Digital Economy Bill: Full of good intentions but can it be implemented?

Friday, April 09, 2010 | Posted by: Grant Thornton
Categories: New Business Models, Business, Media | Tags: media, technology, government, business models, Mark Henshaw, Finance Bill, Digital Economy Bill, Landline tax, Spotify

“The digital sector plays a vital role in the UK economy and the Government is attempting to acknowledge this via the Digital Economy Bill. The Bill may be full of good intentions, but questions still hang over the practicalities of its implementation and possible unintended consequences.” Mark Henshaw, Head of Media and Entertainment at Grant Thornton.

“Clamping down on illegal file-sharing will be welcomed by the digital and creative industries and will claw back some lost revenue. However, the fact remains that current business models for rights holders are outdated and a more profitable model is yet to be proven to work. For example, Spotify is a highly popular free music site but is reportedly yet to show a profit. Technology continues apace and until an innovative way of generating revenue is established, income will continue to slip through the net. It remains to be seen if the Bill will have any success in addressing this core problem as the issue is really about the commercial drivers rather than old fashioned piracy.

“The Government also pledged to tackle the widening quality gap in broadband provision. It will be interesting to see how this will be funded now the landline tax has been dropped from the Finance Bill, as the money raised from this tax was due to fund rural broadband access.”