Is Choruss out of tune?

In July 2008 IP Finance posted this item ("Music recordings: the Lincoff model"). Last week the same author returns to the theme in a well-reasoned piece that was published on the well-regarded IP Watch weblog, "Choruss’s Covenant: The Promised Land (Maybe) For Record Labels; A Lesser Destination For Everyone Else".   I don't feel sufficiently confident to comment on an issue which has "Made in America" stamped right through it, though I do feel that the Choruss model, if successful in the States, will be closely examined as a model for European campuses too.  Readers' comments, please!

Choruss' Music Tax Plan: Bait and Switch here
The Licensing Plate carries Jim Griffin's explanation of Choruss here

"Comes with music" and other experiments

A good article in the Irish Independent by Stephen Foley reflects the tensions that underpin the relations between the music performing/recording industries on the one hand and DRM-based music delivery systems such as iTunes on the other. While there is plenty of money in the iTunes business model, the intriguing questions remain (i) whose money ultimately is it and (ii) how can recording companies claw themselves back into the market for the delivery of albums now that iTunes accounts for more than two-thirds of all paid-for downloads. In this context Foley asks: "what is the point of the iTunes store if music is free?" The point is that, between file-sharing, promotional offers and Radiohead-style business models (see earlier IP Finance post here) the means of accessing music for free keep increasing -- which makes it difficult for anyone to compete with a paid-for product. For this reason

"The value of music sales in the US and Western Europe at the start of the decade was well over $20bn a year, almost all from CDs. In 2008, that will be down to $13.1bn, of which digital music accounts for $2.7bn. In short, revenues from paid-for downloads and online subscription services are not coming close to making up for the decline in CD sales. And Screen Digest predicts they never will. The market in 2012 will be $11.6bn, it calculates, with just $4.6bn from digital sales".

Foley then cites the forthcoming Nokia "Comes With Music" initiative, which will launch before Christmas, selling phones-cum-music players that allow users to download and keep an unlimited amount of music. Universal and Sony BMG are said to be enthusiastically backing the service. Other experimental products are in the pipeline; for example, three of the four major labels are said to have signed up to support a new service by MySpace which will stream music for free on artists' pages on the social networking site, in return for sharing advertising revenues.

Music recordings: the Lincoff model

The excellent Intellectual Property Watch weblog carries a lengthy feature by Bennett Lincoff (right), "Inside Views: A New Business Model For The Music Industry Explained". This feature, which is itself based on a longer work (a 64 page article), succinctly describes the current problem facing the recording industry. Having outlined the status quo, Mr Lincoff proposes as follows:

"I suggest that lawmakers aggregate the rights of songwriters, music publishers, recording artists and record labels in their respective musical works and sound recordings and create a single right for digital transmissions of recorded music. The digital transmission right would replace the parties’ now-existing reproduction, public performance and distribution rights (and, where applicable, the communication and making available rights) for purposes of digital transmissions.

Going forward, the determinative consideration will be whether transmissions of recorded music have occurred, not whether transmissions result in sales, promote sales, or may cause sales to be lost. Licences will be made available without regard to whether recordings are streamed, downloaded, or transmitted by some means not yet devised; whether programming is interactive or non-interactive, or contains this, that or another recording; or whether the service that provides the transmission accepts user-generated content or operates as a P2P network. The number of copies made in the course of transmissions (including server copies, and ephemeral, transitory and buffer copies), the type of transmission technology used, and the file format in which recordings are transmitted will not be of concern.

Ownership of the digital transmission right in each recording will be held jointly by the songwriter(s), music publisher(s), recording artist(s) and record label who contribute to it. Each party will be a co-owner of the right in the recording in question. Moreover, regardless of the nature of their relationships to each other under pre-existing agreements, or to particular recordings under current law, under the digital transmission right each rights holder will have independent and sufficient authority to grant non-exclusive licences on any terms to which they and their licensees agree. The only limitation on this authority will be the obligation to account to co-owners for royalties earned.

...

The digital transmission right would only be enforceable against those who provide digital transmissions, retransmissions or further transmissions of recorded music.

Accordingly, consumers would not incur any liability to rights holders for accessing streams, downloading music, or making copies of recordings for personal use. Similarly, software distributors, technology firms, consumer electronics makers, and telecommunications and internet service providers, as such, would have no liability.

On the other hand, audio service providers will need licences if they operate websites or other services that provide digital transmissions, retransmissions or further transmissions of recorded music.

...

Operators of centralised P2P networks would be jointly liable with their users who share music. These operators would also be liable for further transmissions or retransmissions through their servers of transmissions of recordings initiated by their users. A through-to-the-user licence would authorise all transmissions of licensed recordings through an operator’s centralised network; and individual users would be free to share those recordings through that network without the need to obtain licences themselves ...".

Whatever you may think of the author's proposals,

* it's great to say that someone with experience in the field in question is actually putting solid suggestions on the table rather than simply saying "the recording companies should stop harking back to the halcyon days when their old (pre-digital) business model worked and should design something else;

* it's notable that Mr Lincoff's proposals start with legislative reform as a sine qua non for the development of a new business model -- and this raises the question whether business models should shape the law or merely respond to it;

* given the nature of the distribution media, any solution will depend for its efficacy on the adoption of uniform legal provisions internationally. If there is no international norm, any business model will have to factor in the potentially devastating effect of havens in which the model becomes meaningless.