MESSAGE
| DATE | 2008-04-05 |
| FROM | Ruben Safir
|
| SUBJECT | Subject: [NYLXS - HANGOUT] Tax the Internet
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Having failed to stop piracy by suing internet users, the music industry
is for the first time seriously considering a file sharing surcharge
that internet service providers would collect from users.
In recent months, some of the major labels have warmed to a pitch by
Jim Griffin, one of the idea's chief proponents, to seek an extra fee on
broadband connections and to use the money to compensate rights holders
for music that's shared online. Griffin, who consults on digital strategy
for three of the four majors, will argue his case at what promises to
be a heated discussion Friday at South by Southwest.
"It's monetizing the anarchy," says Peter Jenner, head of the
International Music Manager's Forum, who plans to join Griffin on
the panel.
Griffin's idea is to collect a fee from internet service providers --
something like $5 per user per month -- and put it into a pool that
would be used to compensate songwriters, performers, publishers and
music labels. A collecting agency would divvy up the money according to
artists' popularity on P2P sites, just as ASCAP and BMI pay songwriters
for broadcasts and live performances of their work.
The idea is controversial but -- as Griffin and Jenner point out -- hardly
without precedent. The concept of collecting a fee for unauthorized
use of music was developed in France in 1851 as a way of reimbursing
composers whose work was being performed without their permission in
cafes and the like.
The practice spread to the United States in 1914 and currently applies
to radio airplay and webcasts in addition to live performances. In a
2004 white paper, the Electronic Frontier Foundation called for it to
be applied to file sharing, but the Recording Industry Association of
America immediately dismissed the proposal.
Things are different now. "The labels are beginning to like the idea of
an access-to-music charge," says Jenner, who once managed Pink Floyd and
the Clash, "because they're increasingly aware that their current model
is broken." U.S. music sales, which peaked in 1999 at nearly $15 billion,
dropped to $11.5 billion in 2006. Last year's figures are still being
tallied, but with CD sales cratering and online sales overwhelmingly
dominated by singles, the only question is how far they'll fall.
Meanwhile, the industry's antipiracy efforts appear more and more
futile. Digital rights management, long touted as a solution, has been all
but abandoned. And though the RIAA is said to have threatened or taken
action against some 20,000 suspected file sharers, the market-research
firm NPD Group reports that nearly 20 percent of U.S. internet users
downloaded music illegally last year. The score to date: 0.02 million
alleged P2P users down, 40.98 million to go.
At the music industry trade show MIDEM last year, John Kennedy, the
head of IFPI -- the RIAA's international affiliate organization --
offered modest support for the kind of licensing fee Griffin and
Jenner propose. "It's a model worth looking at," he said at a press
conference. "If the ISPs want to come to us and look for a blanket
license for an amount per month, let's engage in that discussion."
The tone at the January 2008 MIDEM in Cannes, France, was more
combative. Longtime U2 manager Paul McGuinness said in a widely reported
speech that it was time to hold ISPs responsible for the file sharing
deluge. McGuinness wants network operators to cut off those the industry
deems offenders -- an approach France's Sarkozy government is already
pushing in that country. "If ISPs do not cooperate voluntarily,"
McGuinness declared, "there will need to be legislation to force them
to cooperate," McGuinness said.
Behind closed doors, however, MIDEM attendees discussed the prospect
of collecting money from ISPs instead. An invitation-only meeting on
the subject drew about 50 people, including representatives of IFPI,
Sony BMG, T-Mobile, the giant European ISP and mobile-carrier Orange,
and performing-rights organizations like BMI. The response, according to
Jenner, "ranged from 'What do we do now?' to 'It sounds good, but can
it possibly work?' A lot of people are like rabbits in the headlights:
They're terrified they're going to lose their jobs. No one dares to feel
that this might be the solution."
Even so, notes Shira Perlmutter, IFPI’s head of legal policy, “none of
our members are ruling anything out. These companies are all very open to
creative new ideas that would allow customers to do things they want --
including using file sharing technologies.â€
Not everyone sees the two approaches as an either-or situation. "I love
Paul McGuinness' idea," says another scheduled SXSW panelist, Dina LaPolt,
a Los Angeles attorney who represents Mötley Crüe and the estate of
Tupac Shakur. "And I love the idea of trying to make ISPs pay artists
and make up for all the free crap that's going on. I support both,
so long as artists are getting paid for their work."
Whether ISPs will be willing to ante up remains far from clear,
especially since many users can be expected to protest the extra
charge. One option would be to introduce different service tiers and
impose the surcharge only on customers who buy enough bandwidth to make
file sharing feasible. But for ISPs, other music-industry demands could
be far more onerous.
In the weeks since MIDEM, antipiracy zealots have been using McGuinness's
speech as a rallying cry. Last month the British media reported that a
government white paper was about to call for legislation to force ISPs
to move against suspected file sharers. As it turned out, the white
paper merely included a vague call for "voluntary, preferably commercial
solutions" by April 2009.
Just Monday, the four majors sued the largest ISP in Ireland in an
attempt to force it to block illicit downloads. Attorneys for Eircom
retorted that it was not legally obligated to monitor its network traffic.
AT&T has been looking into content-sniffing technology that could turn it
into a spy agency for music labels and film studios, but most ISPs seem
distinctly unenthusiastic about the idea. They have good reason to be.
Technology experts say it would be impossible to reliably inspect
trillions of packets for pirated material, especially if file sharing
networks resort to encryption mechanisms. Legal experts point out that
any attempt by an ISP to monitor its traffic in this way would jeopardize
its status as a common carrier. It could also leave the ISP open to
lawsuits from subscribers who get cut off without good reason. And
financial experts say it would cost a bundle to implement.
But the bottom line is, it simply won’t work. “Ultimately there is
no real hope of eradicating copyright-infringing technology,†says
another SXSW panelist, Eric Garland, CEO of BigChampagne, which tracks
the popularity of music online. “You can push piracy around, discourage
people from doing it in this or that venue, but I don’t think in even
the most Orwellian scenario you could reduce massive infringement in a
comprehensive way.â€
So, which will it be: A last-gasp assault on piracy, or a truce that
would bring in money and benefit everyone except the lawyers?
At this point, the music industry seems too dazed to decide -- and several
nights in Austin probably won't help. Though Jenner and McGuinness are
on opposite sides of the debate, their good cop-bad cop routine could
ultimately prove synergistic. Pay up, the music people are telling
internet providers, or we'll sic Washington on you -- and London and
Paris and anybody else we can find. Yahoo! Buz
--
http://www.mrbrklyn.com - Interesting Stuff
http://www.nylxs.com - Leadership Development in Free Software
So many immigrant groups have swept through our town that Brooklyn, like Atlantis, reaches mythological proportions in the mind of the world - RI Safir 1998
http://fairuse.nylxs.com DRM is THEFT - We are the STAKEHOLDERS - RI Safir 2002
"Yeah - I write Free Software...so SUE ME"
"The tremendous problem we face is that we are becoming sharecroppers to our own cultural heritage -- we need the ability to participate in our own society."
"> I'm an engineer. I choose the best tool for the job, politics be damned.<
You must be a stupid engineer then, because politcs and technology have been attached at the hip since the 1st dynasty in Ancient Egypt. I guess you missed that one."
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