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Entries by Syd Schwartz (1)

Thursday
Mar132008

The Blanket License Debate

Ahead of the actual discussion led by Jim Griffin at SXSW Friday, Wired has posted and overview of a notion that has been whispered about in the hallowed halls of the major labels for years…a fee imposed on ISPs that provided end users with an “all you can eat” music service.  Read Music Industry Proposes a Piracy Surcharge on ISPs for additional details, but the idea is pretty basic.  All ISPs would put a fixed amount (for example, $5 per month per subscriber) into a pool, and that pool is then divided up between the various rights-holders (performers, songwriters, labels and publishers).  An independent third party would be responsible for dividing the pie according “popularity”.

I’ve been a proponent of figuring out the details on such a model since the early days of Napster, but such a notion was blasphemous back then and is only starting to gain some interest now that its clear the toothpaste can’t easily be put back into the tube.

There are unquestionably a multitude of issues that would need to be worked out…would this require Federal regulation of ISPs in the U.S.?  What is are the global impacts and requirements?  What technology would be agreed upon to determine the exact content of the traded bits & bytes?  What privacy issues would arise from the implementation of such technology?  What about the technology itself?  What are the development and deployment costs?  What about advertising and marketing plans/committments in a world where “street date” ends up being whichever day the music leaks?  And what about the enormous hurdle of getting all of those stake-holders to agree on the raw dollars, the allocations, the methodologies and a manageable audit pathway?

These questions are just a handful that represent the tip of the iceberg.  And while plenty of folks at the labels that I’ve discussed this with have balked, myself and plenty of others believe that resources put into figuring this out will prove to be well allocated, and with the right solution will more than outweigh the current resources being put into anti-piracy (both technology due diligence and legal fees).  In fact, should this become a reality it only makes it easier for many new music business models to gain traction.  But make no mistake about it…the notion sounds interesting but the necessary legwork and underlying platform are enormous tasks to undertake, and likely years before they could be reasonably implemented.

Feasible? Folly?  What do YOU think?