File sharing: to fight or accommodate?

The movie and music industries have long had a common problem with piracy. Yet as the infringements migrated from analog to digital, their responses have diverged. The most recent illustration came in comments last week by Jim Griffin, a digital maverick retained by Warner Music Group, and Jim Williams, chief technical officer for the Motion Picture Assn. of America. In remarks published Wednesday, Griffin called on Internet service providers to let customers download and share an unlimited quantity of music for a flat fee of about $5 a month. At a conference in Hollywood the next day, Williams urged ISPs to use emerging technology to stop customers from downloading and sharing bootlegged movies online.

Put another way, a top geek at a major record label said, “Let’s embrace file sharing and make some money off it,” and a top geek at the MPAA replied, “Let’s take the fight against file sharing to another level.”

Granted, Griffin -- a former Geffen Records executive and new media consultant -- hasn’t been exactly a mainstream voice within the music industry. For many years he has begged the industry to make a radical change in business models: abandon individual sales in favor of an open-catalog approach. But ideas like this, which the major labels used to reject out of hand, are starting to gain credence. Top executives at the two largest industry conglomerates, Universal Music Group and Sony BMG, have advanced variations on the all-you-can-eat music theme. And both Universal and EMI have agreed to Nokia’s plan to include unlimited music downloads with premium-priced smartphones.

The studios’ thinking about the Internet is evolving too, but not at the labels’ pace. That’s because the music industry’s dominant product line is failing much more quickly than Hollywood’s. CD sales have slid in six of the last seven years, coinciding with the rise in file sharing. But DVD sales only recently leveled off after years of double-digit growth, and box-office revenues (pdf)have rebounded the last two years. Some Hollywood executives think they’ll be spared the music industry’s fate for at least a few more years because broadband speeds in most countries aren’t fast enough to make downloading a movie as tempting as grabbing a song or an album off a file-sharing network. (The popularity of bootlegged movies and TV shows online suggests that millions of downloaders don’t share that view.)

At any rate, the studios have tended to take a longer view of digital piracy. Instead of playing small ball like the Recording Industry Assn. of America and suing thousands of file sharers, they’ve swung for the fences. They’ve lobbied Washington to force consumer electronics and computer manufacturers to add government-approved anti-piracy technology to their products, require colleges to study ways to block illegal downloading on their networks and pressure other governments to crack down on (pdf).

Lately, the bold stroke being advanced by the studios is to have ISPs identify and cut off online pirates. To be sure, the major record companies like this idea too. But as Griffin’s hiring by Warner Music Group indicates, the labels also appear to be moving ahead with Plan B in case ISPs prove to be more porous than the Maginot Line. (More on that below.) The closest the studios have come to supporting an all-you-can-download plan is licensing the subscription rental offerings from Vongo and Netflix. Those offerings are hobbled by restrictive electronic locks and incomplete catalogs.

Williams of the MPAA pushed the ISP-as-defense-against-piracy idea during a panel discussion on copyright law at the Technology Policy Summit last week. When asked how lawmakers might improve the Digital Millennium Copyright Act, Williams said he’d like to see something that would encourage ISPs to deter mass, indiscriminate redistribution of copyrighted material. Citing a nearly 4-year-old estimate by CacheLogic (now Velocix) that 50% to 80% of the traffic online was file sharing, Williams said it “stands to reason that much of the Internet is being clogged up with stolen goods.” That congestion gives ISPs an interest in deterring piracy, he said.

The studios aren’t trying to stop file sharing, Williams added later. It’s a useful technology. And ISPs don’t necessarily have to be pushed by lawmakers to filter out bootlegs. “I believe that they will find incentive to make their networks more efficient for all their paying customers,” he said. If they reduce infringing content, they’ll have more capacity for legal traffic.

Identifying copyrighted movies and TV shows amid the flurry of data packets would be no mean feat. The file-sharing protocol of choice these days is BitTorrent, which enables people to download multiple pieces of a digital work simultaneously from scattered sources. Williams said in an interview that the technology exists for ISPs to participate in BitTorrent swarms and grab enough of a sample of the file being transferred to match it against a database of video fingerprints. If the file included watermarks, the identification can be done with a minimal amount of data. Other information such as file names and keywords can help to confirm the ID, he said.

Speaking at the same conference, Ashwin Navin, president of BitTorrent Inc., said ISPs “absolutely” could identify BitTorrent downloads as they happen. He added a few caveats: Such monitoring was costly, it may require “some technical investment” and it raised questions about data privacy. “We think the ISPs should be disclosing that to consumers,” advising customers that infringements will be detected and expose them to some kind of sanction, Navin said.

Once ISPs start trying to filter out the studios’ works, determined pirates will fight back with encryption and other measures that make it harder to detect what’s being shared online. So it will be a cat-and-mouse game, Williams acknowledged, and anti-piracy vendors will have to redesign their tools repeatedly. Given how rapidly downloaders have shifted from application to application in the face of filters, the mice appear to have the upper hand in this one. A more troubling issue, according to Zahava Levine, YouTube’s chief counsel, is that content-identification technology can’t tell whether copyrighted material is being shared legally -- for example, if it was a snippet in a news story or film review or if it was part of a parody.

Both Levine and Navin suggested that the best use of content-identification technology is to monetize the distribution of video online, not block it. According to Levine, more than 100 companies are using YouTube’s content-identification system. Most of them have instructed YouTube that when one of their works is posted by the site’s users, the company should “sell ads around it and share the revenue,” Levine said. That’s what the major record companies are doing.

Williams agreed that there are more options than simply blocking unauthorized distributions online. Once an ISP or site identifies a file, he said, it would consult a database of instructions from content owners to find the right policy to apply, such as blocking the transfer and sending a take-down notice to the source, redirecting the downloader to an authorized supplier of the file or allowing the transfer in exchange for a share of the advertising revenue. To make these options possible, though, content-identification tools must be inserted deep into the network. The major record labels would like to regain that kind of control too. But having little to show from seven years of fighting to rein in file sharing, they’ve started to talk about new models that don’t rely on limits -- technological or otherwise.

Jon Healey is a Times editorial writer; he runs the Bit Player blog. Respond at [email protected].