AfterDawn: Tech news

SXSW panel to discuss mandatory online music licensing

Written by Rich Fiscus (Google+) @ 13 Mar 2008 16:57 User comments (22)

SXSW panel to discuss mandatory online music licensing At a panel discussion called 'Mobility, Ubiquity and Monetizing Music,' which will be held tomorrow at the SXSW (South By Southwest) Music And Media Conference in Austin Texas, the focus is expected to be a proposal by one panel member for adding a small monthly surcharge on braodband internet service to pay royalties for music currently being downloaded (illegally) for free. Jim Griffin's plan would see the money divided up among labels, publishers, artists, and songwriters according to download statistics from P2P networks.
Griffiin was responsible for the first commercial release of a song online while head of technology at Geffen Records. Since leaving Geffen he's spent his time working on issues related to digital delivery of various types of media. He'll be joined on the panel by Peter Jenner, manager and former manager of a number of successful recording artits, who describes Griffin's plan as "monetizing the anarchy."

The idea of a subscription licensing fee is hardly new. The Electronic Frontier Foundation made a very public presentation of a similar plan in 2004. What may be new is the recording industry's willingness to listen. With the major labels' lawsuit-driven strategy failing to either resuscitate the nearly dead CD industry. The legal download market hasn't been able to make up for lost CD sales due to a consumer preference for singles rather than complete albums.

The EFF's proposal, as with others that have come since, have generally been criticized by labels and consumers alike, although labels appear be more receptive as they run out of options, and yet have failed to invest in any alternative model of their own. It's also worth noting that it's not substantially different than the mandatory licensing already in place for radio, whether its broadcast terrestrially, using a satellite, or across the internet, except for being directly charged to consumers. However, if they wish to remove labels and radio from the distribution equation this may not be unreasonable.

One sticky point in my mind is the other content distributed on P2P networks. If a precedent is set with a mandatory music license, how many more surcharges could be added for other content from TV shows and movies to ebooks. Before any long term agreement is entered into by ISPs they should make sure the consider all the consequences and leave room to renegotiate in the event other content owners want to work out a similar arrangement.

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22 user comments

113.3.2008 17:09
mikecUSA
Inactive

I think it's a terrible idea. Another tax. If they implement this, it would kill the I-Tunes store, Amazon Mp3 store as well as Napster, not to mention all of the others that currently LEGALLY offer digital music and video purchases.

It wouold also cut indepencdent musical artists off at the knees, and pretty much destroy any possibility of the commercial viability of new record labels willing to exist and give the majority of the profits to artists while taking a much smaller cut for themselves.

Only existing record labels would get a piece of the pie, and there would also be created some sort of offical "legitamitization" agency set up to keep out competition from upstarts and newbies who would want in on the action of music creation, selling and distribution.

It would restrict innovation and be a serious blow to future creative rights.

I vote no---HELL NO!

213.3.2008 17:37

My biggest concern is this:

Quote:
Jim Griffin's plan would see the money divided up among labels, publishers, artists, and songwriters according to download statistics from P2P networks.
How in hell will they have "P2P download statistics" without seeing what everyone is downloading, without spying on people? I think it's just a cunning plot to legalize P2P traffic monitoring on the ISP level.

313.3.2008 18:29

If a P2P tax will put a stop to the MAFIAA suing ordinary joes into bankruptcy, then I'll support it - Reluctantly.

Of course, if this tax does prevail then there needs to be a clause preempting the MPAA, IFPA & the RIAA from suing people for "infringement".

Itunes & Napster will still exist they will have to adopt a slightly different business model.

413.3.2008 19:55

This, in essence, would be legalizing what is currently illegal downloading. This may seem obvious, to some.
On the other hand, they're dreaming. Many ISPs, I'm sure, aren't in the position to implement such a policy. But if the realm of possibility did come about, as the author states it would also have to differentiate content types. Otherwise, there would be a public outcry of people stating that they've never downloaded an mp3, how come they're being charged for it on their monthly bill.

514.3.2008 0:22

Vermin.
Greedy, clueless vermin, living in the Dark Ages.

614.3.2008 2:00

If this goes through watch the backlach from the mainstream public. Average Joe will have a fit that his internet bill is going up! Good idea in theory, bad idea in reality. I think the labels are now worried that their behinds are on the endangered list. Serves them right.
I think artists like Reznor have a clue. Cut out the fat cat middle man and go straight to your fans. I'm not even a fan of NIN but I;m going to buy the albums online to support the artist (in principal).

714.3.2008 9:17

@ mikecUSA & ivymike

I agree with both of you. The implementation of this tax will essentially allow record labels to "profit from P2P". Why should they have the luxury of not having to setup their own download service and still profit from the model? By setting up this tax they will be indirectly given a monopoly back on the music of their signed artists.

I am sure this tax will be in addition to their lawsuits. The RIAA is never going to stop until the US congress stops getting their payments and starts being for the people instead of for the biggest payer or until the RIAA declares bankruptcy.

If this tax goes into effect, then I really hope that other artists follow Reznor's model and start to cut the RIAA out. Anymore all you need is an internet connection and musical ability and you can sell music.

I am against this tax, not because I download music illegally but because I know that the RIAA will be taking at least 60% of the revenue from the tax to further line their own pockets. If the full tax dollars would go directly to the artists, then I would be OK with the tax.

814.3.2008 9:34
varnull
Inactive

"No taxation without representation".. That was the cry that overturned a world political model in the 1920's...

Now yome yankee imperialist organisation wants to tax me even though I do not live in the US.. Over my dead body.. I say steal everything you can from these suits, over and over and over again until they cease to exist...
Make every allegation go all the way to court. They are calling every person on the planet thieves.. You are being accused of a freaking CRIME here and nobody has the guts to stand up and say so..

If I called them thieves I would expect to find my ass in court, so why should it work any differently the other way round?.. oh yeah.. I can't afford to buy politicians....

Check your constitutions people, I think it's why yanks have the right to bear arms.. to protect themselves from an over powerful and oppressive government. Only country so far not to buckle under the greed pressure of the riaa/mpaa?? Italy, where there may be corrupt politicians but, the people have a fair electoral system and can kick them out too.

914.3.2008 10:04

What about the guy like me who doesn't download music sounds like we will have to pay for someone elses crime of course thats the American way the rick get richer and the poor get F#%$#$

1014.3.2008 11:56

If it's $5/month, then I may not flinch. If it's more, then I will get pissed. And it has the potential to be a lot more. As the article brought out, more people are going to want to get in on this. Watch out for the MPAA. The plus side may be that all downloading "should" be made legal then. Now if everyone decides to download triple what they usually do, then these greedy SOB's may have the ISP's raise the tax proportionate to increase in volume of P2P. Or ISP's may cut bandwidth. This would be a nightmare.

1114.3.2008 14:32

Quote:
My biggest concern is this:
Quote:
Jim Griffin's plan would see the money divided up among labels, publishers, artists, and songwriters according to download statistics from P2P networks.
How in hell will they have "P2P download statistics" without seeing what everyone is downloading, without spying on people? I think it's just a cunning plot to legalize P2P traffic monitoring on the ISP level.

P2P download statistics are already collected by various means by industry analysts. To some extent they've replaced radio and SoundScan (CD sales) figures as the chief barometer for music executives.

1214.3.2008 15:13

Originally posted by mikecUSA:
I think it's a terrible idea. Another tax. If they implement this, it would kill the I-Tunes store, Amazon Mp3 store as well as Napster, not to mention all of the others that currently LEGALLY offer digital music and video purchases.

It wouold also cut indepencdent musical artists off at the knees, and pretty much destroy any possibility of the commercial viability of new record labels willing to exist and give the majority of the profits to artists while taking a much smaller cut for themselves.

Only existing record labels would get a piece of the pie, and there would also be created some sort of offical "legitamitization" agency set up to keep out competition from upstarts and newbies who would want in on the action of music creation, selling and distribution.

It would restrict innovation and be a serious blow to future creative rights.

I vote no---HELL NO!

Just like the labels themselves, the online music stores have no "right" to make money. If the future of music distribution is going to be mass licensing of some kind, and realistically I don't see any alternative given P2P's influence, a service like iTunes is using a dying model anyway. Selling downloads for around $1 each is only innovative compared to the labels' heads-in-the-sand approach.

On the other hand, with legalized music sharing would come a need for better P2P networks, that are secure, virus free, and guaranteed to have the content you want available in the format you want. People have shown that they're willing to pay for crap P2P like Kazaa. Selling them a good product should be nothing.

Having said that, I don't think it's as simple as proponents make it out to be. In order for me to support the idea the labels would need to agree to make their entire catalogs available in the latest and greatest formats for those of us who are interested. I'd also like to see serious discussion about the direction copyright terms have taken in the US, basically toward infinite copyright as it gets extended whenever it's about to run out, but I'm not holding my breath on that one.

The ISP's responsibility also becomes an issue. If your broadband provider **cough-Comcast-cough** is blocking P2P traffic that's a problem now. If they're collecting a surcharge for it while they block it that's a whole new ball game. Once again though, ISP service plans and transfer limitations are an area where innovation (competition) is sorely needed.

For all its potential flaws, this type of licensing is almost certainly the way of the future. We just need to be careful not to let the labels or ISPs into the driver's seat unsupervised. This discussion isn't happening because it's what the music industry wants. It's being forced by consumers, and we don't have to accept terms overly favorable to content owners or network operators.

1314.3.2008 15:18

Originally posted by th49:
What about the guy like me who doesn't download music sounds like we will have to pay for someone elses crime of course thats the American way the rick get richer and the poor get F#%$#$

And that's a pretty serious flaw with the current discussion. It can't be as simple as charging everyone because a lot of people don't use P2P now and won't be changing that even if they're forced to pay for it.

1414.3.2008 15:33
mikecUSA
Inactive

O.K.

So some of us want free music. I say that's silly. You wouldn't do anything that you were really good at for free unless you wanted to. Perhaps being financially wealthyn would help you in that decision.

But, the actual cash cow for your average STAR performaer is only about 10 years.

Dedicating your whole being to creating art requires total dedication, and while you're doing that, you're not really going to college or trade school or apprenticing at the boiler maker shop.

So Musical artists and those making the music available have a RIGHT to make money.

I-Tunes has done alot of people a lot of good, Napster has, Amazon Mp3 download---etc etc.

Legalizing P2p music piracy is a bad idea. It will devalue music, and stifle REAL ARTIST DEVELOPMENT!

The only way to get good at something is to stick with it, that takes funding, and that takes longevity.

This new tax, and legalizing P2P Music/Movie Piracy is not neccessary.

Music is a "want" not a "NEED". Everyone that wants music can now afford top get it. At $1.00 a song or $10.00 a month music subscription. Listening to music is rediculously affordable AND legal.

I-tunes and Napster and Amazon etc etc, they are doing good work. I use all three, I'm very happy--there's very little music that they DON'T have.

The new tax and legalization of P2P is just a severely "EFFED UP" idea for real artists and reasonable music distribution outlets.

1514.3.2008 15:36

Originally posted by mspurloc:
Vermin.
Greedy, clueless vermin, living in the Dark Ages.

Without a doubt. More to the point, an industry that's proven completely unwilling to take responsibility for their own profits. Most public companies would be sued by half their shareholders if they were mis-managed the way the labels have been for the last decade. What most people don't realize is that CD sales started slipping before Napster. If you look at the RIAA numbers (the real sales figures, not the "units shipped" crap they publicize) you'll see that sales growth had slowed in the mid-90s and pretty much flattened out completely by 1998 or 1999. They knew, or should have known, that they at least needed a new product by the time P2P appeared.

Instead, they cut new releases and tried to make more from each one when they should have been flooding the market to compensate for lower profits per unit. If production costs are too high find a cheaper way to do things. There are small studios all over the country producing (occasionally pretty good) demos and small releases for all kinds of bands.

I know that some bands record every show. When I saw The Who a couple of years ago they were getting video from every show and selling it on DVD. Jethro Tull released an entire live album of nothing but archived recordings they've been getting every night for probably the last 2 decades. You can't tell me there isn't an unexploited revenue stream there.

It's not just their distribution model that's broken. It's the entire recording industry.

1614.3.2008 16:08

Originally posted by mikecUSA:
O.K.

So some of us want free music. I say that's silly. You wouldn't do anything that you were really good at for free unless you wanted to. Perhaps being financially wealthyn would help you in that decision.

But, the actual cash cow for your average STAR performaer is only about 10 years.

Dedicating your whole being to creating art requires total dedication, and while you're doing that, you're not really going to college or trade school or apprenticing at the boiler maker shop.

So Musical artists and those making the music available have a RIGHT to make money.

No one has a right to make money. If no one wants to pay you what you want or need to be paid for your work you do something else. That's how it works for the rest of the world. Why should musicians and songwriters be exempt?

For example, I could be making more money than I get from my job with Afterdawn, but I'm doing what I want, and I guarantee I'm every bit as dedicated as any musician is to their craft. That doesn't mean anyone owes me for what I do. Afterdawn chooses to pay me for it, and if they choose not to that's their right. Likewise, our visitors choose to read it. They make my work profitable or not. That's not my right its yours.

Quote:
I-Tunes has done alot of people a lot of good, Napster has, Amazon Mp3 download---etc etc.

Those services have done what they could within the constraints of the labels tunnel vision. Most innovation has been "allowed" either because consumers demanded it or to spite Apple. On the other hand, quite a bit of P2P innovation has gone on, making the competition between the two models pretty one sided.

Quote:
Legalizing P2p music piracy is a bad idea. It will devalue music, and stifle REAL ARTIST DEVELOPMENT!

It's not legalizing piracy. It's changing the licensing model to one that's more realistic. There's still money to be made in promotion and providing a good P2P network.

Quote:
The only way to get good at something is to stick with it, that takes funding, and that takes longevity.

This new tax, and legalizing P2P Music/Movie Piracy is not neccessary.

Revenues are down and still dropping. This would increase revenue. How does that lead to less funding?

Quote:
Music is a "want" not a "NEED". Everyone that wants music can now afford top get it. At $1.00 a song or $10.00 a month music subscription. Listening to music is rediculously affordable AND legal.

You're correct. We have a responsibility to pay for garbage collection because it's a need. We have no such responsibility to give money to artists. We do, however have a legitimate cultural interest in sponsoring them. That's certainly not as simple as creating a blanket license and throwing money at the labels. They need to be willing to make a commitment to developing artists or else they don't have anything to sell us. If they're making more money through licensing they have no excuse not to.

At the same time, if the licensing were done through a third party it would allow independent labels, and even individual artists to get their works distributed on equal footing with the majors. Now the labels have a chance to make money through promotion. The more their artists get downloaded the more money they make. Such an independent clearing house could also be responsible for distributing songwriter/artist royalties in order to avoid things like label contracts where the artist who writes his own material accepts a smaller royalty for it as part of their contract.

Quote:
I-tunes and Napster and Amazon etc etc, they are doing good work. I use all three, I'm very happy--there's very little music that they DON'T have.

Unless you're looking for high resolution files. Then there's not much available.

Quote:
The new tax and legalization of P2P is just a severely "EFFED UP" idea for real artists and reasonable music distribution outlets.

You're certainly correct that it's not as simple as charging for P2P, but what alternative do you suggest that reverses the current sales decline? P2P isn't going away. The question is how do you make money from it - and especially how do you get a fair amount to the artist rather than it all going to their label/studio/publisher.

You seem to be suggesting that the artists aren't already being screwed by the labels. If the labels don't control the distribution channel they also lose some control over what the artist's fair share is. In my opinion that's ultimately good for artists.

Rich Fiscus
@Vurbal on Twitter
AfterDawn Staff Writer

1714.3.2008 17:26

Legalizing "illegal" P2P is not going to destroy the music industry, just as legalizing prostitution and drugs will not make everyone in America a stoned sex addict.

There's my stupid comment for the day.

1814.3.2008 17:49

As an example of one potential business opportunity from blanket licensing. Since Amazon won't be making money from individual songs they setup a private P2P network for special promotional content like live tracks bands make while on tour or other "limited releases." These files would still be legal to share on other P2P networks under the blanket license, but the label or artist would release them exclusively to Amazon, so if you want to get them right away you'll have to subscribe for a small fee. Instead of paying labels for these tracks they agree to promote other, lesser known artists. Amazon makes money because they're trading promotion (of their own service essentially) for the content.

If you don't think it's worth paying extra for whatever Amazon is charging you don't subscribe.

Would this be financially viable? Who knows. The point is it's not being tried, and neither is anything else, at least not by the companies whose business is swirling down the drain. Instead the labels are sitting around pointing fingers while their profits disappear.

1914.3.2008 18:17

Originally posted by emugamer:
Legalizing "illegal" P2P is not going to destroy the music industry, just as legalizing prostitution and drugs will not make everyone in America a stoned sex addict.

There's my stupid comment for the day.

How dare you bring reason to an online debate. You should be ashamed of yourself ;-)

2014.3.2008 19:36

While it sounds like a good idea in theory, in practice there is a number of flaws:

Many people don't use P2P, me included.

How long before the MPAA, BSA, and others want to tack on their fee too?

How is the money REALLY going to be distributed? 99% RIAA, 1% Artist would be my guess.

If you are charging me for access to music, YOU provide the downloads on YOUR server at high bitrates or lossless, not making me rely on questionable P2P quality.

Isn't that why we already pay an extra fee on blank music cds?

I can probably think of other concerns, but basically all it would do is prolong an archaic business model.

2115.3.2008 11:19

you can have statistics that don't pony up IP addresses and user info.


a interesting idea I would be happy to pay a 10% tax on my net if everything I downloaded was "free" however the competing media "families" would not want to share it but still a neat ieda.

1.2%Games
2.2%Software
3.2%movies/tv
4.1%book/mag
5.2%Music

Since I do not think books are that hurt from it you could push off 1% to help run the regulation.

If you think about it its not a bad idea as long as things are fully free to trade and share without black bootedlaywers seeking to lock you up over stuff no one is buying anyway.

2228.3.2008 15:46

I know this article is a little dated, but you guys need to see where this is going. First you are going to be charged a monthly fee for music whether you download or not. Now, some of you say that's ok. But is it? Take a look at the subscription model that Comcast is testing in Texas. The more you download the more you pay. So you will be paying twice for that music.

You say that the mp3s aren't that big, so I can get a lot for an extra gig a month. Now consider that the MPAA will want to get in on this, and you know they will. Now you are being charged for movies whether you download them or not. If you do download, how far do you think that extra gig will get you get you?

Now the artists who aren't under the control of the RIAA will want their far share, along with the software companies, and anyone who has ever had anything pirated, or can convince congress that they have.

You see, not such a good deal after all. Who says the Record industry isn't changing their business model?

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