Warner Music Pitches Music Tax To Universities: You Pay, We Stop Suing

from the pay-us-not-to-sue dept

Back in March, we noted that Warner Music Group had hired Jim Griffin, a music industry guy who has been pushing the concept of a "blanket license" for file sharing. The idea would be to get various ISPs to simply add an additional fee to everyone's internet access, have that money go into a pool that the recording industry would be responsible for paying out -- and then let people have free reign for file sharing. This is a bad idea for a variety of reasons. It's basically a music tax -- allowing the record industry to be lazy. Someone else gets to go out and collect all this money and hand it over to the industry to distribute (or, actually, not distribute). It effectively sets the business model of the recording industry in stone, and harms better, more innovative business models by inserting the recording industry (and not the musicians) into a role where they don't belong.

We hadn't heard much about this music tax lately, but apparently Griffin has been focused on getting universities to buy into the plan first. An anonymous reader passed on some details, saying that Columbia, Stanford, University of Chicago, University of Washington, MIT, University of Colorado, University of Michigan, Cornell, Penn State, University of California at Berkeley and University of Virginia have expressed interest and talks are under way. A basic presentation that's being given to these universities is below (if you're reading via another site, click through to see it):
There's obviously something appealing about ending the lawsuits and letting people file share freely. But, it's quite problematic to add an effective "tax" when none is necessary. Plenty of other business models, such as those we've outlined here and elsewhere can suffice to fund the creation of music. On top of that, giving the proceeds of this tax to the very industry that has so badly mismanaged musicians for so many years is a travesty -- sort of like bailing out the failed auto industry or banking industry. The presentation says that a nonprofit has been set up to handle the money, claiming that it's "to be clear we intend to operate with good intentions and not profit as a motive," but given the way the industry has acted in the past, that's difficult to take at face value. Also, this isn't really a license. It's a "covenant not to sue" -- meaning that lawsuits could still result.

Of course, while the introduction frames this as a "voluntary" blanket licensing program, the presentation also mentions that they'll need some way to get all ISPs and universities to buy into the plan, or they'll have to work out a way to "avoid massive leakage." So, basically, it's not voluntary at all. It's either join, or get saddled with significant limitations. In other words: all ISPs and universities need to agree to pay a huge tax to the very industry that hasn't been able to adapt, and then trust them to distribute the funds fairly.

Update: Warner Music got in touch and sent us a statement concerning this presentation from Jim Griffin:
"This presentation belongs to someone outside our company and represents that individual's interpretation of issues discussed at meetings held several months ago. It was not made by me or anyone at Warner Music Group. Of course, we are actively engaged with universities and other parties to seek a constructive resolution to a complex issue - how to assure artists appropriate compensation while enabling the widespread dissemination of their work among fans. Therefore, we are undertaking an effort to develop new voluntary business models that seek something other than - and we believe, better than - a litigation-based approach. This is exactly the type of solution that several universities and their associations have been asking for. We recognize that there are many different potential solutions to this issue, and we are determined to continue to think creatively and cooperatively with other parties in order to find the best ones. At this early stage, many ideas may be discussed and discarded, but efforts to prematurely label or criticize the process only hinder achievement of constructive solutions."

Filed Under: jim griffin, music tax, universities
Companies: warner music group

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  1. identicon
    DG, 4 Dec 2008 @ 10:04pm

    Who says they have to make money?

    Who says that being a musician or indeed any kind of artist means that you have to be able to make a living doing it? Long ago, artists and musicians had PATRONS - people who wanted their art for themselves or the village, or who wanted to hear their music. So they (the patron) paid the musician or artist.

    People throughout the ages have gotten bored quickly - so musicians and artists had to continuously create new works. If the patron didn't like it, they didn't get paid.

    If something was really popular, some other musician might have overheard it, and agreed to play it - but at a lower rate. Now the musician who created it got irked because his income was being cut into. So someone, somewhere, decided to give the creator - the first guy - a COPYRIGHT. He had the right to determine who got to make or produce or perform copies of his work. He was given this right so he could make some money to offset his costs of production, make some money, and to promote him to CREATE NEW WORKS because his copyright was of limited duration - so he'd have to continue to create if he wanted to continue making money. We as the society traded him a brief monopoly in exchange for his creative genius eventually becoming available to everyone after a while...

    Fast forward to the day of records, etc. and now you have some schmuck that came up with a way to sell copies of the work to multiple people. The musician didn't have a way to reproduce the records/tapes/CD's on his/her own because that equipment was expensive. So he gave a cut of the sales to the guy who had that equipment. But you still had a problem of "marketing" this stuff that was produced.

    So someone else got into it and agreed to front the $$$ to market the items in exchange for a cut + his money back...

    Pretty soon, due to 'funny accounting' the costs look pretty high, and the musician is making next to nothing. Also, with the high costs of equipment, shipping, and marketing - you had a reason to 'extend' the amount of time that the copyright was in existence. Everyone had costs, everyone had to make their $$$ back, and the works still entered the public domain - eventually - right?

    That was ok, when it went from 7 years to 14 years then to 20 years. 99 years is insane - most people don't live to 100, so any work created in someone's lifetime OUTLIVES them! In fact it outlives most of the public that it's destined to benefit. This is sheer and utter lunacy.

    Basically what the RIAA's become is a way for a musician to get a loan at insane rates to produce music.

    Finally, from my standpoint - I've bought a lot of Tapes, records, and CD's over my life. Some stuff I've bought more than once in more than one format. Now that I have the capability of reproducing the item in just about whatever format I want, I don't need to keep paying someone else to do it for me. Why's that such a bad thing? OH yeah, because the RIAA doesn't get to make more money on me to buy that which I already own!

    I have no qualms about copying, ripping, trading, sharing, or doing whatever the hell I want with music that I've already purchased. If that means that the musician has to go create something new to get some more money coming in, then that's what he's gotta do - that's the DEAL folks. If he can't create enough to make a living, then tough shit - go get a job or start a company or invent something and make some money so you can engage in your hobby of music. Or get some fool to be your PATRON and share the funds with him...

    But stop whining about file sharing... If anything - it's FREE MARKETING for you. If your music is good, then people are going to come and buy other products you offer (yep, you'll have to keep creating new ones). If your music is crap, then no one's going to buy your stuff and you'll have to figure something else out.

    As a member of the PUBLIC, I demand quid pro quo! We gave you a copyright, we get the goods when it expires... no bullshit. Go create something else already...

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