It’s great having friends who can help you get things done. I’ve been a bit lazy lately when it comes to posting on my blog. Too much golf I guess. My friend Kevin Carmignani from Hofstra University decided to help me with my blog today. In addition to being a low handicap golfer, Kevin works at the radio station at Hofstra University and had asked to interview me for a project he was working on. I was happy to help out. As it turns out, he had a question about this whole notion of charging the ISP’s some kind of fee to compensate artists and labels for the free downloading of music on their networks. This is exactly the topic that I’ve been meaning to cover for the last week so with Kevin’s help we can finally talk about it.
The notion of charging commercial users some of music is not new. Its been around for years. Radio stations, tv stations, bars, theaters, and all kinds of venues that play music in one form or another have been paying license fees to the ASCAP’s and BMI’s for years. That money is collected and split up amongst the artists, labels, and publishers.
With the development of the internet and its impact on the music industry it seems appropriate that these new networks (ISP’s) should be paying some kind of license fees. Paul McGinness, the long time manager of U2 made the point at a music industry conference a few months back and it seems that the idea is starting to get some traction.
Take a listen to Kevin’s interview and then weigh in yourselves.
hey rennie —
the speech you refer to that paul mcguinness gave at midem earlier this year was interesting because it left a bad taste in the mouth of most media futurists working on this problem.
in addition to proposing a tax, mcguinness also painted a world in which the ISP’s also monitored user content and downloads in order to allow the record labels to prosecute offenders which is a slippery slope when it comes to the openness that the internet embodies.
jim griffin may have a better grip on the situation as he and warner music group try to hammer out a way to assess an online fee from ISP’s for access to music. i think where it gets tricky is how you define “access to music”. as a consultant i spend a lot of time explaining to clients how artists and labels get paid differently depending how music is consumed on the internet. the payout structure for artist and labels for streaming a song (on-demand) online on say, last.fm, is different from buying and downloading a song from itunes which in turn is differnt from the monthly subscription to rhapsody or napster. trying to unify (or supplemenmt) the existing disparate consumption models makes for a complicated game.
to some the word “tax” is a bit of a loaded term because it sometimes implies government control — to me, a licensing model, similar to how ascap/bmi/sesac operates, but designed _specifically_ for the way the web works is a bit more palatable and is actually a perspective i’m personally more interested in exploring. there’s been a fair amount of analysis of how online music licensing models might work — one of the leading thought-leaders being gerd leonhard (see: http://www.last100.com/2008/02/20/gerd-leonhard-flat-rate-or-flat-line-further-thoughts-on-the-music-flat-rate/). while some licenses exist that cover some types of online usage, none has successfully proposed a model that is as flexible as the many ways in which the average user consumes music online.
in the digital ecosystem, digitization of content creates near zero reproduction (and distribution) costs which is a scenario the traditional music industry’s revenue model was never designed to accomodate. control of content and distribution was the old revenue model and that control is exactly what the digital world disrupts.
Hey Steve, I just came across this, and I thought it might spark some new discussion on this site. It is too bad that it kind of died a few months ago. Anyway, if you find it interesting, maybe you could make it into a new post. I thought it’s especially relevent what with Mike going to Harvard and all:
http://arstechnica.com/tech-policy/news/2009/02/tell-the-riaa-to-take-a-hike-how-harvard-law-threw-down-the-gauntlet.ars