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Internet: Online Piracy

My Lords, I thank my noble friend Lord Lloyd-Webber for giving us this opportunity to debate this important issue. As he has so clearly highlighted, Britain's creative industry contributes a remarkable amount to our culture and our economy. To sit back and do nothing while online piracy sucks the profitability out of such a productive sector at any time would clearly be irresponsible, even more so during the current disastrous economic situation. However, I am optimistic that there is an answer, and it lies in empowering the private sector to do what it does best, innovate. Recent months have seen a new provider burst on to the scene, offering a novel, perfectly legitimate way for people to listen to music that they do not want to buy. I am talking, of course, about Spotify, where in exchange for listening to the occasional advertisement interspersed through the playlist, users have access to an enormous library for free. As networks become faster and more reliable, as portable devices capable of maintaining a cheap and constant link to the internet become more common, services such as this can only become more popular. Those creating the music have also found ways to reduce their losses. In October 2007, Radiohead released the album "In Rainbows" online, asking only for whatever those downloading it chose to pay. A third of those taking advantage of this offer paid nothing at all but, importantly, two-thirds paid and the average was about £4, chosen, it appears, partly because that is what the public believe an artist generally receives from the sale of a CD through more traditional channels. It clearly is possible to charge for music despite the availability of a free illegal version. So perhaps we are not looking at an outbreak of criminality among the online population; perhaps it is merely that the internet has given them the opportunity to move on from an out-of-date system, where large companies take the huge majority of the revenue leaving the creative talent with pennies. People who are not willing to pay £15 pounds to a high-street chain for a CD are apparently willing to pay a proportion of that directly to the artist. Of course, Radiohead is an established band, with a brand and a fan base of sufficient size to dispense with the support of a record label which a marketing department can provide. But online-only production is not confined to the big names. There is a rash of small independent websites offering online-only music sales from little known bands. The internet represents an enormous opportunity for creative types who are unable to find a record label willing to give them a contract to reach out and find a market for themselves. It is not just music. There are websites available for people to invest in independent films. People can pay to receive blog updates, software improvements, games, anything that anyone with a creative bent is able to develop and put up on the internet. The interim Digital Britain report correctly identified the danger that oppressive regulation could prevent the development of new business models. A dynamic investment climate must, of course, seek to protect the intellectual property of those who have spent their time and money on their creations but, above all, it must provide a clear base for the industry to innovate. The Government must take the greatest care that their concern for the lost revenue from illegal file-sharing does not cause them to suffocate the solution. The answer is surely not stringent penalties and regulation, as the public will always be one step ahead of those; it is allowing and supporting the development of a better alternative.