Anticipating on the possibility that not all customers will be interested in the monthly subscription service, the deal between Virgin and Universal also includes an anti-piracy section. That is, Virgin have pledged to go after their customers who share files illegally on BitTorrent and other file-sharing networks.

How exactly Virgin will prevent or discourage illegal file-sharing is unclear but the ISP itself will not spy on the download behavior of its customers or intercept traffic. Instead, they plan to warn those who download copyrighted content, based on evidence provided by third party tracking companies. Those who receive multiple warnings will experience a suspension in their Internet connection, lasting from “a few minutes to a few hours.”

Interestingly, less than a year ago Virgin publicly said that it would never disconnect alleged file-sharers, after they mistakenly threatened some of their customers with such a measure. There is “absolutely no possibility” of being disconnected, the company said at the time. Clearly they’ve had a change of heart.

In addition to this temporary disconnection, repeat infringers might face speed bumps or humps, meaning that their Internet speed could be decreased significantly, a measure that probably wont be very effective as a deterrent. The music industry is nevertheless happy with the deal and hope that many ISPs will follow Virgin’s lead.

“This is the kind of partnership between a music company and an Internet service provider that is going to shape the future for the music business internationally,” IFPI chairman and chief executive John Kennedy told Reuters commenting on the new deal, adding “It also marks new ground in ISPs’ willingness to take steps to protect copyrighted content on their networks, and that sets a very encouraging example to the whole industry.”

Geoff Taylor, head of the BPI was equally delighted about the deal and told the BBC: “It is very encouraging to see an ISP and a record label working together as creative partners. At the same time, the fact that Virgin Media will apply a graduated response system to tackle persistent illegal downloaders demonstrates that graduated response is a proportionate and workable way forward.”

Tomorrow the UK government will release the final version of the Digital Britain report where it will come up with detailed solutions on how ISPs and the creative industries should deal with the ‘piracy problem.’

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Quantifying its ‘losses’ in court, the four labels claimed illegal downloading costs the Irish music industry 13.8 million Euros every year, and since Eircom has 40 per cent of the ISP market, it must be held responsible for causing the industry losses of between 4 and 5 million Euros. Further details about the case are available in our previous report.

The case, which was due to run for 4 weeks, was cut short this evening after just eight days. According to an RTE report it has ended after a fairly shocking and unexpected development. The ‘Big Four’, headed by the IFPI, have reached an “amicable” settlement with Eircom.

In an agreement believed to be a world first, EMI, Sony BMG, Universal and Warner will start tracking the IP addresses of alleged infringers and supply the details to the ISP. Eircom has agreed that it will ultimately disconnect infringers from the Internet.

Essentially, Eircom has agreed to implement a “3 Strikes” regime against its own customers. On the first allegation the customer will get a warning. On the second allegation they will be informed that if they do not stop their activities, disconnection will follow. On the third, it’s Internet blackout time.

The Chairman of EMI said he now expects other ISPs to follow suit – serious pressure will be brought down on them immediately.

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EMI offered a deadline – either the IFPI reduced the costs associated with membership by 31st March 2008 – or EMI would leave. Now, after a few months of negotiations, it seems some sort of deal has been struck enabling EMI to stay as a member.

An IFPI spokesman said the organisation had been able to a agree a “sensible, appropriate and reasonable reduction in our budget.”

It won’t be just EMI that gets reduced rates either. The other major members – Universal, Sony and Warner will all benefit, says Jean-Francois Cecillon, president of EMI International:

“We undertook to work with our colleagues in the other major labels and with (IFPI boss) John Kennedy on a cost saving plan for the IFPI. Together we have been able to find solutions which we believe are achievable whilst maintaining what the IFPI does best in representing our industry.”

Separately, the IFPI just announced it has successfully shutdown a Direct Connect hub in Chile, specializing in metal. If they feel that this type of action is the most effective way of spending EMI’s money, no surprise they wanted to leave.

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When EMI, Universal Music and Warner music reached settlement agreements with the likes of Napster, KaZaA and Bolt, they collected hundreds of millions of dollars in compensation – money that was supposed to go to artists whose rights had been allegedly infringed upon when the networks were operating with unlicensed music.

Now, according to an article, the managers of some major artists are getting very impatient, as it appears the very people who were supposed to be compensated – the artists – haven’t received anything from the massive settlements. They say the cash – estimated to be as much as $400m – hasn’t filtered through to their clients and understandably they’re getting very impatient.

Lawyer John Branca, who has represented the likes of The Rolling Stones and Korn, said: “Artist managers and lawyers have been wondering for months when their artists will see money from the copyright settlements and how it will be accounted for.”

Indicating the levels of impatience with the big labels holding the money he added: “Some of them are even talking about filing lawsuits if they don’t get paid soon.”

Of course, EMI, Universal and Warner have a different take on the delay, with sources suggesting that it’s down to the difficulties in deciding who gets what money, based on the levels of copyright infringement for each individual group or artist.

A recording industry on the back foot having spent most of its time fighting the digital revolution rather than becoming part of it, is clearly trying to hang on to every penny, even when it comes to compensating the artists who they claim they were defending by taking legal action in the first place.

Irving Azoff, who manages Christina Aguilera, The Eagles, Van Halen, REO Speedwagon and Seal (amongst others) says it’s hard for artists to get what they deserve from the labels: “They will play hide and seek, but eventually will be forced to pay something,” he said. “The record companies have even tried to credit unrecouped accounts. It’s never easy for an artist to get paid their fair share.”

Typically, the labels see it a different way. An EMI spokeperson said that it was “sharing proceeds from the Napster and Kazaa settlements with artists and writers whose work was infringed upon” while Warner’s said the label is “sharing the Napster settlement with its recording artists and songwriters, and at this stage nearly all settlement monies have been disbursed.”

The Universal spokesman spoke only of the label’s ‘policy’ of sharing “its portion of various settlements with its artists, regardless of whether their contracts require it” with no mention of whether it had actually done this or not.

But typically, when money is involved, things start to get murky. The same sources who suggested the reasons for the delay in making payments are also suggesting that there might not be much money to even give to the artists.

It’s being claimed that after legal bills were subtracted from the hundreds of millions in settlements, there wasn’t much left over to hand out.

Article from: TorrentFreak, check out our new blog at FreakBits.