A fortnight ago, when the third season of fantasy TV series Game of Thrones was broadcast, digital pirates around the world illegally downloaded the episode more than 1m times – at one point some 160,000 individuals shared the file using BitTorrent software.
Hollywood’s usual response is to condemn piracy, arguing that it is leading to lost revenues and the loss of jobs in the entertainment industry. Indeed, the programme’s maker HBO narrowed the launch of the show to a single premiere on both sides of the Atlantic to combat piracy. But despite the record piracy levels, viewership was up 13pc on last year.
This scenario, as well as recent research from the EU-backed Institute for Prospective Technological Studies, which claimed a 10pc increase in consumers accessing music on the internet leads to a 1pc increase in legal sales, is contributing to a debate about the real impact of piracy on intellectual property and have Hollywood and the music industry actually gotten it wrong?
Birth of the Pirate Party
For Rickard Falkvinge, the founder of the Pirate Party, this is a discussion that is long overdue.
Falkvinge was in Dublin this week to speak at the Institute of International and European Affairs, as well as to faculty and students at Dublin City University (DCU) about how copyright and patent reform can make us all wealthier and safer.
Lack of understanding by politicians of the relationship between technology, intellectual property and civil liberties prompted Falkvinge, a former technology entrepreneur who worked at Microsoft, to establish the Pirate Party in Sweden in 2006.
In 2009, the Pirate Party was to bring about a seismic shift in the political landscape in Sweden, achieving 7.1pc of the vote in the European Elections and securing two MEP seats. Pirate Parties have sprung up all over the world, with members winning elected posts in Spain, Germany and Austria. In 2011, the German Pirate Party won 8.9pc of the votes in the Berline State election and in the Czech Republic a pirate candidate was elected in the 2012 senate election.
The Swedish Pirate Party’s 2008 Uppsala Declaration commits it to reform of copyright regulations, patent law and the strengthening of civil rights and freedom of speech.
Tough, reactionary technology laws in his native Sweden shaped Falkvinge’s views.
“The Commodore 64 was probably the most-sold computer of all time,” he said, recalling his childhood when he learned how to write software code at the age of eight. “As kids it was natural for us to share computer games and recorded music off the radio and that just carried over into net culture. But it gradually became clear to me that the politicians did not understand net culture and in the early days of the internet in Sweden they created harsh libel laws for people posting on online bulletin boards, as well as a harshening of the copyright monopoly in Sweden, making it illegal to download non-copyrighted resources. That’s like suing a person for just listening to the radio. It was obvious that the politicians were agreeing with everything the record labels and their lobbyists were saying and were trying to kill the bread and butter of indie artists. Everybody in Sweden was discussing this at the dinner table and in the media, everybody except the politicians.
“Normally, politicians are the first to pounce on an emotive subject but they had a blind spot on this issue. So I felt the only way to get their attention was to make it personal – go straight for their power base and take their jobs.”
While Falkvinge feels the party has been largely stonewalled in local politics in Sweden, no thanks to what he describes as a conservative local media, its successes at a European level have been pivotal.
“We stopped the ‘three strikes’ internet laws that were about to be introduced in the EU and the Green Party Group in the EU Parliament has taken up our platform for copyright reform. We are making a lot of differences.”
While Falkvinge’s views make uncomfortable reading for record label executives and movie moguls, he said he isn’t condoning the theft of copyrighted material but is instead trying to make it clear that there just might be alternatives to the draconian measures being sought by record companies.
Civil liberties protection
At the core of Falkvinge’s views is the protection of civil liberties most of us consider inalienable rights, such as the ability to post a sealed letter that reaches the addressee without it being opened.
The same principle, he said, should also apply to our online lives and that in response to the efforts by record labels to enforce three-strikes laws that require internet service providers (ISPs) to implement tracking software, he railed no one should have to be tracked online against their will.
At the heart of the issue is the use of file-sharing software by consumers to download music illegally. In the UK, ISPs have already been ordered to block access to sites like The Pirate Pay and Newzbin1.
In Ireland, a similar case is being taken by the record labels EMI, Sony, Warner and Universal against the ISPs UPC, Digiweb, Imagine, Vodafone and 3. Eircom is currently the only Irish ISP that applies the record labels’ recommended model, whereby if users are alleged to be downloading illegal content they could lose their internet connection for a year after three warnings or ‘strikes’.
Falkvinge said that what needs to change, ultimately, is the record industries’ business models.
“The internet actually isn’t a problem for artists. We’ve seen the income of artists actually rise 114pc since Napster arrived in 1999 through concerts and licences. The ones that are in trouble are the record labels and distributors who used to take 93pc of the cut from a song. Now that link in the chain has been cut, a lot more money is going to the artist.
“But the traditional record industry business model ensured that only 1pc of artists ever got a record deal and of those that did only one in 200 ever saw a cent from royalties.”
Adapt or die
Falkvinge said he believes the record companies need to adapt or die. “You can’t dictate people’s lives because you are not making a profit. The penalties they are seeking are disproportionate. If you shoplifted a CD a court could fine you €100. But if a child downloaded an illegal copy the family could lose their internet connection, which in some cases would affect their livelihoods. The demands by a private industry to wiretap a whole population is an egregious mistake.
“We were able to kill that debate in Sweden by asking a couple of very relevant questions of politicians and they just buried it. But you don’t sentence a family for copyright theft. Cutting someone off from the internet kills the family’s ability to work, go to school.
“This is about civil liberties – in terms of freedom of speech, the right to assembly and press freedom, the internet has become just as fundamental as other inalienable rights,” Falkvinge said.
Falkvinge has called for a change of mindset in how monopolies are allowed to dictate creativity and innovation. “An open software model like Android has taken 50pc of the operating system market in the past few years, shattering the monopoly of Windows, which used to have 90pc.”
He pointed out that in the technology industry, patent lawyers – and in particular, patent trolls – are engaged in the same kind of protectionism that the record labels are trying to impose on the internet.
“The people who work in technology love the work they do, they just hate the industrial protectionism that goes with it – but the lawyers tend to love it.”
A system gone mad?
Evidence of the system going mad, he cited, is the recent high-profile patent cases between Apple and Samsung resulting in a massive US$1bn judgment against Samsung. “From a systemic standpoint, the patent wars are a huge drain on R&D resources and this protectionism is killing innovation.”
Falkvinge said he works closely with venture capitalists and business angels and they are fed up with how the system works. “Most reckon that up to 10pc of the capital they inject into companies goes into feeding patent trolls.”
Falkvinge pointed out the idealism of technology companies in their early days can become tainted by success and gives way to protectionism when they become stagnant and less innovative.
“Early stage industries do not want this kind of protectionism, they just want to build things and improve on things. It is stagnant industries that are asking for this kind of protection. This does not only cost innovation, it protects the kings of the hill.
The same kind of protectionism is being attempted by the record labels who used to dictate which artists became a success. “Being famous does not put food on the plate, but monetising obscurity is impossible.
“By just allowing people to innovate freely without being constrained, we’ll all be much better off.”
A version of this article appeared in the Sunday Times on 14 April