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Let’s Sell Recorded Music! Part 3: Coalition Of The Billing

18th November 2008 @ 6:30 pm - 9:00 pm

Venue: The Boardroom, PRS for Music

TOPIC: What’s the best way to license these new services?  Labels are now ready to license as widely and flexibly as possible yet understandably wish to control the value they place over their rights, especially when ISP music services may one day provide their major income stream for recorded music.  Might collective licensing through a mandated body enable the widest range of music to be legally available, from finished studio recordings to live bootlegs, radio sessions and mash-ups?  Or is that incompatible with the business needs of rightsholders, leaving such content doomed to continue to exist unlicensed?

How will future licensing vary between streams, on-demand streams and downloads when technology is increasingly causing the three to converge?  How can we streamline and simplify the process for licensees, is it desirable or possible to create one-stop joint ‘master and composition’ licenses to make everything easier?  Will labels increasingly extend vertically into the businesses they are licensing, such as MySpace, and how will monies track back to artists?


POST-EVENT MUSICTANK SUMMARY: Bonfire night may have been and gone but that didn’t stop the fireworks flying at last week’s third and penultimate event in MusicTank’s file sharing series – The Coalition of The Billing.  As this is being written (and probably read) before the 9 o’clock watershed, we will have to skip over some of the more colourful language that was in use on the evening but in the interests of fair reporting we should note that the panellists at times robustly disagreed with each others’ opinions.

Dividing the panel like the Red Sea (and a bone of contention throughout the night) was the thorny issue of collective licensing.  Coming out strong for a single blanket licence to cover all digital media was the evening’s keynote speaker Peter Jenner, who argued (as he did back in this newsletter in August) that if the recorded music industry seriously wants to fight piracy, inspire innovation and generally take back the initiative, the answer was to simplify the procedure and create one licence to cover not just full releases but everything from live shows, studio outtakes and user generated content like mash-ups.

Much like Noank’s Jim Gelcer argued in the previous think tank, the users have already decided how they want to get hold of their music and effectively how much they are willing to pay for it.  Instead of trying to force our way upstream we should go with the flow and seek to create an environment in which their behaviour is legitimised.

Paul Sanders, co-founder of Playlouder.com disagreed: actually he did a little more than just disagree but as we established at the start this is a family friendly publication, so we’ll leave it at that.  For Sanders, a blanket licence would have just the opposite effect of what Jenner was hoping to achieve, and strongly believed that rather than embracing the chaos of open systems with all the pornography, viruses and other threats that lurk out in the wilds of the internet,  we should instead be looking to create a civilized, managed service that households can opt in to.

Taking time out from all the name calling, Tom Frederikse from Clintons law firm and Jez Bell of the MCPS-PRS Alliance both came out in favour of a collective licence, though as Tom was quick to point out “no such thing presently exists” and recent changes to European law made the idea of a one-stop licensing shop even less likely to happen in the future.

Indeed it was interesting to hear just how much the licensing landscape had changed in recent years with the rise of private firms encroaching on the territory previously held by the large collecting bodies.  As Frederikse pointed out these private firms were, unlike the traditional bodies such as The Alliance, under no obligation to licence material and are not subject to the fair rate tribunals and can set their fees as high as they like.  Still, as Bell admitted, for the rights holder at least, this competition had had some beneficial effects, and the collecting societies were having to raise their game and were already paying out quicker than before.

Though the panel, and Jenner and Sanders in particular, continued to snipe at each other throughout the proceedings some degree of unity was achieved when iTunes became the focus of the panel’s attention.  It seems that Apple’s MP3 store has the unique ability of winding up everybody in the industry and first to have a pop was Peter Jenner who labelled iTunes’ affect on the industry “disastrous” in that they had successfully managed to take a £10 item, the album and de-bundle it so that the majority of people now just spent £1.60 for the two singles.

For Beggars Group’s Simon Wheeler, the computer giant’s chief sin was that it had “set a level that took power out of rights holders hands”, arbitrarily setting the benchmark price for a la carte downloads.  Whilst even Paul Sanders was able to put aside his differences, accusing the record labels, majors especially, of affording iTunes too much power and influence.  For the last couple of years he said he had been listening to record label people worry that any new service would “displace” their iTunes sales, sales which when averaged out only come to around two to three tracks purchased a year, hardly the stuff of platinum discs and certainly nothing to be overly worried about losing.

Despite that brief moment of bonding, and with the session drawing to a close with little sign of rapprochement between the camps, it was one of the panellists from a previous session, Andrew Orlowski of ‘The Register’, who had the final word.  Turning his attention to the two differing solutions offered by Jenner and Sanders, his concern was that if Sanders’ way didn’t work, the worst that could happen was that yet another digital business model would be proven wrong, while if Jenner’s was adopted and failed the recorded music industry would have nothing left.

The final event in the Lets Sell Recorded Music! programme – Squaring The Circle – will see MusicTank rounding on the key issue to surface throughout the debate – does the future lie with proprietary music services or open ones that somehow utilise P2P?


SERIES CONTEXT: Illegally downloaded any music recently?  Given that nearly two thirds of all internet traffic is made up of P2P activity these days, if you haven’t, then most young people you know are.  Since Napster first reared its head in the late nineties, the recorded music business has tried in vain to put the genie back in the bottle.  The result – some pr blunders and an estimated 20:1 illegal/legal download rate.

For music fans it’s been a golden age where hard to find and out of print releases have been readily available alongside the latest hits of the day, but with no way of monetising these streams the record labels have been forced to watch their profits dwindle while the world’s been moving online.

The UK government has taken notice and is overseeing a three-pronged initiative aimed at educating and developing awareness, dealing with the most serious infringers and facilitating legitimate offerings.

This series will focus on that third prong: effective legitimate alternatives.  Over the course of the four events we will review what people want, where technology is heading, what the most plausible new models are and how they might be licensed.


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