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