Because of the numerous problems with mandatory collective licensing schemes, the consensus among participants in this symposium seems to be that if there is to be any collective licensing, it should be voluntary for both consumers and for artists and labels. What I find striking, however, is how little of a difference there seems to be between such voluntary schemes and a hypothetical version of iTunes that allowed unlimited, DRM-free downloads for a low, flat monthly fee. (Richard Bennett had a similar thought.) Consider the similarities:

• Fundamentally, both systems would be predicated on the notion that if the price of music were lowered enough, many consumers who currently obtain music illegally would start to pay for it, and artists and labels would end up making more money than they do now. Nevertheless, since both systems would be voluntary for consumers, artists and labels would need to continue their campaign of legal threats against consumers in order to ensure that they have an incentive to pay.
• Since both systems would be voluntary for artists and labels, it’s likely that some music wouldn’t be covered by the monthly fee. Consumers who downloaded such music without paying for it separately would be subject to the same liability for copyright infringement that they are subject to now.
• Both systems have the potential to concentrate market power in the hands of one or a few music outlets, whether they are collection societies or online music stores, to the detriment of artists and consumers. Therefore, in both cases, it’s probably essential that there be robust competition between music outlets.
• Although collective licensing would give consumers maximal control over the formats that their music is available in and the devices that they can play it on, DRM-free iTunes could provide almost as much flexibility. The lack of DRM would ensure that consumers would be able to convert their music into the formats that were most useful to them. Moreover, many of the novel music recommendation and sharing applications that could be built around a collective licensing scheme could also work with hypothetical iTunes if, instead of trading in the music files themselves, they traded in deep links to individual songs on iTunes.
• While the peer-to-peer distribution model that collective licensing relies on is more bandwidth efficient than iTunes’s current centralized distribution model, there is no reason why iTunes couldn’t adopt peer-to-peer distribution as well. One could envision an iTunes client that, whenever possible, transparently used a BitTorrent-like protocol to retrieve songs from other iTunes users instead of from Apple’s servers.

Given these similarities, why has collective licensing attracted so much interest? After all, unlimited, DRM-free iTunes might actually be better than collective licensing at tracking music popularity, ensuring consistent quality, and serving “long-tail” demand. It seems to me that the true appeal of collective licensing is that offers the prospect of a grand bargain between music producers and music consumers: all producers agree to end their legal threats and to free consumers from having to think about copyright, but in exchange, all consumers agree to pay a fixed fee. Such a bargain can only work, however, if participation among producers and consumers is nearly universal. Otherwise, producers wouldn’t be able to relinquish their right to sue and consumers would still be burdened with having to make sure that the music that they download and the people that they share music with are under the collective licensing umbrella.

Perhaps it’s the appeal of nearly universal collective licensing that led Jim Griffin to propose a system that, despite being described as voluntary, seems rather mandatory. The desire to create a licensing scheme that’s almost mandatory seems to be the most plausible explanation for Griffin’s decision to involve, and inevitably share revenue with, ISPs.

This entry was posted on Monday, April 14th, 2008 at 6:43 pm and is filed under Voluntary Collective Licensing of Music.