More on Fisher’s Compulsory Licensing

So Matt’s a bit skeptical.  That’s a good thing, because Fisher’s plan (and similar versions of compulsory licensing) are fairly radical changes.  We need to be cautious before we turn to these alternatives. 

Here’s Matt’s criticism:

“The music industry has developed a business model that’s in danger of being made obsolete. Compulsory licensing does not change that. The most it does is say, “In exchange for destroying your business, here’s some cash.”…Obviously, a solution that benefits both the music industry and the computer industry while preserving customers’ rights would be a great thing. I’m doubtful that compulsory licensing actually solves the right problem.”

When I think about future policies for music distribution, I generally consider two questions:

1.  What is the problem and what must be done to address it?

2.  What would be the optimal scenario?  This question doesn’t always take into account practicalities.  It might go beyond addressing what must change.  Instead, we might examine emerging values that need not be fostered, but could be.

Now, let me deal with the two questions in relation to Matt’s sentiments:

1.  Matt seems to agree that there’s got to be some fundamental change in the way the music industry does business.  He doesn’t see compulsory licensing as a way of really addressing it – it’s just cash, not a business model.  First, what is a business model if not a way of making cash?  Compulsory licensing could keep the music business profitable.  In addition, the record companies could still play an important role as middlemen in the sense that they can act as marketers and as financial sponsors.

Second, as Matt implies, the problem really isn’t just that the record industry’s business model is obsolete. It’s that, and the fact that we want to ensure music is produced and distributed, and, to do that, we need to find a new way to pay musicians.  Matt’s right from a policy perspective that it is impractical to only focus on encouraging music production without looking at how the record companies will be affected.  The record companies will fight back if they’re losing out.  But, I’m not sure how far we can take this line of reasoning.  Right now, the debate centers too much around protecting the record companies and not enough around protecting music production and distribution.  At some point, we’ve got to realize that the latter is really what’s most important.  If musicians on their own stopped signing record deals and started producing their own music on a wide-scale basis, would that be a problem? I don’t think so.  That might kill off the record companies, but I’m not sure that would matter.

2.  In an optimal world, I would want the policy solution to protect P2P specifically.  I’ve tried to explain this before, and Mary Hodder has some similar ideas here.  The overall point is: an optimal solution would take advantage of the Internet and P2P specifically. It would not simply transfer current distribution to the digital realm. It would reshape it and allow it to conform to the new medium.

An important addendum: this is also a reason to like the mediAgora plan.  In the relationship between customers and promoters, it takes advantage of P2P’s benefits -it encourages a larger music community.

One Response to “More on Fisher’s Compulsory Licensing”

  1. Terry Fisher
    April 22nd, 2003 | 1:59 pm

    I’m largely in agreement with Derek’s helpful comment. I certainly do not envision my proposed system as merely preserving the existing business models of the record companies. Rather, it seems to me the best hope for facilitating the displacement of those models.

    For those readers sufficiently dedicated to wade through a lot of prose on these issues, here’s the link to the current (incomplete and evolving) draft of my book on the music and film industries: Chapter 1 outlines the ways in which full exploitation of currently available technologies could, in my view, transform the world of entertainment. Chapter 6 suggests how a tax-and-royalty system could conduce to that end.