EMI chief praises ISPs' piracy crackdown

Says content providers must find ways to innovate

LONDON -- EMI Music CEO Elio Leoni-Sceti has spoken of his support for the U.K. government and others' attempts to get ISPs to tackle illegal file-sharing, while admitting the music industry failed to adapt to changes in consumer behavior.

Leoni-Sceti appeared at U.K. media/telecoms regulator Ofcom's Next Generation Net Generation conference in London. Vivendi CEO Jean-Bernard Levy was also among the business leaders at the conference.

The EMI Music CEO appeared on a panel, "Global Content Economy -- Challenges for Business," alongside executives including Telefonica Europe CEO Ronan Dunne, Nikesh Arora, president EMEA (Europe, Middle East, Africa) operations, Google, and Roma Khanna, president, global networks & digital initiatives at NBC Universal.

Pledging to transform EMI into a "consumer-focused music company," Leoni-Sceti said: "The new EMI wants to be the most consumer-led, innovative music company in the world -- that means listening to our consumers and putting the consumer experience at the heart of our business strategy."

A consultation process was recently concluded by the U.K. government, following this summer's brokering of a memorandum of understanding between the music industry and ISPs. Part of the agreement includes a pledge by ISPs to write letters to customers who are involved in illegal peer-to-peer activity.

"We, the content providers, have clear responsibilities. We have to find ways to innovate and to make sure we are adding value for the price we ask consumers and business partners to pay," Leoni-Sceti said. "ISPs have responsibilities too, and they are beginning to act.

"EMI supports the efforts by a growing number of governments to help the content industry work with ISPs to reduce illegal file-sharing. The U.K. government has initiated a process, led by Ofcom, which should result in new codes of practice for ISPs, backed by legislation."

He admitted that the industry "didn't adapt fast enough" to changing consumer demand for digital, noting that music sales had declined 20% over three years while broadband subscriptions doubled.

Leoni-Sceti added that "we were one of the first content businesses to have to grapple with a business model that suddenly wasn't a business model at all. Suddenly it became common for consumers -- and businesses -- to use our music without paying for it.

"Today, for every legitimate paid download, there are more than 19 that aren't paid for. Think back to the value chain and consider who the beneficiaries are.

"Paying for music seems to have become almost voluntary, and its illegal consumption at times is considered 'acceptable.' That's a disturbing development in our society. Together with government -- and under its lead -- all parties must take a role in defending society against theft; just as all parties have done for hundreds of years in the physical world, and just as they do with fraud online or any other illegal activity."