“A Better Way Forward” | Can Music P2P Become Monetized?

Posted on November 18th, 2008 by LeeBerg

We all know the story…

CD sales are sky diving, P2P services are incredibly popular, record labels are stubborn, and music fans are getting sued.

Can this nightmare ever be fixed? The Electronic Frontier Foundation has created a plan that in theory could work to combatant the nightmare we’ve all heard above. Their proposal, “A Better Way Forward: Voluntary Collective Licensing of Music File Sharing” breaks down an innovative plan that seemingly could work.

In brief, the plan is to have file sharers pay a small fee every month to a blanket or collective liscense that is almost exactly the same as what radio broadcasters pay to ASCAP/BMI/SESAC in order to play nearly every song under the sun. The file sharers would either pay a collection agency, like ASCAP, or pay through a vendor such as their ISP.

The plan puts a lot of trust into the willingness of file sharers to pay the said fee every month. EFF thinks that most sharers would be willing to pay, but I think that they have overestimated. Yes, I do see the 24 and up crowd paying, but I find it hard to picture the youth of America paying a monthly fee. Most of these kids do not see anything wrong with what they are doing, so they do not play into the “guilt” factor which EFF hinges on as one of its reasons for so many sharers to pay.

The proposal is very interesting though, and I really like how their plan is set so that the maximum amount of innovation can occur.

Here are some advantages to the plan:

Artists and rights holders get paid. What’s more, the more broadband grows, the more people will want “all-you-can-eat” music, and the more artists and copyright owners get paid, which means that the entertainment industry’s powerful lobby will be working for a big, open, and innovative Internet, instead of against it.

Government involvement is kept to a minimum. Copyright law need not be amended, and the collecting society sets its own prices. The market will keep the price reasonable—collecting societies make more money with a palatable price and a larger base of subscribers, than with a higher price and expensive enforcement efforts.

Broadband deployment gets a real boost. Music file sharing—already one of the de facto “killer apps” for residential broadband—will finally be made legitimate.

New investment in digital music technologies and services. So long as the fans are paying, technology companies can stop worrying about the impossible maze of licensing and instead focus on providing fans with the most attractive products and services in a competitive marketplace. Rather than being limited to a handful of “authorized services” like Apple’s iTunes or Rhapsody, fans will see a marketplace filled with competing file-sharing applications and ancillary services.

A Library of Alexandria for music. Music fans will finally have completely legal access to the virtually unlimited selection of music that the file-sharing networks have provided since the days of the original Napster. With the cloud of litigation and “spoofing” eliminated, these networks will rapidly improve.

Artists have options. The distribution bottleneck that has limited the opportunities of independent artists will be eliminated. Artists can choose any road to online popularity—including, but no longer limited to, a major label contract. So long as their songs are being shared among fans, they will be paid.