Collective Licensing for Web-Based Music Distribution

Two weeks ago we discussed a proposal from music industry veteran Jim Griffin to implement a monthly fee from ISPs in exchange for the legal distribution of copyrighted music. Now, quinthar brings news that Warner Music Group has hired Griffin with the intention to make that proposal a reality. Warner wants Griffin to establish a collective licensing deal with ISPs that would let the ISPs stop worrying about their legal responsibilities for file-sharing while contributing to a pool of money (potentially up to $20 billion per year) that would be distributed amongst the music industry. "Griffin says that in just the few weeks since Warner began working on this plan, the company has been approached by internet service providers 'who want to discharge their risk.' Eventually, advertising could subsidize the entire system, so that users who don't want to receive ads could pay the fee, and those who don't mind advertising wouldn't pay a dime. 'I.S.P.'s want to distinguish themselves with marketing," Griffin says. "You can only imagine that an I.S.P. that marketed a 'fair trade' network connection would see a marketing advantage.'"

Who Says I wanna buy your crap?

So now instead of me having the choice of walking into a store and buying a CD I'm forced to?

Who says that just because I use the Internet I ever listen to your music?

Get out of my fucking wallet!

what about TV?

You do realise that you already do that when watching TV, right?

Because the flat tax you pay for it and that helps fun programs is exactly the same as this one (okay, more advertisement contributes to it, and it's not only for music; but still).

Would you c

Re:

But why should people who are not accessing the content or paying for the content through something like iTunes have to pay any kind of tax?

In my mind this is no better than extorting ISPs.
Why not address the problem by capping upload limits from cus

Re:what about TV?

You must be from England. There's no flat tax to pay for TV programming here in the U.S. ... most television programs are advertiser-supported, except those that are produced by cable outfits like HBO and Showtime.

Re:what about TV?

Okay, I was afraid of making that mistake; (and actually I'm from France, where the tax exists).

Still, here I don't see people complaining about that flat fee just because they don't watch all channels, or because they don't watch them all the time. And of course that's in part because that tax is pretty low, just as the music fee could be (for example, if it was the avarage money spent spent by customer on music per month, or even better, the avarage actually given to artist; plus probably some money for marketing).

Maybe a better example would be Disneyland: you pay to enter, and that pays for the haunted mansion, even if you never go there.

Or a second example: buying a swiss army knife with a can openner, even if you never use it. Of course from your point of veiw it would be logical not to get a can openner, but as a global system it is more economic to "force" everyone to get the can opener, so that price get lower by volume.

Of course this doesn't solve the problem of deciding what artist gets what amount of that money, but it still is a system that economicaly makes sense; charging 99cents on itune for every song does not.

Re:what about TV?

Maybe a better example would be Disneyland: you pay to enter, and that pays for the haunted mansion, even if you never go there.

This is an example of bundling (i.e. you always have to buy "a" and "b" together). Economically bundling always favors the seller giving them more power and money (the reasons are to complicated to explain here; look it up in an Econ book). It is not illegal, but it can really disadvantage the buyer and when the seller is running a de facto monopoly (as most non-metropolitan, US, broadband ISPs are) they could be hauled up on anti-trust allegations.

For example, most people wouldn't object to the grocery store bundling batteries with their flashlights, but if the water company required you to buy a car with your water service then people would squeal. Here it is all shades of gray depending on how related the items being bundled are and whether the buyer has alternative to buying the bundled items. Personally I think this steps across the line. For me the internet is a utility and I really don't want it to be bundled (e.g. the AOL portal model) with things that I have no intention of using. After all who is to say there shouldn't also be a Slashdot tax on ISPs to pay for running the Slashdot site.

Re:what about TV?

So, not to be ad hominem, but lets use your own analogy.

The difference here is between choosing to go to Disneyland (and pay it or not), and being forced to pay for Disneyland. It's not a question of where the money goes, its whether you have the choice of how to spend it. The system doesn't work because the cost will be passed to the consumer, not the ones tossing aside their liability. Additionally, what does this do for non-label artists? There are issues on both sides of the table and why this doesn't work.

Or analogy two: Your choice to buy the swiss army knife or not, are you saying that you should just pay the fee for it, or you can choose to buy it? That is the bigger deal here. It's not where the magic marketing numbers are (which are shown that most people don't click advertising)

I hate to say it, but I would be seriously offended by a "pay for being a criminal" type subscription charge for the reasons above, what it implies, and all it is doing is degrading service. I really hate to support big business but by increasing the cost for the same service that is the same thing as degrading it due to lack of efficiency. Sometimes this happens naturally but artificially like this is just lining MPAA/RIAA/IFPI pockets at the simultaneous expense of every consumer who is legitimately or not using a service.

May as well just label it a "profit charge" and put that into your service bill for anything...except for the reality of just how much backlash that would create. Or maybe they'll try to get it passed by calling it "opt-out" or some garbage.

There are plenty of articles out there about ad revenue, associating things like "just because you watch TV" = money in a media associates pocket are unaccurate as far as ad revenue. Unless someone explicitly provides you a way to track a sale back to a TV ad, you can't really associate a sales increase from strictly an ad (especially if there is more than 1 source of adds, and even with fairly stable business). Reason here is that markets are volatile, and sales is just as volatile. People can change on the drop of a hat, because the sky is blue today, etc in the same way that a stock does. http://techdirt.com/articles/20060504/1941211.shtml [techdirt.com] provides a decent example of that.

Re:what about TV?

The big difference between an "internet content tax" and the television taxes you guys have over across the pond is that there are hundreds of types of media that are accessible through the internet.

If this were put in place, it would be less than a week before the ISP bill had hundreds of additional charges:
Music Fee $5
Movie Fee $10.50
TV Fee $7
News Fee $12.32
Voice Transmission Fee $3
Software Fee $15
Slashdot Fee $3
Google Fee $6
Photo Fee $5
Book Fee $8

etc, etc, etc, every single industry that has piracy exposure, or distributes anything online would get in on this racket ASAP, and it would suddenly cost $500/mo to get a simple internet connection. Whether you used any of the above services or not.

Personally, I do not download music, I do not listen to any music except for the music I purchased on CDs. I haven't purchased a new CD in nearly 8 years as nothing that has come out has made me the least bit interested. I detest the music industry, and I refuse to give them a dime. If they manage to push this through, I would be forced against my will to give these evil bastards my hard earned money.

Re:what about TV?

Maybe a better example would be you walk into a shopping mall, but you don't buy anything, but just because you walked into the mall you have to pay for it just in case you stole something, however if you do want to buy something, then you need to pay again.

That's a more accurate description of what is happening.

Re:Who Says I wanna buy your crap?

I have 10 CD's I listen to. I have have purchased them over the last 10 years. I do not listen to anything else on radio or cable on demand. Why should I have to pay this tax?

Indeed

And what about the deaf, will they have to pay this tax, err, I mean, collective licensing?

First they came for my mp3s..

First they came for my mp3s, but I did not download those, so I did nothing.

Then they came for my tv shows, but I did not download those, so I did nothing.

Then they came for my porn and I was sunk :(

careful

They aren't quite clear about what you get for that fee. On the one hand, they talk about "access to a database of all music", but then they talk about freeing the ISPs from liability. This might well mean that for your fee, the only thing you can legally do is "access" music in Windows-only formats from an unreliable and poorly maintained RIAA server, whose notion of "all music" is limited to top-20 stuff.

In any case, any proposal like this should have a clear and well-defined path in it towards dismantling the RIAA and making its members obsolete; a world in which music can be shared and distributed freely does not require record companies in the traditional sense. The only thing these people still can hold on to should be the old copyrights they managed to obtain from less lucky artists.

I want my cut!

This is quite possibly the worst idea the record companies have ever come up with. I would be very surprised if any ISPs ever give in. I can see it now:

Monthly internet bill:
50.00 - connection fee
5.00 - music extortion fee
5.50 - movies extortion fee
8.25 - television extortion fee
3.00 - print media extortion fee
4.00 - software warez extortion fee
2.00 - images possibly out of copyright
4.00 - independent music fee
3.00 - documentaries fee
2.50 - guitar tabs/sheet music
3.00 - song lyrics
2.00 - spambot fee (just in case I'm a node)
7.00 - fee for everyone else wanting my pound of flesh

total: $100 per month, and I think I'm being quite generous

Where will this stop? If the record labels get their fee, I want my fee for everyone that downloaded that one picture from my blog that I told you that you shouldn't save but you did anyways. You can just send me those $.02 per subscriber per month, or I'll take a flat fee of $3,000,000 - thanks.

Did They Hire Ex-SCO Staffers?

Seriously, this is so exponentially insane the first thing I thought of was SCO.

- "The company has been approached by internet service providers 'who want to discharge their risk.'" Fuckin' bullshit. Total horseshit. Lies, lies, lies. Classic smokescreen to try to create some kind of peer pressure. There is no risk. There are no such ISPs. That's why they must go nameless.

- What ISP would open themselves to this kind of blackmail? Wouldn't that be an obvious signal to the movie industry, the book publishing industry, the software industry, "come get in line and bilk us for money, we're weak and easily intimidated"?

- "Eventually, advertising could subsidize the entire system, so that users who don't want to receive ads could pay the fee, and those who don't mind advertising wouldn't pay a dime." What the fuck? How do those ads get on my system from the ISP? Across Firefox? Through my email? In my WOW packets? Take over my OS? WTF is that?

This guy should be in protective custody, under observation for a few weeks. He's clearly lost his grip on reality and must be a danger to himself. But then, that didn't stop SCO.

Fair distribution?

I'd be much less repulsed by this idea if I had any belief that the fees would be distributed in a fair fashion. As someone who listens to a fair deal of indie stuff (and virtually no major label stuff), I'm concerned that there's no way in hell anyone not on a major label would get to see a dime of the money. (Not that anyone ON a major label will see a dime of the money either, what with the soul-stealing contracts they make bands sign).

Ultimately then, it becomes about subsidizing an industry in a manner that provides absolutely no incentive for any major label to make desirable music. They can produce whatever they want and take the flat fee, preventing us from voting with our wallet. As a result, music would become even more controlled by the major labels than it already is now. And that's a particularly disgusting thought.

ISPs legal responsibilities?

Do they actually have any? Surely their responsibilities begin and end with complying with law enforcement requests to provide details of users suspected of copyright infringement.

Sort of sounds like a scare tactic; I can't imagine ISPs falling for it - aren't they 'common carriers' specifically so the responsibility for what people do with their network _doesn't_ fall on them?

No. Just no.

And then there were a few providers who wouldn't pay. They set up a new network where this practice was prohibited, at the time called the Othernet. Since it was a new network they could use the open technologies of the Internet, but avoid the chains of legacy technology like IP v4.

This proved to be the revolution that transformed intellectual property. Because the Othernet required secure Onion Routing protocols and packets protected by public key encryption fast ASICs to make the requirement fast and reliable were developed. The logic from these ASICs became embedded in the logic for Othernet core routers. The features were found to be popular on Internet and intranet routers as well, and so became an industry standard feature no vendor could avoid.

On the Othernet it was impossible to determine who sent what to whom. Naturally this became a haven for the criminal element, the disaffected and the insane. Here also though was a channel for open discussion free from fear of oppression. The Othernet begat Radio Free Othernet and the numerous cells responsible for the October Rebellion culminating in the Halloween event referred to in your history books as "the day they hanged the lawyers."

The market for the classic Internet shrivelled as its proprietors folded one by one. Eventually the last desperate holdouts were absorbed into the Othernet. Although the official name for the network is still the Othernet for casual purposes it is now referred to as the Internet.

WHAT THE FUCK

This is the most retarded business idea I have ever seen.

How is it decided who gets the money, what are we paying for?

This is just another way of passing the costs on to us, however this time we don't get a valuable product in return, and there is no incentive to produce. This will inevitably cripple the music industry more than file sharing could ever do, and it will hurt the ISP industry as well (Unless it's voluntary, in which case it won't last long, since there are significant economic incentives to not do it).

I can't believe someone even considered this.

No legitimate business would ever consider this, only Government would consider a revenue stream like this.

This is pissing me off heaps right now, and I haven't even read the article. I hope this is another one of those "Slashdot went crazy and badly worded the article" moments.

Someone needs to smack them over the head with the wealth of nations followed by free to choose.

$20 billion

Great idea!

The entire music industry gross revenues are about $14 billion. So what we'll do is hand the RIAA $20 billion pure profit for sitting back and not doing any work in particular on top of them continuing to collecting most of the $14 billion they get now minus whatever speculative amount legal P2P might actually diminish those $14 billion revenues.

I'm glad to see we've finally found a fair solution.

-

Re:this is great!

That's not what it is, it's a fee to free the ISP's from the legal responsibilities of their services being used for piracy. The pirate still could be sued under these terms, and legal users are in effect being charged twice.

Re:Complete change of strategy

This is a fucking shakedown. The MAFIAA is shaking down the ISPs for a percent of the money they earn by providing me with internet service. I do not do file-sharing that involves unlicensed music in any way. So of course the MAFIAA does not deserve to receive any of my hard earned money. What. The. Fuck. Are. They. Injecting. Into. Their. Veins.

Re:Complete change of strategy

Right on AC.
Seriously, I don't see why everyone's got such a hard-on for protecting the music industry. Maybe we're obsessed with this idea of the small musician being able to make it big, maybe we just like the sound of a corporation making money, but seriously, guys, SERIOUSLY.
CUT THIS SHIT OUT. I'm sick and fucking tired of people defending the damn RIAA while they continue to make off with money they didn't earn. Did they compose the song? Is it part of their soul? A creation of their own? No! They sit there and exploit their artists so they can exploit their consumers. It cheapens the value of art, it destroys the beauty of sound, and it fucks us all over in a giant corporatist blood orgy.

Why is it corporatist? The entire legal backing behind a record distribution company- the idea of COPYRIGHT, is a law intended to CREATE a market for something unmarketable. Why can the music industry continue to use old, outdated media (CDs, record stores) when there is a BETTER media around? (FLAC, the internet)
Because we are CORPORATISTS. We feel like we have the right nay the OBLIGATION to protect something someone made up in their heads. Fuck that shit. Music is meant to be enjoyed, not exploited.
Seriously, FUCK that shit.

Re:Complete change of strategy

What about all the independent musicians? Do you think they will get a share in this tax?

Remember, this isn't collecting royalties, this is the traditional and dying music industry looking for free money.

Why not tax electricity for the RIAA? After all, we all know music pirates have to use electricity to make illegal copies,
therefore all users of electricity must be music pirates! (This is the kind of logic we're talking about here)..

This blanket tax thing is an incredibly bad idea.

Ask Nine Inch Nails and Radiohead how they feel about such a tax, after showing they can make far more money without the "help" of a corrupt and bloated music industry.

Re:Complete change of strategy

What about all the independent musicians? Do you think they will get a share in this tax?

What about software developers, movie makers, authors of books, magazines and newspaper articles, photographers, web page authors including bloggers, etc? Don't they deserve a share of the cash too?