Sweden sees music sales soar after crackdown on filesharing
Music executives in the UK are looking to the home of Abba for signs their declining sales can be stemmed by new laws
Thank you for the music. Or rather thank you for paying for the music, to borrow from Abba.
Record labels are pointing to the dramatic rise in Swedish music sales, just months after the country introduced anti-piracy laws, as evidence of what a similar crackdown in the UK could do to the flagging market.
Figures from the record labels association IFPI Sweden show revenues rose 18% in the first nine months of this year, a significant reversal from seven consecutive years of declines. Most of the rise came after April's implementation of an anti-piracy law alongside a ruling against the operators of filesharing site, The Pirate Bay. The two events generated a great deal of interest and deeply divided debate around copyright in Sweden.
Music executives in the UK are looking to the country's experience for signs that their own tumbling sales can be stemmed by new laws outlined by the government last week. Business secretary Lord Mandelson's digital economy bill includes controversial plans to send warning letters to the most flagrant unlawful filesharers and paves the way for persistent offenders to have their broadband suspended from 2011.
Opponents of the UK proposals are quick to point out that the Swedish sales rise coincides with the emergence of new digital services such as the popular Spotify.
Music industry groups concede that too, but they insist the combination of carrot and stick is the key to changing consumer behaviour.
"The increase in sales in Sweden, set against the backdrop of innovative new digital services and tighter copyright laws, is encouraging," said John Kennedy, chairman and chief executive of the international record labels group, IFPI.
"It is too early to say if Sweden has permanently turned a corner, but we hope that users there will permanently switch from unlicensed filesharing networks that give nothing back to the music community to great value legal services whose operators recognise continuous investment is needed to discover and promote the talent of tomorrow."
The 18% rise in nine-month Swedish sales reflects an 80% increase in the digital market and a 9% rise in physical format sales. IFPI also points out that four new physical music retailers have opened in Stockholm this year.
Ludvig Werner, who chairs IFPI Sweden, says that even if the new law has not changed people's perceptions of whether copyright owners should be properly remunerated, it has changed their behaviour. A crackdown on illegal sites combined with the spread of legal sites supported by advertising has helped push consumers from one to the other.
"It's like speeding, put up cameras and people will start to ease off the gas pedal. Even if it doesn't change the attitudes they find legal alternatives because they don't want to get caught," he said.
The rise in sales has been as "dramatic as when the figures started to drop in 2002", he says. But music bosses in the home of Abba and Ace of Base are not cracking open the bubbly just yet.
"The music business in Sweden has been so used to negative sales information for the majority of a decade, so they don't stand up and drink champagne when they see these figures," said Werner.
"They are saying: 'It's interesting … but let's wait and see if this is a change in trends or is it just a deviation from the downward spiral?'"
IFPI also flags up rising sales in South Korea, another country that recently introduced an anti-piracy law and where several legal services have launched. It says music sales there were up 18% in the first half of 2009 on a year ago as CD sales rose for the first time in five years.
Geoff Taylor, the chief executive of UK record labels group BPI, says the figures from Sweden and South Korea show how legislation can steer people into legal services. He hopes the UK's experience will follow suit.
"We hope that even the announcement of the new legislation will have some educational effect by reminding people illegal downloading is against the law and that there's a huge range of legal services out there," he said.
On the other side of the debate over proposed UK laws, Jim Killock, executive director of the Open Rights Group, questioned how much the Swedish figures reflected a legal change there.
"We shouldn't be surprised that digital revenues are going up in countries like Sweden now that new services have been online for a while. The question is whether it is necessary to have harsh enforcements," he said.
Killock believes music companies and other rights holders are already alienating consumers. He points out that Sweden's Pirate party, which wants to legalise internet filesharing, has won a seat in the European Parliament. His own group, which is running a "say no to disconnection" campaign, has seen its membership grow by 20% in the last two months, to just over 1,000 people.
"If the music industry wants to build a movement of people that are angry with the way they are being treated they are going about it the right way," he said.
He and many of the internet service providers argue the way to curb piracy is for music companies to provide more legal online music sources like Spotify.
"Filesharing is not the root of the problem. It's a symptom not a cause. It's a symptom of a lack of relevant services," said Killock.
Broadband provider TalkTalk, whose chief executive Charles Dunstone has been an outspoken opponent of Mandelson's planned clampdown, said the sales rise in Sweden did reflect "some movement towards more accessible and reasonably priced content".
But the company questioned whether piracy was on the wane.
"We have almost no idea how much content is being accessed illegally because people are migrating away from P2P (peer to peer) platforms and increasingly access content via proxy servers, encryption, ripping from internet radio and so on – all of which is undetectable," said a spokesman.
"At best, the Swedish system has hastened the migration from P2P. The development of better legitimate models is very welcome and it probably explains the uptick in sales but it seems highly implausible that it is legislation which has prompted any reversal of fortune," he added.
The debate over how much new laws can actually help music sales over the longer term has also deeply divided musicians.
In Sweden many artists came out in support of new legislation, says Werner. But many opposed it as counter-productive.
Alex Jonsson, the keyboard player in Swedish progressive rock band Maze of Time, describes the new law as "absolutely horrid", partly because of the privacy implications but also because he believes many bands have benefited from filesharing.
"If I could, I would put everything out there. The way the music business has developed means that spread is much more important than short-term gain … It's a changing climate and you have to look at new ways of getting your music out such as the live scene and bundling music together with other services and so on," he said.
"I do get a smaller piece of the pie but the pie is getting bigger. People in Kuala Lumpur would never have known before about a band in a suburb of Stockholm."
Katie Allen
Monday 23 November 2009 15.51 GMT
guardian.co.uk © Guardian News and Media Limited 2009
Pro-copyright groups lobby MPs for digital economy bill
New Alliance Against Intellectual Property Theft pushes for legal protection against filesharing piracy
Music executives in the UK are looking to the home of Abba for signs their declining sales can be stemmed by new laws
Thank you for the music. Or rather thank you for paying for the music, to borrow from Abba.
Record labels are pointing to the dramatic rise in Swedish music sales, just months after the country introduced anti-piracy laws, as evidence of what a similar crackdown in the UK could do to the flagging market.
Figures from the record labels association IFPI Sweden show revenues rose 18% in the first nine months of this year, a significant reversal from seven consecutive years of declines. Most of the rise came after April's implementation of an anti-piracy law alongside a ruling against the operators of filesharing site, The Pirate Bay. The two events generated a great deal of interest and deeply divided debate around copyright in Sweden.
Music executives in the UK are looking to the country's experience for signs that their own tumbling sales can be stemmed by new laws outlined by the government last week. Business secretary Lord Mandelson's digital economy bill includes controversial plans to send warning letters to the most flagrant unlawful filesharers and paves the way for persistent offenders to have their broadband suspended from 2011.
Opponents of the UK proposals are quick to point out that the Swedish sales rise coincides with the emergence of new digital services such as the popular Spotify.
Music industry groups concede that too, but they insist the combination of carrot and stick is the key to changing consumer behaviour.
"The increase in sales in Sweden, set against the backdrop of innovative new digital services and tighter copyright laws, is encouraging," said John Kennedy, chairman and chief executive of the international record labels group, IFPI.
"It is too early to say if Sweden has permanently turned a corner, but we hope that users there will permanently switch from unlicensed filesharing networks that give nothing back to the music community to great value legal services whose operators recognise continuous investment is needed to discover and promote the talent of tomorrow."
The 18% rise in nine-month Swedish sales reflects an 80% increase in the digital market and a 9% rise in physical format sales. IFPI also points out that four new physical music retailers have opened in Stockholm this year.
Ludvig Werner, who chairs IFPI Sweden, says that even if the new law has not changed people's perceptions of whether copyright owners should be properly remunerated, it has changed their behaviour. A crackdown on illegal sites combined with the spread of legal sites supported by advertising has helped push consumers from one to the other.
"It's like speeding, put up cameras and people will start to ease off the gas pedal. Even if it doesn't change the attitudes they find legal alternatives because they don't want to get caught," he said.
The rise in sales has been as "dramatic as when the figures started to drop in 2002", he says. But music bosses in the home of Abba and Ace of Base are not cracking open the bubbly just yet.
"The music business in Sweden has been so used to negative sales information for the majority of a decade, so they don't stand up and drink champagne when they see these figures," said Werner.
"They are saying: 'It's interesting … but let's wait and see if this is a change in trends or is it just a deviation from the downward spiral?'"
IFPI also flags up rising sales in South Korea, another country that recently introduced an anti-piracy law and where several legal services have launched. It says music sales there were up 18% in the first half of 2009 on a year ago as CD sales rose for the first time in five years.
Geoff Taylor, the chief executive of UK record labels group BPI, says the figures from Sweden and South Korea show how legislation can steer people into legal services. He hopes the UK's experience will follow suit.
"We hope that even the announcement of the new legislation will have some educational effect by reminding people illegal downloading is against the law and that there's a huge range of legal services out there," he said.
On the other side of the debate over proposed UK laws, Jim Killock, executive director of the Open Rights Group, questioned how much the Swedish figures reflected a legal change there.
"We shouldn't be surprised that digital revenues are going up in countries like Sweden now that new services have been online for a while. The question is whether it is necessary to have harsh enforcements," he said.
Killock believes music companies and other rights holders are already alienating consumers. He points out that Sweden's Pirate party, which wants to legalise internet filesharing, has won a seat in the European Parliament. His own group, which is running a "say no to disconnection" campaign, has seen its membership grow by 20% in the last two months, to just over 1,000 people.
"If the music industry wants to build a movement of people that are angry with the way they are being treated they are going about it the right way," he said.
He and many of the internet service providers argue the way to curb piracy is for music companies to provide more legal online music sources like Spotify.
"Filesharing is not the root of the problem. It's a symptom not a cause. It's a symptom of a lack of relevant services," said Killock.
Broadband provider TalkTalk, whose chief executive Charles Dunstone has been an outspoken opponent of Mandelson's planned clampdown, said the sales rise in Sweden did reflect "some movement towards more accessible and reasonably priced content".
But the company questioned whether piracy was on the wane.
"We have almost no idea how much content is being accessed illegally because people are migrating away from P2P (peer to peer) platforms and increasingly access content via proxy servers, encryption, ripping from internet radio and so on – all of which is undetectable," said a spokesman.
"At best, the Swedish system has hastened the migration from P2P. The development of better legitimate models is very welcome and it probably explains the uptick in sales but it seems highly implausible that it is legislation which has prompted any reversal of fortune," he added.
The debate over how much new laws can actually help music sales over the longer term has also deeply divided musicians.
In Sweden many artists came out in support of new legislation, says Werner. But many opposed it as counter-productive.
Alex Jonsson, the keyboard player in Swedish progressive rock band Maze of Time, describes the new law as "absolutely horrid", partly because of the privacy implications but also because he believes many bands have benefited from filesharing.
"If I could, I would put everything out there. The way the music business has developed means that spread is much more important than short-term gain … It's a changing climate and you have to look at new ways of getting your music out such as the live scene and bundling music together with other services and so on," he said.
"I do get a smaller piece of the pie but the pie is getting bigger. People in Kuala Lumpur would never have known before about a band in a suburb of Stockholm."
Katie Allen
Monday 23 November 2009 15.51 GMT
guardian.co.uk © Guardian News and Media Limited 2009
Pro-copyright groups lobby MPs for digital economy bill
New Alliance Against Intellectual Property Theft pushes for legal protection against filesharing piracy
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