How online pirates divide Australia

Australia is a nation divided. I'm not talking rugby vs AFL, Ford vs Holden or even Apple vs PC.

Rather, we are a nation of sharply divided views about the local seriousness of online copyright infringement.

It's a global phenomenon often referred to as ‘internet piracy' – the improper sharing of content files that enable consumers to receive films, music, games, software and a range of other copyrighted material without paying for it.

Australia's Federal Cabinet will soon wrestle with this complex issue following a period of wide-ranging consultation and discussion around a range of options to combat the problem. Most of the ideas up for consideration in Australia have already been tried overseas, with varying levels of success.

All stakeholders, including Australia's internet providers (ISPs) acknowledge that action needs to be taken to better protect the legitimate rights of content owners and in particular to ensure that creative artists are fairly paid for the content they generate.

Research commissioned by Communications Alliance and conducted during October by JWS Research, points to gender and age-based delineations in how Australians view online copyright infringement.

The survey of 1500 people found that if you are an Aussie male, younger than 34, tech-savvy and familiar with downloading techniques, then you are likely to see internet piracy in Australia as a small problem, or no problem at all.

Those aged over 55 – and particularly women in the older age group – disagree, with more than 60 per cent believing we have a significant issue to address.

Greater unanimity emerged when consumers were asked about the risks of some of the policy proposals under consideration.

Almost 70 per cent of Australians consumers fear they will face higher internet bills if ISPs are forced to shoulder the responsibility for and cost of identifying, monitoring and punishing people who illegally download content from the internet.

This fear relates to the potential structure of one option being looked at by industry and Government - a notice scheme in which alleged copyright infringers would be detected through specialised software and ISPs would be required to match IP address details to a specific customer account, then send notices to those customers, warning them that their activity might be illegal and educating them about where to access lawful content.

There are two key parameters about such a scheme that have generated real heat between the content owner and ISP camps in Australia.

The first is whether a notice scheme should involve ISPs being required to punish their own customers on behalf of rights holders, by imposing sanctions such as slowing the customer's internet speed or even disconnecting their service.

Most ISPs, not surprisingly, are staunchly opposed to being made the policeman – pointing to the potential for wrongful allegations, the need to focus on education rather than punishment and the fact that right holders have existing rights to pursue infringers through the courts, but typically choose not to do so.

The second hot issue is not hard to guess – “who pays for all this?”  ISPs believe that right holders should reimburse the reasonable costs that ISPs would incur in helping the rights holders solve the piracy problem. After all, they reason, rights holders say that piracy costs them around $1.4 billion per annum in lost sales.

Therefore, any scheme that made decent inroads into the piracy problem would generate a huge financial uplift to rights holders – more than enough to enable them to contribute to the cost of the scheme and avoid internet users – the vast majority of whom are not pirates, being hit with the bill.

Sixty per cent of respondents in the JWS Research survey agreed that ISPs costs should be reimbursed by rights holders if a notice scheme was put in place.

But a much larger majority – almost 80 per cent - zeroed in on the need for rights holders to make their content available at reasonable prices and in the same timeframe it is released elsewhere in the world. They point to the combination of content being unavailable in Australia through legal channels - or priced above what it costs to buy elsewhere - as major contributors to piracy.

The HBO smash hit series Games of Thrones, is perennially cited as an example of content that is pirated because it airs in the US before it screens in Australia and/or is only available to pay-tv subscribers. But there is a new kid on the piracy block…………

Transparent – the hottest item on US TV right now - is a comedy-drama television series that debuted in the US in February this year. The story revolves around a Los Angeles family and their lives following the discovery that their father Mort is transgender. Australians can't view it – nor can they legally purchase it online. You can guess what is happening today as a result!

I readily acknowledge that some rights holders have made efforts during the past year to improve content availability and pricing, and should be commended for doing so. But as Transparent demonstrates clearly, the availability issue is far from conquered.

It is inconvenient for content distributors that in a globally connected audience environment, consumers aren't willing to wait weeks or months to see the programs that the rest of the world is already talking about on social media. Nonetheless, the old established content distribution business models need to evolve to meet market expectation. If not, no amount of heavy-handed regulation will fully protect the legitimate rights of creative artists in Australia and globally. 

We may see a policy package emerge from Cabinet this week. It is likely to involve a range of measures, in recognition that nowhere around the world has anyone unearthed a single ‘silver bullet' measure to eradicate online piracy.

Mercifully, there has been broadly based and convincing push-back – from rights holders, the telecommunications sector, consumer representatives and academia – against a proposal floated by Government to extend authorisation liability under the Copyright Act. 

The legislative effect of such a change is complex to explain, but the bottom line is that not just telcos, but every Australian school, university, library, technology company, Wi-Fi operator and even some retailers could find themselves subject to new legal liabilities relating to consumer activities over which they have no control.

In the meantime a group of ISPs is working through Communications Alliance to create a cooperative ‘follow-the-money' strategy designed to restrict the advertising revenues flowing to websites that promote or facilitate online copyright infringement. It is hoped that this will help to choke off the financial viability of those sites fertilising a practice that most of us would like to see done away with.

A summary of the JWS research report is available here.

John Stanton is the chief executive officer of the industry umbrella group, the Communications Alliance.