June 13, 2024

Music Industry Under Fire for Exploring EFF Suggestion

Jim Griffin, a music industry consultant who is in the unusual position of being recognized as smart and reasonable by participants across a broad swath of positions in the copyright debate, revealed last week that he’s working to start a new music industry organization that will urge ISPs to bundle a music licensing fee into their monthly service costs, in exchange for which the major labels will agree not to sue (and, presumably, not to threaten suit against) the ISP’s customers for copyright infringement of the music whose rights they own. The goal, Griffin says, is to “monetize the anarchy of the Internet.”

This idea has a long history and has at various times been propounded by some on the “copyleft.” The Electronic Frontier Foundation, for example, issued in April 2004 a report entitled “A Better Way Forward: Voluntary Collective Licensing of Music File Sharing“. This report even suggested the $5 per user per month ($60 per user per year) that Griffin apparently has in mind.

According to the OECD, there were roughly 60 million broadband subscriptions in the United States as of the end of 2006. If each of these were to pay $60 a year, the total would be $3.6 billion a year. I know that broadband uptake is increasing, but I remain unsure how Griffin figures that the proposed system “could create a pool as large as $20 billion a year.” Perhaps this imagines global, rather than national, uptake of the plan? If so, it seems to embody some optimistic assumptions about how widely any such agreement could plausibly be extended.

Some prominent blogs have reacted with ire—Michael Arrington at TechCrunch, for example, characterizes the move as an “extortion scheme.” Arrington argues that a licensing system will hinder innovation because the revenues from it will be constant irrespective of the amount or quality of music published by the labels, and will flow to an infrastructure that, once it begins to be subsidized, will have little structural incentive to innovate. He also argues in a later post that since the core of the system is a covenant not to sue, it represents a “protection racket.”

I think this kind of skepticism is poorly justified at this point. If the labels can turn their statutory right to sue for damages after copyright infringement into a voluntary system where they get paid and nobody gets sued, it strikes me as a case of the system working. And the numbers matter: The idea of a $20 billion payoff that would triple the industry’s current $10 billion in annual revenue does not seem reasonable, but unless I am missing something it also does not seem probable.

There are two core questions for the plan. First, what will it cover? The idea is that it will let the industry stop suing, and thereby end the antagonism between labels and customers. But unless a critical mass of the labels agree to the plan, users whose ISPs are paying in will still face the risk of suit from non-participating copyright holders. In fact, if the plan takes off, individual rights holders may face an incentive to defect, since consumers are equally likely to infringe all popular music regardless of which music happens to be covered by the plan (since they aren’t likely to track which music is covered).

Second, how will the revenue be shared? Filesharing metrics, provided by analysts like BigChampagne, are at best approximate, and they only track downloads that occur via the public, unencrypted Internet–presumably a large share of the relevant copying, but not all of it, especially in the context of University and other networks. The squabbles will be challenging, and if past is prologue, then the labels may not prove themselves an amicable bunch in negotiating with each other.

Finally, it’s important to remember that the labels’ power depends, in the very long run, on their ability to sign the best new talent. If the licensing system proposed by Griffin takes off, it may preserve the status quo for now. But if the industry continues to give artists themselves a raw deal, as it is so often accused of doing, artists will still have the growing power that digital technology gives them to share their music without a label’s help.


  1. And mismatched analogies abound 😉

    The second they sell me the permission to download their selection from anywhere, downloading it isn’t illegal any more for me, it’s authorized. L e g a l. Regardless where I get it from. You are still free to pay them individually for CDs if you choose. No one is taking anything away from you and no one is hurting you, so please leave out the woe-is-me physical attack similes. At the moment you are just arguing for restricting the market to your own personal buying habits.

    To clarify, since at least one person seems to misunderstand me: my suggestion is a voluntary monthly contribution, possibly but not necessarily including a contribution to the movie and content providers, that gets collected by an independent publicly monitored agency whose only task is to distribute the contribution fairly and efficiently to the artists/producers/content providers. As a value for this contribution I get the right to legally download AND share copyright protected content for my own non-commercial use without harassment, guaranteed by law, as long as I pay the contribution.

    Where is this scheme not exactly according to the free market you say you strive for?

  2. Your right to swing your fist ends short of my nose. If you want a “right to download” make sure it stops well before it interferes with my right to spend my money as I see fit and to not pay into some scheme desired by others that interferes with the operation of the free market. If the labels want to set up a service that I can pay for that puts their catalog online then fine. That’s just the free market at work. If on the other hand they want to sell me their permission (with or without my consent) to commit illegal acts, then no thank you.
    In short, if I am obtaining my mp3’s from Time-Warner with their permission then everything is clear. If I am obtaining a supposedly Time-Warner copyrighted mp3 from rob in pirateville then nothing is truly clear. From my perspective, just because I have a prescription for vicoden doesn’t mean I care to go buy it from some guy in a trenchcoat standing on the corner that’s holding a big “I am a drug dealer” sign.

  3. ‘First of all there is no “right to download”.’ There isn’t one at the moment. But then, there wasn’t a right to vote for women for a long time. Personal disinterest by some in a right to download should not prevent anybody inclined to wanting one to work towards it.

    And again, the system of paying for each song you listen to separately is grossly inefficient and mostly still leaves the choice of what music you listen to to the big labels (or how many small indie groups songs do you get to buy on amazon?). Rhapsody is not an all you can eat download plan either since it again features mostly mainstream and is just for streaming.

  4. First of all there is no “right to download”. Secondly, if I need an all you can eat legal download plan there is rapsidy and similar services. Instead I buy my wife the occassional ITunes gift card, a couple old fashioned CD’s a month and spend most of my money at Amazon (gotta love DRM free tracks!). Since i’m a big sci-fi fan I also transact a lot of business at http://www.baen.com (check it out, including both their free library as their for-pay content). As with Amazon, their material is DRM free. Do I share any of this wonderful DRM free content? Nope, not outside my wife’s ipod anyway. For me I need DRM free mp3’s (my mustang’s CD player does mp3) and ebooks that I can read with firefox and i’m good at home and on the road.

  5. “If I could pay the media conglomerates $15/yr not to sue me for copyright infringement, I’d do it. I’d have a very busy torrent client, huge storage array and so would all other subscribers to their racket.” (asphaltjesus)

    This is exactly how this ‘tax’ (if you want to call it that way) bring about a much more diverse and varied selection of choices in songs and artists. The point is to have everyone use it, to get the music out there. Ranking sites will crop up where the users can exchange their favorites, including p2p links, totally legal. I assume that’s what about 90% of the musicians want: to get their music out to people, without hassle, without having to worry too much about the monetary side or engage lawyers and sponsors. It’s not effective to have an artist run around to beg money off donors half of his/her time, when in that time new art could be created, aside the fact that this depends on a lot of random factors – the artists ability to deal with people, the availability of local sponsors, the amount of competition for funds in the local art community, the economy and so on. If you want good music, you’re making a mistake putting the first focus on the charm of the artist or skill and social contacts of its manager.

    John Millington, you may be fine in just buying from a few select artists websites you know, and only getting CDs from bands you hear locally, but with this you restrict your choice to a fraction of what is available. Not everyone is prepared to narrow down the selection this way in a global culture and for those people your approach does not scale.

    And yes, for all this to work this has to be a law, not just a contract between the user and the RIAA. Otherwise the labels could still control who gets what, raise the rate as much as they want and cancel the contract for ‘excessive downloads’ or whatever comes to their mind. Only the legislative approach can offer the user paying the ‘entertainment tax’ enduring safety and take away the labels ability to sue.

  6. asphaltjesus says

    This is a classic “heads you win, tails I lose.” argument.

    1. The media conglomerates control distribution of entertainment. That’s one of the reasons CD’s still cost $15+. If distributing music was a competitive industry, the retail price of a CD would have gone way, way down. Their cost of manufacturing most certainly has….

    By condoning a tax on all ISP consumers to fund an oligopoly is just plain wrong.

    2. Where is the value proposition in a $15 tax? I get a temporary covenant not to sue? Placed in a different perspective, this is racketeering.

    3. Is it a discrete payment? e.g. Is there an exchange for which the media conglomerates will never bother me again? No.

    If I could pay the media conglomerates $15/yr not to sue me for copyright infringement, I’d do it. I’d have a very busy torrent client, huge storage array and so would all other subscribers to their racket.

    Can you see how your position is unworkable?

  7. “Radix malorum est cupiditas.”

    In English, please?

  8. John Millington says

    Crosbie Fitch: “I’ll point out that the ‘voluntary’ in VCL means that the copyright holder doesn’t have to participate if they don’t want to license their work (the poor citizen is of course compelled to pay the license fee – VCL is proposed by those concerned for copyright holders, not the public).”

    So if some copyright holders opt out, and the p2p user pays his fee, the p2p user _still_ isn’t protected from liability? He’s just protected from _some_ organizations but not others, and doesn’t even _know_ which is which? Sheesh. This doesn’t sound like something that is going to free _anyone_ from the “black cloud of lawsuits.”

  9. John Millington says

    Ragnar: “I see it as a way for the average p2p user to still enjoy the freedom to download without the black cloud of a lawsuit looming.”

    Good for them, but their enjoyment should not be at everyone else’s expense. I already transact _directly_ with the copyright holders (either by downloading directly from their websites, or buying their CDs when I see them play at my local bars) for most of my music. This is very efficient (no middlemen) and accurate (my favorite bands get the money, rather than some committee trying to *guess* how many people have downloaded their music with p2p clients, a process that is absolutely *nebulous* compared to the band looking at their Apache log).

    Why involve the RIAA or a state agency? All that they have to offer, are overhead and inaccuracy: both adding up to unfairness.

  10. What’s been noodled by folks like the EFF is something rather different, as I recall. This kind of thing can’t really effectively be done by contracts among private parties for all the reasons people have mentioned and more. In particular, a voluntary suspension of the decision to sue doesn’t mean the RIAA couldn’t turn around a year later and say “Nah, we decided we’re going to sue again.” Sure, they’d lose against the people with the resources to fight them, but every year you’d go through the same damn “raise the fee or we’ll start suing again” dance.

    In addition, the industry version I’ve seen reported is essentially a rental plan, where the fee gets people access to all the streams they can listen to, but no right to hold onto the material. And we know how well that’s going to work.

  11. Fred, it is not fantasy, it’s the real world. It is people who still believe that copyright is preventing copying and uncontrolled digital diffusion that are living in a fantasy world.
    Well, at least some of them are realising that copyright may be over, but because they can’t confront the reality of a world without this monopoly, they are pleading for a tax to replace the revenues that it traditionally and so unethically enabled.

    And Fred, I don’t know where you get the idea that artists are so pure they should create art for love not money. I wholly support commerce in digital goods just as much in material goods, but like the latter, such commerce should not enjoy the mercantile privilege of monopoly or subsidy.

    If you’re so confident that people will be willing to pay a tax to collectively subsidise artists for their art, then why aren’t you confident (as I am) that they will be willing to collectively commission artists for art in a free market?

    Of course some artworks are expensive to produce, but then such artworks have large audiences and consequently can collect large commissions.

    This is voluntary (for audience as well as artist) collective (the artist’s audience) funding (haggling over an agreeable price) in a free market.

    I’ll point out that the ‘voluntary’ in VCL means that the copyright holder doesn’t have to participate if they don’t want to license their work (the poor citizen is of course compelled to pay the license fee – VCL is proposed by those concerned for copyright holders, not the public).

  12. Faramond says

    Subsidizing music is madness. Subsidies in general are bad. Ask any economist: they’ll tell you that subsidies lead to change-resistant, rent-seeking, capital-devouring lobbies. The sole exception is when they are used to provide essential public goods that markets are incapable of or inefficient at providing. Such a subsidy would only entrench the power of the labels, at consumers’, artists’, and the entire economy’s expense. If we’re going to subsidize something, why should it not be something we need, e.g.: the environment? research? health care? education? defense?

    Music is a luxury, not a need. Subsidizing it is madness.

  13. As invigorating as it may seem to abolish copyright in favor of returning to a “natural” state where it simply doesn’t exist, this is a fantasy and not a viable model for capital intensive cultural production as it stands now.

    And as much as I’d like to believe people are willing create art simply out of their nature, as some tend to do, it is naive to assume that all work can be created this way: non-fiction books require research, editing even if publishing costs are nil, photographers need to pay for equipment, the list goes on.

    Listen, the argument seems to be over whether or not tax would be mandatory or not. This is not settled though it appears as if consumers will have a choice to participate in it.

    I’m sorry the Internet won’t be the anarchy you’d hoped it had been, but real creators are actively looking for new solutions to recoup their costs and sustain their work. Collective licensing is a viable alternative to the most ridiculous of value propositions (selling copyable media); if you are still blind to see it as a market evolution and nothing else, then I’m not sure what else we have to discuss.

  14. Walter Dnes says

    This would set an extremely ugly precedent.

    The music industry (RIAA) gets their $5/month.

    The movie industry (MPAA) is next with hand Then the ebook publishers demand *THEIR* $5/month.extended for *THEIR* $5/month.

    Then the TV studios demand *THEIR* $5/month.

    Then the dead-tree book publishers demand *THEIR* $5/month. See http://entertainment.timesonline.co.uk/tol/arts_and_entertainment/books/article3648813.ece

    Then the software publishers (BSA) demand *THEIR* $5/month. Steve Balmer would absolutely love this, as he collects his $5/month from linux users like me.

    So much for my $29.95/month ADSL account. The internet becomes the preserve of the filthy rich.

  15. This idea has a long history and has at various times been propounded by some on the “copyleft.”

    I believe you’re misusing that word, which is usually understood to mean a system of copyright licensing whereby a work and its derivatives must be licensed under terms that guarantee certain user freedoms.

    The people you’re describing are more commonly referred to as participants in the “copyfight”. Perhaps that’s how the confusion arose.

  16. “the service is the ability to share music, unencumbered, freely,”

    Ahem, that ‘service’ you’re so disingenuously referring to is the people’s liberty that was so egregiously suspended three centuries ago to give publishers a little commercial sweetener for their troubles (if they’d be so nice as to subject themselves to supervision by the crown).

    The Internet is allowing the people’s rightful liberty to come racing back like the tide over flat sands.

    And you’re suggesting that the people compensate those who’ve unjustly enjoyed the suspension of their cultural liberty all these years? With a tax?!

    That is the greatest impudence of the 21st century, to put the icing on the cake of the previous three.

    It took long enough to abolish blatant commercial exploitation of people’s suspended liberty in the form of slavery. One would hope that the suspension of cultural liberty over the last three centuries if anything deserves compensation from the publishers to the public, not perversely to the very publishers who so greedily exploited it in the first place.

    If you have favoured artists you wish to reward for their labours and your enjoyment of their art, by all means reward them directly and amply. But reward no-one for their exploitation of your suspended liberty.

  17. I agree with Ragnar — the hysteria surrounding this announcement is really confounding to those of us who have advocated for collective licensing for so long as a solution to the endless and vicious battles between record company and consumer.

    The argument that there is “no service to consumers” being exchanged to the fee seems to be missing the point entirely — the service is the ability to share music, unencumbered, freely, much like how radio stations and public venues already enjoy the ability to play music unencumbered so long as they pay a license fee. Are these fees extortionist? No, they are market solutions to the inability (and high transactional cost) of regulating individual uses.

    As Felten points out, collective licensing /is/ the innovation that the market seems to be exploring right now, so for Arrington to claim that it will stifle innovation is really a category error. To the extent that DRM, and file sharing litigation (both commercial and consumer level) have fortunately failed in their efforts to save traditional music businesses this may be an prescient and farsighted investigation by a stakeholder.

    Moreover, is there anyone who advocates that they shouldn’t investigate such options? Does anyone really object to a record company spending their own money by hiring someone knowledgeable in these topics to determine if there might be a better business model out there than selling per-copy music and suing fans? Should they just close the book before it is even open?

    Ultimately, are those who object to collective licensing really advocating that record labels should be prohibited from investigating this as an option for creating sustainable revenues for musicians?

    It would seem to me that those who favor the free market should welcome experimentation in business models and products — not prejudge explorations and new ideas.

    Finally, to the point about freedom: freedom is not absolute by any means. Most European countries do not have freedom of speech laws, does this mean that their citizens are not free?

  18. @Ragnar:

    The reaction is not amazing at all. What if I knocked on your door and demanded that you pay me a monthly fee, threatening you with a lawsuit for noncompliance. I’m not providing you any service, and you have no recourse to appeal to a higher authority because most legislators are in my pocket and most judges/juries are clueless about the technology. And I have a legal budget to make you my indentured servant for the rest of your life if I see fit. But remember, I’m not doing this for MY benefit, I’m doing it for those starving artists over there. At least, that’s the story I tell to the public and most people buy it, but anyone that cares to look a little into the validity of my claims knows that I will screw the artists whatever chance I get. Sounds like a racket to me.

    You’re misunderstanding the idea of freedom. Freedom comes from the ability to do what you want, including whatever you want to do with your own money. There are no degrees of freedom; you either have the ability to do what you want or you don’t. Not being able to withhold payment to the RIAA under penalty of law is not freedom. You’re basically saying “Well, at least they’re not doing anything to me after they took my money and declared me guilty of a crime I didn’t commit… at least I have my freedom!” It doesn’t make any sense.

    And I didn’t see anyone here arguing about “competition” between musicians, for the record. Also, I doubt anyone here is a lawyer profiting from the RIAA’s campaigns of terror. We just don’t want to pay a tax to a lobbyist group.

  19. Personally, I’m far from convinced that the nation has a vital interest in forcing consumers to remunerate musicians for the recorded music they listen to. But let’s assume for a moment that the existence of such a remuneration scheme really is so critically important that the government absolutely must enforce it by law. Then why on earth wouldn’t the government operate it as well? Why would a consortium of private corporations be given a monopoly over it, and allowed to take a massive cut for their efforts?

    Or is it being claimed that the nation has a vital interest in forcing consumers to remunerate musicians not only for the recorded music they listen to, but also for the marketing and sales costs they incur in the course of trying to maximize their revenue from people listening to their recorded music?

  20. It’s quite amazing that as soon as a reasonable suggestion to relieve the user of the wildfire lawsuit campaign, people scream about how it’s ‘extortion’ and a ‘racket’. I don’t see it that way. I see it as a way for the average p2p user to still enjoy the freedom to download without the black cloud of a lawsuit looming. I really wonder if those people who scream and rant against this are either not worried about the risk at all, or if they are lawyers profiting from the RIAA campaign?

    The idea of a ‘culture flatrate’ has been floated in Europe quite a lot in the last few years and there was real discussion about it, quite different from the polemic and panic-stricken-hen-house ‘debates’ that come up here ;p. Some of the suggestions there even involve making the fee mandatory by law- you pay for an internet connection, you pay the fee, as is done already for public financed TV in for example the UK and Germany. You own a TV there, you pay for the public programming, or else … 🙂 I don’t see a problem with financing arts with a moderate fee, especially since it gives me freedom, freedom to enjoy music I selected and like, without risk of prosecution.

    Most approaches there center around a state-controlled agency scheme, independent from the media industry, which collects a flat amount (I’ve seen suggestions up to 30 Euros, but those were also covering movie downloads and other media content) and distributes this to the players in the media market, according to the percentage of downloads for an individual piece, which can be tracked either roughly, by monitoring the spread of files on the p2p nets, or by voluntary submission of this information by the downloader, which does not have an incentive any more to hide this data when the process of downloading and sharing on p2p networks is made legal by paying the flat fee. Some countries in Europe already have a similar scheme for the usage rights of songs on radio or live performances, and for these cases it works pretty well. For the artist there is only a registration with the agency involved, no deal with the labels would be necessary.

    On the other hand I agree that giving the ability to leverage such a fee to the RIAA would be a bad idea, since in this scenario independent musicians then would be severely pressed to contract with the labels. But having an agency independent of the RIAA deal with the division of the fees would even make an independent musicians life easier. If the musician is well received and has good self-promotion, the revenue gained from the p2p fees may well beat the revenue the artist could make from a label contract, with minimal effort. This scheme can also be extended to non p2p downloads, giving artists a cheap way to extract revenue from offering their songs on social networks and the like.

    As to the argument that having a flat fee would be detrimental to competition between the music producers … oh please, come on, where has the current pseudo-competition done anything recently to make quality music? In fact, the quality of label produced music has declined considerably in the last decade of unfettered ‘competition’ (at least in my opinion). So why not try something new?

  21. According to EFF, their proposal was for a completely voluntary fee.

  22. This story should have been posted yesterday. Clearly no sane person can take the idea seriously. (As others have pointed out, it’s little more than a protection racket.)

  23. The public weren’t asked when some bright spark suspended their liberty to create copyright.

    That bright spark was Queen Anne of England and although no one of her day really cared much about the opinion of peasants, what Anne offered was a better deal than what they had before (the Stationer’s Guild and the Court of the Star Chamber). England was (at the time) a world leader in slightly less oppressive government.

  24. I already pay tax in various forms.

    If the RIAA have a particular case why they should be receiving government sponsorship then they should present that case to the relevant authorities (there are existing arts-funding departments, grants schemes, etc), rather than pretending that this is a system of fair compensation. When I buy music, I buy from Magnatune or CD-Baby and I always check to make sure I’m buying from a non-RIAA artist, as is my right in a free society.

    After the artists, and the consumers, and the free-market have all rejected the RIAA, and the RIAA has outlived any usefulness they might have once had, they now seek to enshrine themselves in law for no other purpose than being a permanent burden on society.

  25. I think you guys need to give the idea a chance. It’s far from perfect, but, with some modification, I think it has the best chance of addressing the issue of distribution over the internet.

    First, let’s clear some things up. Jim Griffin is not the RIAA. This idea is Griffin’s not the RIAA’s. At the moment, the proposal includes only Warner Bros. library, though it needs to have the support of all labels to work.

    It is voluntary in the sense that it is intended to be a voluntary agreement between the ISPs and the labels — not one enforced by law. I’m not sure what’s in it for the labels at this point, but we’ll see.

    As for making downloading legitimate, yes, that’s exactly what it’s supposed to do. That means, yes, if you like, you can stop buying CDs and download all-you-can-eat from Limewire or pick the p2p network of your choice. If a physical CD has more value to you than a p2p download, then, of course, the industry is welcome to charge you a premium for that added value. But, this isn’t about the music you’ve already paid for. It’s about the music you have yet to pay for. A download tax allows you to legimately acquire music from download sources, without fear of violating copyright. If you want to pay more for a CD, that’s your business, but the industry as a whole is moving towards the internet as a primary distribution medium.

    Now, on to the problems:

    – $5/mo is far too high. I suspect Griffin knows this — this is just a starting point for negotiation. The revenue they take in from the levy needs to be proportional to the per track profit that artists make plus the cost of distributing the money. It should not include distribution or retail overhead, which the $20bil industry number quoted by David undoubtedly includes.

    – Under no circumstances should anyone with a financial stake in distribution be allowed to distribute money to the artists. This counts out the RIAA and all labels. This is why Griffin has set up the collection agency as a separate company. The challenge is that Griffin needs to walk away from it as soon as it is up and running, and he can’t leave it in the hands of the labels.

    – All rights holders on the internet need to be included. That includes Hollywood, the software industry, and possibly even news agencies, though I think the written word has its own currency online and shouldn’t be included. There’s so many people writing online for free (or advertising dollars) that it’s not fair to set aside money for a professional writer’s organization. I think $5~10 for *all* rights holders might be fair.

    – A fully transparent, reasonably fair means of distributing the money needs to be designed. The best way to do this would be to convince the listening public to track changes in their music library monthly and base the distribution on those changes. Perhaps a portion of *deleted* tracks should count against the total number of added tracks. Tracking downloads is not feasible — too many distribution paths and too many ways to game the system. Obviously, this needs to be implemented in a way that respects privacy and anonymity, but a music library in itself (with no identifying information) doesn’t strike me as being particularly private data. This approach narrows the possiblity of fraud to the “fake user” approach, which should be easier to detect and avoid than just spoofing downloads.

    – The distribution plan needs to include all artists, not just those represented by major labels. It should be possible, in principle, for individual, unsigned bands to apply to the rights organization to get their cut. There should be no charge for this, but they need to prove their identity.

    – The levy shouldn’t be a primary source of income for anyone. Bands need to develop their fan bases and rely on “voluntary” income where people *choose* to support them through merchandising, CD sales, vinyl sales or whatever else they can come up with. The levy suppliments this by providing a source of income from casual listeners who are only passing fans.

    – Labels / RIAA get nothing. If the labels have a role to play, they need to convince bands that whatever services they offer are worth paying for — they don’t get a cut of profits any more. Since labels are no longer needed for distribution, this will probably amount to a marketing charge that is paid for like any other type of advertising.

  26. Anyone concerned about the welfare of music publishers needs to read about the reality: http://www.negativland.com/albini.html

  27. It baffles me that the EFF, with its admirable record, could have suggested something so downright idiotic. Whether they originally proposed the idea or not, this plan is foolish for a number of reasons.

    1) The “problem” that this arrangement solves is the RIAA’s unreasonable use of the courts to make life miserable for a number of music lovers. Rather appease the RIAA, whose questionable legal tactics are well documented here (http://recordingindustryvspeople.blogspot.com/), it would make much more sense for America to stand up to it. Why are we caving in to a special interest who is morally and legally reprehensible?

    2) The RIAA has a history of threatening to sure various industries (blank CDs makers, digital music player manufacturers, etc.) with the “pay us extortion fees or we’ll sue” tactic. If we give them this ISP cookie, they’re going to want a glass of milk… in fact, a lot of milk. What business segment will they decide to threaten next for some additional revenue?

    3) This arrangement uses a “guilty until proven innocent” approach to making individuals pay the RIAA. As others above have pointed out, someone who has never downloaded music will still have to pay the ISP surcharge. As Crosbie Fitch points out above, this arrangement tramples all over the individual liberties of broadband customers.

    4) There is no evidence that “piracy,” as the labels misleadingly call it, is driving music revenue down. See this Harvard study: http://investor.com.com/2100-1027_3-5181562.html

    5) Perhaps the most important point: the era in which we needed large corporations like Sony to distribute music has come to an end. Music can now be produced without studio time on an inexpensive computer. Large files can be distributed over BitTorrent for virtually nothing. Publicity can be done via MySpace, and other sites. Why do some see the RIAA as necessary when it has outlived its utility to society? Now it just serves as a leech on public and private resources by dragging unlucky music lovers through the courts.

    6) Nobody has made this argument yet, but I want to head it off at the pass: none of this money will ever make its way to “poor, starving artists” that backers of schemes like this whine so much about. It will go straight to the pockets of industry executives and nowhere else. See this link for a precedent: http://www.nypost.com/seven/02272008/business/infringement__99428.htm

    So yeah, this is a VERY bad idea. Don’t fall for it.

  28. Like many others posting here, I do not steal music. I would go out of my way to avoid paying that $5 per month. I would switch ISPs in a heartbeat if Comcast bought into this and forced their customers to pay.

    I don’t see the incentive for the ISPs. I guess that is because I don’t steal. If I was a cronic downloader, perhaps I would want to have this “feature”. Perhaps, if it is not trademarked, the RIAA can start their own ISP and call it “Pirate Bay Networks”.

    Should I pay $5 per month so I can go through stop signs without getting a ticket? Perhaps a bad analogy.. I am way against this. I have purchased over 3,000 items from iTunes since the store opened. I play within the rules.

  29. Exactly the problem with this plan is that not everyone on broadband steals music. I work in the entertainment industry in fact I write music, not stuff labels would be interested in but I do. Therefore I don’t steal music. Why should I pay an extra $60/year for something someone else is doing? This in fact would make me start stealing music and $60/year is a lot cheaper than I would pay to buy it legally. Its entirely flawed system.

  30. David Robinson:
    “I haven’t seen a copy of any proposed contract. As far as I know, Mr. Griffin has yet to create, let alone circulate, such a draft. If one exists, I’d be happy to be able to point readers to it.

    Tom: Have you seen a contract? Do you have a link?”

    ANS: The RIAA acts on behalf of members. Members sign away their rights in order to have the RIAA act on their behalf. One member, public domain, has yet to receive one penny from these mafioso jerks. RIAA/Jim Griffin do not recognize public domain as a member, but apparently will collect monies on their behalf. Do you? If not, why not? Keep in mind, this is an organization that is obviously asking to collect a blanket fee, including all works in the public domain, but will only distribute to members. Those that opt out by not joining and paying membership fees, will also have fees collected on their behalf, but will not receive their fair share. The RIAA/Jim Griffin thinks they’re the Sam’s Club of entertainment.

    The absurdities just keep ticking. If there’s to be a blanket fee, why not have Canada expand their blanket fee to a global membership, and build in a little accountability for the blanket fee? Oooops. The RIAA/Jim Griffin just had a kannipshin fit. 🙂

  31. This is a bad idea which could be made slightly better if it was opt-in. If it was mandatory, then all it would do is make a non-pirate (such as myself) want to pirate music. After all, if I’m being fined as if I’m a pirate anyway, I might as well get some music out of the deal.

    Then there’s the argument about fining/taxing people who couldn’t listen to the music if they wanted to. Should a deaf person pay the “music download” fee since they couldn’t listen to the music if they wanted to?

    And since we’re doing this for music, would the movie industry want to get in on the deal? Say, another $5 per user per month. And the TV industry too. And the book industry (people might scan and copy books online). And the software industry (in case you download warez). Pretty soon, your “Assumed Pirate” tax rises from $5 to $25 per month or more. Could I jump in on this also? I’m not greedy. I’ll only charge ISPs $0.10 per user per month. I figure I’ll be able to retire in a month or two. (Unless my ISP fees rise to a million dollars per month, that is.)

  32. There are three ways to reward musicians and other digital artists (movie makers, software engineers, etc.):

    1) Suspend the public’s natural right (to cultural liberty) to make copies and derivatives of published works in order to grant this as the exclusive privilege of publishers for their commercial exploitation.

    2) Tax the public for their use of communications and diffusion technologies in order to grant financial reward to publishers in proportion to the prevalence of the works they publish.

    3) Leave digital artists and their audiences to develop a free market for digital art, in which they make exchanges directly without needing to fund or otherwise compensate publishers.

    So, loss of liberty, taxation, or disintermediating publishers?

    It’s pretty obvious what the publishers are going to vote for.

    The real question is, are the public going to have any say in the matter?

    The public weren’t asked when some bright spark suspended their liberty to create copyright. They probably aren’t going to be asked when Jim Griffin’s bright idea of taxation is considered (similarly misnamed as a voluntary license, just as copyright was misnamed a right instead of a privilege).

    Jim Griffin is astute in having long ago seen the appeal of taxation as a life raft, and the inevitable day when the record labels would beg for it as somewhere to land having had to jump off their sinking ship. The right product at the right time.

    One final point. At least with copyright, copies still had to find their price in a market (even if assisted by monopoly). With taxation, who decides how much music is worth? There is no market. We can only refer to the monopoly subsidised revenues of a recording industry.

    The fairest deal for music and any other digital art is quite simple: art for money, money for art. No loss of liberty. No monopolies. No taxation. Just a free market.

    Ask Kevin Kelly:

  33. Levying prepayments will not work unless the correct musicians get theit share of the money. Ed, I was at a forum of yours where you spoke of how difficult that is. Any method of trying to determine who deserves this money can be “gamed” into disrepute.

    The chalennge is to distribute the money over the “long tail”, not to a few artisst the big companies want to push. The RIAA is terrible about passing money on to musicians. The NAPSTER fines have not gone to musicians (years afer the RIAA got the money), I believe.

    – toby robison

  34. deltaepsilon says

    Unlike the other commenters, I actually think a music levy is a good idea. The problem is not the levy – the problem is that nobody trusts the RIAA (with good reason). I don’t know how we get around that. Maybe the government could legislate away the right to sue? And require that the money goes to all music producers, not merely RIAA associated ones?

  35. Filesharing metrics can also be gamed. If the profits are being distributed based on such metrics, someone could “rig” mass downloads of songs from a particular publisher. That someone could either be an immoral publisher (imagine that), or a third-party who simply wants to turn the publishers against each other.

  36. Another Kevin says

    How does this “voluntary” scheme differ from the blank media levies that have been tried before?

    I predict there will be no “opt-out” provision. The scheme will be “voluntary” in the sense that an ISP can choose whether or not to participate and pass on the cost to consumers. From the customer’s standpoint, it won’t be voluntary at all. If you have an Internet connection, you’ll have to pay. Moreover, the fee isn’t going to stay $5/month. It will surely be scaled to bandwidth: $5/month for a 128k DSL, say, and a sliding scale for wider pipes. Since I hardly ever use the RIAA’s product (when I or a family member want music in the house, our first thought is usually the Steinway rather than the stereo), I resent being told that I must pay for it anyway.

    I further predict that paying the fee will offer listeners no protection. We’ve seen this time and again in jurisdictions with blank media levies; media users pay the tax to compensate the labels for the cost of piracy, and get sued anyway. In fact, I suspect that the contract will be drafted in such a way that collecting the fee shields the ISP from liability for secondary (tertiary? quaternary?) infringement, and offers the customer nothing. That’s the problem with a protection racket: paying the racketeer doesn’t mean that he won’t decide to break your kneecaps anyway.

    Another prediction: The industry surely has people working on music search engines. When it sees a real threat of loss of revenue to independent artists, it’ll start dragging out the search engines, finding something in its copyright portfolio that’s vaguely similar to a piece by an independent musician, and bring suit or extort settlements from the independents. Even musicians who play identifiable public-domain material will not be exempt, as the Hyperion case shows: they’ll simply owe a pound to music editors rather than composers.

    Radix malorum est cupiditas.

  37. David Robinson says

    Tom Poe asks:

    “Is there a particular reason for not offering your readers the pointer to the RIAA/Jim Griffin handy dandy contract all members of this proposed racket must sign with them?”

    I haven’t seen a copy of any proposed contract. As far as I know, Mr. Griffin has yet to create, let alone circulate, such a draft. If one exists, I’d be happy to be able to point readers to it.

    Tom: Have you seen a contract? Do you have a link?

  38. I don’t get it. Why should I, already paying for all my music, have to pay a surcharge to basically pay for my music again? If my ISP adds this surcharge, does that mean that I can switch to filesharing and grab any song I want and stop paying for my MP3 and CDs? Even if that were true, how exactly am I supposed to know which tracks are covered by this surcharge, and which aren’t? Will the RIAA create a server that allows me to freely download all the tracks that my surcharge covers (in a non-DRM encumbers format) so I don’t accidentally grab anything not covered?

    I just don’t think it’s manageable. Plus, what about iTunes and the Amazon MP3 store. Sure the RIAA gets a ton of cash, but the retailers lose their revenue.

  39. Why would you think you can opine on some cockamame extortion scheme without presenting the facts to your readers? Is there a particular reason for not offering your readers the pointer to the RIAA/Jim Griffin handy dandy contract all members of this proposed racket must sign with them?

    I am a musician, do not want to sign over my rights to my music to the RIAA/Jim Griffin, in order to have them decide if I should receive a cut, or not.

    Participants to this extortion scheme include the artists who must waive their rights to their works in order for the RIAA/Jim Griffin to act on their behalf. Please address this little detail, before you offer potentially misleading support for notorious criminal enterprises. Your readers deserve better.