers and middle men, like iTunes, SENSIBLY for BOTH parties to be fair on margins. This’ll probably never happen, but it should.

        There are many others I’m sure people in marketing and advertising could come up with. But, again, why would the studios bother when they’re sitting on 30% profits and a move like this would not only be costly to begin with, but would bring lower average margins too? Business never accepts growth is never sustainable exponentially (ie always higher profits) but i’st a top 3 rule of the market.

        • Muso1
          Posted 07/06/2012 at 8:55 pm | Permalink |

          “They are NOT supporting the artists, as they would have us believe. THAT is a load of bollocks. If they could get away WITHOUT paying the artists, they would.”

          Weird then that most artists support the mainstream industry and the concept of copyright.
          Weirder that you would claim the labels would not pay artists if they could get away with it, but apparently support people who ACTUALLY don’t pay artists a penny and DO get away with it.

          As I said in my first post, the music software industry (plug-ins, virtual instruments etc) have to come the party on price, availability, connecting with customers, free products and free demos. But there are masses of music software products still being shared illegally on filesharing sites.

          • Posted 07/06/2012 at 8:58 pm | Permalink |

            “Weird then that most artists support the mainstream industry and the concept of copyright.”

            Of course they do. As I said, mainstream artists make HUGE money from studios. It’s expected. All you have to do though is look at niche artists or alternatives and many provide free singles to fans, bonus album art or free merchandise direct from their own store. They’re doing it cause they love it AND want to make a living. The mainstream artists, IMO, are doing it for the money, because the market allows it.

            Also, may I ask what sort of software we’re talking here?

            • Muso1
              Posted 07/06/2012 at 9:09 pm | Permalink |

              I’ve worked with mainstream artists. They are not all ‘doing it for the money’. The problem is many people commenting on the music industry have precious little experience of it, and get all their information from internet blogs and such.
              I already told you about the music software I’m talking about – (plug-ins, virtual instruments, DAW’s).
              Reaper by Cockos is free to demo, and only $60 to buy if you earn less than $20,000 a year from your music.
              As perspective, Ableton Live is $449.

              • Posted 07/06/2012 at 9:11 pm | Permalink |

                I never meant to suggest ALL mainstream artists do it for the money. But many would. It’s a money based business high end music.

                “I already told you about the music software I’m talking about – (plug-ins, virtual instruments, DAW’s).”

                Can I assume then that these pieces of software, which I am by NO means experienced with, are used mainly by music lovers and professionals?

                • Muso1
                  Posted 07/06/2012 at 9:39 pm | Permalink |

                  You really have no way of knowing which mainstream artist ‘does it for the money’ and which doesn’t.
                  For example, Paul McCartney could have retired to one of his numerous mansions about 30 years ago.
                  I haven’t worked with any (in my 30 years) who was JUST about making money.

                  Yes, music software is used by professionals in the industry as well as millions of hobbyists.

                  • Posted 07/06/2012 at 9:55 pm | Permalink |

                    “You really have no way of knowing which mainstream artist ‘does it for the money’ and which doesn’t.
                    For example, Paul McCartney could have retired to one of his numerous mansions about 30 years ago.
                    I haven’t worked with any (in my 30 years) who was JUST about making money.
                    Yes, music software is used by professionals in the industry as well as millions of hobbyists.”

                    Can you really tell me Kanye West and Chris Brown “do it because it’s all they live for”…..I doubt it. I KNOW there are good mainstream artists out there, who do it because they love the music. I would like to think my favourite Muse are like that, I don’t KNOW they are, but the quality of their music speaks volumes, to me at least. But there would be equally as many who do it for the new Ferrari.

                    Ok so you’re/we’re having a problem with pirated music software. I wouldn’t disagree there’s a major problem in that sphere. I worked at a small recording studio who pirated their first copy of Adobe Audition, as their income from recording in our area was about $8000 a year and a full suite was nearly a quarter of that. They HAD to use adobe, because the artists that came in all used it….most had pirated it, because it was so good and they couldn’t compete otherwise, using cheaper, less effective software. The studio’s second copy was bought under “academic” license as they applied under a “School of recording” moniker, which was bollocks. The only person they taught was me, and I was self-taught. So it only cost a fraction of the $1800 normally (WHICH by the way is TWICE what the US pay for it…) All the musicians (hobbyists and amateurs mostly, a couple of pros) I know have once had or still have pirated copies of adobe and the like.

                    This is ONE sphere I agree there’s a major problem; possibly because of the nature of the amateur/hobbyist musician. They have little money, do gigs when they can and it’s usually a side project. But they all want the best software to sound and look the best to the outside world in the hope to make it big.

                    But I think piracy in other areas is overrepresented by sphere’s like this. Piracy in an entertainment capacity (buying songs/movies/TV) is a VERY different attitude where LOTS of money is made and amateurs and hobbyists generally do it for fun with little or no money changing hands. Those that do do it as a small business (video editing/photo editing/small time film production) ie it’s their livelihood, that I know of from my days working in that studio had similar attitudes to those in the amateur music arena- they had no money, but people expected the best, so they pirated to stay competitive.

                    I’m not saying piracy is confined to the hobbyist and small time arena, it isn’t, but I think it’s overrepresented by these areas from what I have seen

                    • Muso1
                      Posted 08/06/2012 at 7:33 am | Permalink |

                      “This is ONE sphere I agree there’s a major problem; possibly because of the nature of the amateur/hobbyist musician. They have little money, do gigs when they can and it’s usually a side project. But they all want the best software to sound and look the best to the outside world in the hope to make it big.”

                      Well this is my entire point. The music software industry HAS listened to customers, and yet it is still heavily pirated. This goes back to Mr Dalby’s claim that all our problems would be solved if we would only listen to customers and give them what they want.
                      Reaper by Cockos is $60 and is very likely much better than Adobe Audition. Many high-end music software companies offer lower budget products, smaller software companies and amateur coders offer a wide range of excellent FREE music software products.
                      In the video scene, a full professional product like FCPX is $320.

                      “Piracy in an entertainment capacity (buying songs/movies/TV) is a VERY different attitude where LOTS of money is made”

                      But NO ONE in the self releasing, indie scene is making LOTS of money. Yet people download their music without permission and without paying.
                      It’s not like there is a youth movement to punish Kanye West and U2 for making too much money. It’s that there is widespread unauthorized downloading of all music. And that means lowly paid EDM artists, and indie bands with a debut album find they are heavily fileshared and can’t make enough money to keep going.

                      • Posted 08/06/2012 at 12:18 pm | Permalink |

                        No one making a profit? … Look i agree with your point about there being issues with niche software getting pirated hard. But you CANNOT claim that the indy & self release scene is making no one money.

                        http://www.kickstarter.com/projects/amandapalmer/amanda-palmer-the-new-record-art-book-and-tour
                        She asked for $100k, that was the budget she needed to complete the project.
                        She got $1.1million.
                        A substantial portion of that will most likely be a profit due to economies of scale she couldnt bank on when she started the project, eg: 10k cds printed being $5 vs 100k being $2.5 each (fake prices to show the principle)

                        Indy and self release makes money. Thats why you see EA offer 90days free use of the origin distribution platform to Indy game companies, they ARE making money and EA would like some of that delicious green money to feed their massive bloated bottom line (god I hate EA, worst company in the games industry)

                        Now in software as niche as the module & synth stuff you have experience in, I suspect a problem you may be failing to account for is competition with free open source projects, there is a LOT of open source music software, some VERY flexible stuff. A growing market is also springing up with things like Garageband included free on a machine from Apple that the music hobby scene participant has probably already got. Not to mention $5 garage band on ipad & iphone. Your issue is simply “we arent making enough money”

                        The general point for anyone waving the ‘piracy is evil’ flag at a personal level needs to prove is this.
                        If you cannot prove that your IP is not being paid for by someone that is both USING IT TO MAKE MONEY and also making enough that they are CAPABLE OF PAYING (caps instead of bold). Then you cant claim your unfairly being pirated as you have lost no sales.

                        Music companies love to claim every download equates to a sale. Which has been well proven to be false, and is why i have such a hard time listening to anyone claim anything close.
                        These are customers that would if your software was not piratable, would just pirate another. If they wont pay, you never had any money to make from them, and therefore no cause for outrage.

                      • muso1
                        Posted 08/06/2012 at 12:30 pm | Permalink |

                        Err, I didn’t say no one was making a profit, I said no one was making ‘LOTS of money’.
                        Besides, one highly publicised success story???

                        You are way off on the music software arguments. Too many falsehoods to really comment without writing pages, but just for starters, no the particular software I’m involved with does not see competition from freeware, or even amateur made products.
                        It costs too much money to record drum kits in well known studios. So NO ONE is creating that kind of product and giving it away.

                      • Alex
                        Posted 08/06/2012 at 2:06 pm | Permalink |

                        Although this is not a passionate subject for me (like the NBN is) and I’m not all that savvy to the ins and outs, I tend to, as one without an actual evidence based opinion, on the surface agree with Muso1…

                        We are hiding behind the excuse, well the multi-billion dollar conglomerates and highly paid pampered stars can afford it, so it’s ok.

                        Well, yes of course “they can”, but as Muso1 says, where does it leave the struggling artist, who is anything but rich and flamboyant?

                        Let’s think (take the everyday people on youtube, the voice, aus idol, all investing towards and waiting for their big break) vs. the stars. So the percentage of artists who would make little from their careers, throughout the world, as opposed to those who make disgustingly huge salaries, would be, what… probably, at a wild guess, 90%? So the big boys probably wouldn’t even notice it, but the majority, the little guys certainly would!

                        For example if you or I were a musicians (since I am agreeing with ‘Muso1′) for arguments sake – bear with me I am surmising here. Would you in many cases, put in years or a a lifetime career of studying music, learning your craft (which I assume would now have to include about a dozen genres – from old style jazz to metal), writing time, practice time, paying for all of your equipment, paying for recording studios, recordings, rehearsals, promotion (cards, website, posters, agents, managers), playing low paid places like the local pub to pay the bills (with piss heads, like me…lol, giving you shit) all the while trying to convince those who can distribute your product, to take you on… and you finally get a toe in the door…. only to find your product is on the net being downloaded by everyone for free?

                        I would wager that those who say across the board piracy is ok, would be the first to whinge if they wrote a potentially popular book, groundbreaking software or recorded a possible hit song, only to find they receive minimal return due to people not paying for their work?

                        If people want to offer freeware or free music, great! But let’s not hurt the artists who are simply trying to put food on the table and pay the rent, because it’s ok, the big guys can afford it. But then I suppose there are those who will simply say, “go get a real job, like the rest of us” and completely miss the point!

                        Please feel free to troll me; because as I say, it’s not really a subject close to my heart, it’s just my take on a very pertinent point made by Muso1 and largely overlooked, imo. And going by Muso1’s moniker, he/she possibly has more hands-on experience than all of us.

                      • Noddy
                        Posted 08/06/2012 at 2:55 pm | Permalink |

                        Alex, good for you. I have written messages in many forums on the piracy subject. Very, very few will take the time to look at how it effects the average worker in these industries. I find that like the NBN discussions, there are those that only use data that supports their wished for outcome rather than looking at the whole picture. Unfortunately with piracy the majority want cheap or free easily available music and will put forth only arguments (multi million dollar movies and artists) and ignore what the effect on the average worker. Even in piracy has a 20% loss of sales, would you like to take a 20% drop on an already low income? Most musos aren’t rich, they, like most actors, do multiple jobs to make a living. Studio production work, ads, session muso. I know a few that release albums when they can afford to, constantly travel to appear live to increase their following, work on big artists albums, write songs for others, plus work a full time job outside of music, because without it they see virtually nothing.

                      • Alex
                        Posted 08/06/2012 at 4:05 pm | Permalink |

                        Thanks Noddy.

                      • muso1
                        Posted 08/06/2012 at 5:07 pm | Permalink |

                        I agree with you both.

      • Muso1
        Posted 07/06/2012 at 9:02 pm | Permalink |

        “Where is it political spin? They’re very clear. Decriminalise non-commercial copyright infringement. They believe the current copyright law is too radical and oppressive for society.”

        Most copyright infringement is non-commercial. Punters going to their favourite filesharing sites and downloading as much content as they want without paying for it.
        As such, The Pirate Party claiming they support copyright is pretty meaningless.
        I’m up for negotiating copyright, and I applaud the PP for taking the debate to democratic means, but while their conferences condone “I encourage reckless and inconsiderate copying that denies all consideration of copyright and similar bullshit.” (Isak Gerson, Swedish Founder of Kopimism), and while the PP has been sanctioned and fined by the Dutch government for helping people circumvent blocks on The Pirate Bay, their claims ring rather hollow.

        • Joakal
          Posted 07/06/2012 at 9:15 pm | Permalink |

          “I’m up for negotiating copyright, and I applaud the PP for taking the debate to democratic means, but while their conferences condone “I encourage reckless and inconsiderate copying that denies all consideration of copyright and similar bullshit.” (Isak Gerson, Swedish Founder of Kopimism), and while the PP has been sanctioned and fined by the Dutch government for helping people circumvent blocks on The Pirate Bay, their claims ring rather hollow.”

          Like I said, you’re saying that Pirate Party are Kopimists. Labor Party might as well be Christians. The PPAU’s policies speak for themselves.

          It’s sad that the big businesses now have artists advocating Internet censorship.

          • Muso1
            Posted 07/06/2012 at 9:23 pm | Permalink |

            “Like I said, you’re saying that Pirate Party are Kopimists.”

            NO, as I’ve repeatedly said, they invite these people to their conferences and listen intently to their presentations about “inconsiderate copying”. The person making the Kopimism presentation was also a US PP member.
            Artists don’t advocate internet censorship. It’s disingenuous to talk about freedoms, genuine sharing and freedom of speech though while encouraging one sector of society (consumers) to exploit another smaller, weaker sector of society (artists). It seems everyone should have equal rights….. UNLESS it gets in the way of owning the new Missy Higgins album free of charge.

            • Joakal
              Posted 07/06/2012 at 9:38 pm | Permalink |

              “NO, as I’ve repeatedly said, they invite these people to their conferences and listen intently to their presentations about “inconsiderate copying”. The person making the Kopimism presentation was also a US PP member.”

              Interesting. But what about Pirate Party Australia?

              “Artists don’t advocate internet censorship. It’s disingenuous to talk about freedoms, genuine sharing and freedom of speech though while encouraging one sector of society (consumers) to exploit another smaller, weaker sector of society (artists). It seems everyone should have equal rights….. UNLESS it gets in the way of owning the new Missy Higgins album free of charge.”

              It’s not Internet censorship because you agree with it? Unless you’re against blocking websites, including The Pirate Bay then?

              • Muso1
                Posted 07/06/2012 at 9:48 pm | Permalink |

                “Interesting. But what about Pirate Party Australia?”

                From everything I’ve seen about the PPAU, they are fully onboard with the Pirate Party movement worldwide. Why would they be traveling a different road? Also one of the most prominent Aussies helped the American wing set up and get their act together.

                Blocking websites equals censorship? I guess it’s a difficult subject.
                Are you in favour of blocking sites hosting child pornography? Are you in favour of Google, Facebook and Twitter censoring content so they can operate a commercial business in less open countries?
                The whole of life is one big compromise, and you hope to choose a path that is right.
                For me, it is absolutely NOT right to download against the wishes of independent film makers, musicians and software developers in order to procure their products without paying.
                The free information movement can make their own movies, music and television, and offer it to anyone free of charge. Some are…. which again I applaud. If your favourite band asks you to pay them, then no it’s not right to ignore the law, OR download their work against their wishes.

                • Anonykitten
                  Posted 07/06/2012 at 10:17 pm | Permalink |

                  Really? Which Aussie was that by the way? I didn’t know anyone from PPAU was involved with the US Party.

                  • Muso1
                    Posted 08/06/2012 at 7:18 am | Permalink |

                    Check the resume:
                    http://olbrychtpalmer.files.wordpress.com/2012/03/mozart-olbrycht-palmer-rc3a9sumc3a9.pdf

                    • Anonykitten
                      Posted 08/06/2012 at 7:06 pm | Permalink |

                      Good to see how uneducated you are about politics Stateside! New York is not the United States. Derp.

                      If you bothered to read up, you’d find out that there is no such thing as a national party over here. The New York Republican, Democrat or Pirate Parties are not the same political parties as the Californian Reps, Dems or Pirates. The NY Pirates are not the same as the MA Pirates, so I suggest you learn more about politics before you start lumping everyone together. The US political system is more like the EU than AU politics. And of course parties help each other, that’s how movements work.

                      If you’re going to embarrass yourself, at least know what you’re talking about.

                      • Posted 09/06/2012 at 7:54 am | Permalink |

                        “If you’re going to embarrass yourself, at least know what you’re talking about.”

                        So you are trying to claim the various Pirate parties all have different policies and goals?
                        Pull the other one it has bells on.

                        Just another pedantic point to try and divert attention from their policy platform.
                        I’ve followed the European party, the US based branches and the Aussies. They all basically agree on what they want, and what they don’t like.
                        I’ve read about their International Conferences, I see them Twittering each other.
                        But anyway, even if you were right, The PPAU want unlimited, unfettered filesharing, which would render professional music, film and tv DEAD in the water!
                        And when you quiz members on that, they say money and art are a bad combination. So hooray, amateur tv and movies from now on if the PP ever get power.

                      • Anonykitten
                        Posted 09/06/2012 at 1:28 pm | Permalink |

                        Seems like the reply button is broken on your comment…

                        (1) Yes, sovereignty still exists believe it or not. The policies of parties that are part of an international movement will differ from country to country. (See the Labor movement for example).
                        (2) Communication is not collaboration or even agreement. Kopimism is considered mostly a joke by the Australians.
                        (3) If you had followed them properly, you would have realised that there is great disagreement between them in many cases.
                        (4) Read “the Case for Copyright Reform” (Google, it’s a free download). It will explain how arts will flourish under a Pirate Party government.
                        (5) The “quizzing” you mention is a very poor representation of the truth. I read the blog post you’re talking about. You, Mr Whitten, clearly have failed to understand that the point was money-led art was inferior to art for art’s sake.

                      • Muso1
                        Posted 09/06/2012 at 3:54 pm | Permalink |

                        But if you aren’t in the industry and never have been, you can only assume art is money led in the industry.
                        It actually isn’t. Many people are doing music for music’s sake, they just need income too to help them make music everyday, instead of as a weekend warrior.
                        But anyway, whether people make music for money or for art, it isn’t YOUR place or the PPAU to dictate to them.
                        Just support the arts for arts sake musicians you like…..and ignore the rest.

                        (PS Ironic my blog comment was deleted by that Pirate Party member…. seeing as the PPAU are 100% against censorship (epic fail).

                    • Penman
                      Posted 08/06/2012 at 10:05 pm | Permalink |

                      For clarification: you _never_ own the content. You merely have a very limited license to use it.

                      • Penman
                        Posted 08/06/2012 at 10:08 pm | Permalink |

                        Speaking of derps. Sorry Anonykitten… _very_ wayward comment there.

                • Joakal
                  Posted 07/06/2012 at 10:32 pm | Permalink |

                  “Are you in favour of blocking sites hosting child pornography?”

                  Nope. Possession of child pornography is illegal. Anyone accessing it would be in possession. Even the government officials were caught out stockpiling child pornography. I see no reason for Internet censorship so far.

                  “Are you in favour of Google, Facebook and Twitter censoring content so they can operate a commercial business in less open countries?”

                  Nope. That’s disgusting.

                  “The whole of life is one big compromise, and you hope to choose a path that is right. For me, it is absolutely NOT right to download against the wishes of independent film makers, musicians and software developers in order to procure their products without paying.”

                  That is unfortunate, but unless you can come up with something that does not affect access to enriching information for billions of people, I will be supporting the Pirate Party Australia.

                  • Muso1
                    Posted 08/06/2012 at 7:22 am | Permalink |

                    Anything that so damages the finances of musicians and causes them to give up their careers ALSO damages ‘enriched information’ for billions of people.
                    You don’t get something for nothing. So you have to put in to get out.
                    As I said, I’m 100% with free information groups experimenting with their own arts with no income attached.
                    But by and large the public prefer free versions of Arts that were created in a remuneration model.
                    They’re just currently enjoying business funded art without paying the required entry fee.

                    • Noddy
                      Posted 08/06/2012 at 10:29 am | Permalink |

                      “But by and large the public prefer free versions of Arts that were created in a remuneration model.”

                      You hit the nail it there. There is virtually unlimited free movies, music, games BUT they want to stuff that costs big budgets to make for near nothing or free. They then point to the free stuff and say, see they are free. You point out the cost and risk and they point out the few percent of movies and musicians who make megabucks.
                      it mightn’t make the mega successful close down but it will distroy a lot of the smaller studios. Soon there will be only ultra high end who can afford the reduced income and the free amateur.
                      Arguing that to stop piracy means they should provide it cheap or free is just blackmail.
                      I bet they wouldn’t like it if someone constantly came in their house and took stuff while they were at work. They complained to the neighbour who is home all day. The neighbour said “Sorry, I don’t want to violate the guys right to privacy” I can’t tell you who is doing it. You go to the police about it and their answer is to put it out on the lawn, then he won’t enter your house to take it.

                      • Posted 08/06/2012 at 12:36 pm | Permalink |

                        Economics 101 – Supply and Demand.

                        There is enough music everywhere, live, radio, cds, paying a performer to throw a concert at your house (some reasonably high profile musicians go that far to engage the fans & bring in the money at the same time) that people think the fair price to listen to a song is somewhere between $0 and $1. I would say that they have also settled that the price for a physical copy such as a CD or DVDAudio copy, is only marginally above that, at $1-$2 a track for a cd at most.

                        The reason that the price is so low? The demand is fixed at ‘basically everyone’s cumulative desire to listen to music all the time like life was a movie with a constant backing track. (I argue this since after the ipod & mp3 player revoloution and the integration of this into mobile phones, most people now have the ability to play as much music as they want without further effort, since they will likely always have either a specialist device capable of holding more than 24hrs of music and able to play back for more than 24hrs on a charge, or a device that they try to keep always charged & always with them ‘just in case’ that they may listen to music on ‘just because its with me and convenient’) And the increasing number of artists entering the fray either encouraged by a giant recording label to pad their catalog, or indy musicians giving it a go, to hobbist releasing music as CC Share with Attribution to get fans, all of these new sources of music does nothing more than gradually erode the price people are willing to pay.

                      • Posted 08/06/2012 at 1:37 pm | Permalink |

                        I gotta go with S here. Look, I agree there is a problem with piracy. I agree there has to be something done to curb its’ effects, particularly on the Indie and low range scenes of music and film. But I DON’T believe it is this apocalypse causing issue the studios are making out. And I don’t agree with the idea of legislation that affects our access to free information to stem it. That is a definite step towards the Orwellian and no matter which way you look at it, that’s wrong.

                        Look at the sort of punishment these companies want. $1.5 MILLION dollars for a woman who copied 24 songs. 3 years ago! Translate that to normal society. It’s the equivalent of being fined $1.5 million for stealing a CD. There’s no question that we would reprimand and punish someone who stole a CD. But to ask for $1.5 MILLION dollars as compensation?? That’s ridiculous.

                        The studios, networks and content middlemen don’t WANT to figure out a new business model. They’re happy with the one they’ve got. I say to that, cliched but true- You snooze you lose. In 5 or 7 years there WILL be people who have the right models. Then those that don’t will be left behind.

                      • Noddy
                        Posted 08/06/2012 at 2:09 pm | Permalink |

                        If they price it too high, don’t buy it. It isn’t life saving drugs, it’s a luxury item. Too expensive? Listen to something else. Market forces will reduce prices, not piracy.

                        “But I DON’T believe it is this apocalypse causing issue the studios are making out”
                        No, not really for them, but for the average artist it is. The average being someone who just gets by as a muso as that is the majority.

                        “Look at the sort of punishment these companies want. $1.5 MILLION dollars for a woman who copied 24 songs. 3 years ago! Translate that to normal society. It’s the equivalent of being fined $1.5 million for stealing a CD. There’s no question that we would reprimand and punish someone who stole a CD. But to ask for $1.5 MILLION dollars as compensation?? That’s ridiculous.”

                        Yes, it is ridiculous. But if there is no way to enforce a law without spending millions to prosecute one or two people, those people will bare all the costs. Why is it so expensive? Because there is no way to enforce the law economically. It would be nice if it was just a fine like parking or speeding. But until there are changes it isn’t economical to do so.

                        I do not blame AFACT for not being interested in the enforcement proposal of the ISPs. Come on, 100 IP addresses per month per ISP? What’s the chance of it hitting the same person 2 times, let alone the 3-4 times needed before anything is done? People will just ignore them as much as they ignore the current emails. Unfortunately I don’t see a solution. Best do what I and many others have done, just leave the industry. leave it to the mega stars who even if their income is halved can survive. The average person can’t afford that.

                        As for business models that work. Providing something easily and cheaply does make a difference. It reduces piracy slightly, but reduces the bottom line even more. I am sure some are honest in their desire to pay a little or a fair price. If you think it will drop piracy by even 20% you are dreaming.

                      • Posted 08/06/2012 at 3:03 pm | Permalink |

                        I can see your point Noddy and Muso1. I can also see my own and S’s too. I really don’t know what the answer is. And to be honest, I could just be thinking as another consumer. I don’t buy a heap of music, but I ALWAYS buy it, about 12-15 songs every few months. I appreciate pop, but I LOVE soundtracks and alternative.

                        I did Music in the HSC, Music2 (bleh, so much writing) and I play piano for the enjoyment. My music teacher told me, word for word “You have to love it AND be good to make a living”. I’m not in music now, but I am in Theatre and arts. The same DEFINITELY applies in this industry.

                        From what I’ve seen, I think alot of people in the arts (music AND theatre) have an unrealistic expectation of becoming the next Guy Sebastian/Cate Blanchett. Not all, but alot. And let’s face it, where egos are involved, it’s a bit rich for them to complain “ahhhh! We’re losing money from pirates, I can’t become rich and famous!” when genuine hard working software engineers, who will likely never be either rich OR famous, are being pirated just as much. This is my issue, the entertainment industry bleet over it, but we don’t see lots publicly from people like Muso1 here who is complaining about software piracy as well, not just music piracy, mainly because there’s less money in these spheres. Not because it’s less important.

                        I don’t know what the answer is, but it’s likely a compromise between content producers, content providers and ISP’s. And yeah…..that’s gonna happen…..lol

                      • Posted 08/06/2012 at 3:05 pm | Permalink |

                        P.S- Renai, if you’ve read this far…..I think there’s an issue with Javascript somewhere. At least, I’ve got my new One XL (it happened on my old Desire too) and I have MAJOR issues once we get above about 20 or 30 comments. Can’t load the whole page, timeouts, then when I try to type in comments, it quite often ignores it.

                        I know it’s probably not a big issue for alot of people and probably a big time waster…..but it’s REALLY annoying! :D

                    • muso1
                      Posted 08/06/2012 at 1:34 pm | Permalink |

                      And all the free, identical quality songs flooding the market courtesy filesharing sites.

                      Economics 101: you can’t compete fairly when the market is flooded with free product from a competitor.

                      • Noddy
                        Posted 08/06/2012 at 2:12 pm | Permalink |

                        The example I always get, being from the games industry, it Steam. Hey Steam provides cheap games that are easily available. The drop in piracy? Steam games are at the top of the piracy lists. In the end rates of piracy are most strongly correlated to desirability of the product, not availability, nor price (maybe $1 iphone games are the exception, but I am talking major tittles)

    10. Troden
      Posted 07/06/2012 at 6:19 pm | Permalink |

      “The bottled water industry does a very good job of competing with existing free alternatives”

      Exactly!

    11. Geoff
      Posted 08/06/2012 at 10:22 am | Permalink |

      I thought it strange the delimiter article doesn’t link to the iiNet blog post. I’m sure I checked the delimiter article a few times, but please excuse me if I still missed it. If you want to read the blog post itself, it’s at http://blog.iinet.net.au/find-share-content-talking-brick-wall/

    12. Duke
      Posted 08/06/2012 at 4:29 pm | Permalink |

      Now for a real muso… Ms Apple to Epic… p.ss off…

      http://www.techdirt.com/blog/casestudies/articles/20120606/15440619227/fiona-apple-to-label-back-off-im-connecting-with-my-fans.shtml

      • Posted 08/06/2012 at 4:32 pm | Permalink |

        +1 Duke. It wouldn’t happen in every case, but it shows the rot within the industry.

      • Noddy
        Posted 08/06/2012 at 4:59 pm | Permalink |

        Ahh, so some respect for artists wishes but just not when it’s choosing to give their IP away for free. If her income dies down and decides she can’t afford to give stuff away would their be the same respect?

    13. Posted 08/06/2012 at 5:20 pm | Permalink |

      Regarding the $1.5 million for 24 songs….
      Thomas was offered a $5000 settlement months ago. She turned it down. She received very bad advice.
      She’s being used as a test case by the filesharing lobby.

      All musicians want is choice.
      Fiona Apple had the choice not to sign to Epic. She has a fully negotiated contract.
      Lots of musicians don’t choose to sign with a label.
      All we are asking for is the chooice to either sell our music, or give it away free, not have the choice to sell taken away from us.
      I don’t have any choice when someone pirates my work. No pay, no contract, no choice.

      • Posted 08/06/2012 at 5:22 pm | Permalink |

        I take your point Muso1.

        Now we just have to get all the children to play nice in this arena….

      • Joakal
        Posted 08/06/2012 at 7:10 pm | Permalink |

        How exactly do you prevent piracy without screwing other people, even other creators, Muso1?

        • Posted 08/06/2012 at 8:01 pm | Permalink |

          You’ll never prevent piracy, but you can greatly reduce it.

          • Joakal
            Posted 09/06/2012 at 7:58 am | Permalink |

            How can you reduce piracy without affecting everyone’s access?

    14. My 2c
      Posted 08/06/2012 at 8:10 pm | Permalink |

      If a TV show/movie or song is played on free to air tv or radio. I usually have 2 choices, see if the station plays the episode/movie/song online for viewing/listening at a convenient time, or download it. Guess which one is easier.

      If it’s on free to air anywhere in the world, its free everywhere in the world, all the time. Or are we pretending globalisation isn’t happening and the internet doesn’t exist?

      Artists make a lot of money from contracts with businesses, not with consumers. How much does the music and film industy make from advertising?

      Want to put an end to illegal downloading? Sell access to all music and all movies ever made and to ever be made for a set fee ($20 a month?) that can be viewed from anywhere, anytime.

      We all know the above scenario will not happen whils’t the majority of consumers are unable (for various reasons) to download a movie/song for free and are willing to pay $30 a movie or album.

      • Posted 08/06/2012 at 8:25 pm | Permalink |

        “f it’s on free to air anywhere in the world, its free everywhere in the world, all the time. Or are we pretending globalisation isn’t happening and the internet doesn’t exist?”

        1- It’s NOT free everywhere in the world. The US has mainly payTV produce these shows, so it’s the subscriptions that pay for it as WELL as advertising

        2- Countries like UK, the consumer must pay for a licence to watch “free”-to-air TV.

        2- It ISN’T free anyway. It’s free to the consumer AS LONG as there’s advertising.

        Would you like to see advertising in all you bought TV episodes online? No didn’t think so.

        “Want to put an end to illegal downloading? Sell access to all music and all movies ever made and to ever be made for a set fee ($20 a month?) that can be viewed from anywhere, anytime.”

        Not viable. Netflix is under strain because its’ business model is contingent on content throughput. Once a certain number of customers have streamed an episode, the provider pulls it’s streaming capability. The only way to stem this is charge more, or limit the number of downloads.

        I think a more viable why would be, say, $30 a month for 10 movies and 30 TV shows. That’s a reasonable amount and if it’s too little….good, you’re obviously watching too much TV. Most of the US is too fat. We save the content AND put pay to childhood obesity.

        2 birds, one stone

        • My 2c
          Posted 08/06/2012 at 9:17 pm | Permalink |

          “It ISN’T free anyway. It’s free to the consumer AS LONG as there’s advertising.”

          I don’t mind a bit of advertising. It’s what makes great things free! Never paid to google or facebook, I think they’re doing pretty well.

          “I think a more viable why would be, say, $30 a month for 10 movies and 30 TV shows. That’s a reasonable amount and if it’s too little….good, you’re obviously watching too much TV. Most of the US is too fat. We save the content AND put pay to childhood obesity”

          Your assumption that I am young and lazy (work a 6 day week, play sport and active gym member) is false. Your option is a good start though, but doesn’t go far enough to make a dent in piracy.

          You do help me make my point though, because I’m busy I miss almost all the shows and movies that I like (or they just never make it to Aus). What’s are my options? Download it, pay too much for it or miss it. If I could download any tv show or movie from one site for free that contained adds, I would. Give me the option and make it easy, real easy!

          • Posted 08/06/2012 at 9:31 pm | Permalink |

            “Your assumption that I am young and lazy (work a 6 day week, play sport and active gym member) is false.”

            Never said or thought you were. I was commenting on the average American and even then I’m not talking about everyone. That would be ridiculous.

            “You do help me make my point though, because I’m busy I miss almost all the shows and movies that I like (or they just never make it to Aus). What’s are my options? Download it, pay too much for it or miss it. If I could download any tv show or movie from one site for free that contained adds, I would. Give me the option and make it easy, real easy!”

            Ease of content providing is what will make a dent in piracy. However, you say you work too much and miss shows? As do I. Once I take into account travel, I’m on a 55 hour week. I ALSO have a WMC recorder setup. I get CRAP reception, but I’m still able to record and watch MOST of what I like to watch….just as many others do….

            In regards to whether it is available though, that IS the issue, as has been shown with the recent story about Game of Thrones. There is little to no excuse for not providing access globally for these shows. However, I think the blame rests as much on Austar (Telstra) as it does on HBO. THEY would probably have been required to pay a higher price to get it sooner, so they chose not to. It makes no SENSE to charge a higher price for overseas networks to simulcast it. It simply inflates piracy. There will ALWAYS be someone to record it and transfer it to the web. If you simulcast it, or delay by a matter of hours, not days, it GREATLY reduces this impact. But such is the nonsensical attitude of the content providers….

            Providing content online with ads doesn’t work. I use an ad-blocker. I’ve not SEEN an ad on a website INCLUDING youTube video ads in months. So…..that business model won’t really work will it….If you mean provide a broadcast stream, with ads, online…..maybe. But with the ads chewing up your quota, especially if it’s HD (12 mins of ads in an hour HD would equal about 1.5 gigs….), would you REALLY sit and watch ads…..or would you just bypass it and pirate anyway?…..

            • Posted 08/06/2012 at 9:32 pm | Permalink |

              Edit: 55 hour week! I WISH!! Try 65 hour…..

              • Posted 09/06/2012 at 7:57 am | Permalink |

                Personally I can’t stand advertising. I watch ABC channels almost exclusively.
                More advertising in music would be a pure negative for me.
                Given a choice of paying $2 for a song and getting it free, but with Pepsi and McDonalds ads, I’d vote $2 every time.

                • Posted 09/06/2012 at 9:19 am | Permalink |

                  +1

                • My 2c
                  Posted 09/06/2012 at 11:35 am | Permalink |

                  Firstly, this reply button better work this time.

                  Secondly, I agree with adds in music is stupid, willing to pay for that. Not $2 a song though.

                  I don’t think any changes will happen until 4G is everywhere and the NBN is up and running allowing for a real cloud based system. For now, I need a copy of every song on every device. Easiest way wins.

                  TV shows – I can stand some adds.
                  Movies – One at the start and on in the middle is fine (pretty much how fox works).

                  • Posted 09/06/2012 at 1:11 pm | Permalink |

                    “Not $2 a song though.”

                    The maker/ seller set the price, usually based on cost, and hopefully fair competition (driving prices down).
                    If the consumer could demand $X, we’d all be driving Porches and enjoying fast broadband at $5 a week.

    15. My 2c
      Posted 08/06/2012 at 9:56 pm | Permalink |

      “If you mean provide a broadcast stream, with ads, online…..maybe. But with the ads chewing up your quota, especially if it’s HD (12 mins of ads in an hour HD would equal about 1.5 gigs….), would you REALLY sit and watch ads…..or would you just bypass it and pirate anyway?…..”

      This is what ISPs and copyright holders need to discuss. Like it or not with the NBN around the corner they will have to sell it cheap to the masses, or risk people downloading it for free (which they definately will).

      Let say $150 for all phone calls and data (which includes unlimited music and videos), including mobile. I currently pay $120 for pretty much the same service.

    16. Posted 08/06/2012 at 10:02 pm | Permalink |

      “Let say $150 for all phone calls and data (which includes unlimited music and videos), including mobile. I currently pay $120 for pretty much the same service.”

      Two things:

      1- You obviously live in a city…..fortunately, as you say, we have the NBN coming to rectify price non-parity

      2- What services give you unlimited music AND videos? Music, you could do via Rdio or Grooveshark, but you don’t own the music and many people have a problem with that.
      Videos? You must mean Netflix, via a VPN. Just a heads up, in about 6-12 months, Netflix are going to GREATLY increase price. They’ve already hinted at it. They have to. The content producers are getting angry at how much Netflix is streaming and how much it’s cutting into their margins, so when the contracts come for renegotiation Netflix will either have to accept it CAN’T have such a dynamic and vast library or…..put up the price and pay more for it.

      Studios won’t put up with decreasing margins, so providers will have to put up their prices as contract prices increase. Unlimited for $15 a month it may be now…..just give it 12 months until 50% of ALL date comes from Netflix instead of just 35%….

      • Penman
        Posted 08/06/2012 at 10:09 pm | Permalink |

        (Reposting comment from earlier which I accidentally replied to someone else’s comment with).

        For clarification: you _never_ own the content. You merely have a very limited license to use it.

        • Joakal
          Posted 09/06/2012 at 8:04 am | Permalink |

          Indeed, it’s unfortunate that they are legally restricting consumer’s access to what they paid for. The pirated version gives more freedom for people to consume the content. As well, there’s pissed off customers paying ‘Australia Tax’ despite lower prices in USA, China, etc, for same thing.

          • Posted 09/06/2012 at 9:20 am | Permalink |

            The ‘Australia Tax’ has been enthusiastically embraced by most web/tech companies though.
            Many Apple products, including downloadable software, cost more here than in the US. More than 10% more (GST).
            So it’s a little weird to see young people sleeping outside the Apple store overnight to pay more for an iPad than they would in LA, then have many of the same young people pirating music because they say it’s unfairly priced.

            • Posted 09/06/2012 at 9:21 am | Permalink |

              And as i said earlier, internet services are way more expensive and slower than the OECD average.

            • seven_tech
              Posted 09/06/2012 at 1:52 pm | Permalink |

              Muso1, most people VEHEMENTLY disagree with the Australia Tax and there is now an investigation of it. Does that mean if music, movies and software online attract this ‘tax’ we should investigate them for price gouging too? Cause then essentially you’re saying, if It’s found the ‘tax’ is indeed bogus, that the prices we are charged on music, movies and software is bogus too…..that doesn’t go well with the argument you’re making?…

              Also, people buy Apple products especially, but also other tech too, in Australia as compared to overseas for 3 main reasons:

              1-Especially in the case of Apple, they like the loyalty and hype in their own country. Call it fanboism or call it what you want.

              2- Many people don’t know or trust how to ‘grey import’ and so they are stuck paying high consumer prices in Australia even though they don’t want to and shouldn’t have to; hence the investigation.

              3- Warranty. If you’ve ever tried to dodge the minefield that is international warranty you’ll understand how hard it is. Companies like ASUS SPECIFICALLY disclude Australia in their international warranties….while including countries like Brazil!!

              Sorry but this argument has a lot of holes. And you’re also assuming a lot of those people that ‘line up’ pirate too. What evidence of that do you have?

              • Muso1
                Posted 09/06/2012 at 4:00 pm | Permalink |

                I think you have me wrong on many counts.
                I’m against overcharging foranything.
                I’m against (for example) iTunes having different pricing in the US to here (excepting local tax – gst?).
                I don’t assume other Delimiter posters are pirates.
                But I do see people all over the web making claims about the content industry, when they have zero actual experience working in the creative arts.
                I do think the telco and web industries are pots calling the kettle black.
                They charge as much as they can. They don’t really listen to customers, and unfortunately they don’t care about the content creators who in many cases power their businesses.

                • Posted 09/06/2012 at 4:06 pm | Permalink |

                  “I do think the telco and web industries are pots calling the kettle black.
                  They charge as much as they can. They don’t really listen to customers, and unfortunately they don’t care about the content creators who in many cases power their businesses.”

                  Here we can DEFINITELY agree. And THIS is where our problem stems. This meeting, between ISP’s like iinet, which you’ve said aren’t being fair, and the organisations like AFACT, which I’m saying are ALSO not being fair, is not going to come to any conclusion. It hasn’t for the last 7 years, why would it now?

                  The problem is, until they both DO compromise, piracy is just gonna get worse and the ultimate losers are the creators; NOT the studios, because they’ll just raise the price to compensate and NOT the ISP’s, because, simplified greatly, more downloads means more money.

                  This is ultimately the problem. No one wants to agree. But I DON’T think it is right for the government to make the decision WITHOUT public consultation, as is the case now.

                  • Posted 09/06/2012 at 5:37 pm | Permalink |

                    Yes!

                    I think the main thing that came out of the SOPA debacle in the USA was a realisation amongst those on both sides of the argument that the only solution is going to be some workable compromise.
                    Most musicians don’t want heavy control of the internet. most musicians don’t want the public criminalised.
                    But those same people don’t want or deserve to be exploited without proper pay, and the main problem is the big tech enablers (TPB for one).
                    The Pirate Bay is making huge bucks from advertising (est $14 million per year). No content creator is seeing ANY of that.

    17. Zeo
      Posted 11/06/2012 at 8:53 pm | Permalink |

      Well to Muso1 and the big companies/middlemen, he is what I was told at work once “If you don’t like this job and don’t think your getting paid enough, go and get another job”

      • Muso1
        Posted 12/06/2012 at 8:36 am | Permalink |

        Yeah, but we don’t want thousands of artists giving up their music just because they don’t like having their work ripped off.
        In that scenario, the consumer definitely loses.




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