That Darn Internet Music "Tax"... Sorry, I Mean "Network Licensing Model"... at SXSW

REM at this year's SXSW festival (photo by kk+)

Brendan P. Lewis – Through the miracles of life, I was lucky enough to attend SxSW this year for 463. More thoughts on the week, including SXSW Interactive, to come.

However, an interesting discussion took place today at the Mobility, Ubiquity and Monetizing Music panel, centering on what the future holds for compensating artists as technology advances and provides avenues for people to get music for free (read: illegally.)

Providing a backdrop for the conversation was an article in Wired today that outlined a suggestion of panelist Jim Griffin to “collect a fee from internet service providers -- something like $5 per user per month -- and put it into a pool that would be used to compensate songwriters, performers, publishers and music labels.”

The Pho list, the Dave Farber IP list and a niche of the blogosphere went mental.

Griffin has been accused in said venues of suggesting a “tax” or “surcharge” on broadband to compensate those various parties, and he was quick to dispel that notion. He said he didn’t favor a tax or government involvement, but rather a network licensing model to combat a growing sentiment that paying for music had become voluntary, rendering the music industry’s economic model one that “operates on a tip-jar.” He also went on to say that the Internet, specifically bandwidth, is not the only cause of the illegal distribution of music. Another culprit, if you will, is storage. Said Griffin, “You can carry a 500GB hard drive and carry more music than an entire record store that just went out of business.”

That sentiment was quickly echoed by Sandy Pearlman of McGill University who outlined his vision of the “Paradise of Infinite Storage,” which he feels will enable anyone to be able to store every piece of recorded music – ever. While that might seem a bit far-fetched to some, there’s no questioning that storage capacity is increasing and prices dropping to the point where that scenario is more and more plausible. The real blame for a “loss of control” of music, according to Pearlman, is the record industry executives themselves. “The people who control the assets have failed to be good stewards of those assets,” said Pearlman. “Artists should have filed class actions lawsuits against their record labels for failing to be good stewards. (Because of their failure to act in good faith) control of music has slipped away.”

Lost in the blame-game is the artists themselves – who are creating music and not getting properly compensated for their wares. The answer, according to lawyer Dina LaPolt is for record labels to build brands around bands and seeking new venues to merchandise.

While that may work for the Hannah Montana’s and other “musicians” of the world – I find that last point pretty ironic as hundreds of young, start up bands have descended upon Austin to showcase their music. One would hope that the majority of them are in it for the craft, not to build a brand. And while solutions to compensate them range from suing college students, to technological filters, to a service-based subscription model – it seems pretty clear that while record industry themselves are twiddling their thumbs trying to come up with a model to “monetize” new forms of music distribution, the sentiment of “paying for music is voluntary” is taking greater root among a younger generation that will think it the norm.

Comments

[ps3break]

This is an interesting post. While the major labels work out new business models, there exists today many legal ways for innovators to create music services within the existing legal framework. Go to http://www.volumerates.com/ for more.

[Microsoft Office 2007]

This is a good,common sense article.Very helpful to one who is just finding the resouces about this part.It will certainly help educate me

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