Transparency is Clearly the Answer
By Samantha MurphyAs an independent musical artist traversing the waters of the digital age, my greatest desire as we transition into a new Music Industry is for transparency to lead the way.
When we look at history in terms of major label recording contracts, we see that artists have consistently been taken advantage of. I attribute this to the behavior of both the music industry and its artists. It’s difficult to say which came first: the greedy controlling industry or the lazy, victimized artist.
We are in a new time requiring new ideas that reflect the culture of today’s society. Stereotypes no longer apply. Today’s successful artists are tech savvy and very much in control of their own careers. Whether you like it or not (and I happen to love it), the Internet and technology are front and center in today’s world. As people, we have been given the tools to achieve anything we set our minds to. As artists, there’s nowhere we can’t reach and, for the first time, no one is standing in the way of our fans. The playing field has been leveled and is only limited by our minds. At least, for the moment.
If I were a major record label the Internet would petrify me. It provides everything an artist needs to create and launch their own career single-handedly. Not only that, the artist has control of their own destiny for the first time ever! When you don’t understand something and it’s out of your control, you’re afraid of it. The Major Labels clearly don’t understand the Internet, so it makes complete sense that they would act out of fear.
Very wisely the majors are starting to hire people who do have a clue. One is Jim Griffin, who I respect and with whom I have agreed a lot in the past, recently hired by Warner Bros Records. Another recent notable hire is that of Google’s former CIO Doug Merrill by the flailing EMI Records. My first question is, how much room will these men be given to make changes? Who will be making the final decisions? I think we all know it will not be these men themselves.
Because this symposium is focused on Voluntary Collective Licensing, I will speak directly to the project Warner Bros Records C.E.O. Edgar Bronfman Jr. has hired Jim Griffin to spearhead.
There are three main problems I have with the Warner Bros project:
1. Performing Rights Organizations
Funds will be collected and distributed by ASCAP, BMI, SESAC, SoundExchange et al. Without going too deeply into why this is a problem I will simply state that there is no transparency within these organizations. They cannot be audited. Their methods of sampling, collection and distribution have nothing to do with reality and they must be revised from the ground up before any pool of money will matter.
2. Control/Net Neutrality
Major record labels have always been in control of this industry and by creating a collective license that’s supposedly voluntary, they are taking control of the industry yet again, as well as adding a new level of power by beginning to control the Internet. Universities and ISP’s know that should they choose not to participate, they will be direct targets for lawsuits. Consumers will begin to see that as well. Additionally, I agree with Techcrunch’s Michael Arrington that a blanket license will give major labels the authority to feed the public whatever music they like and to have the upper hand over artists reaching their fans directly.
3. Privacy invasion
There will most certainly be a database of those who opt in or out of the license, providing a very concise list of those who choose not to be controlled by or take part in the project. This list will be very easily narrowed down and, once the few who don’t listen to music have been filtered out, those who remain on the list will be tracked and lawsuits will most likely follow.
In agreement with Fred, I’m of the opinion that any blanket licensing must be on a voluntary basis in terms of artists, consumers and ISP’s. However, I do not believe that the project proposed by Warner Bros Records and Jim Griffin is in any way voluntary. You can call it that, but everyone knows who’s running the show here. Universities and ISP’s will gladly pay a fee to sidestep the wrath of the labels and their lawsuits. This leaves them right back in control of everything:from the top, through the Internet, the PRO’s and all the way down to the artist.
April 8th, 2008 at 6:05 pm
Samantha, I like “transparency” to such a degree that I have long advocates the bare bones transparent publication of a “wholesale” price for a download or stream, without exclusives or negotiations over up front or hidden payments, wherein any “retailer” (in the broad sense of an entity delivering the content to the consumer) and who meets basic credit-worthiness tests can participate. That would not only drive the retail price competition, but would also drive the delivery layer cost competition (codecs, p2p versus direct, etc.). The payment methods would be wide open — why would the copyright owner care if the $N were delivered via premium charges to the customer, discount charges to the customer, buy two get one free, buy a pizza get one free, watch an add get half off, and so on? Wouldn’t the copyright owner be just as satisfied with, the money so long as the bargained for wholesale price was paid — even if the retailer eventually folded? Is this what you mean by transparency?
April 8th, 2008 at 8:32 pm
While I admire Samantha’s insights in this area, I’m afraid I don’t share her concerns. Let’s not allow the perfect to become the enemy of the good here.
As to PROs, sure, they could do better on transparency, but they actually are much better than any noncompetitive collecting society solution. ASCAP, BMI and SESAC are not the same as SoundExchange (or, shudder, the European collecting societies). We have to demand transparency, but traditionally the best guarantee for this is market competition. If artists are free to choose between collecting societies, the collectives will have an incentive to court them with transparency. Will it ever be perfect? No. But it’s the best we’re likely to get while creating a realistic possibility for payment to indies. (Remember, today independents get nothing for the vast majority of digital sharing.)
On Net Neutrality, I think collective licensing will be GOOD for neutrality, not bad. After all, the status quo is where the ISPs are being pressured to throttle protocols in the name of copyright, and deploy network-wide filtering and “3 strikes and you’re banned from the Net for life” systems. Solving the music piracy issue with collective licensing would take a lot of that pressure off of ISPs (not all of it, but still a lot).
As to privacy, yes, Samantha is right that those who are not paying the license will probably be targeted for enforcement. I don’t see anything wrong with that. Enforcement is necessary if you want the system to be voluntary. If you prefer a blanket “everyone pays” system, you can avoid the need for enforcement. But I think the trade offs are pretty serious (e.g., no market pricing mechanism, forcing people to pay for things they don’t use, etc).
April 9th, 2008 at 6:48 am
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April 9th, 2008 at 11:50 pm
ASCAP, BMI, SESAC and any other existing organization must be excluded from participation in any scheme, as their presence simply inserts control over activities on the Internet that are not covered in their charters.
I am a singer/songwriter, limited to singing Happy Birthday (in secret, of course, so as not to be sued by the above jerks).
There are millions, if not billions of musicians at my level. We all want our fair share of the pot. Please add all our names to the list.
On the other hand, Miro is an application that allows every one of us to have our own music channel. When someone likes our work, they can click, visit our website, and join our fan club, send us as much money as they want. So, why do we need a mandatory payment scheme that locks out some of us, because the whole thing is run by a bunch of thugs? Hope I haven’t insulted anyone. :)
April 10th, 2008 at 5:30 pm
“We have to demand transparency, but traditionally the best guarantee for this is market competition.” … yea, if you close your eyes and dream maybe. See for example the oh so highly competitive health insurance market in the US.
April 11th, 2008 at 12:29 am
Forgive my delay in responding.
John,
That is not what I meant by transparency.
Specifically as it pertains to the PRO’s, I’m looking for a simplified system that’s fair at any cost. Yes, I do believe in census and not sampling. Yes, I do feel we need to spend whatever it takes to ascertain exactly who is owed what. It’s not good enough to say that longtail artists don’t earn enough to justify fair and accurate tracking, reporting and payment. it is just too damn hard to get any radio to play your music to not be paid for it. Add to that the fact that independent artists in the longtail usually don’t have a team of people promoting them so they’re working two jobs and are the first people who deserve to be paid.
Fred,
There are few people I admire as much as you, however I don’t agree that market competition gives us greater transparency.
Take BMI and ASCAP for example. I know two writers who had a hit as equal co-writers of the same song. One was a BMI writer, one ASCAP. When they both received their quarterly checks for the same song, there was a $5,000 discrepancy. The writer who had been underpaid contacted the PRO and they paid her the additional $5,000, however no explanation was offered nor was there a way to audit the sampling methods of each PRO to discover how each org had arrived at their respective figure. Simply not good enough. Particularly when under normal circumstances, the discrepancy would have gone unnoticed.
On Net Neutrality:collective licensing may indeed prove good for the Internet, but collective licensing organized by a major label will most definitely NOT serve freedom in any way. Having ISP’s and consumers volunteer due to fear of being sued is asking for equality from organizations who most definitely have proven through their self serving ways that they’re at worst filled with greed and at best unable to navigate the waters of change.
And finally, I don’t want the RIAA enforcing anything. If it needs to be the government, so be it, but the RIAA should not have the power to bankrupt families and destroy lives. They’ve been allowed such power for too long.
April 14th, 2008 at 6:18 pm
But under the proposed scheme, the societies will be the ones who get to decide who is a genuine artist.
April 14th, 2008 at 7:54 pm
Tel,
Exactly.