ARTSETC.
Pay, Don’t Sue, Song-Swappers, Trade Group Urges
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Friday, February 6, 2004
WASHINGTON (Reuters) — Internet users could collect paychecks rather than lawsuits when they share music through “peer-to-peer” networks like Kazaa, under a proposal outlined by an industry trade group on Thursday.
Rather than losing millions of dollars in potential sales to online song swappers, the recording industry should give them a cut of the revenues when they distribute songs in a protected format, the Distributed Computing Industry Association said.
The scenario follows two others put forth by the trade group in an effort to forge peace between peer-to-peer networks and the major record labels that have hounded them and their users in court.
DCIA chief executive Marty Lafferty said record labels could see sales grow by 10 percent over the next four years if they embraced the new technology, much as movie studios increased their market when they embraced the videocassette recorder in the 1980s.
“Each time there’s a technology breakthrough in entertainment distribution, once it’s harnessed and embraced and an industry finds a way to capitalize on it, the industry does enjoy accelerated growth,” he said.
Under the plan, record labels would encode their songs with copy-protection technology so users would have to pay a small fee, between 80 cents and 40 cents, to listen to them.
Prolific song-swappers would be encouraged to convert their collections of unprotected material into the protected format, and then paid a portion of the fees collected each time somebody purchases a song after copying it from them.
Eventually, user-friendly software would allow amateur musicians without recording contracts to make their music available as well, DCIA said.
But implementing the plan could be difficult as it would require the cooperation of Internet providers, record labels and peer-to-peer networks.
Most peer-to-peer networks back a model in which musicians and record labels could be reimbursed through surcharges on blank CDs, CD burners, and fees from Internet providers and peer-to-peer networks themselves.
Though any proposal to pay artists for peer-to-peer activity is welcome, DCIA’s suggestions “need to be taken with a large portion of the salt shaker,” said Adam Eisgrau, executive director of P2P United, a competing trade group.
An earlier DCIA proposal would have positioned member company Brilliant Digital Entertainment Inc.’s copy-protection technology as a standard, Eisgrau noted.
A spokesman for the Recording Industry Association of America said he had not had time to look over the proposal and declined comment.
Major record labels include Vivendi Universal, Bertelsmann AG’s BMG, EMI Group Plc, Sony Corp.’s Sony Music and Time Warner Inc.’s Warner Music.
