Is ACTA really dead?

With supreme irony, the European Parliament chose US Independence Day to exercise its power, granted under the Lisbon Treaty, to reject an international trade agreement. But is the Anti-Counterfeiting Trade Agreement (ACTA) really dead? 

The decision by the European Parliament on July 4 to reject the agreement deprived the deal of 27 of its potential 38 participants and a number of other countries, including Australia, have withheld ratification, but there are still enough in play to validate it.

A US journalist quipped that the ACTA will end up the US-Morocco anti-counterfeiting trade agreement but let's not forget our cousins across the ditch.  The way the present New Zealand government is buddying up to the US, after so many years of being the missing NZ in the ANZUS agreement, ACTA is more likely to become the New Zealand-USA-Morocco anti-counterfeiting trade agreement.  If that were the case, our CER obligations with New Zealand may bring elements of the ACTA into our legal regime.

Punitive international agreement are one way to go to counter the real issues of piracy and counterfeiting, issues that range from lost revenues to the lack of quality control on counterfeit goods as diverse as aircraft parts and pharmaceuticals, but there are others.

One example is a report released on 27 June in the UK titled ‘The Six Business Models for Copyright Infringement: A data-driven study of web sites considered to be infringing copyright'.

Jointly commissioned by PRS for Music, the UK copyright collecting agency with a similar remit to AMCOS and APRA, and Google UK, the research work was done by BAE Systems Detica.

One thing is immediately apparent on reading the report:  the alleged illegal files-sharing and download sites they examined are not being run by freedom of speech-loving geeks and nerds with vaguely anarchistic politics. These sites are serious businesses raking in millions of dollars that otherwise would trickle down to rights-holders and performers, albeit leaving much of the cash with middlemen, lawyers and bankers.

A lot of the data, quantitative and qualitative, gathered on these kinds of sites, have been to do with why people use these sites: a rewards and satisfactions approach. Little data has been gathered about how these sites are financed, where they are located and what communication strategies are used to deliver files to customers.

The value of research like this is that by providing industry and policymakers with the operating details of offending sites, it suggests the avenues for the most effective interventions.

The researchers were provided with lists of web sites, believed to be significant infringers of copyright, by The Federation against Copyright Theft, The British Phonographic Industry, The Football Association Premier League, UK Interactive Entertainment, PRS for Music and the Publishers Association.  The lists totalled more than one thousand sites.

From these, researchers identified 153 sites for detailed examination.  More than one hundred different measures were used in the research, to evaluate information drawn from the sites themselves, accessed by becoming a member, and augmented by publicly available information and the use of Python scripts to automatically gather site data.

Remarkably enough, the measures clustered around just six models.  In consultation with sponsors, Detica named them: TV Gateway, P2P Community, Subscription Community, Music Transaction, Rewarded Freemium, and Embedded Streaming, distinguished by the way they are financed, the content and formats provided, how users arrive at sites and where the segments are predominantly located.

The largest individual site is in the P2P Community segment but the Live TV Gateway segment is the largest with to 1.1 million unique UK users per month on one site alone. The Subscription Community segment was the smallest, representing just 5 per cent of the sites sampled.

Finance

All six models have similar financial characteristics. They are most commonly funded, in part or in combination, by either advertising or by payments that could include subscriptions, donations and fee for service.  More than a third of the sites had payment pages but Detica says that didn't mean the rest were not taking payment, only that a payment page was not visible, or a site was closed and they could not obtain membership.

Interestingly, credit card company logos were present on more than two thirds of sites, and in three of the six segment models, the existence of the logos for credit card and/or electronic payment processor logos were featured.  So restrictions outlawing electronic payments to offending sites, such as the US government used against Wikileaks, is one, but contentious, avenue for control.

Advertising

Advertising is important to financing least three of the segments.  Two-thirds of the Live TV Gateway segment sites carry ads.  It is the fastest-growing segment and provides live streams of free-to-air and pay-TV content as well as other content.  These sites also solicit donations as a part of their business model.

According to Detica, in P2P Communities, the second fastest growing segment, 86 per cent are dependent on advertising income, and more likely to solicit donations from their community members than the other five segments.

They also concluded, based on the absence of an ‘Ad Choices' logo, that the advertisers and their agencies do not associate themselves with self-regulatory code of online advertising, administered by the Internet Advertising Bureau in the UK.

Content and format  

Sites in the Live TV Gateway and P2P Community segments, the two largest and fastest growing segments, tended to link to content on other sites or services rather than host the content themselves, but use different architecture.  Live TV Gateway sites deliver the content from one central server to which they link, whereas P2P Community sites offer links to files on a distributed array of servers or users within the community.

Sites in the P2P Community segment, where page views are growing at around 17% per year, generally make all forms of content, except live TV, available to download.  This allows the user to obtain a full copy of the file that they can then view off-line or make a copy for each of their devices. And as downloads don't depend heavily on the speed of the user's Internet connection, downloading enables files of high quality to be copied. 

Arriving on the sites

The study showed that people reach different kinds of sites by quite different routes. Users of sites in the Live TV Gateway, P2P Community and Music Transaction segments were all more likely to go directly to the site than with sites in the other three segments.

Users were more likely to have visited a search engine prior to arriving on a Music Transaction site than was the case with the other five segments. Live TV Gateway users were most likely to have visited a social network prior to their visit to the site we examined.  These sites were also the most likely to have a social networking presence, in the form of an ‘action' icon, for example Facebook ‘like' buttons, Twitter ‘tweet' button or similar.

Users of Embedded Streaming and Rewarded Freemium sites were more likely to have visited sites that don't fall into the social networking or search categories than was the case with the other 4 segments.

Location

Here were some surprises: sites in the ‘Music Transaction' segment were far more likely to be hosted in Russia than any other segment and a disproportionate number of sites in the ‘Rewarded Freemium' and the ‘Embedded Streaming' segments were hosted in the Netherlands.  Less of a surprise, one third of Live TV Gateway sites were in the USA.

The UK is home of only a relatively small proportion of one segment: P2P Community, but this type of site appears to have high numbers of users and is growing.  Australia is an unreported part of the ‘Other' part of the pie-charts.

This report is just a snapshot of the characteristics of the 153 sites.  Taken in April and May this year, it does not contain much to do with trends.  That will require regular sampling using the same methodology. 

But the snapshot does inform debate about how to address online copyright infringement and, done at intervals, is a means of evaluating strategies.

One must wonder if the tens of millions of dollars put into the many years of work by international bureaucrats in ritzy negotiating venues all around the world had been put into research of counterfeiting and piracy practices, would we now have sharper weapons than the blunt tools of treaties like the Anti-Counterfeiting Agreement?

Dr Vincent O'Donnell is the media policy editor at Screen Hub and an executive producer at Arts Alive. He is also an independent media analyst associated with the School of Media and Communication at RMIT University. This article is an edited version of an article first published in Screen Hub.