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My 99 Cents

The purpose of this project was to find a way to incorporate the best options from multiple avenues to deal with the P2P filesharing problem in the music industry. I have explored and described many sources that all offer differing opinions on the severity of the problem and what can and should be done to fix it, but I think that a compromise between a few of the more feasible options is the best way to tackle this. I propose a stop to the targeting and shutdown of illegal music sharing sites and applications, both because it quells innovation and because it’s obviously not working. It has been over a decade since Napster was launched, and the backlash against the government for shutting down sites has only intensified since then (see: The Pirate Bay). Rather than fighting them, I think that the music industry and the US Copyright Office needs to support these services in becoming legitimate by offering them support in the form of music licensing agreements. Trust has to go both ways, and these great services need the music industry in order to offer the range of services their consumers want, and the music industry needs the pool of users these applications have in order to stop losing money. This deal could also be forged so that the illegal sharing services are given the rights to any advertising on the site in exchange for paying royalties to the copyright holders. While these sites will lose money, the lure of having the ability to host whatever you want on a site without fear of legal action will draw more consumers and increase the advertising revenue. Obviously this is all in the hope that the illegal filesharing sites will form the same kind of mutually beneficial bond with the movie and literature industries as well. Under this model, the sharing sites receive enough money from advertising to stay in business (when they would’ve been shut down in any other universe) and the music copyright holders receive their royalties from a portion of the advertising revenue. Additionally, the music industry should be involved in encouraging new start-up sites and applications that offer a wide variety of services and are willing to abide by all copyright restrictions, similarly to iTunes. These new companies should offer iPod-compatible mobile and desktop streaming as well as download options, packaged with obstacles to illegal sharing. But those shouldn’t even be necessary if the prices are reasonable enough and the previously illegal sites are paying royalties to stay up anyway. These new third-party servers shouldn’t make money from the actual music sales, again similarly to iTunes, but the revenue from the free traffic due to the availability of the product should be enough to keep them afloat. The biggest issue here is that innovation in these services could be slowed because they would become less of a lucrative business to enter, leading to control of the industry by a few big partners. Although, this is better than the current market, where the only real competition for iTunes is the up-and-coming Spotify, and even they offer completely different services for totally different prices. In order to push down the prices of individual tracks even further, I would suggest bringing ISPs into the fold and offering them the option to bundle music licensing with their traditional packages. Of course, consumers would still be paying the same amount of money, but the distribution of where the money comes from is likely to appease them better than a larger up-front cost. Additionally, this adds another level of competition to the ISP industry and the addition of another player to the entire argument is always beneficial to the flow of ideas and innovation. For consumers who want to use music they have bought for a small-scale (definition to be determined) commercial use, I would suggest bringing the model of the EFF into play. For a monthly fee, consumers would be able to use the music for certain purposes, at a cost much lower than is currently in place, without fear of legal action, and the artists again get exposure with due payment for their work. In the case of independent music producers, another layer of consideration has to be added. In the start-up services, I would suggest that special lower price deals be set in addition to limited free promotion (in the form of multiple page redirects or larger fonts or the like) so that the artists receive more exposure and consumers get even cheaper music. It really is all about compromise between the industry and the service providers, and I think that when we stop attacking and start talking between the multiple facets of this argument, we’re actually going to get somewhere, stop crushing innovation, and everyone will get paid what they should.

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Solving the P2P “Problem”- An Innovative Marketplace Solution

Read the Article Here

Point 1: The rhetoric and dramatization of piracy takes away from the serious problem at hand.

“…What has been called the “delicate balance of copyright” has taken on a whole new character.”

            The language surrounding copyright infringement changes the argument drastically, depending on how you use it. For example, “sharing” is seen as a collective good- it encourages innovation, competition, and general consumer worldliness. “Piracy”, however, is a crime, and the music industry is seen as having used their power to sue teenagers for millions of dollars because they downloaded a few songs. In the eyes of Rob Kasunic, Stanford professor, calling the music industry out for making money and rationalizing theft through that is as ineffective a solution to illegal filesharing as suing children is. The real problem behind copyright infringement, he says, is that both sides want too much control over the situation. The solution lies in finding a compromise where the music industry receives compensation for their work and the consumers receive their product in a way that they can afford and not feel stifled by. Attempts to do this through legitimate filesharing applications have failed because of the music industry’s reluctance to negotiate with third-party suppliers for every song on every album they own the rights to. The application that will appease both sides will need to have the flexibility of option that illegal sources have as well as the backing of the five major record labels for legitimacy.


Point 2: Alternate payment models for illegal downloading are not effective enough in the current market.

While the use of existing law to address the uncompensated P2P downloading warrants further examination, the viability of this particular intermediary model is questionable.”

            Suggestions such as a noncommercial use tax or a royalty on music-related devices and material have been popular since the mid-2000s as a solution to illegal filesharing. Potentially, this tax could be extended to computers and data storage devices like hard drives and CD jewel cases. Some have suggested that Internet service providers add an additional charge to their monthly package to cover potential illegal downloading. This option would also bring ISPs into the debate over what to do about illegal filesharing, giving them a stake similar to how phone companies function in the advertising community. In addition to taxes, another suggestion is that some form of central music server is created by the music industry’s big record labels, a low price is set, and consumers have access to every song they want. The issues with taxes and a central server, however, lie in that they don’t remove illegal filesharing sites, just attempt to provide competition. If a central server were to fail in the market due to inadequate advantages over the illegal sites, the music industry would lose money and trust with the consumers.


Point 3: The aim of the law should be to minimize the effects of copyright infringement, not completely annihilate it.

“There must be effective competition with the illegitimate services.”

            On-demand access via XM Radio, Comcast Music Service, Spotify, and Pandora have provided consumers with a solution to the problem of being able to play music, but not the problem of being able to own music. Some of the services allow for downloading directly from the application, but the prices include the costs of the third-party as well as the record industry. iTunes is the only application that goes beyond these issues and provides options for music ownership as well as obstacles to illegal sharing. Of course, Apple’s income is not from selling music, it’s from selling iPods and other music accessories, and even so the prices per song are considered by the general consumer to be too steep. Apple has set the precedent that copyright holders may have to allow for extended private use in exchange for the prevention of widespread noncommercial sharing. The major issue with the Apple model is the breadth of the music they have to offer, though. In order for a new application to compete with both the illegitimate services and iTunes, it will need to have access to a large library of music, a source of income outside of the actual application, and the option to download as well as stream music.

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A Better Way Forward: Voluntary Collective Licensing of Music File Sharing

Read the Article Here

Point 1: Fans do a better job than the music industry at getting music out and listened to.

“…If we want to build a Library of Alexandria for our global musical heritage, it’s the file sharing fans that will build it for us.”

            The Electronic Frontier Foundation has suggested since 2003 that “voluntary collective licensing” be implemented in the music industry in order to minimize lawsuits and ensure that artists and copyright holders are given fair compensation for their work. In their plan, if the music industry were to form collecting agencies that offered filesharers the opportunity to “get legit”, music would continue to be distributed throughout the world and everyone would get their paycheck. More simply, the EFF wants people who like Mediafire, Spotify, and Rhapsody to pay less than $10 a month to do whatever they want with the music they have. Copyright holders and artists would be paid according to the popularity of their music, leading them to encourage people to keep sharing their music files. This model would encourage new competition among filesharing applications and software developers, as well as form a new bond between the creators and the consumers of digital music. Luckily, this idea has already been implemented in broadcast radio since the early 20th century, so there’s a lot of precedent for how well it works.


Point 2: The government doesn’t need to place in the music industry.

“…Any solution should minimize government intervention in favor of market forces.”

            The RIAA claimed to stop suing individual consumers for digital music copyright infringement in the mid-2000s for a reason- it wasn’t profitable anymore. The time and energy it takes to drag a case through the US legal system costs more than the couple million defendants are required to pay in damages, chump change for the music industry. Under the EFF’s plan, the only reason the government would need to get involved with filesharing is to be a threat to those who would potentially try and avoid paying fees to share their music. Additionally, this plan would provide Internet providers with a new incentive to bundle with their monthly package, as well as increase market competition because of that fact. This plan is similar to the one proposed by the RIAA in 2004 that offered amnesty to illegal filesharers who paid them a fee. The mechanisms to monitor the popularity of each music file and eventually divvy up the payments to the copyright holders would create an entirely new Internet market in itself.

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