Time To Scrap All Music Industry Licensing Schemes

from the a-house-of-cards dept

It's impossible to be a legal innovator in online music these days. No matter what you do, you will run afoul of some kind of music licensing issue. That's because of the way that copyright law is designed. Basically, each time some new technology comes along that doesn't fit with the way copyright law used to work, the copyright holders run to Congress and demand yet another new "right" to be included in copyright -- and anyone who wants to do anything has to now pay for yet another license to cover that right. The end result is a comical house of cards that no one can actually figure out -- and you're pretty much bound to be sued by someone for violating one of those "rights," if you do anything even remotely innovative. At MidemNet, in one of the panels I watched, an executive complained that for every track one startup streamed online it needed to negotiate eight separate licenses. And that's not the worst of it. At a panel last week, execs from all over made it clear that things aren't about to get any better at all. Instead, it's just a bunch of legacy industry execs who keep demanding that the government grants them more rights.

But here's the problem: no one is providing any actual evidence that these rights are necessary. So let's scrap them all.

Plenty of musicians are showing that they can make good money by embracing new business models that have nothing to do with these antiquated licensing schemes. So why not get rid of them all and just let the market work. The end benefit would be great for everyone except the folks in collections societies who have made themselves a fantastic living sitting in the middle collecting money. Musicians would still make money by embracing new business models, and the ability for internet startups to actually innovate without getting sued or having to pay multiples of any possible profits to guys in suits doing nothing, would help grow the music industry many times over.

But, instead, we just hear from the folks representing the industry trying to add new licenses to the mix insisting (falsely) that they are somehow needed for the industry to survive. So we slap on another unnecessary layer that's really just designed to keep the guys in suits rolling in cash, but has nothing to do with helping out the actual musicians or creating more music. Meanwhile, the collections agencies -- the SoundExchanges and the ASCAP's of the world -- insist that a new license layer is a great thing, and they're more than willing to step up to be the ones to collect it. But it's not necessary and the answer is to go in the other direction.

We don't need to add more music licenses. We need to get rid of the old licensing regime. Entirely.

Even copyright attorneys are realizing that this is leading to the death of copyright. Layering licensing right on top of licensing right is building a house of cards that has to collapse. Copyright attorney David Post talks about the ridiculous situation of trying to determine how one would go about getting all the proper licenses for one of the thousands of increasingly viral videos made by people using Microsoft's Songsmith software, combined with vocals from classic music hits. As Post notes, that's definitely a creative endeavor -- the sort that copyright law is supposed to be encouraging. But he notes that copyright doesn't scale. All those different licensing rights make it impossible to actually get all the rights necessary to make that sort of creativity legal. After going through the impossibility of getting the licenses for just one of those videos, he asks how you would do it for the 100,000 Songsmith-inspired videos on YouTube alone -- not to mention those not even found on YouTube, or which will be loaded up in the future.

We've built a copyright system by having politicians incorrectly accept the screaming complaints of legacy industries every time some new technology comes along. So they add another layer of complexity to that house of cards, and we've now reached the point where it's impossible to innovate legally -- and even doing basic creativity puts you at significant risk. Yet, there's ample evidence that none of this is actually needed for musicians to make a living making music. It's time to recognize this and look to just wipe out all of these unnecessary legacy artifacts of a dead system, and clear the decks to let real innovation thrive.

Filed Under: copyright, innovation, licensing, music

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  1. identicon
    TonsoTunez, 7 Mar 2009 @ 6:14pm


    Like gasoline is to the automobile, music related technology is useless without fuel(music).

    I don't believe anyone has ever suggested that laws, licenses and fees required to drill for oil, refine it, and deliver it to a gas station so it can be pumped into your car should be abolished. If someone did make that suggestion and, against all odds, it became reality, oil would stay in the ground ... and people would be pushing their cars around town to make them 'run'.

    It's the same with the layers of intellectual endeavors that have to come together to make it possible for a song to come out of the head of its creator, find the right artist to sing it, producer to produce it, background musicians and singers to perform on it, engineers to mix and master it, marketers to market it and financiers to fund it before it becomes the recorded fuel that makes music related technology operate.

    If, per your suggestion, laws, licenses and fees required to encourage people to become proficient in, and hopefully make a living from, the various specialized fields of endeavor needed to deliver interesting and exciting music to the consumer were removed from the path of technology's march to the sea ... those who would have been inclined to take up music and music related endeavors on a profession basis would simply find something else to do with their lives and the torrent of great new music that has been pleasing the public since the invention of recording technology would dwindle to a trickle.

    Mike, you always use the self contained artists playing clubs and selling t-shirts as your model for music's future. There's no future for artists using that model. The total lack of enthusiasm for music offered via the Creative Commons is undeniable proof of that fact. In this click to delete world an artist's shelf life (if they can even get on the shelf in the first place) is about as long as their zany YouTube video stays hot ... Besides, what moron would think spending 40 years playing rotten clubs would be a life worth living.

    You also like to point to Trent Reznor as an example of what artists can do without labels... and seem to indicate that unknown artists could follow the same route and achieve similar results... One missing element each time you use Nine Inch Nails as an example is the fact that the group is a long time well established super BRAND built by their record label. So, of course, is the Grateful Dead.

    In this world of deposable music, I believe we are seeing the end of the era of mega brand artists - so, while the Nine Inch Nails example could be more damaging to labels than piracy in the future (because artists will use the labels to help build their brand then go out on their own when their contracts are over), it is disingenuous on your part to suggest that the formula will work for unknowns.

    Most unknown acts will never have the money or the carefully constructed public persona to do what Reznor did ... and, if they tried, 95% of them would be flushing their money down the drain because the percentage of successes to failures has not changed since the world went digital.

    As to the organizations you wish to have abolished, you display a profound lack of understanding as to what they do. You really should bone up on how they operate, before trying to give them the bone. Two of the organizations you mention are not for profits - they don't produce fat cat middle men - they negotiate rates and fees, license, collect and protect rights on behalf of their members, and pay out every penny they take in - less overhead costs (between 10-15% of gross.) It would be impossible for an individual artist - or songwriter - to do 1% of what these organizations do on their behalf and still find time to create and promote their music. Something to do with the concept of collective bargaining I believe.

    You should really try to understand what at you are talking about before passing yourself off as an expert in the field of music. You do a great disservice to yourself, your readers and to music.

    By the way, I hear you will be keynoting the Leadership Music Digital Summit in Nashville. One thing you might wish to keep in mind is that your audience will include a good number of digitally hip music industry professionals and professional creators. Try to feed them the kind of clearly uninformed malarkey you presented in this blog, and I guarantee you they will hand you your head. This won't be the standard unenlightened college student and uniformed Tex Nobody artist wanna-be crowd that usually show up at these sorts of events you will be facing.

    My suggestion, get a handle before you fly off the handle.

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