U.S. Trade Rep Condemns Stream Ripping, Calls Out Alibaba in New 'Notorious Markets' Report

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The Office of the U.S. Trade Representative (USTR) on Wednesday (Dec. 21) released its annual "notorious markets" report listing the online and physical markets that most threaten America's creative industries and in it specifically highlighted the "emerging trend" of stream ripping. 

Stream ripping is the unauthorized act of converting a file from a licensing streaming service site -- such as YouTube -- into an unauthorized copy for download. In recognition of what the report calls a "growing threat," one of the most popular websites enabling this form of piracy, YouTube-mp3.org, was added to the notorious markets list with special focus as the year's "issue focus."

The report cites a study from the International Federation of the Phonographic Industry that shows stream ripping on the rise in the world's leading music markets with 30 percent of Internet users obtaining unauthorized copies of music from stream ripping service. Just as streaming has passed downloads in digital music sales, methods of piracy have mimicked this trend with ripping surpassing downloading as the preferred method of stealing music. 

"Stream ripping is a direct threat to this digital growth as it eliminates the need for users to return to licensed services, thereby depriving artists and record companies of this important revenue source," the USTR's notorious markets report states. "Pay-for-download sites and legitimate streaming services are simultaneously undermined, and incentives to create and launch new legitimate streaming services are weakened."

But while the USTR and the study it cites present stream ripping as a serious threat to the music industry's digital revenues, they instead focus on the method's growth without providing the overall impact in any financial terms. In so doing, they ignore the greater trend that less people seem interested in "owning" music at all -- purchased or pirated -- as streaming is the new king. (This year even vinyl albums outsold digital downloads.) This leaves vagueness as to whether they are overstating stream ripping's real significance on the industry. 

The Recording Industry Association of America (RIAA) responded to the USTR's acknowledgment of stream ripping favorably with chairman and CEO Cary Sherman issuing a statement.

"This new report rightly shines a much-needed spotlight on this specific type of notorious market, which robs songwriters, artists and labels of the royalties they would have earned from licensed streaming services," said Sherman.

The report also specifically calls out Chinese consumer-to-consumer marketplace Taobao.com as an "important concern" of rights holders in the U.S. and internationally, who "continue to report serious challenges to reducing high levels of counterfeit and pirated goods" on the site. Taobao's parent, Alibaba, claims it purged nearly 400 million product listings and shut down 180,000 Taobao stores in the 12 months ending Aug. 2016. Alibaba has also changed its enforcement policy from four strikes to three strikes for sellers.

Alibaba claims it has proactively removed more than 380 million product listings and closed approximately 180,000 Taobao stores in the 12 months ending August 2016. Prospectively, Alibaba has announced a shift from a Four Strike to a Three Strike Policy and the launch of a Joint Force System that is intended to expand proactive enforcement efforts.

The report states, "As Alibaba moves forward with its plans to further reform and enhance its enforcement tools across platforms, the recommendations highlighted in [last year's list] remain valid, namely: (1) simplifying processes for right holders to register and request enforcement action; (2) making good faith takedown procedures generally available; and (3) reducing Taobao’s timelines for takedowns and issuing penalties for counterfeit sellers."


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