How piracy paved the way in Sweden

The trial against The Pirate Bay site began Monday in Sweden. And while Sweden is depicted by copyright-enforcement groups as piracy's promised land, it is also a nation that experiments with legal music-service alternatives.

The case against the founders of Piratebay.org--one of the world's three major BitTorrent sites--is expected to last 13 days, which would make it Sweden's longest-ever trial dealing with copyright issues. The case is the result of the search and seizure of servers by Swedish police at Pirate Bay's offices in May 2006.

For years, the International Federation of the Phonographic Industry and the Motion Picture Association of America have depicted Sweden as rife with digital piracy.

On a mash-up created with Google Maps, Pirate Bay itself shows where file-sharing users are located: most are in China (22 percent) and the U.S. (11 percent). Sweden (2 percent) is clearly over-represented, which might partly be explained by the fact that broadband connections are widely used throughout the country.

During the time leading up to the trial, though, at least three innovative, legal alternatives for listening to digital music have been launched in Sweden: Spotify, Tunerec, and Chilirec.

"It helped us see that there's something wrong when an illegal alternative defeats a legal one. We wanted to solve the problem with playing music on the Internet and find a model that would work for artists, users, and advertisers," said Daniel Ek, co-founder and CEO of Spotify.

Spotify has forged agreements with organizations such as Universal Music Group, Sony BMG, EMI Music, Warner Music Group, Merlin, The Orchard, and CD Baby, and now offers millions of songs streamed online. Subscribers pay about $12 a month and can listen to any song at any time.

But there's even more buzz about Spotify's alternative offer, a nonpaid service, completely free, that's currently open only for a limited group of invited users (except in the U.K., where Spotify a few days ago opened it up for anyone who wants to register). It's ad-financed, with a short commercial message being played a couple of times per hour, between two songs, whereas the paid service is ad free.

Chilirec and Tunerec, by contrast, offer a kind of personal Internet-based storage that records music from Internet radio stations worldwide, continually, resulting in a huge amount of songs stored in a short time that people have the right to listen to whenever they want, without ever downloading them.

The basic idea is that because the songs are recorded in a personal disk space for each user, it is to be considered private recording of radio music for personal use, which is perfectly legal.

Tunerec actually has an agreement with the International Federation of the Phonographic Industry and the Swedish copyright organization STIM. Chilirec has closed its beta, stating that it is now working on the design of a commercial product.

Three elegant solutions
We end up with three elegant solutions, at a time when copyright owners and authorities are trying to solve the piracy problem with law enforcement.

All three depend on people being online since they don't offer downloading. It's likely only a matter of time before they offer that feature, though. And when they do, they will probably use BitTorrent or similar file-sharing technologies as effective ways to distribute large files.

Where do we end up? Having people downloading and listening to all kinds of music, without paying, using file sharing. It seems familiar, but it will be legal and commercially viable. So did we really have to endure all the mess with hopeless legal efforts? It seems so.

Law enforcement is certainly giving people one reason to choose legal alternatives instead of piracy, but for years we have seen that it is not enough. Legal ways to consume digital music must also be extremely easy to use and have a very competitive price, which requires new ideas that both record companies and copyright enforcers have failed to produce.

These new ideas are instead popping up from companies that view a business opportunity where old models are failing. From that perspective, one might arrive at the conclusion that piracy actually showed the way.