Illegal downloaders to get warning letter in government clampdown

Internet service providers have struck a deal with government and the music industry to help clamp down on illegal downloading.

The deal, to be announced later today, is thought to include an agreement for ISPs to send out hundreds of thousands of letters to account holders responsible for illegal downloading.

The memorandum of understanding, struck with the BPI, the body that represents record labels, and the government, will be announced today ahead of the launch of a consultation on the introduction of legislation to clampdown on offending.

The memorandum of understanding has been struck with the UK's six biggest ISPs - BT, Virgin, Carphone Warehouse, Orange, Tiscali and BSkyB - and includes a deal for all parties to work together to develop ways to deal with repeat offenders.

The agreement has been reached ahead of an announcement expected later today by the Department for Business, Enterprise and Regulatory Reform of a consultation on regulatory options to punish ISPs if they fail to take action against the illegal downloading of music, films and TV programmes.

"We have looked to ISPs to acknowledge their responsibility to help deal with illegal filesharing, engage in communicating the issue to their customers, and put in place procedures necessary to effectively tackle repeated unlawful filesharing," said a spokesman for the BPI.

"Achieving this would represent a significant step forward and demonstrate clearly the collective will that exists to tackle this serious issue."

It is thought that BSkyB's announcement of a digital music joint venture with Universal Music earlier this week - the venture has no name, no pricing and no launch date - could have been a move to prove that ISPs are supporting new, innovative, legal digital models ahead of the announcements today.

In February, the culture secretary, Andy Burnham, raised the possibility of introducing legislation to crack down of illegal filesharing as part of a wide-ranging strategy paper designed to look at ways of supporting the UK creative industries and digital intellectual property.

At the time Burnham said that the government preferred to find "voluntary, preferably commercial, solutions" but that it would look to introduce legislation next April if necessary.

The strong stance by the government has alarmed ISPs, which believe that regulation is a step too far.

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79% of Americans download movies illegally

79% of Americans who are downloading movies do so illegally despite access to subscription based services.

US consumers are still downloading movies illegally despite the growing availability of subscription based movie download services according to a study conducted by Advanis Inc. Subscription based movie downloads have grown in prevalence with companies like Apple Inc., CinemaNow, MovieLink and most recently Wal-Mart offering movie downloads for a fee.

Yet 79% of those downloading movies are still doing so illegally, according to the study and is estimated to be costing the industry $598 million.

"The industry can respond to this stubborn core of piracy in one of two ways," said Phil Dwyer, Executive Vice President of Sales and Marketing at Advanis. "It can spend its time and resources pursuing the pirates, and attempting to get them to change their ways, or it can put those same resources into accelerating the adoption of these services by the early mainstream consumers, who are more inclined to behave legally."

"The experience of the music industry, and the evidence of our research suggests there is a hardcore of illegal downloaders who are unlikely to change their behavior. The industry would be better advised to focus resources on migrating new, and legally inclined consumers on to these services."

Downloaders Look For Deals

Despite the convenience of the movie download services, consumers are unwilling to pay a premium for them. In fact, online movie addicts, on average, value downloads at $2.59, while they value a movie bought in a store at more than double that - $5.98.

About this study

Findings are based on a survey of 506 online Americans, fielded between February 5th and 6th, 2007. Estimates are accurate to within +/- 4.6%, 19 times out of 20.