Friday, April 25, 2008

One Way to Bring Down the Machine?

An interesting idea, courtesy of Slate's Rehan Salam: A music tax for the Internet?

I'll admit that, upon reading the beginning of the article, I got a little riled up by this idea. You may understand after reading one of the opening paragraphs:
Four companies (Universal Music Group, Warner Music Group, Sony BMG, and EMI) control a staggering 90 percent of all record sales in the United States, and they're hopping mad. CD sales are in free fall, and the recording industry's revenues have shrunk from $15 billion to $10 billion in less than a decade. Instead of blaming themselves for failing to embrace the Internet soon enough, Big Music has pointed the finger at piracy, shaking down scofflaw MP3 downloaders with capricious, multimillion-dollar lawsuits. This has not strengthened the record companies' position—at this point, they're losing money and everybody hates them.

Now Big Music is mulling the [schoolyard bully] approach. Warner Music Group is trying to rally the rest of the industry behind a plan to charge Internet service providers $5 per customer per month, an amount that would be added to your Internet bill. In exchange, music lovers would get all the online tunes they want, meaning that anyone who spends more than $60 a year on music will come out way ahead. Download whatever you want and pay nothing! No more DRM! Swap files to your heart's content—we promise, we won't sue you (or snatch your ice-cream cone)!
On the surface, this sounds like a horrible idea. But Salam figures that something has to happen in order for artists to be compensated fairly:
Despite all the downsides, something like the music tax simply has to happen. Most of us don't want to steal music. But it takes a saintly person (like me) to jump through hoops to pay for something you can get for free. I use eMusic and, which both offer DRM-free MP3 downloads. Yet cheapskates galore still have their Limewire and BitTorrent and whatever future file-sharing tools savvy Web guerrillas haven't even dreamed up yet.

That's why piracy can't be stopped. Meanwhile, artists aren't being compensated in a sensible way. Sure, some musicians will make a living by playing live shows and selling T-shirts. A massively popular band like Radiohead can give away its music and still make millions. But plenty of other artists will no longer be able to make a living in the music business as royalties dry up, which will leave our culture a little less vital and a little less fun. What we need is a reward system, one that could eliminate middlemen and encourage a massive upsurge in creativity.
OK, I'm listening now...
What plan will work best for music lovers and artists? Instead of a fake music tax, the best solution might be—sorry, libertarians—for the government to step in with a real music tax. In the book Promises To Keep: Technology, Law, and the Future of Entertainment, Harvard Law School professor William Fisher devised an ingenious reward system that levels the playing field for artists. At first glance, it looks a lot like the music biz extortion scheme. The feds would levy a small tax on all broadband subscribers. Musicians, signed and unsigned, would register their creations with the U.S. Copyright Office, who would then set up a massive Nielsen-style sample of music listeners to track the popularity of different songs. The more your song is played, the more you get paid. The revenue from the tax would be parceled out to the copyright holders.

The beauty of this approach is that it has the potential to cut out middlemen like Steve Jobs and the fat-cat record execs. My a cappella version of "Chocolate Rain" would have as much chance of making it as "Purple Rain," at least in theory. When the costs of discovering new music are zero and artists are paid on the basis of how often songs are played, listeners are more adventurous and bands with dedicated followers can make as much scratch as bands that record big hits. Bands get paid, music lovers can listen to their hearts' delight, and the record companies will slowly turn to dust. What's not to like?
Well, as I've said before, I'd be perfectly happy to see the bulk of Big Music go away (and even some of the artist-friendly jazz labels that I support might do even better if freed from the shackles of their corporate overlords). It would be great if we could simply stop illegal downloads, but it looks like that cat's not going back into the bag anytime soon.

What do you think of this idea? Could it use some tweaking, or is it OK as is? When it comes down to it, I'm in favor of control of the music being in the hands of its creators instead of (generally) uncreative corporate types. The Internet has allowed for a great number of new distribution models that don't require a non-musician stuffed shirt to decide what everyone gets to listen to, and I embrace these things.

I guess it's a theme with me: Those who do the creatiion should reap the bulk of its benefits. Sure, the creators can hire people to do the things that sometimes get in the way of creativity (agents, accountants, etc.), but the latter should never actually be in charge. Musicians should run the music business. Teachers should run the schools. Regular people should run the government.

More to come on this, I'm sure.

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