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UK’s cunning plan to make anti-piracy campaign pay for itself

The UK’s four major ISPs recently rather reluctantly bashed out the Voluntary Copyright Alert Programme (Vcap), where they agreed to send out letters which are ‘educational’ in tone, aimed at ‘promoting an increase in awareness’ over copyright infringement issues, to those accused of copyright offenses.

This agreement came after intense pressure from both entertainment industry and the government (who was itself under intense pressure from the entertainment industry). Although notable very weak, and theoretically a private initiative, the government elected to back the Programme to the tune of several million pounds.

Unfortunately for the UK government, it does not have a few million pounds to spare, so TorrentFreak put in a Freedom of Information request about how the funding was achieved.

What it obtained was an email conversation dated May this year between the UK Intellectual Property Office’s (IPO) Ros Lynch and the British Phonographic Industry (BPI). The problem was explained thus,

As part of the process of agreeing Government financial support for the educational element of VCAP we will need to seek a marketing exemption as we are currently not permitted to spend on marketing.

The solution implied by the letter, however, is novel and arguably even creative,

Essentially this will require a proper business case which includes hard figures… For example, what research are you basing your target audiences on? How have you calculated your 5% reduction in infringement? What £ saving does a 5% reduction bring? What overall estimate can you make of the ROI of this campaign e.g. what financial benefit would a £2.2m Government investment bring?

The email effectively suggests that the promotional scheme can be made to pay for itself out of the additional revenue the government would raise from VAT on the 5 percent increase in media sales that are predicted to happen as a result of the scheme. Ingenious!

The BPI wrote back with a report (pdf) confirming this as the plan, estimating that piracy need only decease 1 percent over three years for the Government to recoup its investment:

This return to Government is expressed in VAT revenues only, and does not model the dynamic effect of increased legal economic activity on wider jobs/growth/income tax etc. So even from a very simple, static assumption, a small reduction in piracy of between .49% and 1% over the three years would return Government investment of £4m in an education scheme.

This apparently convinced the government, which has now invested £3.5m rather than the £2.2 proposed in May. The problem of course, is that despite the report’s claim that…

The vast majority of academic studies show that there is harm from piracy through lost sales. Rights holders do not use a 1:1 ratio of replacement of pirated copy with a legal sale. The academic research gives estimate of what the proportionate replacement ratio is likely to be of any interventions to cause reductions in piracy.

… the reality is that the evidence is very tenuous (and hotly contended), and there is even evidence that piracy actually increases sales.

Still, you do have to admire the government for the sheer audacity of the plan..!


Douglas Crawford I am a freelance writer, technology enthusiast, and lover of life who enjoys spinning words and sharing knowledge for a living. Find me on Google+

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One response to “UK’s cunning plan to make anti-piracy campaign pay for itself

  1. Brilliant idea! Except for the fact that all the (non-industry-sponsored) evidence indicates that the people we have decided should be called “pirates” actually spend MORE as a group on their entertainment than non-pirates.

    *I wonder how Talk-Like-A-Pirate day (19 September) went within some groups. Was it “Arr, me hearties, shiver me timbers”, or “so if you’re having trouble connecting to that torrenting peer, try using a proxy and redirecting your IP to Switzerland”?

    Of course, that isn’t true for all pirates, who can broadly be split into three groups:

    1. Can’t afford it! The student who has no money is not going to buy that movie rather than torrent it, simply because they have no money. That said, if they enjoy the ripped movie, then in ten years when they have a job and a family they will be more likely to do the nostalgia buying that we all indulge in, and pay for the 4K (8K? 16K?) version. Not being able to see it at all means lost sales in the future.

    2. Try before you buy. This is apparently quite a large group, of people who do not want to waste their money on The Love Guru before they have figured out whether it is worth the investment. These people spend quite a lot of money on their entertainment, but rely on checking out the product first. Can’t do that any more? Lost sales, or more careful purchases less often.

    3. Stick it to The Man! This is, anecdotally at least, the smallest group within the group of people we seem to have decided to call “pirates”. They see very clearly that the entertainment industry is trying to use government to do their job of making people buy their stuff, rather than relying on decent product and decent delivery channels. These are the people that say “I’ll never buy another movie! I bought Star Wars Episode IV on my Betamax, then had to buy it on VHS, then I saw that it was available in stereo(!), then had to buy the DVD with its fancy-pants computer graphics†, they persuaded me that the Blu-Ray looked even better, and now I own the 4K version! The entire entertainment system are blood-suckers, and I absolutely refuse to buy this new sniffable version”. These are the guys who give “piracy” a bad name, but they have some fairly strong reasons for their views. If the entertainment industry actually provides them with decent products how and when they want it, they will likely shift – just as they moved to Spotify when it came out.

    †Han shot first!

    In other words, the British government is subsidising the entertainment industry, and will not see that money again. Worse, the entertainment industry has no incentive to fix their business model as long as they continue to receive these subsidies. They have successfully persuaded/bribed governments around the world to let them stay in these comfortable monopolies and to treat anyone who seeks to get around their total disrespect for the customer as being equivalent to a car thief (but subject to totally life-destroying and disproportionate fines on top).

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