Ask Jim Griffin Questions About Choruss... Along With My Concerns About It

from the ask-away dept

It's no secret that I think Jim Griffin's plan for Choruss -- to set up a licensing system for P2P -- isn't just grossly flawed, but dangerous in many ways. We discussed at length why the very idea of any sort of licensing (i.e., a "tax") on online music is a bad idea. We've also worried about the apparent bait-and-switch nature of the plan -- in that, while it would grant either "covenants not to sue" or (potentially) "licenses" for any file sharing you do, it wouldn't stop the recording industry from still trying to shut down file sharing apps as illegal.

A few months back, I finally met Jim and was still left with many, many questions about the program -- especially because I felt that when anyone tried to pin him down on any particular bad idea that's been associated with the project, he would cut off the discussion by saying, "we're just experimenting -- so just let us get data before you criticize." And this, in fact, is a part of the problem. Rather than discussing the merits of any particular idea, Griffin keeps suggesting that -- despite evidence, history or theories about how various license programs work -- none of that is relevant to discuss until he's got data on his particular experiment. The way the plan is structured is that different (as yet unnamed) universities and colleges will begin testing Choruss this fall -- and each university will set it up how they see fit, in order to get comparative data. Thus, some could make it compulsory. Some could make it voluntary. Some could charge a lot. Some could bundle it with something else. Some could charge a flat fee. Some could charge a per download fee. Some could charge a per listen fee. But, if you try to dig down into the problems with any of these, Griffin has just said, "well, we're just experimenting, and we don't know if it's a good idea or not." Unfortunately, this avoids allowing us to discuss the details of why the concept is troubling, because we're told repeatedly it's just an experiment.

Jim Griffin to answer questions

That said, in an email exchange, Griffin agreed that if we asked folks at Techdirt what questions they had about the program, he would answer them -- and I hope that we can get more detailed answers. Now, to say our email conversation has been without conflict would be incorrect, and there was a bit of a misunderstanding about the timing of us soliciting questions (I had hoped to do it as a part of The Free Summit, which he was scheduled to attend, but for perfectly legitimate reasons, he was unable to attend at the last minute). But Griffin says he wants to answer whatever questions we have, and I'd like to send him some good ones.

My own concerns

To kick it off though, I'm going to share an edited/updated version of the last email I sent Griffin, after he asked again why I was so against Choruss. In pitching Choruss, Griffin likes to tell the story of the founding of SACEM, the very first collective licensing society. He talks about how since restaurants benefited from the music, they should pay for that benefit -- and how that's the basis of every collection society since: any place/service that benefits from music should pay for that benefit. I have serious qualms about that thinking, and here's why:
My worries about Choruss come from a few different angles. I think any sort of collective/group licensing scheme involving such a third party is an economically inefficient, and unnecessary solution, that ends up doing more harm than good. I know you like to tell the story of SACEM. To me, that's a horror story. It's a story of how to create a system that leads to massive wasted resources, inefficiency, a reliance on a bad (but easy) business model, followed quite quickly by regulatory capture that leads to an ever increasing inefficiency. Look at what SACEM has resulted in, and all I see are massive inefficiencies. The idea of adding to that legacy concerns me. If you look at collections societies, over time they just keep trying to increase how much they collect, and will often lean on the government for help in doing so. The story of PRS in the UK is instructive here.

My concern is specifically that we're seeing other business models that are working tremendously well. I know you were unable to stay for my keynote in Nashville, but I went through examples of many different artists (small, medium and big) who were embracing new business models to tremendous success -- none of which relied on any sort of licensing proposal.

So, then, along comes a licensing plan where I need to pay (and, yes, I know this isn't determined yet and experiments will occur) say... $5/month for Choruss. Now suddenly that's $60/year that I'm paying for music (some of which gets siphoned off by the bureaucracy in the middle, even if it's a non-profit, just for administration) that relies on some magic formula to figure out who it goes to. I'm now less inclined to spend additional money directly with my favorite artists, because I've already spent the money via Choruss. My favorite artists get less money (and I'm reliant on your system to make sure that my favorite artists are actually rewarded). My money is spent less efficiently, and now there's a group in the middle who has every incentive in the world (even as a non-profit) to try to get an ever increasing part of the pie.

That just doesn't make sense to me.

You talk about the two issues: collecting a pool of money and distributing it efficiently. What's wrong with letting the market do that? People are giving money, gladly, to the artists who give them a reason to buy. That's your efficient collection and distribution system all in one. Except it doesn't need a middleman like Choruss.

The problem the recording industry faces isn't that there hasn't been an effective licensing system in the middle. It's that they weren't giving people a reason to buy. A licensing scheme isn't a reason to buy. It's a removal of a threat. That's negative value (we won't sue!), not positive value (here's additional scarce value you want to pay for). The artists I highlighted in my presentation were all giving positive reasons to buy. I'm afraid that focusing on a system like yours focuses on that negative reason to buy (you won't get sued!) rather than the positive reason (check out all the benefits I get).

That's my big concern.

That concern is exacerbated by the fact that every time a direct question is asked about how Choruss will work, your response is "it's just an experiment, so we don't know." I recognize that it is an experiment and you don't know all of the answers, but it feels very much like a dodge. I'm sure it's a fine line, because there are many details you don't know about, but you've been so vague about everything that it's hard to know what to think. A bunch of universities have agreed to it, but who are they? Why would they agree to test something without the details being clear? Who's setting up what those details are? In Nashville, you said some would involve all students, but at the SanFran Music Tech event you were saying they'd all be voluntary for the users. It just has this quantum feel to it. Any time anyone tries to get specific and warn about a certain aspect, you can just claim "well, we might not do that."

My biggest concern, frankly, is that putting in this inefficient, unnecessary bureaucracy in the middle, we take away resources from the new, more efficient, business models that are working. Both times I've seen you speak about Choruss, you've claimed that those business models won't necessarily be harmed, because they can still be built on top of Choruss -- but that goes against fundamental economics. If people have less money due to Choruss, they're a lot less likely to buy into these other business models.

Now, I'll be the first to admit that competing between business models is a good thing, but the very foundation upon which any sort of collective licensing system is built is to basically get everyone to opt-in, somehow or another -- and thus is set up to crowd out more efficient business models. Otherwise it just doesn't work. So you have every incentive to get third parties (universities, ISPs) to put in place policies that either force, or heavily incentivize, their students/subscribers to adopt a much more inefficient plan. The incentives are skewed. You and the universities/ISPs benefit -- but users (and musicians) do not.
So, with that, let's kick off some questions that I have as "starter" questions, and let's see what else you guys can come up with in the comments. Also, feel free to let me know which of the starter questions/user submitted questions you like best. Once we have a good bunch, I'll send them to Griffin and when we get his answers, I'll post them here. Some of these starter questions are the same ones I asked earlier this year, but I've added a few as well:
  • Why do we even need such a plan when plenty of musicians are showing that they can craft business models on the open market that work?
  • How does adding yet another middleman make the music market any more efficient?
  • What's wrong with letting the market mechanism handle the collection and distribution of the funds directly between musicians and fans?
  • Will the recording industry promise to stop trying to shut down file sharing systems if this program gets adopted?
  • Will the recording industry promise to stop pushing for 3 strikes if this program gets adopted?
  • How will the program prevent the gaming opportunities, where artists set up scripts to constantly reload/download their songs?
  • Why should music be separated out and subsidized while other industries have to come up with their own business models?
  • Why should those who don't listen to much music and aren't interested in giving their money to the recording industry be required to participate if their university or ISP decides to make them?
  • Why should we have a business model focused on negative value (you don't get sued), rather than positive value (here's something scarce that's worth buying)?
  • The history of collections societies shows that they only tend to expand, and try to capture more rents. Why would Choruss be different?
  • If Choruss becomes big, won't lots of other industries want in? Movies will want their own version. Then newspapers. And if newspapers are getting their cut, then why not bloggers too? Or blog commenters? Or just any website? The road this leads down is a bad one, where we end up creating massive bureaucracies to subsidize every form of content, rather than focus on business models where those content providers have to provide a reason to buy their particular product. How do you prevent that?


Reader Comments (rss)

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    yozoo, May 22nd, 2009 @ 11:18am

    my question

    Why would students pay for this service, instead of continuing to get thier music for free? Where is the value comming from (aside from avoiding annoying lawsuits - which the RIAA says they dont do anymore)?

     

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    ChurchHatesTucker (profile), May 22nd, 2009 @ 11:24am

    Opt Out?

    I'm always alarmed when people show up and say, "We're from [x] and we're here to help." Because they always mean, "We're here to help [x]"

    Is there any way to opt out of this scheme? I listen mainly to Nerdcore hiphop, Wizard Rock, Chiptunes, Browncoat rock, Geek rock, etc. Most of these guys are all about getting their stuff scattered as far and wide as can possibly be done.

    How are you helping these artists? How are you not hindering them? What is it that you do that will place barriers in front of them? Why do you think that's OK?

     

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    Tgeigs, May 22nd, 2009 @ 11:50am

    Question of accountability

    Question: For those of us that wish to support the artists whose music we like to consume but are wary of these shadowy licensing plans, what assurances and accountability to we the end user have that YOU are keeping your end of the bargain?

    For instance, is there going to be a correlation between the amount of files from each group/artist dl'd through the universities network to how much of a payout they receive? As you are ostensibly getting involved with public universities where there are taxpayer concerns, are you going to make your non-profit books public record, available for public review?

     

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    Osno, May 22nd, 2009 @ 11:51am

    some of my own

    I have a few questions:
    1) Who will decide which artist gets the money?
    2) Will the artists and the clients (students) know the schema beforehand or is it part of the experiment?
    3) Is this system opt-in for the artists too or are they forced to it by the RIAA, etc?
    4) If an artist decides not to participate, will I have some way of knowing that while I'm downloading? (As in, some sort of plug-in mechanism that warns me that this download is actually illegal)
    5) Do the students get to keep the music after they're our of college or is it then illegal for them to retain the songs? (I see a major loophole here: "but I downloaded that while I was using choruss)
    6) Will there be a "blanket pardon" for previous offenses from these students, or are they still liable for previous downloads? (and related, how will you know which file is which?)

     

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    Killer_Tofu (profile), May 22nd, 2009 @ 12:00pm

    My Main Thought

    It is my money. I like being able to give it to the artists I like. I like seeing them do well, because I enjoy their music. What I do not like is the idea of my money going into a pool and ending up with artists I do not like. I absolutely loathe the idea of Britney Spears ever ending up with a penny of my money, just because she is more popular than Metsuo.
    That is really what it boils down to for me. I want to be able to get all the music I want, and to listen to it, and delete everything I do not want and never have to give those artists anything. The music I do like, I will go back and contribute something to the artist in some form for fashion, be it paying some coin, or going to a concert.
    I just don't like the idea of people I dislike getting my money.

    That is the same reasoning I can use to boycott other products I do not like. I use the competition. A method such as this completely subverts my ability to boycott, and I do not like that.

     

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      PaulT (profile), May 22nd, 2009 @ 12:58pm

      Re: My Main Thought

      Exactly. These are the same concerns I have about any such model, and I've never heard any decent answer to it. In short: how do I know where my money goes?

      I *despise* manufactured American Idol/boy/girl bands. If I was part of such a scheme, I would need to know that my money goes to the artists *I* listen to, not the flavour-of-the-month karaoke singer.

      Currently, I vote with my wallet and only buy the music I'm interested in. If it's all taken from one pot, how can I be sure that my listening to, say, Hybrid's discography earns money for Hybrid and not Amy Winehouse's latest rehab bill?

      Add to that the fact that the nearest comparable scheme, SoundExchange, has proven utterly unable to get money to the artists they owe, and I see no reason to support any such scheme.

       

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    lulz, May 22nd, 2009 @ 12:07pm

    Where is the oversight and transparency here?

     

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    Tgeigs, May 22nd, 2009 @ 12:20pm

    Another Question

    Who ultimately funds these expirements? And I mean ULTIMATELY. As in if I follow the parrot companies and subsidiaries all the way to the very tippy tippy top, who is that?

     

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    Justin, May 22nd, 2009 @ 12:21pm

    Questions

    Who asked for this?
    Are their any big artists and if so, who and how many will come out and back you up that they want this to happen?
    will you be working for this non-profit company once this gets going?
    why does my university/ISP have to get involved and not just me deciding if I want to join in?

     

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    Justin, May 22nd, 2009 @ 12:29pm

    Another One I got

    why does this sound a lot like socialism to me? put the resources in one big pool and everybody gets an "Equal" share no mater how hard they work (tracks get downloaded). Now I know that they will have some kind of formula to determine who gets how much money but it needs to be pretty well thought out to have any merit and be close to fair so like Killer_Tofu says that my money does not go to Brittany Spears instead of the artist I really want to support

     

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    Cardinal Fang, May 22nd, 2009 @ 12:38pm

    Why are Choruss trying to perpetuate what already doesn't work?

    What is the point other than self-perpetuational funding?

    Why is an artist getting paid directly by fans, using whichever model they wish, such an outlandish and unsustainable idea to Choruss?

    What makes them think this will stop or even slow P2P sharing outside of the Choruss model?

     

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    batch, May 22nd, 2009 @ 1:02pm

    What right do you have to impose a tax upon me?

     

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    lavi d (profile), May 22nd, 2009 @ 1:16pm

    No Question, Just Observation

    The whole problem with this idea is that its basic assumptions are horribly flawed

    The following must be acknowleged now that technology has effectively rendered the physical value of audio reproductions to zero:

    • Artists are not forced to release recordings.
    • No one has a "right" to "value". Value is assigned by the market.
    • It is not the government's place to ensure that a product has value.

    For most of us, if no one is willing to pay for what you want to do, then you either do it out of love, or you do something else that people will pay for.

     

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    Nate Lew, May 22nd, 2009 @ 1:27pm

    Shortsighted

    How about:

    Has Mr. Griffin considered (let alone done any modeling around) the implications that his proposed program will possibly have on the post-college music spending habits of those who graduate during the Choruss era? That is, if a kid spends 4 years thinking that music is free (the *parents* pay $60/year) and learning the ins and outs of P2P networks to acquire music, does anyone actually expect the kid to stop using those P2P networks and start buying music once he/she graduates? I don't.

     

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    Mike C., May 22nd, 2009 @ 1:30pm

    Money not distributed?

    Assuming that an artist or group due money cannot be found (for whatever reason), what happens to that money?

    SoundExchange has a notorious reputation of not trying very hard to find artists and keeping the money for itself. What is to prevent this from happening with this latest scheme?

     

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    Rekrul, May 22nd, 2009 @ 1:54pm

    The two questions I'd like to see answered (both have already been mentioned, but you said you wanted comments on which questions we preferred);

    1. Won't the movie industry want a similar tax? And the TV networks? And video game publishers? And application software companies? And the comic book industry? And the porn industry? After all, you can't claim that music is entitled to such a tax, but other copyrighted works aren't. As someone who downloads a variety of things (usually not music though), how do I know that my monthly internet bill won't some day be $30 for access and $100 for all the stuff I might download?

    2. Will you be willing to make all the records and bookkeeping open to the public, so that they can see EXACTLY where the money is going and which artists are, or aren't getting their share of the profits?

     

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    Fred (profile), May 22nd, 2009 @ 2:07pm

    Team America, World Police

    First off I really like this line in your email:

    'It just has this quantum feel to it. Any time anyone tries to get specific and warn about a certain aspect, you can just claim "well, we might not do that." '

    It's like you're accusing him of being Schrödinger's cat. :) Maybe call it the "Heisenberg Uncertainty Principle of bad PR". The answer changes as soon as you ask the question.

    Here's my question:

    As I understand it, Coruss is a far reaching license system for just about any use of online music. It is online, so it involves International relations, as this data is passed around between multiple nations. So who is the main license enforcer here -- the UN? Did you see the movie "Team America, World Police" and think it was a good idea? If you did see it, did you laugh at all?

     

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    Anonymous Coward, May 22nd, 2009 @ 2:40pm

    An Experiment

    Griffin has just said, "well, we're just experimenting, and we don't know if it's a good idea or not."

    Hey Jim,
    I've got an experiment for ya. Why don't don't you try jumping off the top of a tall building while flapping your arms and see if you can fly like a bird. Now I know that the naysayers might say that it won't work and history might even be on their side, but I still think you should try it. I don't know if it's a good idea or not, but just an experiment, you know?

     

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    Richard, May 22nd, 2009 @ 2:49pm

    I swear , if they tax my broadband connection I'm throwing all my mp3's into Boston harbor...

     

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    Anonymous Coward, May 22nd, 2009 @ 2:49pm

    Fred, shut up.

     

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    Anonymous Coward, May 22nd, 2009 @ 3:14pm

    Wrong approach.

     

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    moz, May 22nd, 2009 @ 5:09pm

    How do bands sign up?

    I'm interested in how bands/artists get their money. Say I play a few songs down at the local open mic night, and they put those up on their website as part of their standard promo. Choruss members download them, so I'm due some money from Choruss.

    - How does that money reach me here in Australia?
    - Do I have to sign up with Choruss?
    - Do I have to register all songs, or just the artist?
    - What if I don't realise that the songs are out there because someone taped me busking?
    - Where is tax payable - the US, Australia or Italy?

    To say that I'm skeptical about this would be generous.

     

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    PrometheeFeu (profile), May 22nd, 2009 @ 5:20pm

    My turn

    Thanks for setting up this opportunity to ask questions.

    How will you set the price for the service? Unlike traditional products, you can't base it on marginal cost (which is 0 or close to 0) and also unlike traditional product, if it is a required service, you won't get information that your price is too high or too low based on how many people choose the service.

    I assume that it won't be a per-download price as that would defeat the point. (iTunes already offers that service and yet people still download) Is that an accurate assumption? (Same thing for per-listen effectively)

    Do you expect to require users to have to use special software in order to participate in the program? If yes, will that software be available for all platforms?

    If this is successful, do you intend to expand that program outside of universities? Perhaps through partnerships with Comcast and such? If so, how would you avoid anti-trust issues?

    Concerning the issue of artists not wanting to participate, I would not worry. If such a program saw widespread use, there would be little reason for the RIIA to expand significant resources to fight the piracy of the works of just a few people.

    I think that the crowding out question is good, but perhaps not appropriate. Companies have the interests of their shareholders at heart. Consumers are just the means. (Nothing wrong with that) I think it is evident that a mandatory licensing system would benefit the music industry and it is in their best interest to pursue it. After all, artists can also use the business models you are promoting on top of the licensing system. There is just an extra tax which they receive. Inefficient and bad for us, but that is not their concern. Not to say that we should not lobby government to do something about it. But it is silly to expect them to work against having more money.

     

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    Mr Big Content, May 22nd, 2009 @ 6:35pm

    Give The Guy A Break

    The reason he’s being so cagey is this is one of those experiments that really needs 100% buy-in before it has any chance of succeeding. That’s what he’s trying to do—get everybody on board, stamp out the rebels, the nay-sayers, the contrarians and those who think for themselves. Once adoption has become completely universal, you will see what a wonderful world it can be.

     

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    Blaise Alleyne (profile), May 23rd, 2009 @ 7:35am

    Is the Change in Scope a Change in Nature?

    Traditional collective licensing and similar royalties have largely only regulated big businesses on a regular basis (e.g. radio or television broadcasters), or the average person only on special occasions (e.g. paying a flat rate for performance royalties when you hire a DJ for your wedding). Extending this sort of licensing to the web seems to mean that it will affect everyone, all the time. That is, royalties are triggered not by some special occasion or large commercial activity, but simply by virtual of having and using an Internet connection.

    This seems to me like a fundamental shift, which ought to cause us to pause and reflect on whether or not such a licensing model is actually scalable to the medium.

    Why should this sort of collective licensing, which has traditionally only affected large commercial activities or special circumstances, be extended in such a way that it affects everyone all the time on the internet?

    Has Mr. Griffin considered the fundamental change in nature of this approach when the scope is broadened so much?

     

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    Nick Dynice (profile), May 23rd, 2009 @ 11:44am

    http://techdirt.com/article.php?sid=20090324/1439024238#c371

    1. How is Choruss not like a Trojan Horse on the technology of education, where Choruss can have control over a network that could theoretically grow tighter?

    2. What will stops grandstandy, RIAA-sponsored legislators from passing a law that uses the logic: "You are not using Choruss, thus you must have students that are infringing, you will be litigated or you will settle"? Sure, there is due process, but this could be an unnecessary hassle on the university.

    3. Will Choruss be able to limit the number of songs downloaded by a specific campus or user? Is it buffet or à la carte? If there is a restriction on the number of songs by campus or user, by what process can users claim they did download the quota or songs Choruss claims they have?

    4. Does Choruss care about they effect they will have on limiting the liberties provided by open wifi networks and its benefits to students such as mobility, convenience, access to all parts of the internet?

    5. Will Choruss's system be independently accounted and audited?

    6. Will Choruss be able to turn on or off access to specific P2P networks, handing a level of control that is above the campus's own IT department? Will Choruss's be able to restrict access to particular artists or songs at the request of labels, publishers, mechanical rights holders, or artists on P2P licenses?

    7. Will Choruss be responsible for any additional IT costs, or be liable for any network downtime, losses of educational related files related to false positives, or damages to a campus's network equipment?

    8. What security measures are in place to prevent hackers from breaking into Choruss's accounting system, exposing private student data?

    9. Has Choruss considered that they might drive students to start sharing music on ad-hoc wifi networks, or share CD-Rs, flash drives, and network drives at "music sharing parties" which will then be untraceable, thus triggering rights holders to engage in Stasi-like activities to discover new methods of unauthorized sharing?

    10. Has Choruss considered that new P2P networks, audio formats, and encryption schemes will pop up that attempt to evade Choruss's trackers, creating a cat-and-mouse game for Choruss?

    11. Will Choruss have he ability to distinguish downloads between legitimate music stores such as iTunes, Amazon MP3, Napster, Rhapsody, Bleep, Beatport, AmieStreet or EMusic (and others I have left out or have not been developed yet) and what are right now considered illegal P2P networks so students are not double charged? What measure stops Choruss from ignoring these to increase play and download counts? What stops Choruss from saying which companies can and cannot engaged in digital music commerce over a Choruss network now and in the future without being charged double?

    12. Will Choruss be able to track song downloads via web browsers? What about legitimately licensed and monetized streams via iTunes, Real, WMP and other apps that have not yet been developed?

    13. What measures are in place to stop a Choruss partner form claiming false ownership over independently distributed songs, and by what process will content owners be able to dispute false ownership?

    14. What measures are in place to stop Choruss from counting and charging for songs intentionally distributed via P2P by independent labels and artists that are not represented by Choruss partners, and then handing over payment to Choruss partner labels and publishers for this content?

    15. What measures are in place to help Choruss identify between multiple licensing and distribution agreements that could be in place for a single song title? A song can be licensed for sale under a Choruss to one party and for free P2P distribution to another party. What about music licensed under Creative Commons?

    16. What stops an independent label, publisher, or artists not represented by Choruss from suing students?

    17. What will stop Choruss from engage in sharing data with entities like the NSA, DHS, or The Authors Guild, invading further into civili liberties to "stop terrorists," "protect the children," "protect authors," and other political grandstanding opportunities? What measures stops Choruss from being co-opted by the RIAA in order to become even more oppressive?

    18. Why, as proud Americans, do Choruss and its partners believe that its commercial interests are more important than the US's ranking in higher education per capita? They could prove otherwise by shuttering Choruss, making it that much easier for students to afford an education.

    19. How can we trust an industry to fairly divide up the booty when "... the spreadsheets and financial models dictate that suing customers and partners just makes too much sense." http://www.techcrunch.com/2009/03/08/big-music-will-surrender-but-not-until-at-least-2011/ Is this not the logic of a thug? Sure, Choruss is not the RIAA, but in most consumer's minds, they one and the same. Pay "us" and "we" won't sue. Sounds more like a cartel.

     

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    Hephaestus (profile), May 23rd, 2009 @ 9:50pm

    Hello all .....

    The one thing I want out of this is ....

    to know where the money is going. So my question is ...

    will you open your books to the public and show that the artists are getting paid?

    I personally think that someone should get a bunch of indie labels and artiists together and start a + - a penny a song system for college students.

     

    reply to this | link to this | view in chronology ]


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