This is from Gerd Leonhard's 2009 book The End of Control. Leonhard is a media futurist and writer. He discusses how the record industry has attempted to control their product but ultimately failed. The music industry must admit to what is happening and let go of there old economy business models and belief that content is king. They must accept it fast as the longer the wait the more they have to lose. Advances in technology such as memory sticks, iPhones, wireless hard drives / music players have made file sharing easier and easier and its popularity will grow exponentially. Record companies must embrace the end of distribution control and stop harassing their customers with lawsuits and threats. They must move to a service based model.
Leonhard proposes blanket licensing as the best solution. Existing public performance blanket licenses given by collectives are easy to get and make economic sense. The system is straightforward and benefits performers and artists but a new method will be needed for the internet. A blanket scenario would work best and he likens music to commodities such as water or electricity in that everyone should be a legal user. However, it is important to recognize in any discussion that music can be consumed unlimitedly, thus in determining the appropriate fee, TV is provided as an example. Flat rates could be connected to service or other methods.
The article's most interesting topic is its emphasis placed on control. Music companies still hope to maintain control of their product which does not make sense considering how uncontrollable it is. The movement of data has become so commonplace that controlling it seems almost ridiculous. Record companies have no other choice; they should strongly consider the prospects of blanket licenses. Flat rate licensing would work better as it would get money to creators who are not being served properly by the groups trying to represent them. I think this is probably the reason voluntary collective licensing has still not hit the mainstream. Middlemen like record companies realize their role will be diminished in a world where artists can provide their product directly to their fans.
tagged blanket_licensing choruss collective_licensing copyright file_sharing fisher free_music isp_licensing leonhard licensing music_piracy new_economy piracy voluntary_collective_licensing wired by neild ...on 15-APR-09
The Higher Education Opportunity Act written in August 2008 contained a few mentions of file sharing on campuses. The act addressed three main areas. First, students must be warned about illegal downloading and illegitimate P2P file sharing. They must be notified about potential repercussions such as civil and criminal liabilities. Next, institutions must certify that they have developed plans to combat the unauthorized distribution of copyrighted materials including technology based deterrents. Third, they must, to the extent possible, provide alternatives to illegal downloading. The timing for this is 1 year after the Act was signed.
The Act is quite specific in its requirements. Universities must both combat and provide solutions to the peer-to-peer file sharing dilemma that has run rampant on college campuses since the creation of Napster over a decade ago. Numerous attempts of other services have been tested, but all have failed the ultimate goal of compensating creators and giving students the music they want. Ruckus was the most recent failure. With the Act in place, universities must address the issue in the near future giving Choruss a unique opportunity as it is backed by both labels and file-sharing proponents. The controlled nature of campuses and use of a central ISP makes them a very attractive place to test the subscription model and this will be important to watch develop for the future of collective licensing.
tagged choruss collective_licensing copyright file_sharing free_music isp_licensing licensing music_piracy new_economy piracy voluntary_collective_licensing wired by neild ...and 2 other people ...on 15-APR-09
The editorial by Reihan Salam discusses the benefits and issues with voluntary collective licensing. Four music companies (Universal, Warner, Sony BMG, EMI) control 90% of all record sales in the U.S and have blamed piracy for the 40% decline in music sales over the past decade. Some opinions in the article describe voluntary collective licensing as a "music tax" or even an extortion scheme. Issues such as the masses paying for the actions of a few and the recording industry gaining too much are reflected. Salam believes the system is actually beneficial as it rewards smaller artists and will help creativity. If artists are not compensated and royalty streams dry up, they will in fact stop recording. I do not necessarily subscribe to this as plenty of musicians do so out of passion not profit.
The part of the article that is most interesting is related to Apple, which record companies believe has a virtual monopoly on music downloading and must be kept in check. Voluntary collective licensing helps record companies ease their reliance on the software. Apple's counter attack to voluntary collective licensing is also discussed which poses an interesting proposition. A one-time fee on an Ipod purchase would give purchasers access to all music available on the iTunes website. The reason this hasn't yet happened is price and that it further entrenches Apple in its power against record companies.
Additional concerns are raised about how VCL would hurt independent labels; the other 10% of record sales and with the Apple plan its effects on other music software programs. It also discusses what actually may work best and sides with William Fischer’s book Promises to Keep and its strategy of an actually government music tax. Such a strategy would benefit artists and consumers but may cut out the powerful RIAA, which is well liked by the current administration.
The Apple tax idea is interesting and one that sticks in my mind, but again grants power to Apple who the record companies are too dependent on already. If an agreement was reached, I think it would be revolutionary but still limit consumers full access to the world’s music catalog as iTunes only holds a small percentage of all music available.
tagged choruss collective_licensing copyright file_sharing free_music isp_licensing licensing music_piracy new_economy piracy voluntary_collective_licensing wired by neild ...on 15-APR-09
This is a New York Times article written by Eric Pfanner in January 2009. It discusses a proposal by the Isle Of Man to test voluntary collective licensing. For $1.38 a month, the eighty thousand residents, who all have broadband access, would be able to download unlimited amounts of music. A fee would be collected by the ISP. The music industry estimates that currently 95% of tracks distributed online are pirated and this is a potential solution offered by the Isle.
The article discusses European perspectives on the issue and they do appear to be farther along than the U.S. A similar proposal made it Parliament in France, but it was eventually rejected after a fierce battle by copyright holders. Currently European countries seem more interested in the idea of holding ISPs responsible for illegal downloading on their networks. They have also proposed ideas including a 3 strikes your out rule and the banning of individuals from broadband access. While these idea are taking shape in the U.S., it seems unreasonable to hold ISPs responsible for reporting their customers actions. It also could create competitive advantages for those ISPs who refuse to participate and also distrust in them in general. Similar to phone tapping under the Patriot Act, it impedes on individuals freedom without the concerns of national security. It seems to be another example of the record companies alienating their own customers and building ill will and holding onto their past control ideals vs. adjusting to the future and the fact that file sharing is here to stay.
tagged blanket_licensing choruss collective_licensing copyright file_sharing fisher free_music isle_of_man isp_licensing licensing music_piracy new_economy piracy voluntary_collective_licensing wired by neild ...on 15-APR-09
This transcript is from Jim Griffins keynote speech about Choruss at the Digital Music Forum East in March 2009. Jim Griffins heads Choruss, LLC is a non-profit organization created and supported by major music labels. Choruss aim is to provide voluntary collective licensing to universities. It amazingly is backed by both the RIAA and EFF, who usually are on opposite sides of the music file-sharing issue. Choruss would act as a collective pool and then distribute royalties to artists based on various metrics.
Mr. Griffins discusses the need for a new business model in the music industry as technology has completely changed the game. He states, "It’s a fact of life: If your business model depends on controlling or getting paid for copies of zeros and ones, you may need to look at a new business model." He explains how collective licensing has existed in various industries in various forms and now is no different. Mr. Griffins then specifically addresses a Billboard editorial written by Chris Carter on the issues facing voluntary collective licensing. He provides mitigating arguments to the issues including lack of data to allocate funds, legal implications of collective licensing, opt-in / opt-out, label favoritism, and implementation challenges. He further discusses that this is not an academic pursuit but rather an actual attempt at monetizing and regulating piracy. He stresses that the creation of the system will also expand the market and uses the Copyright Clearance Center as an example of past success. Choruss has the goal to test various systems and eventually make paying for music fast and simple because doing so will release the floodwaters for money to flow.
Mr. Griffin is basically heading up the idea of voluntary collective licensing and is the initiatives public face and voice. This transcript gives a cohesive response to critics of voluntary collective licensing. By addressing the concerns of Mr. Castle, he has provided counter-arguments necessary to push the discussion on this revolutionary concept. His answers are based in reality and admit the concerns faced but are optimistic and derived out of reason.
tagged chorus collective_licensing copyright eff electronic_frontier_foundation file_sharing free_music isp_licensing music_piracy new_economy piracy voluntary_collective_licensing wired by neild ...on 15-APR-09
Chris Castle is a California attorney who represents clients on music technology and public policy. He wrote this editorial in January 2009 and takes a much needed look at the problems with voluntary collective licensing and ISP taxes. He explores what would happen in a world where suddenly downloading music is free. The main issue he brings up is without any legitimate proven tracking sources, ISPs would basically be providing good guesses on how the fees garnished should be distributed. Other concerns he raises are about file quality, illegitimate lawsuits and the lack of feasibility of the plan in actual implementation. He further comments that the record industry would be exchanging one form of uncertainty for another.
The editorial further accuses proponents of voluntary collective licensing of ignoring the positive results in the billion dollar industry of quality digital content such as Hulu and Itunes which are experiencing successful growth. The author questions how collective funds would be distributed with no good data and the addition of another middle-man pulling money out of artists pockets. Questions are also raised about any promises to not sue ISPs, especially by those who opt-out of collective licensing. ISPs will also face issues related to other content illegally downloaded on their sites like images, movies, etc. and international trade agreements that may be tested.
While voluntary collective licensing on a topical level sounds great, Mr. Carter raises some very legitimate points and the issues that could be present in actual practice. ISPs will have to take on additional duties and are vulnerable to attack for participating as a middle-man whether it be voluntarily or involuntarily. Consumers may also be at risk in a world where authorized and unauthorized works are at their fingertips with no clear ability to distinguish between the two. If this is the case, lawsuits may continue unabated.
tagged collective_licensing copyright eff electronic_frontier_foundation file_sharing free_music isp_licensing isp_tax music_piracy new_economy piracy voluntary_collective_licensing wired by neild ...on 15-APR-09
This is Chapter 6: An Alternative Compensation System from William Fisher III's 2004 book Promises to Keep. Mr. Fisher is the Hale and Dorr Professor of IP Law at Harvard and Director of the Berkman Center for Internet and Society. This is a very comprehensive discussion of the creation of a governmentally administered reward system for music and movie file sharing. Its basic premise is musicians or filmmakers would register their work with the copyright office and be given a unique identifier that would be used to track downloads of their work. The government would enact taxes which would be used to create a central fund. Using techniques created by television rating agencies, performing rights organizations, etc. the government would determine what frequency the work was used. The artist would then receive their royalty payment. The benefits would be consumers would pay less for more entertainment and artist would receive their fair share. Distribution companies would largely become obsolete over the long run. Society at large would benefit with less litigation and transaction costs.
The chapter goes on in detail to explain the various components of the plan. It also performs a deep analysis into revenue sources to determine the financial impact of the system. In the end, Mr. Fisher determines a tax of approximately $27 per year per household would make the system work. Concerns with this do exist such as consumers potentially supporting music they are morally or ethically opposed to. Another funding source could be taxes on the goods and services that are used to gain access to the media. Items such as ISPs, mp3 players, etc. are all explored and in the end an approximately tax of 12% is calculated as being appropriate. This is very deep and thoughtful analysis on what the actual numbers are that is helpful in pushing the discussion of voluntary collective licensing forward.
The chapter raises very important issues about voluntary collective licensing including derivative works, artists gaming the system, the inadequacy of the current copyright office, and how to create an appropriate sampling system. This is deep dive is essential to my research project as it peels back the surface to explore further ideas that will have to be confronted as the method moves forward. While a required government tax may face strong opposition, the idea of taxing devices is logical. My other concern with this strategy is the involvement of the government as the EFF plan to have non-profit collectives seems more in-line with letting the market do its work in maintaining innovation and efficiency.
tagged choruss collective_licensing copyright file_sharing fisher free_music isp_licensing licensing music_piracy new_economy piracy voluntary_collective_licensing wired by neild ...on 15-APR-09
This is The Songwriters Association of Canada’s proposal for monetizing file sharing of Canadian music. It lays out a voluntary collective licensing scheme similar to that proposed by the Electronic Frontier Foundation. The plan highlights its unobtrusive nature which will basically let consumers continue to download music as they wish but remove the legal risks and legitimize their actions. Consumers would have unlimited access to the world's music collection both preserving and fostering its growth. The association believes the voluntary collective licensing method will usher in a "Golden Age of creativity."
The background of the proposal provides some interesting statistics on music downloading. The estimate 98% of all music is shared and only 2% is actually purchased obviously indicating that sharing is the preferred method of the public at large to access music. The proposal also argues that legalizing file sharing would increase the amount of high quality virus-free music available as only 6mm of the 100mm recordings created are available on legal sites. Legitimizing file sharing will hence increase society's access to all music promoting the arts. It will also answer the most important dilemma: compensation for creators.
The proposal is an amendment to the current copyright act instituting collective licensing and the payment by consumers of a monthly fee on internet and wireless accounts. This would basically be a government tax but with an opt-out option. Consumers could sign documentation stating they will not share files and face penalty for breaking their agreement. Creators could also opt-out. The proposal would not only benefit consumers, but also ISPs and the music industry. ISPs would receive an administrative fee and record companies would finally receive compensation for file-sharing. The collective would be responsible for tracking music file sharing and distribution of royalties and could be outsourced to firms currently doing similar work.
Overall, the system seems very reasonable and a solution to the secular downward trend facing the record industry. The proposal is broad in its strokes, but it is the details of voluntary collective licensing that make it difficult which are not addressed. Issues such as how royalty streams are fairly distributed, misuse for non-music materials, cheating by artists, impact on record companies and current providers of legal file sharing are not fully tackled. Still the proposal takes the next steps necessary to move the method forward.
tagged canada collective_licensing copyright eff electronic_frontier_foundation file_sharing free_music isp_licensing isp_tax music_piracy new_economy piracy proposal s.a.c. voluntary_collective_licensing wired by neild ...on 15-APR-09
This is Fred von Lohmann of the Electronic Frontier Foundation's whitepaper on voluntary collective licensing. The EFF has been a proponent of the idea since 2004 and put its seal of approval on current attempts to give life to the idea such as Choruss. The idea has gained traction with both Warner Music and Universal expressing interest. There has been a plethora of comments by writers, bloggers, panel discussions regarding the subject.
The paper presents voluntary collective licensing as a method to combat digital music piracy and create a legitimate revenue source for the flailing music industry. It lays out the precedent, the idea, the logic and the advantages. Voluntary collective licensing could be a way to monetize file sharing and hence provide the creators with compensation for their work, but at the same time provide consumers with what they have wanted all along, complete and uninhibited access to music. Since the creation of Napster, peer-to-peer file sharing has resulted in a secular decline of the music industry. Even through numerous evolutions and legal battles, file sharing has continued illegally and impacted recording artists. Consumers have been sued and accused by record companies of piracy, all of which has resulted in ill will towards record companies and little revenue generation for artists. Lohmann lays out the reasons voluntary collective licensing is needed including artists deserving to be compensated for their work, file-sharing has become the normal mode of music distribution, fans are in fact the best distributors, decision makers and preserves of music and finally the importance of letting the market drive innovation more than the government.
Voluntary collective licensing is compared to the system currently used by radio stations and insights are provided on how the concept will alleviate piracy in the music industry. The idea is to form "collecting societies" similar to ASCAP, BMI, and SESAC which provide music fans with unlimited downloading in exchange for a reasonable monthly fee. The fees would be collected through a variety of sources including at the ISP, university networks or subscriptions (similar to Rhapsody). All money would move to a central organization who would distribute compensation to artists based on popularity of their music, the technology for which already exists. The whitepaper further answers the most obvious questions including antitrust, division of money, and the impact on unwilling artists.
The Higher Education Opportunity Act made it mandatory for universities to provide alternatives to illegal peer-to-peer networks.