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. icon
    Killer_Tofu (profile), 5 Dec 2008 @ 6:52am

    Re: A flat fee is already in use... they're called taxes.

    I have several main counterpoints.

    First, note that all of the money from this goes, once again, to the middle men. The creators of all the content you are mentioning generally see pretty much nothing from the people who would be collecting this. So, in effect, this would be simply to line the pockets of those middle men even more. The creators continue to get nothing.

    Also, note that this is only the majors. What about all the great indie bands that aren't under these label's tyranny? They get left out in the cold. When they don't even compensate their own members, would you expect them to compensate those that aren't members?

    What about deaf people who go to college. They get to pay a tax for something they will never use, and couldn't possibly use.

    Also, you said:
    Personally, I'm all for it. I would love to be able to download all the songs I want for a small fee.
    So sign up for Napster or some similar service. A monthly charge and you get to download. There are already plenty of services like this out there, each with their own sets of features and restrictions. Find one that works for you. There is no need to FORCE college students and colleges into this when such services already exist. If they like it, they can already sign up for it. If you don't like their restrictions, complain to them so they know to fight to have them removed.


    Schools and other things taxes go to benefit everybody. That money comes from the government and goes to such bodies. This is talking about giving funds to a private industry that has been shown to rip off the people they say they care so much about. Again, do not expect the actual creators to ever see anything.

    Because until they do, we'll continue to get bombarded with DRM, legal issues, IP conflicts, and every other damn consumer inconvenience they can think up.
    That IS after all their decision to be assholes, isn't it? They are well within their rights and abilities to move forward with technology and adapt. They are the ones who are choosing not to.

    If the overall "product" consumers want is the music and movie, do you really think they'll rush out to buy a limited edition tshirt, CD/DVD, book, or other things?
    Have you seen anything like this released? ALL true fans do rush to these things. I have bought every single official Nine Inch Nails "Halo". I consider myself a true fan. While I do not buy the super deluxe editions of things, I do buy them all. Also note that his super deluxe edition sold out within a day for his last CD / Halo. That also totaled 3/4 a million dollars just for that version, even not counting the rest of his stuff. Best part, no label to fleece him of most of that!

    Take the movie "The Dark Knight". 2nd best in history.
    Also one of the most downloaded movies in history.

    Encapsulate the movie industry in the same tax, and for the first time ever, the internet does become a place of sharing.
    The internet is already a place of communication a sharing. It does not need to become, as it already is. The labels just need to find a way to monetize that without taxing everybody, since not everybody uses said services. Some people use the pay monthly fee download a lot for stuff like Napster. Other people use services like iTunes & Amazon and pay per download. This "tax" is an attempt to regain control and run out all of the competition. It will actually help to restrict their options by forcing a single option on universities.

    Also note that it is NOT the universities responsibility to help the RIAA at all. Not one bit. They have no obligation to do so. The RIAA just wants them to think they do.



    I also want to note that I personally refuse to buy any CD or anything from any artist that is part of a major label. I want to point to a group called Metsuo. Recently they had a couple songs that were either made for the Max Payne soundtrack, or simply used on the Max Payne soundtrack (I do not know which, but that doesn't matter to me at the moment). The song that started off the credits was awesome. I looked it up online once at home. Found out that they made it. I found their myspace page which had those couple songs on it, as well as a few others. It is a type of techno music. I love it. I really do. Being on myspace I was able to talk to them. I found out that they are independant and not part of a major label. After finding this out, I did buy their 2 "cds" (not produced as a physical copy yet, so does it still count as a cd?) from the Amazon store. Approx 89cents each song for a non-DRMed MP3 at a quality that is good enough for my ears. For 8$ I got all 9 songs they have. I love every one. The price was well worth the value I get from the songs. And I have engaged in a conversation (although over the net) with them. Makes me feel quite warm and fuzzy about them when I love their music so much and I have talked to them. Being included in that movie has highly increased their popularity. I can only imagine how much they have made since then even if they licensed to the movie really cheap. It is a model that does not rely on forced taxes and has worked out quite nicely for them so far.

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