April 19, 2003
Comp Lic II

Donna Wentworth points to Matt Morse's latest on the compulsory licensing column by Fred Von Lohmann last week, where a flat fee scheme is discussed. Derek Slater addresses the privacy issues of tracking file sharing and watermarks. Ren Bucholz, who used to manage a radio station follows with some insights into artist compensation and the radio station model, and Alexander Payne responds on taxation and ISPs.

They are talking about the complexities of implementing a compulsory license system to track downloaded music, resulting in an accurate distribution of fees to the artists. One thought is to count watermarked songs as they pass through a pipe, no matter where they are going or who is getting the music. This way privacy for users could be ensured, with even the smallest artists directly compensated. And a portion of the fees would go to artists regardless of who owns the rights. Payne addresses the taxation scheme, suggesting that a government tax wouldn't be the way to go. Instead, he thinks an ISP based market scheme would work, where only downloaders are charged, instead of every user, since many users do not engage in music file sharing. However, the privacy issues are ripe for abuse and if the fees per song were small enough, might not be worth charging directly per user.

I like the central heat metaphor put forth by Greg Blonder, because it protects privacy, makes fees really low because everyone pays, which then encourages the eventual participation by many more than just those currently downloading. Americans like flat fees anyway; witness our cell phone system as compared to Europe. Paying per minute/per song fees isn't as fun. People get niggly over every 25 cent song (mobile minute), as opposed to paying a flat monthly amount, where they use services without thinking. It would also discourage the trading of burned cds, because why bother if a user can just download something reliable and easy? Imagine users emailing each other playlists and links to songs they wanted to share as a form of expression, commenting, and trading recommendations, to legal works.

Maybe there could be a maximum monthly download, say 1gb of watermarked content, before increased flat fees were applied. Also, because most P2P downloading is currently illegal, and because it is something people with particular music tastes engage in now, the content and distribution model mean that the entire internet population does not participate. But if music downloading were simple, cheap (and flat fee), and the available content was directed at a much wider range audience, I think a much higher percentage of those on the internet would participate, making the flat fee a more equitable and reasonable solution. It would encourage experimenting with unknown and obscure content, in formats that are also less popular, and might even be a way of allowing for, even encouraging and compensating, artists sampled by other artists, bringing back a dying category killed by the copyright wars. And, it would maintain user privacy.

Posted by Mary Hodder at April 19, 2003 09:35 AM | TrackBack
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