The Register has an article claiming that once “compulsory licensing” is introduced (something the author views as a forgone conclusion) the current fight over how music is sold to customers and the DRM debate will be deemed irrelevant. The assertion is made that mobile operators and handset manufacturers would benefit from the new scheme, although not much is done to support it. Compulsory licensing is the idea that the hardware used to listen to music (MP3 players, CD players, computers etc) should have a “tax” that is then distributed amongst musicians.
The idea has been around for a while, and while its not completely crazy it’s an approach I disagree with. The comment “the only reason a compulsory license hasn’t been introduced already – and the subject was broached in Congress in 1999 – is the large recording rights holders’ fear of losing their distributional channels” is a little presumptuous. Concerns have also been raised over the distribution of funds received and the fact that everyone pays the tax whether or not they use the music service. While portable MP3 players are pretty much ubiquitously used for music hard drives and CDs aren’t. I’m willing to subsidize my neighbor’s health care and education, but not downloads of Britney Spears.
Anyway, there are other, more pressing problems with the idea. In the review on the book “The future of music” The Register states: “If 50 percent of the world’s active Internet users would pay only $2 per month, the industry would collect $500 million per month – $6 billion per year – a whopping 20 percent of the current revenues from CD sales.” The music industry isn’t going to be happy with 20%. In fact, there’s nothing to prevent them continuing to charge for music after the tax is introduced. “You’re paying $2 a month on your iPod? That’s great!. You still have to use FairPlay, and you still have to pay 99c per song.”
Despite waxing lyrical about compulsory licensing, the book review is a good read (and from that one can infer the book is also a good read) because it does offer alternative ways for artists to distribute music, which it erroneously claims is made possible by compulsory licensing.
Bands will be able to sell “premium” content such as web casts of them recording an album or live chats with fans. They will get far more than 8 percent per album sale by moving songs via the web. And, they will be receiving their fair share of the licensing pool – a fairer share than exists today as it’s much easier to track digital sales and P2P activity than what bars, radio stations and elevators play.
Since it is much easier to track digital sales why bother with the compulsory licence? If bands are going to return to promoting themselves rather than relying on record labels and MTV then why would they go with a label? If the labels get 49% of the sale of a CD – the artists 8% and the rest going in retailing, manufacturing and shipping (most of which will disappear, or be replaced by a mobile host), it’s pretty easy to determine that once bands start selling direct to the public they can make their music cheaper and still receive more money per song. With the new promotional models being developed for mobile distribution (tell-a-friend, etc) this will be easier than ever. Even if the compulsory licence idea does become reality we’re going to keep paying for music. The only question is who we pay the money to…
Related stories:
–Mobile Phones Accused Of Planning iPod Death
–Record Labels Court Mobile Carriers
–Xingtone mStore Lets Everyone Sell Ringtones
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