Why RIAA, ISP cooperation may deliver returns for both sides
The Recording Industry Association of America and Internet service providers are reportedly pairing up to police illegal downloads.
CNET News' Greg Sandoval and Maggie Reardon report:
AT&T and Comcast, two of the nation's largest Internet service providers, are expected to be among a group of ISPs that will cooperate with the music industry in battling illegal file sharing, three sources close to the companies told CNET News.
The Recording Industry Association of America, the lobbying group representing the four largest recording companies, said last month that it had enlisted the help of ISPs as part of a new antipiracy campaign. The RIAA has declined to identify which ISPs or how many.
CNET News adds that none of the half dozen or so ISPs involved have signed agreements because of worries about bad press. ISPs will reportedly have a series of measures to deter piracy. The last response would be a service suspension or termination.
The partnership raises a bevy of questions. Why would ISPs want to get tangled up with policing downloads? What happens when someone is falsely accused and is there an appeal process? If ISPs police downloads with the RIAA does that open a Pandora's Box of liability?
And the biggest question of all: Why are these two groups partnering?
The answer can be summed up in one word: Money.
The RIAA is looking to shut the door on illegal music downloads and revive an industry. That's relatively easy to see.
So what's in it for the ISPs? My hunch is that ISPs will get some sort of cut of any music partnerships. But the real payoff comes from forcing mass downloaders--the folks that eat up all the bandwidth--to go elsewhere. The ISPs want to be careful about outright booting customers, but they surely won't mind nudging bandwidth hogs to drop service.
Here's a scenario:
- Mr. Downloadeverymovieandsong guy is identified as someone who is swiping songs illegally.
- The RIAA is happy to stop him. But so are the ISPs. ISPs hate bandwidth hogs--that's why some are flirting with bandwidth caps.
- The ISP and the RIAA serves notice to Mr. Downloadeverymovieandsong guy.
- Mr. Downloadeverymovieandsong guy gets angry. He blogs. He forms a Twitter coalition. And as a protest move he goes to another ISP, say Comcast to Verizon.
- Well guess what? Comcast is stoked that Mr. Downloadeverymovieandsong guy is gone. He was screwing up the broadband pipe anyway. And double bonus if this guy goes to a rival.
- The return on investment from booting Mr. Downloadeverymovieandsong guy is clear: Comcast can use that capacity on a user that provides better profit margins.
Given that scenario the ISPs partnered with the RIAA come out as winners. Sure, there may be bad press, but nudging bandwidth hogs off an ISP's network is worth it. ISPs are making a good trade: Profit margin in exchange for a little grief from customers they don't want anyway. That's a pretty good deal.