Industry Challenge: Sell ‘File Sharing’ Licence

The legal battles surrounding peer-to-peer (P2P) file sharing are a losing proposition for everyone: the industry say they face sliding sales, while the tens of millions of file sharers —music, book, movie and tv fans— are made to feel like criminals.

Every day the collateral damage mounts — privacy at risk, innovation stymied, economic growth suppressed, and random unlucky individuals singled out for lawsuits. In the meantime, the lawsuits against music fans have not put a cent into the pockets of artists. There must be a better way forward. We pose a challenge to the music, tv and film industries to provide an alternative approach that earns money while making some file sharing legal: voluntary collective licensing.

The Premises

First, artists and copyright holders deserve to be fairly compensated.

Second, file sharing is here to stay. Despite all the lawsuits, P2P file sharing is more popular than ever. And new digital technologies are just going to make copying digital content easier and cheaper every year.

Third, the fans will always do a better job making content available than the content industry. The majority of the world’s recorded music is “out-of-print.” Yet the fans are making it available, every day, on P2P file sharing networks and the World Wide Web. In other words, if we want to build a Library of Alexandria for our global heritage, it’s the file sharing fans that will build it for us.

Fourth, any solution should minimize government intervention in favor of market forces. Markets-driven solutions are likely to work faster, and more efficiently, than top-down government regimes.

The Proposal: Voluntary Collective Licensing

We join other international groups in suggesting an alternative approach that gets artists paid while making file sharing legal: voluntary collective licensing.

The concept is simple: the content industry forms several “collecting societies,” which then offer file-sharing music fans the opportunity to “get legit” in exchange for a reasonable regular payment, say a total of $5-10 per month (after all, services like Rhapsody sell all-you-can-eat music for around $10 per month, so we know the rate should be below that). So long as they pay, the fans are free to keep doing what they are going to do anyway—share the content 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 content.

In exchange, file-sharing fans will be free to download and share 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.

The Precedent: Broadcast Radio

It has been done before.

By voluntarily creating collecting societies like ASCAP, BMI and SESAC, songwriters brought broadcast radio in from the copyright cold in the first half of the 20th century.

Songwriters originally viewed radio exactly the way the music industry today views KaZaA users—as pirates. After trying to sue radio out of existence, the songwriters ultimately got together to form ASCAP (and later BMI and SESAC). Radio stations interested in broadcasting music stepped up, paid a fee, and in return got to play whatever music they liked, using whatever equipment worked best. Today, the performing-rights societies ASCAP and BMI collect money and pay out millions annually to their artists. Even though these collecting societies get a fair bit of criticism, there’s no question that the system that has evolved for radio is preferable to one based on trying to sue radio out of existence one broadcaster at a time.

Copyright lawyers call this voluntary collective licensing. It’s voluntary for artists—the government doesn’t force them to join a collecting society, and even after they join a collecting society, they remain free to license their songs directly (that’s why it’s not a compulsory license). It’s also voluntary for the broadcasters—the government doesn’t force radio stations to take licenses from any PRO (that’s why its not a tax).

The same thing could happen today for file-sharing: Copyright holders could get together to offer their music in a “blanket license”—an easy-to-pay, all-you-can-eat, music buffet. We could get there without the need for changes to copyright law and with minimal government intervention.

Note: Text on this page has been copied liberally from the EFF’s A Better Way Forward under a CC-BY license but adjusted for the New Zealand context, and generalised to instead talk about all media rather than just music.