Blog article
See all stories »

Entertainment Industry Bubble To Crash Next

I spend a lot of time in Australia and of course I use the internet. I have always believed that the actions of internet users are their own and do not 'belong' to the Internet Provider. Sabiene Heindl of the Australian Music Industry Anti-Piracy Investigations(MIPI) is of a different view. Following MIPI's line of reasoning, every corporation should be able to do deep packet inspections of every bit of internet traffic you receive or send. Just in case you might be infringing someone's copyright.

They've picked a smallish ISP to bully in court and try and force them to be the thought police.

What's next, the telephone company letting everyone listen in to our calls in case we libel or otherwise say something which purportedly infringes some corporation's rights?

I don't for a second think piracy should be OK, bit if the music industry hadn't been overcharging for their products, making them difficult to obtain and bundling a couple of good tracks with a pile of rubbish and forcing consumers to buy an album for 20 times the value of even a couple of the tracks, they might not find themselves in this situation.

I note that they've hired the former music and file sharing pioneer and creator of Kazaa as a turncoat to supposedly 'cure' consumers of the problem. Well I've got news for you, if you think you can stop it by suing ISP's and forcing them into becoming the thought police, it will come back to bite you many times over. Apart from the fact that anyone who claims to be able to defeat piracy would be most likely be taking your money under false pretenses, the manner in which the record companies are attempting to claw back income is bound to fail.

These bloated corporations have plenty of skeletons in their own closets and I'd suggest a little digging by journalists would uncover some of the illegal and unconscionable practices that the record companies routinely engaged in, in the past.

I fail to see how they will gain any sympathy from consumers by their latest tactics. They are, as usual, about a decade or two behind the times.

Australia has recently decided to take a leaf out of the Chinese rule book and is attempting to create a massive censorship mechanism to stop anyone from seeing anything the government determines as being unsuitable. Way to go. Who's advice are you taking? The snake oil salesman who wants to sell you the Big Brother gadget?

Any mechanism for oppression (ie censorship) is bound to fail, and worse, be abused by corporations or politicians just too keen to get their hands on the power.

Wake up, there is no going back to the book-burning days. Information sharing is here. If you attempt to censor the internet it will fail, both as a medium for the exchange of ideas and knowledge and the very attempt will fail.

There are better ways to protect children and make people who do wrong accountable for their action that don't include a Fascist recipe for disaster.

The entertainment industry is hoping to become part of the censorship machine, but would be better served looking at ways to make it easier and cheaper for consumers to enjoy their employer's (the content creators) products. The old economics are gone and the entertainment companies have to get rid of the grey haired fantasists running them and get into the 21st century.

The outcome of any attempt to censor the internet is very likely to be the reverse. There are a multitude of ways to share information and so long as the entertainment companies want too much of a share of the income, and are willing to pay the likes of itunes, and inflate the prices further, there will be piracy.

Censoring the net will merely see a new business opportunity for the neighbourhood criminal. Stand by for peddlers on the street offering passers-by any track they want for a few cents via wifi or bluetooth. They could carry every song and movie ever made in their backpack and still outrun the average cop. Will the kids swap tracks at the bus stop waiting for school just because they can?

New gadgets will make it easier to share tracks with your friends and neighbours and the ISP will know nothing about it. What will you do then? Stop people in the street and perform random searches?

It's time the entertainment companies grew up and realised. 10 years on and they're still living in a fantasy world. Probably a hangover from all that drug-taking in the 70's and 80's.

I'm willing to predict, yet again, that the entertainment companies will fail miserably. I'm shorting their shares now and I suggest you do the same. It's like 1997 all over again - a few dinosaurs fighting for their overly large share of the pie, while the world passes them by.

As I predicted and told them in 1997 - if you take that course of action you'll lose billions. They did, they lost.

They will lose again, only this time it'll be the end. Hey I didn't make much from them directly, but boy was it easy to pick which share prices would tank (Sony, BMG for instance). I was amused to see them all consolidating as a last gasp effort, and this latest effort is the death rattle.

Sell, or short those shares now, the entertainment industry crash can't be far off if they make every consumer the enemy, when the real enemy is within their own ranks.


Comments: (4)

Anthony Cossey
Anthony Cossey - Fixnetix ltd - London 20 November, 2008, 13:35Be the first to give this comment the thumbs up 0 likes

I make you 100% correct, the current music and entertainment industry was founded on their ability to manufacture, promote and distribute MEDIA, like CD's, LP and Singles.....The internet now not only frees the consumer but the artist as well, this portion of the economy is heading for a meritocracy, which going to be a sea change. Successful artists based on consumer choice, not on promation by media companies. I never pirate content, i feel that if something entertains me that i should pay the artist for his work, comes from being an ex contractor. As an example i had NO issue paying (£22) for the recent Blu-ray disc of Ironman, however others i know simply PINCHED the DVD from torrents.....a practice i really don't agree with. If you want to stop piracy, drop the on release cost of a DVD/Blu-ray to $10, after a set period of time after release, let people download it for $1 or for nothing.....entertainment companies who try the find and fine approach via ISP's are doomed.

A Finextra member
A Finextra member 20 November, 2008, 14:52Be the first to give this comment the thumbs up 0 likes

Yes Anthony, I too like the idea of supporting an artist who entertains me, but many of them just make it too hard and too expensive. Having everything in the house from a valve record player through to ipods, I find the quality of the mp3s are so poor that I am sure that is a factor in why teenagers play them so loud and damage their ears. They are paying for rubbish. My daughter was surprised to hear the difference between a CD and an ipod track when played on one of the better systems in the house.

The entertainment companies sell poor quality product at prices that cannot be sustained by the wallets of consumers. I would not be unsurprised to see the itunes store tank in the current climate. The numbers of tracks they've sold doesn't impress me in the least, it's a tiny fraction of the number being listened to.

The entertainment companies are in danger of a fullscale revolt (if it hasn't already happened).

Until they make it easier, lower the price and lessen the proprietary nature of the music format, I'm not buying, for myself or anyone else. Having seen the walkman era come and go I'm sure the ipod thing will do the same. It's still a novelty. Once those hearing damage statistics start to come home to roost the kids may well drop them like a hot potato and go back to socialising and listening to better quality sound (if they haven't been hit by a bus). Storage devices are getting smaller, with more capacity and cheaper and more capable of holding real music.

The music industry is probably the only industry where they think they can go backwards, both in technology and quality of their product, limit their distribution and still expect to make money.

I wouldn't be a shareholder in any of them if you gave me the shares. I'll happily borrow some and short them though.

I note that e-commerce has gone backwards with the latest figures showing a -1% year on year growth this quarter. Incomes under $50,000 are drastically reducing their online spend. The first thing to go will be buying DVD's and itunes.

Only the $100,00+ income bracket are continuing to spend (+14%). That won't sustain the entertainment companies.

Retail E-Commerce (Non-Travel) Growth Rates by Income Segment

Aug-Oct 2008 vs. Year Ago

HH Incomes Segment    Aug-Oct Y/Y

                             % Change             Share of Total
$0 - $49,999               -3%                      21%

$50,000 - $99,999       1%                      45%

Excludes Auctions, Autos and Large Corporate Purchases

Total U.S. – Home/Work/University Locations

Source: comScore, Inc.

The others will be next...

A Finextra member
A Finextra member 24 November, 2008, 03:41Be the first to give this comment the thumbs up 0 likes

Electronic Frontiers Australa (EFA) today expressed concern about a lawsuit filed against Internet Service Provider iiNet in the Federal Court. A consortium of media companies have sued the ISP for allegedly allowing its users to download infringing movies and TV shows by failing to terminate their accounts after allegations of infringement by the copyright industry.

"This lawsuit is the latest attempt by the movie industry to bully
Internet Service Providers into becoming copyright police," said EFA spokesperson Nicolas Suzor. "ISPs are not in a position to monitor and terminate internet access to users based upon unsubstantiated threats from copyright owners, and should not be asked to do so."

Recognising the need for immunity from copyright infringement suits such as these, the Australian Government introduced safe harbours for Internet Service Providers as part of the Australia - United States Free Trade Agreement (AUSFTA). These safe harbours provide that ISPs will not be liable to copyright owners for merely routing internet traffic as long as they "adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the accounts of repeat infringers." iiNet has publicly stated that it will not disconnect customers on mere allegations of infringement, and that it will comply with its obligations to terminate a customer's internet access after such allegations have been properly proved in a court of law. EFA strongly supports iiNet's position on this issue, and believes that Internet Service Providers cannot and should not be required to pass judgments on the legitimacy of their customers' actions.

"Copyright infringement is a complicated area of law with numerous exceptions. ISPs are simply not equipped and certainly should not be asked to play the role of judge, jury, and executioner upon allegations of infringement," Suzor continued. "Every citizen has a right of due process under the law, and when faced with having their internet service terminated, every citizen has the right to ask that the case against them be proven first."

Experience in the United States of America has shown that allegations of infringement are often made without basis. There have been documented cases in which copyright owners have even alleged that a simple laser printer has illicitly downloaded and shared copyright movies, for example. There have also been allegations of infringement for uses which are clearly permissible under US fair-use law, such as the case of a short home movie in which a baby was filmed dancing to a song on the radio.

Suzor expressed concern that the approach taken by the movie industry will unjustly punish users without due process: "To shift the burden of proof, and require that ISPs terminate access to users upon mere allegations of infringement, would be incredibly harmful to individual internet users in Australia. With the mistakes we have seen in the past overseas, where innocent users have been mercilessly and incorrectly targeted by copyright owners, a regime which requires disconnection without proof goes against all notions of fairness." EFA is also highly concerned that ISPs are being asked to violate the privacy of internet users by spying on their online activities.

EFA believes that if this case were to erode the utility of Australia's safe harbour provisions, it would be extremely stifling to internet innovation and new technology in this country. The existence of safe harbours provide the certainty that operators of communications networks need in order to provide their services to the public. The public benefits greatly from technologies such as BitTorrent, and platforms such as YouTube and MySpace. These services are used for much more than simply exchanging material that infringes copyrights. However, without safe harbours, these services would be likely to be too difficult or risky to operate, or would be so
restricted as to lose the majority of their value.

The safe harbours in Australian copyright law exist to protect
providers of innovative new technologies from copyright infringement claims which would shut them down. The way the safe harbours are designed also protects users from having their accounts terminated without due process. EFA believes that any weakening of either of these two protections is likely to have disastrous effects for Australian internet users.

In fighting this lawsuit, iiNet will be defending the rights of all
Australian Internet users and we wish them luck.

– Ends –

Below is:
- Background information
- Contact details for media


    *  AFACT Press release about the lawsuit:

    * iiNet Press release about the lawsuit:

    * Limitations on remedies for copyright infringement against
carriage service providers - Fact sheet:

    * Printer accused of copyright infringement: Tracking the
Trackers, University of Washington:

    * 'Dancing Baby' video accused of infringing copyright:

A Finextra member
A Finextra member 26 November, 2008, 07:43Be the first to give this comment the thumbs up 0 likes

Not that I'd bother to actually do it but I had a thought on how to make all movies and songs, books and other copyright material available in the whole, legally and for nothing.

It is actually legally possible to do it. I don't suppose I should point out how, but it just might come in handy in negotiations with the entertainment companies one day.

Blame the 1993 Moss Wood...

Retired Member

Member since

19 Mar 2009


Blog posts




This post is from a series of posts in the group:


A place to share stuff that isn't at all fintec related but is amusing, absurd or scary.

See all