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Would You Pay a Fee for Legal Music File Sharing?

Kim Hart

CD sales are at record lows. People continue to illegally download songs over the Internet. Record labels file law suit after law suit to make sure they, and the artists the represent, get their fair share of royalties.

The debate over the best way to distribute music on the Web took a new turn last week at South by Southwest Music Festival in Austin. I wasn't there, but I hear from other attendees that a Friday panel discussion sparked some controversy.

The new idea on the table: Internet service providers would tack a small fee ($5 for example) onto monthly bills for broadband connections. The money would then go to the music industry to help compensate labels, performers, song-writers and other artists for music shared online.

It is aimed at the people who illegally download free songs through peer-to-peer file-sharing services, like BitTorrent and Kazaa. Similar ideas have been floating around for a couple of years now, but it seems the music industry may be starting to see it as a viable option. The Electronic Freedom Foundation put forth a similar proposal for "voluntary collective licensing" in 2004. Here's an excerpt from the explanation on the EFF Web site:

"The concept is simple: the music industry forms a collecting society, which then offers file-sharing music fans the opportunity to "get legit" in exchange for a reasonable regular payment, say $5 per month. So long as they pay, the fans are free to keep doing what they are going to do anyway--share the music they love using whatever software they like on whatever computer platform they prefer--without fear of lawsuits. The money collected gets divided among rights-holders based on the popularity of their music.

In exchange, file-sharing music fans will be free to download whatever they like, using whatever software works best for them. The more people share, the more money goes to rights-holders. The more competition in applications, the more rapid the innovation and improvement. The more freedom to fans to publish what they care about, the deeper the catalog."

Some say it is a good compromise for the music industry to make the most out of a tough situation. But there are many criticisms. For one, it could unfairly penalize the people who already pay to get legitimate music files online, or the people who don't download music at all. If people start paying an extra monthly fee to cover music consumption, they could lose the incentive to also pay subscription services to the likes of iTunes, eMusic or Rhapsody.

It's similar to the way radio stations pay to replay music on the air, according to EFF. Radio stations interested in broadcasting music pay a regular fee and, in return, are able to play the music of their choice, with any equipment.

Another question I have is whether this will shift any bandwidth costs to the Internet service providers. The monthly fee would, in theory, go to the music industry, but the ISP could face a serious spike in traffic if people start using file-sharing sites a lot more to get their money's worth.

Also, what would this mean for the digital books, TV shows and movies that are also downloaded online? Would another surcharge have to be added to cover the rights of that content?

I intend to find out more about this debate, now that the South by Southwest attendees are getting over their jet-lag and concert-induced exhaustion. But I'm interested in hearing from readers. Is this a good idea? Would you be willing to pay a few extra bucks to get all the music you want, legally?

By Kim Hart  |  March 17, 2008; 12:41 PM ET  | Category:  Kim Hart
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It's not a few bucks. It's 10 to 15 percent of average ISP charges.
There is no guarantee it will not dramatically increase once the RIAA/MPAA begin to feed on this free money. There is competition for ISP services so prices remain somewhat competitive. This monopolistic charge is unregulated; you can't change providers if they jack up the rates.
This might be of value to me if I can access works that the publishers do not make available commercially. If it allows mining other users "My Music" directories ala Kazaa et al or via P2P/Torrents then there may be utility.
It will be interesting to see how this plays out. Keep us informed.

Posted by: Smedley | March 17, 2008 1:34 PM

This is a terrible idea. I do purchase my music legally, at least $100/month and often more. If I were to then be charged for something I'm not doing, well, what's the incentive for me to NOT steal music?

Posted by: Adam | March 17, 2008 1:42 PM

I do not frequently purchase music but when I do, it is either iTunes or physical CDs from the usual brick and mortar outlets. I do not participate in illegal file sharing. I tend to listen to Internet radio stations and if I really like something, I'll go buy it. I do not like the idea of paying an additional fee to my ISP to subsidize a failed business model of the music industry. Services exist for those who want to obtain music on a monthly basis, pay a one time download, or they can visit the local music shop to buy a CD. This would be about as crazy as adding a fee on top of MP3 players or to CD/DVD media to cover the cost of illegal file sharing.

Posted by: Jim | March 17, 2008 2:41 PM

Sounds like racketeering to me. All you're doing is paying RIAA members a monthly bribe so they won't sue you. But you're still exposed to the same risks of spyware-infested free/cheap music sites. Or you can continue to pay for itunes or its competitors on top of the RIAA's cease-fire fee.

Why doesn't the RIAA set up its own free download site and laden it with ads--some banners and then force users to watch a 20 sec commercial every 5 songs. Maybe also coordinate the band's concerts with Ticketmaster and get a share of their ginormous "convenience fees." [sorry, still bitter that my $20 ticket cost $30 through ticketmaster after the purchase fee and the pay to print your own ticket fee.]

Posted by: ugh | March 17, 2008 2:54 PM

Check the link for all the free SXSW highlights:

http://www.blender.com/Blender-Blog/blogs/1168.aspx?src=tstbbsxsw

Posted by: peetah | March 17, 2008 2:59 PM

Comcast already takes $65 a month as my ISP, then the government takes a little more for its share, and then the government takes a little more again from my phone bill so someone somewhere can have high speed access at my small expense.

I haven't bought a CD or any other music in years - I like the radio. And I am not the slightest bit interested in giving even a little more(but just wait,it will grow)so some lawyer/record company/artist can have any more of mine.

Posted by: tombob | March 17, 2008 7:10 PM

This is a horrible,insane,stupid idea that will probably cost the music industry milions more. Me, im a honest a hardworking citizen who does go out and buy cds legally from actual stores. But if this fee does get added downloading illegal music is no longer immoral, this fee will almost legitimize illegal downloading. I will no longer feel guilty,no longer feel like Im stealing someone's livelihood. Cause I'm paying a fee right? I think this is how lots of people feel and that small group that actually does buy cd's will diminish to those without a computer or interet service. If this idiotic fee does get tacked on, singers just might need to find a 9-5. Or at least a night gig at the local bar.

Posted by: Twisted | March 18, 2008 8:03 AM

What will happen five or more years is we no longer will be paying monthly for unlimited Internet. We'll purchase monthly bandwidth plans that provide X amount of bandwidth for X dollars and any overage we pay additional for.

This will make broadband universally affordable and will create a new economies of scale. From here we can file share all we want to and our ISPs can funnel the money accordingly.

This is a hugely unpopular idea, but suck it up, because it's going to happen! Think how many ISPs are cable companies and think of the current crop of sites where you can watch free content (Hulu, Joost, Fancast). Content you'd otherwise have to pay your cable provider for and rest assured there will be many more of these sites in the future! They also will be crazy innovation involved ... making the masses flock to these new sites, all the while more and more start canceling their cable TV service.

I canceled mine a year ago and just watch everything through the net; PC hooked up to 42" LCD TV.

Posted by: Ryan S | March 18, 2008 9:21 AM

I think the fee is unfair as it would affect people who do not download music or who download very little.

Posted by: Rohit | March 18, 2008 9:34 AM

I think that a lot of the commenters above assume that the additional fee would be mandatory--I don't think that needs to be the case at all. Paying the extra $5 (or whatever) to the ISP is something you do if you plan on downloading from unauthorized sites. If you don't plan on doing that, then no need to pay.

I don't think this is necessarily naive--people will not only pay to support artists they like, but also to prevent getting sued.

Posted by: S Siy publicknowledge.org | March 18, 2008 10:56 AM

this will never fly - I remember when they first proposed this.

There are too many different alternatives now that are being developed (ad supported music, free streaming music sites, etc) that will take hold long before this option does

Posted by: Andrew | March 18, 2008 8:17 PM

Ok... who thought of this stupid plan to add a fee to ISP for the music industry's failure to run a business properly?

First... has anyone stopped to ask what this idea will do to indie/unsigned bands all across the world? Go visit bebo.com, MySpace, Hi5, YouTube, etc. and you will find literally thousands of independant talents/bands struggling to make a buck in this file sharing war.

If this deal goes through... well congrats to Britney Spears, Jennifer Lopez, and every other artist signed by a Major Company who will benefit from this deal.... but... it completely screws every unsigned artist from ever selling another mp3 or CD.

Second.. every music based company who survives primarily on music sales... such as internet companies like itunes, and offline companies like CD stores, etc.... will be completely rendered useless.

Third... is it really possible to force someone to pay for a service if they can perhaps prove that they are NOT using that service? What if I can prove (using my isp provider net surfing activities records) that I don't download music at all? Can I still be forced by the court of law to pay for this service that I proved i'm not using?

There are many factors to consider. Overall... I can't see it working to well. The deal... if it goes through... is going to cause alot of hell.

Posted by: Muzickmage | March 19, 2008 6:37 AM

If "I" were in charge of fixing this problem... I would work the deal in the opposite direction....

I would contact AOL (for example) and say.. listen... if any of your clients share a music file... cancel their account and ban them for 1 year for having AOL ISP service. We'll refund you the 1 year of lost client's fee.

Then I would contact every other ISP company and do the same thing. People would soon learn to stop sharing music files... or lose their freaking internet service... which would still hault their activities.

Then... I would contact every single webhosting company and make a deal with them as well.... offering them a refund for all music sharing websites on their hosting accounts.

Now THATS how you stop illegal filing sharing. You start a music file sharing website... you lose your website account. You share a mp3 file with a friend... you lose your internet service.

The music industry is doing this all backwards. Its not the fans they need to control... its the people creating the gateways for the fans to use. If the music industry shuts down the gateways of file sharing... then the fans won't be able to file share now will they?

Posted by: muzickmage | March 19, 2008 6:54 AM

i agree 200% with muzickmage. Well said.

Posted by: Twisted300 | March 19, 2008 8:20 AM

i agree 200% with muzickmage. Well said.

Posted by: Twisted300 | March 19, 2008 8:21 AM

To Muzickmage:

In regard to your first point...your view may seem attractive to someone who is ignorant of the actual world of file-sharing. File-sharing has had the exact oppostie effect. Today, the bands who are considered the highestest quality performers/musicians are breaking first on file-sharing networks and from there are being jettisoned into the mainstream. Indie bands can only dream their single becomes the most "ripped-off" mp3 on the internet.
Second...sometimes shooting your horse is actually mercy.
Third...this proposal would only work as a general rate increase...not an itemized "premuim" you cannot refuse...

Posted by: Poppajon | March 19, 2008 10:55 AM

I agree with what muzickmage said: when will everyone stop ripping off the indie/unsigned artists, who are trying to make a living?

Give them a chance.

Posted by: lexi | March 19, 2008 11:10 AM

>

Indeed. I think this would hurt legal music downloading businesses.

I remember in the '80s the record industry wanted a surcharge on cassette tapes to make up for all their losses caused by people taping albums.

Posted by: swt | March 20, 2008 5:33 PM

I already purchase the songs I want from I-Tunes, so I wouldn't mind paying for the ability to get songs from a file sharing program instead of using I-Tunes. I feel that the artists and the other people involved in making the music deserve to be paid.

Posted by: CalvertAdam | March 20, 2008 7:42 PM

No, I would not want to pay for this, since I buy CDs and copy them to my hard drive.

Posted by: David Walker | March 21, 2008 12:55 PM

A mandatory plan wouldn't work, for all the well-stated reasons above. But many people would be attracted to an opt-in plan. For it to be successful, the recording companies would need to pool their catalogs into one repository. I'd happily pay $15 a month for that kind of access. I've never had the slightest interest in iTunes or any of its competitors because the pickings are so slim.

Posted by: Joey Harrison | March 25, 2008 4:42 PM

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