Technology bloggers have written some pretty dumb things about how the
major record labels have no right to exist. But delivering something
completely stupid apparently requires an intellectual.
A recent story in Slatecompares
a fledgling major label effort, which will add a fee to ISP charges to
cover unlimited access to music, to a "protection racket." Under this
idea, Internet access providers would charge users an additional $5 or
$10 a month to cover all the music they download, legally or not, then
somehow distribute that money to labels, songwriters, and performers.
Paying the fee would presumably mean that users could not be sued by
one of the labels for copyright violation.
It's a sensible
plan, although no one has heard enough details to determine whether it
would work. But some tech bloggers are screaming "extortion," and the Slate article
compares it to a situation in which "Joey Giggles," a hypothetical ice
cream thief, demands five dollars a month to change his ways. This is a
great anecdotal lead – that happens to make no sense whatsoever. Not
because the major labels haven't engaged in some bullying behavior –
they have – but because the ice cream belongs to them to begin with!
What if a punk kid – let's give him the name of Reihan Salam, who wrote
the Slate story – kept stealing Joey Giggles's ice cream.
After years of frustration, Giggles gave up trying to sell his ice
cream by the cone and told Salam he'd simply charge him $5 a month for
all he could eat. That sounds like a pretty good deal to me.
Salam
then goes on to point out all the potential flaws with the idea of what
he calls a "music tax." Some of them are valid, such as the idea that
the four major labels could use this plan to raise their market share
at the expense of indies. But it would be hard to imagine that any
label could get a deal like this through without getting an independent
company to monitor file-trading and then distributing the money that
comes in from ISPs according to which songs get played. Such a company
already exists: BigChampagne.
And there's a precedent for this kind of arrangement. ASCAP and BMI
collect and distribute money on behalf of songwriters according to a
formula that determines how often their compositions are played on the
radio, and in restaurants and bars. No one has suggested that any kind
of data measurement system is perfect, but it wouldn't be that hard to
make it reasonably accurate.
Salam's point seems to be that major labels could use a music tax to
cut out the indies. But indie-label music has become so popular that
it's hard to imagine any serious music fan wanting to buy a
subscription that didn't include it. And indie labels have improved
their negotiating power by signing deals with digital distributors like
the Orchard and organizing a new trade organization called Merlin.
Salam
then goes on to suggest that the government get involved, by imposing a
"small tax on all broadband subscribers." Performers and songwriters
could register their songs with the Copyright Office, which could set
up a system for distributing the tax revenue. It's a fine idea – and
almost certainly not so different from what the majors actually have in
mind.
In Salam's mind, this would cut out "middlemen like
Steve Jobs and the fat-cat record execs." But Jobs doesn't make much
money on iTunes anyway – Apple's profits come from its iPod devices,
which are some of the highest-margin electronics items available. And
the record execs would keep their same role: discovering and marketing
music. Salam ends his essay by joking that "My a cappella version of 'Chocolate Rain'
would have as much chance of making it as 'Purple Rain,' at least in
theory." Maybe so. In practice, though, I'm betting on Prince.
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