p2pnet news view Music:- Warner Music Group – Proposed Experiment/Pilot in “Voluntary Blanket Licensing” for Online Access to Music – Mark Luker, EDUCAUSE

Intriguing.

Warner Music is one of the Big 4 record labels who are currently using their RIAA to  try to turn universities across America into taxpayer-funded corporate copyright enforcement agencies acting on behalf of the music industry. The others are Vivendi Universal, EMI and Sony BMG.

Educause describes itself as a “nonprofit association whose mission is to advance higher education by promoting the intelligent use of information technology” and Mark Luker is its vice president.

The statement above is the first slide in a series with Jim Griffin’s name at the bottom.

“Warner Bros hopes Jim Griffin (right) will be able to pull at least one rabbit out of the hat to help keep the company alive in the 21st digital century,” said p2pnet in March.

Specifically, he`s to, “spearhead a controversial plan to bundle a monthly fee into consumers` internet-service bills for unlimited access to music,”" said Portfolio.com.

Is the Voluntary Blanket Licensing plan the result?

Techdirt broke this latest story and says »»»

Of course, while the introduction frames this as a ‘voluntary’ blanket licensing program, the presentation also mentions that they’ll need some way to get all ISPs and universities to buy into the plan, or they’ll have to work out a way to ‘avoid massive leakage.’ So, basically, it’s not voluntary at all. It’s either join, or get saddled with significant limitations. In other words: all ISPs and universities need to agree to pay a huge tax to the very industry that hasn’t been able to adapt, and then trust them to distribute the funds fairly.

Here’s Griffin’s plan in full »»»

Goal

* Let students access and use music any way they want to
* Generate fair returns to content owners
* Avoid DMCA notices, lawsuits, etc
* Avoid technological requirements that might impact our networks or hinder innovation

How?

* Students access and use music any way they want to through the campus net
o P2P, Limewire, iTunes, etc. OK
o No DRM OK
o iPods OK
o Hardware neutral

* Institutions make a reasonable effort to estimate the number of downloads per song
o Might monitor traffic through a cache
o Statistical sampling OK
o Determined by the campus
o Experimentation encouraged

How?

* Institutions collect/fund/amass a pot of money (e.g. per student per month)
o As determined by the campus
o All students or none

* A non-profit organization distributes the money proportionately to content owners
o All major labels and an indie association are members
o Covers all rights holders for the music
o ‘Prices’ TBD

In return:

* Content owners refrain from all DMCA notices and lawsuits
o Not really licensing
o ‘Covenant not to sue’

* Possible complication
o Simplest if accepted by all HE and ISPs
o If not must avoid massive leakage from those that are covered to others that are not

WMG Question

* Are any institutions interested in
o Learning more?
o Participating in a pilot?

* Is CSG interested in herding a pilot project?

Comments from WMG

* We are open-minded as regards our non-commercial voluntary blanket license solution, for which we’re assembling all rights (sound recording and publishing) from all four big music companies and the independents:

* We suggest our approach be self-administered in an academic setting.

* Our fundamentals are but two, a pool of money and data for a fair split amongst rights holders.

* We are following history, not an eight-ball or ill-conceived scheme. We offer the approach that followed the arrival of electricity — performance, radio, television, cable, satellite and webcast are all monetized through blanket licenses.

* Our approach leads other media and makes music the canary in the mine — music sets a precedent that video, text, graphics and others can and will follow.

* We’ve started a non-profit company to be clear we intend to operate with good intentions and not profit as a motive.

* Our approach is supported by the EFF, Public Knowledge and many organizations dedicated to network freedom.
Comments from WMG

* We believe our approach is loaded with upside for the academic community:

* We believe growth and learning will result from this self-administration approach.

* Caching can lead to bandwidth savings that may offset or obviate the fees.

* Our approach guarantees unfettered network access and encourages network management optimization.

* It is a clear truce in the war between content and network. It meets the interests and goals of all concerned, a win-win.

Has Warner approached any of the other major labels to get their support for this?

And if it hasn’t does it plan to?

We’re waiting for Warner’s responses to these questions.

‘Musicians themselves may just be crazy’

In a follow-up to the p2pnet story on Griffin’s appointment, “But TechCrunch‘s Michael Arrington isn’t impressed,” we said.

“Far from it, in fact. ‘Musicians themselves may just be crazy, but the music labels are dangerously stupid, and need to be stopped before they can do any further damage to the music industry’.”

The post continued, quoting Arrington »»»

Case in point: Warner Music, fully aware that the days of charging for recorded music are coming to an end, is now pushing for a music tax.

This isn`t the first time someone has called for a music tax. Peter Jenner argued for it in Europe in 2006. Trent Reznor said the same thing last year (as did the Songwriters Association of Canada). Mathew Ingram has other examples.

But Warner Music is doing more than just talking about a music tax. They`ve hired industry veteran Jim Griffin to create a new entity that would create a pool of money from user fees to be distributed to artists and copyright holders. Lawsuits against their customers aren`t working (The RIAA sent out 5,400 letters in the last year, says Portfolio, settling with 2,300 of those individuals and suing 2,465 who didn`t respond).

The goal? $5 per month from everyone, or fees of $20 billion per year. That`s double the current size of the recorded music industry ($10 billion).

$5? That seems familiar. Oh Yeh! That`s what the EFF was proposing in RIAA v The People – four years later.

The concept is simple, said the EFF: the music industry forms one or more collecting societies, which then offer file sharing music fans the opportunity to get legit in exchange for a, reasonable regular payment, say $5 per month.

It continued »»»

So long as they pay, the fans are free to keep doing what they are going to do anyway – share the music they love using whatever software they like on whatever computer platform they prefer – without fear of lawsuits. The money collected gets divided among rightsholders based on the popularity of their music. In exchange, file sharing music fans who pay (or have their ISP or software provider or other intermediary pay on their behalf) will be free to download whatever they like, using whatever software works best for them. The more people share, the more money goes to rights-holders. The more competition in P2P software, the more rapid the innovation and improvement. The more freedom for fans to upload what they care about, the deeper the catalog.

And didn`t Canadian musicians in the Songwriters` Association of Canada (SAC) and Canadian Music Creators Coalition (CMCC) have a similar idea?

We propose a licence fee of $5.00 per internet subscription, per month. Payment of this fee would remove the stigma of illegality from file sharing. In addition, it would represent excellent value to the consumer, since this fee would grant access to the majority of the world`s repertoire of music. Existing download subscription services generally charge considerably more than $5.00 per month, while offering a mere fraction of the file-sharing repertoire.

At first blush, it looks like it might be good thinking.

But wait!

In Canada, at least, it`s perfectly legitimate [for] anyone to download any piece of music they want so long as it`s for personal use.

Warner Music, EMI, Vivendi Universal and Sony BMG are desperately lobbying to have that changed so they can start trying to sue Canadians into becoming compliant corporate customers, just like they do in America.

`Classic protection racket`

Akamai`s David Barrett has an interesting angle on the $5 plan, says TechCrunch. He calls it tantamount to extortion, because it forces everyone to join, and It`s too late to charge people for what they`re already getting for free.

I agree – the music tax is little more than a classic protection racket, says Arrington, going on to quote an earlier TechCrunch piece, to wit >>>

Forcing people to buy music whether they want to or not is not a solution to this problem. The incentives created by such a system are perverse – guaranteed revenue and guaranteed profits will remove any incentive to innovate and serve niche markets. It will be the death of music.

Music industry revenues will be a set size, regardless of the quality or type of music they release. Incentives to innovate will evaporate. There will only be competition for market share, with no attempt to build the size of market or serve less-popular niches. Forget labels building new brands and encouraging early artists to succeed – they`ll bleed existing big names for all they are worth and work hard to keep anything new – labels, artists, and songwriters – out of the market. New entrants just means more competition for a static amount of money. Collusion by existing players will run rampant.

Soon labels will complain that revenues aren`t high enough to sustain their businesses, and demand a higher tax. It will go up, but it will never go down.

As I said before, Asking the government to prop up a dying industry is always (always) a bad idea. In this case, it is a monumentally stupid, dangerous, and bad idea.

If this happens, it`ll, put an end to the endless creative/destructive energy that is reshaping the music industry today, says TechCrunch, adding:

Good musicians will always find a way to make money. Others may have to follow their passion as a hobby and (shudder) get a day job to pay the bills. But if a music tax is put in place, that innovation will die, and with guaranteed revenues and profits, the need to innovate, market and compete will also die. A music tax is a sure fire way to destroy an industry that is just beginning to really blossom.

Yes, blossom. As terrifying as these days must be for music industry players, it`s clear that a golden age of creativity and innovation is ahead of us, all led by the Internet as a nearly perfect distribution mechanism for their product. Music labels must die. Hopefully, before they do any more damage.

[Note: - the 5,400 letters Arrington and Portfolio refer to were to American students alone. Only the RIAA knows how many subpoenas they`ve fired at men, women and children they accuse of being massive online distributors of copyrighted music`.]

=======================

UPDATE  »»»

9:10 AM Pacific

The supposed Warner Music university music plan outlined above and bearing the name of Jim Griffin wasn’t written by him, Warner Music has told p2pnet.

“This presentation belongs to someone outside our company and represents that individual`s interpretation of issues discussed at meetings held several months ago,” says Griffin in a statement.

Definitely stay tuned.

Did you enjoy this story, or find it interesting/useful? Help keep the posts coming by donating. No amount is too small. Cheers! And thanks.

p2pnet – Warner Music hires Jim Griffin, March 28, 2008
Portfolio.com – Fee for All, March 27, 2008
Techdirt – Warner Music Pitches Music Tax To Universities: You Pay, We Stop Suing, December 4, 2008
follow-up -  Warner Music `classic protection racket`, March 28, 2008
keep the company alive – Warner Music hires Jim Griffin, March 28, 2008
TechCrunch – The Music Industry`s New Extortion Scheme, March 27, 2008
similar idea – Canadian musicians` file sharing plan, December 5, 2007

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This entry was posted on Friday, December 5th, 2008 at 11:31 am and is filed under Music. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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