Three Strikes if passed will be a costly way of trying to ‘educate’ the public. (Some estimates of around £1million/day) Whether you agree with the following ideas or not, there will be great sums of ‘money’ involved in the implementation and enforcement such a ruling. Inevitably, costs the ISPs will incur with Three Strikes and the projected costs government plans to spend upon its enforcement will ultimately trickle down to the ISP customer and the taxpayer.
Since most ISP customers are also taxpayers, the public may end up paying twice. So, please, before ruling out the possibility of a two-pronged approach Public License + ISP levies, bear in mind the alternative. The Three Strikes + Law Suits route will be MUCH more costly, inefficient and at best, ineffective.
Background: The Music 2.0 World Currently:
At the moment (as in the past), the major music labels are licensing their catalogues to music services by territory. In the UK alone, the advances payable to the labels equate to roughly a million pounds once advances, legal fees and integration are paid in order to license the four major catalogues. Once the money has been transferred to the labels, the website can offer the music as a stream and/or downloads. If a site wants to allow downloads, the going rate paid to the labels is around 50p per download and around a penny per stream, which are accrued against the advances until the well dries up. (This does not include publishing royalties the site must pay subsequently which in the UK is approx 0.22p per stream or 8% of wholesale price 4p).
For a music service to offer music legitimately (paying the rights holders), the service needs to raise millions if it wants to play ball globally. In many cases, labels even ask for advances if a service proposes to simply ’sell’ their catalogue.
If a fan isn’t allowed to access content because it hasn’t been released in their country yet and a fan isn’t allowed to purchase it either due to territorial restrictions, P2P becomes the only way for a fan to access it. For artists, this scenario isn’t great because it means their music can only be legitimately accessed in certain territories. Basically, the three components artist/label, fan and services all three become ‘limited’ in what they can offer and what can be accessed with these kinds of territorial restrictions well before the argument of ‘free’ versus ‘paid for’ comes into the equation.
Prong One: Introducing A Public License
Imagine if every radio station paid labels an ‘advance’ before they were allowed to help ‘popularize’ their music with airplay. At the moment, record labels actually pay people to plug music to radio. They spend a fortune wining & dining Radio 2 programmers and producers. Here comes the Internet and suddenly, the major labels want ‘advances’ from internet ‘broadcasters’ (websites)? It’s crazy. They also want money up front if you plan to sell their music for them on-line. Likewise, record labels pay PR companies to get media coverage for their artists. Now, record companies want paid for the same type of promotion they used to pay people to do. So, what’s the sketch?
Could a public license for the use of music on the Internet perhaps benefit artists, songwriters and potentially all media? Since the nature of the web is indeed ‘global’, it seems necessary and ultimately inevitable a license be put into place to cover the ‘internet’ as a whole or as ‘one territory’ globally.
Because the major music labels control the majority of the music is being consumed, they are in a position to ask for whatever they want. This means ‘legitimate’ music services have absolutely no negotiation leverage, which in turn means many of these services will likely never be viable without some form of subscription model. So, here you have the ‘free P2P model’ versus ’subscription’ services.
Since most internauts can work under the guise of a proxy IP or VPN, cutting off access by territory is nonsensical. For this very reason alone, enforcing a Three Strikes policy isn’t only costly, but also technically impossible without an Internet re-design and a personal ID system (or Internet passport.) We could by-pass this type of negative legislation through a public license.
Business Viability for ‘Legal’ services:
These financial and territorial limitations have resulted in many legitimate services having to close their doors before ever truly getting off the ground. They face raising millions in capital in order to reach a global community in an extremely risky economic climate. Without some form of workable legislation and consideration by the copyright tribunal and/or government with regard to the use of music on the net, artists end up in a limbo situation making it difficult for them to earn a living or know where their fanbase is in order to
tour.
Some music services hope to legitimately pay artists; however, depending upon the type of deal the labels have with their artists, it’s uncertain ‘advances’ paid to the labels actually trickle down to the artists.
On top of the advances paid to the labels, the service must also obtain licenses from the publishing rights authorities in each territory (eg PRS/MCPS, Gema, Ascap, BMI, etc). Once again, these advances are against projected streams (or downloads) in order to cover the publishing aspects of the copyright
After a lot of hard work, red tape and legal fees for the sake of being a ‘legitimately’ recognized legal download and/or streaming service, current copyright legislation combined with demands of the major label advances are effectively limiting the possibilities for those artists to be heard and compensated. ( A public license would erase those limitations.)
Whether a service is considered legitimate or not, the result is the same for the ‘fan’ who obtains an mp3 either by stream or download. And in both cases, it’s noset certain whether the artists themselves benefit. Independent artists who are compensated directly by the legitimate services, however, do benefit via direct compensation because there is no middleman. How will Three Strikes legislation change any of this? (Answer: It won’t.)
In either situation, we all must agree an mp3 is the same whether it’s from a bit torrent client, itunes, or amazon.mp3. In simple terms, whether it’s on demand or not, streams or downloads, youtube, myspace or P2P, it’s all the same. Websites are broadcasters of media. When a site uses media to attract traffic whether we’re talking a search engine, a network, or even a blog, it’s essentially a broadcaster. Fans tune in and consume the media. Solution: Prong one = License Internet Broadcasters.
Public license = Legalization of P2P
Introducing Websites as Broadcasters
Rather than dividing the legitimate (’advance’ paying) services and the P2P services into two camps, we could initiate a public license, which could level the playing field. Here’s where a global compulsory (or public) license comes into play. (Global meaning: ‘for use on the net’)
The Internet needs a Compulsory public license for Music (and potentially all media). This would enable websites to calculate their margins and contributions. Rather than oppressing artistic culture by penalizing ‘fans’ of media, such a license would stimulate and compensate creators. Currently, the music industry is banking cash advances in exchange for a very limited number of legitimate services.
Why not create a public license for all media that covers everything across the board? Why not consider websites as broadcasters just like radio or television regardless of the type of service being provided. An mp3 is an mp3 whether streamed, downloaded, shared, copied, etc? Trying to differentiate one mp3 from another simply due to access format or the type of service being accessed is absurd. (Format meaning ‘on demand’, ’stream’, ‘download’, etc.)
Mandelson’s ‘3 strikes and the fan gets beheaded’ game plan is bound to be a costly endeavour which is impossible to enforce. Sending warning letters which supposedly will also help ‘educate’ people on how to protect their wireless connections sounds extremely naïve from a government who wants to be considered ‘innovative’. The plan reeks of negativity and is an extension of the RIAA’s previous lawsuits against its fanbase. Mandelson is shifting the focus to ISPs penalising customers. (Presumably this is meant to take the music industry off of the ‘hot seat’ for a while?)
A public license may mean the labels and societies will have to lose a bit of their copyright control, however, such a license would in return create a potential for creators to score on a massive and unprecedented scale regardless of whether the artist/band is independent or signed to a major. Widening the level of distribution and use and spreading the license to all forms of use on the net, a public license for websites as broadcasters could have a massive effect upon the flow of media.
All licensed sites would be deemed ‘legitimate’ and whether it’s P2P, a music service, or a social network, all would benefit and potentially become viable, and the P2P sites would no longer be considered ‘infringers’ this would allow them to boost their advertising revenues and increase profitability as the taboo of ‘illegal’ became lifted.
Theoretically, all services would contribute based upon the traffic and consumption of media flowing through their service. This can be monitored fairly easily. The license would obviously impose play counters for streams and downloads. (seeds, leeches, etc.) All music (globally) would be covered under the license regardless of status (major label, independent or unsigned.) However, sites would report to the license regulating bodies of their territory/ country. Artists and songwriters would register their music with the appropriate collection societies for their territory or opt for direct payment from the sites/services. At the moment, all deemed ‘legitimite’ sites are already subject to paying these collection societies anyway. The machinery dating back to the 1930’s for collection is already in place but the societies model needs an upgrade. This boils down to the copyright tribunal and competent government legislation.
***** Please be aware currently in the scenario where you’re the artist and you’re also the sole songwriter and are on your own label and you decide to give away 100,000 FREE downloads of YOUR song, written solely by you, on your label, the PRS in the UK and similarly abroad will require you to pay them approx 2.5p for each free download you wish to give away of your wholly owned copyright simply because you have asked them to collect royalties on your behalf.
In fact, as the owner, if you wish to give it away free and don’t wish them to collect anything on your behalf, you legally cannot. If you don’t pay them this amount to give your music away free, you (the artist/songwriter label) are breaking the law.
Now who is looking after whom? In reality, an artist is allowing their music to be available on a P2P site and not paying the societies for these ‘free’ downloads IS essentially breaking the law, just as much as the downloader is considered to be breaking the law.
The societies are much more intransigent than the major labels, which is overlooked by most, (a reality which is slowly becoming evident as more and more of them around the world try to force hairdressers, school cafeterias, bars, doctors and dentists, to pay monthly music licensing fees). Their existence in the digital world with archaic views and contracts based in the 1930’s (talkies, movies, etc) is WAY another discussion.
Tell me folks, when will they sue their first artist? Would Trent Reznor perhaps be the first candidate? Maybe start out soft and cut off his internet or something for allowing this gratuitous breech of archaic copyright? How ludicrous!? So, just like the ice men in Sweden had to stop cutting ice due to the ‘fridge’ as Peter Sunde (TPB) and Rick Falkvinge (Pirate Party Sweden) put it so eloquently, perhaps the societies might think about revisiting their business model just like every other internet business seems to be obligated to do these days on a ‘monthly’ basis.
The ISPs: The Second Prong
What are they really selling and what do you use Broadband for?
OK, check this out: http://www.broadband-finder.co.uk/broadband-information/broadband-usage-levels.html
Here it’s straight from the ISP horses mouth: ‘What do I get for 10GB? 20GB? 40GB?’
Answer: They tell you straight up in terms of music & film downloads exactly what you get.
For example: 40GB/ month gets you the following:
Hours spent browsing (per day) – 24 hours
Emails sent & received (per day) – 1500
Music downloads (per month) – 340 tracks
Video downloads (per month) – 9 hours
Software updates / downloads (per month) – 24 hours
Break it down. What’s the big one in this list? Are most people using their broadband to send and receive 1500 emails? How many GB is worth? Hang on here, but, you can download 340 tracks. (Of course, everyone is paying 99 cents /track on iTunes right? Ummm. NOT. )
So, isn’t it rather obvious? The second contributor to the compensation of music and media SHOULD be the ISPs themselves. You know, you’re paying for it anyway. That’s what they’ve sold you, right?
Now, this levy on the ISPs could (but not necessarily) inadvertently focus some of the responsibility onto the ‘fans’ want to ‘try before they buy’. But, realistically, how much would a levy on ISPs actually cost the users? In theory, a levy absolutely SHOULDN’T raise the price of your broadband at all. Why? Because they’ve been selling you service already! And this levy shouldn't be some kind of 'blanket' levy. In today's digital age, there is no reason why it couldn't be calculated on a per-use basis.
The ISPs and Telecoms are expanding rapidly even during a global recession. The telecoms generate huge revenues and turn over massive profits. We all pay for access.
Without question, a portion of their profits should be allocated to the media creators. What does broadband get you? What are they really selling us? (Answer: Media, Music, Film and access to the exchange of all kinds of information.)
However, strangely enough, the reason why the ISP levy idea isn’t being pushed forward and a Three Strikes is, could be the government is already trying to initiate a broadband tax to stuff somebody’s pockets: http://www.broadband-finder.co.uk/news/broadband/broadband-tax-is-unjust-and-regressive_19440993.html
A levy on the ISPs and mobile phone networks towards compensating creators would allow a passage of ‘free culture’ on the Internet whereby piracy and copyright infringement could become obsolete. Essentially,t his would mean P2P could exist without being ‘demonised’. In fact, it just might even thrive.
Simply put, a levy could come out of the ISP’s profits based upon the percentage of Internet traffic is used for the consumption of media content (music, film, software, press). Ofcom regulated of course since we have a situation where the ISPs are teaming up with the labels (the Virgin media and Universal deal for example).
Again, collection would need to be monitored and distribution of these funds would need to be handled by the collection societies and allocated based upon the consumption reports from all websites who contribute to the ‘public license’ described above in prong one in order to prevent ‘blanket’ licensing problems and the ‘black boxes’ of the past. In the digital world, accountability shouldn’t be a problem.
Since this would be a two-pronged approach (services and websites + ISPs contributing), theoretically some would argue this kind of levy should never raise the cost of broadband to the consumer. In theory, fixed costs are spread over more customers as the rate of broadband expands, so, prices could even fall and this kind of levy would have minimum impact. In fact, legislation like Three Strikes is more likely to raise costs than an ISP levy would. The governments, in fact, should put in measures to assure the public that this type of levy would not raise the price of their monthly payments. Why? Because the public is already paying for it in their current monthly subscriptions.
If every ISP has to comply with the levy, there would be just as much competition between services as there is now. This cost simply has to be factored in and if the levy is taken out of net profits, it’s not such a huge ordeal especially since the media industries are a huge force behind why people want bigger bandwidth. The ISPs need the thriving media industries. (Not everyone likes watching babies giggling on youtube.) Quality does still matter. Plus, it’s all about ‘the need for speed’. Let’s face it, you don’t really need broadband for email and blog reading folks. You need it to stream, download and access rich media. You can chat with friends without the need for high-speed internet. It’s rich media content sells broadband upgrades.
Feasibility Of The Two-Pronged Approach?
So you ask: Is a two-pronged system like this technically possible?
Of course it is. Each service (website) reports to its respective society by territory. Society reports usage data to the ISPs. Each ISP is regulated by territory. Globally, the license is the same across the board. Internauts access all media regardless of territory. Labels would be forced to treat the Internet as ‘one’ territory rather than dividing the net through the same physical territorial licensing practices of the past. Result? Free exchange of media and compensation of it's creators based upon 'USE'.
Would this kind of a system potentially help reduce the power of monopolies?
Yes, if regulated and constructed via a checks-and-balances system. Fans could still help artists by buying tickets to live gigs, buying merchandise, donating etc, but, the real power they would have would be to freely listen without being demonised by the recording and publishing industries. Artists and songwriters could potentially track their progress and cross-check the stats to make sure their isn’t a ‘black box’ scenario. This may require an open-accounting system, but, why not? It would render the application of traditional ‘copyright’ to the web as obsolete with exception of commercial use. Likewise, why not? Any Black-box money could be held in a fund for charities or the regeneration of media.
What role would government play? Perhaps putting measures together to ensure the system is regulated properly through subsidies and the implementation of these types of innovations. Rather than spending money penalizing file-sharers, they could be using resources to work with both new and established services during the transition. Subscription models would and could still be viable (after all, they existed during ‘piracy’ before, why would this change anything. If people like a premium service for the added perks, they are still likely pay for them.)
What P2P asks of artists in the current climate:
At the moment, the general consensus from P2P advocates is asking artists to be buskers, dependent upon a donation button when their music is being ‘used’ all over the web whether it’s via P2P or any social network or website.
Many P2P users expect bands and artists to produce recordings for free use. They ask artists furthermore to raise the money to tour and gig (without tour support because their music was free) and consequently ask them to base their entire livelihood upon T-shirts and merchandise. All this in the name of ‘try before you buy’.
Nobody needs to waste another breathe on whether a download would equal a ‘lost’ sale or not. It doesn’t matter whether you’re talking about a stream or a download; they are both the SAME thing. Neither one has any value until the music being accessed is ‘heard’ or ‘used’. Once you access music, you’re a consumer. ‘Try before you buy’ is senseless. You hear it, you’ve used it. (Same with film: You don’t need to ‘try’ the film first. Once you’ve seen it, that’s it. It’s done.) ‘USE’ is the key word here. Media is like gas or electricity. You don’t tell the gas board you plan to try out their service beforehand. The moment you’re listening, you’re consuming.
How is an artist expected to break-even when potentially thousands or even millions of people have ‘used’ their music. Likewise, asking them to sell CD’s at gigs won’t be an option for much longer. Who needs more plastic when you have a 80GB hard drive stores zillions of songs? Young bands won’t want to deal with the manufacturing cost when it’s unlikely they will make a return on them since transferring the data onto a computer to eventually get the music onto your ipod is such a pain. The truth be told, if the goal of being a musician is being pushed towards how many t-shirts you can sell in order to finance your next gig, what’s the point? It already takes years for most artists to get a ‘break’. Now, once they do, they’re expected to beg and sell more t-shirts after they’ve toured, promoted, raised marketing investment, gotten radio play, press, and generated loads of illegitimate downloads? The message this sends: ‘ Raise capital and create a T-shirt factory and busk the underground and city parks on the weekends.’
It’s likewise unfair to expect songwriters (who in many cases aren’t performing artists) to live off of fresh air. Some of the most talented vocalists in the world simply have no talent for writing songs. Likewise, some of the best songwriters aren’t vocalists or performers. Non-performing Songwriters are rarely mentioned in any of the arguments have been put forward in this debate oddly enough. Where does the land lie for them in the current situation? Not to mention Session players will no longer have session work because there would be no money to finance recordings use session players. So, in this new age of digital, are we going to simply forget about hiring live orchestras to play on recordings because they’re too expensive?
Leaving P2P to stand as it is without some form of license or compromise is a non-starter. Strangely enough, the current proposals by government in the form of Three Strikes won’t help any of these scenarios either. A public license alongside a levy on ISPs would. It’s a question of moving the money that would be spent on Three Strikes towards something actually could help the parties involved. A license and levy would be more proactive whereas Three Strikes is clearly destructive and involves money being spent frivolously with potentially little or no effectiveness generated.
Conclusion:
A public license combined with a levy on the ISPs could create an eco-system whereby artists and fans could have their cake and eat it too. It could also create a more viable system for music services, P2P and even record labels or ‘investors’ in music and media.
The current situation simply does not work for anybody and a Three Strikes motion is likely to create more bitterness between fans of music and the creative industries.
A public license could help solve the ‘Rubiks cube’- as I call it. Because there are at least 6-sides to this -and that’s before you get to the whole ‘live side’-
You have:
1)performing artists and songwriters
2)societies who collect on the behalf of the performers and/or songwriters
3) labels and/or investors
4)ISPs and Telecoms
5)Websites & Broadcasters
6)session musicians, Producers/engineers/studios
The primary focus of the ‘cube’ and their very existense being ‘the fans’ or ‘the consumers’.
So, please, before you decide to blindly pretend P2P is currently leveling the playing field, try to take a look at the ‘rubiks cube’ from all sides.
Solving this requires having an understanding of each side,
If we’re unable to come up with an organized, fair and logical alternative to what governments are currently proposing, we’ll inevitably remain in a position where governments jump in and things like Three Strikes are put into motion, opening up a can of worms which will ultimately lead to more more agressive legislation.
