Piracy is a problem Down Under. But it's a problem that might become a whole lot bigger thanks to the Australian's government roll-out of its broadband super-infrastructure.
That's the warning wrapped-up in a 2010 cable from the Canberra Embassy to the White House, and published last week by WikiLeaks. In it, the communiqué spells out the Australian Federation of Copyright Theft's (AFACT) Federal Court failure to hold the Perth-based Internet service provider iiNet accountable for copyright theft. Dig a little deeper and the document discloses something unexpected: a warning that the National Broadband Network (NBN) will encourage piracy.
In the absence of adequate digital copyright legislation, the cable continues, "the problem (piracy) will persist and probably worsen with the advent of Australia's high-speed National Broadband Network, as the speeds at which copyright theft can take place will literally multiply."
Australia's Labor government has already started the ambitious project of contracting and laying high-speed cables across the country, the idea being that it will connect nearly everyone in this vast and sparsely-populated country and spur growth in the high tech sector.
Internet service providers are many and varied in Australia. There are an estimated 700 ISPs in Australia, Telstra being the biggest. By 2020, the ambition of the NBN is to establish Australia among the worlds leading digital economies. In five years from now, users connected to the network may be able to download at speeds of 10GBPS.
As far as government-led technology projects go, it's a good deed. But it has courted controversy, not least because of its $36 billion Australian ($38 billion) price-tag. And content creators have long pointed out that the NBN has the potential to be a big enabler of piracy.
The leaking of the Austral-American cable provides another powerful voice of concern.
IFPI CEO Frances Moore told Billboard.biz she supports the NBN, but also warned that the project presented "threats to innovation and investment in content."
Pointing to the "Sphere Report," some 6.5 million Australian Internet users are predicted to access online content illegally by 2016, with retail revenues of $5.2 billion being lost to the Australian content industries and a further 40,000 jobs under threat. "I encourage the government to fulfill its policy commitment in "Australia's Digital Economy: Future Directions" (a government consultation report) - to facilitate development of an appropriate solution to the issue of online piracy - prior to the introduction of the NBN," Moore said.
According to the IFPI's 2010 "Digital Music Report," overall industry revenues last year were well down from previous levels due to a steep fall in physical sales and "growing digital piracy."
All told, the record market was valued at Australian $384 million ($408 million), down 13.9% on the corresponding result for 2009.
Australia's legitimate digital music market, however, is in good shape: In the calendar year to July, the digital market grew by 32% up to July, according ARIA stats revealed to Billboard.biz. Digital revenue Down Under now accounts for 40% of all sales, up from 27% in 2010.