3 questions on the short-term future of music exchange

Every year, Cannes MIDEM’s week used to bring the pain back. Abusive accusations against piracy and few ideas on the future of music. That’s the past. At last we are there: the music industry lives in the information era. DRM are dead for music (it will take a few years more for moving image). Global licensing for non-commercial P2P exchanges for a flat rate is no longer taboo for music industry consultants and the European Commission. It is now acknowledged that legalised non commercial P2P exchanges will generate much more cultural diversity. Thanks and congrats. Of course it was a long road, and we are not at the end, since we only heard words and they were still shy. We still live with the absurd technological and legal by-products of the former fallacies, first and foremost DRM and the criminalisation of circumvention of the related technical measures. But still, thanks and congrats to those who like music enough and travelled that far. Now, we face 3 questions that need to be debated immediately. I propose below some arguments in favour of the answer I support for each.

  • Must a flat-rate global license for non commercial exchange of music (upload included of course) be put in place immediately?
  • My analysis on this issue: There is a likely scenario in which the European Commission would only emit some soft law recommandations in favour of stakeholder agreements codified by charters. EU Member States (for instance France) would only soften anti-circumvention legislation and introduce interoperability provisions or case law, without making this interoperability truly effective since effective interoperability amounts to no DRM (open or interactive DRM are an oxymoron). This is scenario is in reality dangerous. It would enable the DRM technology providers to go on deploying them, it would install the domination of advertising funded heavy promotion download platforms, it would keep the present limits of artist remuneration and it would prevent non-commercial P2P from maturing technically, ethically and culturally in the open (since it would be kept underground). The scenario would hinder the reinvention of a music carrier industry which has an interesting potential in a context of free music exchanges (with different prices and concentration compared to the present models). Some for-pay download platforms would exist in niche markets, but in competition with two free-of charge mechanisms : one precious, but kept illegal (non-commercial P2P) and one harmful and legal. Consequences for French voters : ask candidates for which you imagine you could vote to make firm commitments to introduce without any delay a flat-rate legal licensing for non commercial exchange of music files. Of course, those who distribute music works under free access and redistribution licenses must be included in the redistribution of the global license. In other countries, readers will sure find out how it translates.

  • Must financial contribution to this license be compulsory for all broadband subscribers?
  • I have often expressed my position on this subject: a compulsory contribution for download subscribers has huge benefits in terms of the predictibility of the collected funds and of the meaning attached to this collection. By making the funds predictible it provides certainty to artists and makes the positive impact on their remuneration undisputable. The feared impact of an additional financial burden for low income households can be prevented by modulating the amount for such households (mutualising exemption or lower rates over the full mechanism or using government funding). This can be done without harming predictibility of the collected sums. The fears of a poor governance of redistribution by collective societies may be well founded, but they also apply to other existing mechanisms. The answer lies in a reform of this governance and in guaranteeing the equity of redistribution towards less popular works, which is feasible (non-commercial network exchanges can be counter-monitored, in contrast to public perfomance of music, for instance). Finally, the compulsory character of contribution manifests its role as a social mutualisation of funding creation, while a facultative mechanisms would belong only to compensation and bargaining of rights.

  • Must all music works fall under this license (and receive the corresponding benefits)?
  • In other terms, must the global license be global? Let’s first explain why the question can be raised. Some artists, labels and platforms have started to distribute music files for a fee and without DRM. This model will have in my opinion to significantly evolve, but it is clearly respectful of the public, and one must at least allow it to evolve smoothly towards new models that are more evidently compatible with global licensing. Let’s not be hypocritical here: if non commercial exchanges are legalised (and thus quality services develop) a significant share of the present pay-per-unit downloads will be cannibalised by the global license. Of course the artists will receive a probably higher compensation, but the survival of the platforms themselves is not necessarily ensured if one does not pay specific attention. On another note, the forced inclusion of all works has been the only argument against global licensing that spoke to the heart of some artists, even though they generally get along without problem with similar existing schemes such as legal licensing for radio or private copy fees. Here are the arguments that lead me to prefer a truly global license:

    • The case by case management of the inclusion or not of each work would create unmanageable transaction costs. It would require an important reform of collective societies, much beyond what is anyway necessary to ensure equity of redistribution in particular for the creators of freely disseminated works. It would also be very difficult to prevent distributors from exerting pressure on artists to stop them including their works in the global licensing scheme. In the name of keeping a freedom of choice for artists, a case by case system would in reality dispossess them of this freedom in favour of distributors.
    • In the information era, unless one installs extreme control mechanisms, sales of information whose interest goes beyond the very short term can exist only under precise conditions: when buying information is in reality the compensation for a service (creating and mediating an information community, investigative reporting or editorial added-value in cases of newspapers) or when “buying” is in reality a gift to enable a particular activity such as promoting one musique genre that one likes. These situations are not marginal cases and can gain much from building commercial models that make explicit the underlying service. One can put in place transition mechanisms to help platforms and labels to put in place these models that are truly compatible with global licensing.
    • Finally, a dual model would be used to claim that DRM and usage control are still necessary, which would defeat one of the very purposes of global licensing.

This post is also available in: French

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