Sunday, March 30, 2008

Warner taking the first step?

The last few weeks have been interesting as a number of record labels and other organisations seem to be stepping toward different models for music distribution.

SonyBMG were reported to be considering a subscription service of their own and Apple has also indicated a desire to start a subscription service. It has been suggested that these subscription services will differ from current ones such as Rhapsody and Napster(2) as those that discontinue their contracts will be entitled to keep some of the files they have downloaded. The SonyBMG proposal has attracted some criticism with many questioning the viability and logic of a label specific service. There are also questions about the growth of existing subscription services to contend with.

The most promising move has come from Warner Music who have announced their intention to set up a new company, affiliated with Warner but not owned by it, with the objective of developing a licensing model over the next few years. Jim Griffin will lead the effort and has been reported as saying that the desire is to create a new collection society for individual users to pay a monthly fee to their internet service provider with the pool of funds – he estimates to be around $20 billion a year – to be shared by the copyright holders of music.

Two different types of licensing schemes have been discussed in the past as potential solutions to file sharing. The EFF support a voluntary collective licensing scheme whereby artists and consumers both elect as to whether or not they want to pay a fee/license their music. The other scheme that has been discussed is often referred to as a blanket licensing scheme. This has typically been seen as requiring government intervention to force consumers/copyright holders to participate. It seemed initially that Warner were proposing something of a hybrid scheme where it might be voluntary for the copyright holders but compulsory for consumers with charges automatically included with their internet access fees. More recent reports however suggest that the hybrid licensing proposal may already be re-evaluated with Wired quoting Griffin as stating:

"We are in the earliest stages of what is a dynamic conversation about licensing opportunities in the global digital marketplace... It would be unfortunate if a creative and fruitful dialogue were sidetracked by a rush to judgment about what was simply my own illustrative example of one of many concepts I have in this space."

As I have noted in previous posts, music cannot or should not be completely free as there needs to be incentive to attract the best creators in order to produce quality music and social progress. Other factors to be considered include the status quo – this surely has to be better than what we have now; as well as the viability of other business models on an industry wide basis. While some of these may have been successful in isolated incidents there remain questions as to their suitability on a larger scale.

The devil, as always, will be in the detail and it will be interesting to watch the scheme develop - particularly the technology that is put in place and the treatment of both signed and independent artists and songwriters. The role of ISPs is also another area to be considered as such a scheme may potentially impact on their independence just as much as having to disclose users details for the purposes of lawsuits, as well as open them up to new forms of liability which they are not currently facing. There is obviously a long way to go yet with this proposal but it is certainly the first step in the right direction.

Articles:, Fee for All (27 March 2008)
<> at 30 March 2008

TechDirt, Warner Music Latest To Jump On The Music Tax Bandwagon (28 March 2008) <> at 30 March 2008

EFF Deeplinks, Monetizing File-Sharing: Collective Licensing Good, ISP Tax Bad (20 March 2008) <> at 30 March 2008

CNet News Blog, Jim Griffin says ISP music tax only one possibility (29 March 2008) <> at 30 March 2008

ArsTechnica, Warner Music floats ISP surcharge idea for unlimited P2P music (28 March 2008) <> at 30 March 2008

ChicagoTribune, Music biz looks at giving fans all the songs they want in exchange for broadband access fee (20 March 2008) <> at 27 March 2008

Wired, Music Industry Proposes a Piracy Surcharge on ISPs (13 March 2008) <> at 18 March 2008

ArsTechnica, $5 a month for legal P2P could happen sooner than you think (13 March 2008) <> at 18 March 2008

TechDirt, RIAA Now Open To 'You Must Be A Criminal' Tax On ISP Fees (14 March 2008)
<> at 18 March 2008

TechDirt, Why A Music Download Tax Is A Bad Idea (26 February 2008) <> at 28 February 2008

The Register, Apple 'mulls all-you-can-eat music plan' (19 March 2008)
<> at 22 March 2008

ZeroPaid, Apple in Talks with Record Labels for unlimited iTunes (20 March 2008) <> at 22 March 2008

ZeroPaid, Sony BMG Developing Music Subscription Service (26 March 2008) <> at 27 March 2008

Digital Music News, Sony BMG Ponders Subscription Launch, Details Emerging (26 March 2008) <> at 27 March 2008

TechDirt, Why Sony-BMG's Music Subscription Idea Won't Work (25 March 2008)
<> at 27 March 2008

Digital Music News, Kitty Still Tame; Napster Subscriber Tally Stay Flat (6 February 2008) <> at 19 February 2008

Digital Music News, Struggling Subscription: Rhapsody Numbers Show Modest Growth (8 February 2008) <> at 19 February 2008

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