February 21, 2007 | By Derek Slater

LA Times: Start Blanket Licensing, Stop Blanket Lawsuits

The major record labels have stayed the course for the last five years with predictable results -- they've stuck by DRM, ratcheted up their file sharing lawsuit campaign, and let revenues continue to slide. Today, the LA Times suggests some reasons to think the labels may finally be coming around to a sensible solution that EFF has long advocated -- blanket licenses for music fans to share as much music as they like for a flat monthly fee.

"If Internet service providers 'want to come to us and look for a blanket license for an amount per month,' IFPI chief John Kennedy said, 'let's engage in that discussion....'

"In the past, label executives made three main arguments against the blanket-licensing concept: it turned their companies into glorified marketing firms; it forced labels to fight over a fixed pool of dollars, so that one artist's gain was another one's loss; and there wouldn't be enough money in the pool to replace all the CD sales that would be lost. The first two complaints get little mention today; instead, the make-or-break issue for blanket-licensing deals is the amount of royalties the service can generate.

"That's the right focus. Blanket licensing wouldn't transform labels into advertising companies; the only element of their business they would lose is the part that distributes plastic discs, and that's going away anyway. When consumers can choose from a virtually unlimited supply of songs, the ability of a label to find, sign and promote the most compelling artists will be even more important than it is today. And the fees that consumers pay for downloading rights represent only a portion of the money [that blanket licensing] could generate for copyright holders. There's also money to be made from advertisers, mobile phone companies, device makers and premium music services that want to insert themselves into the network."

As we point out in our white paper about blanket licensing, even a small monthly fee from the millions of American filesharers could provide more profit than the industry has ever seen.

Unfortunately, the record labels haven't done a complete 180 from their backward-thinking ways. For instance, the labels seem eager to coopt ISPs into helping push their file sharing lawsuit campaign even further, and the AP reports that the labels have radically increased their copyright notices aimed at college students. Neither of these actions will put a dime in artists' pockets or get the labels any closer to a real solution.

The LA Times story closes by saying, "You have to wonder how low [major label revenues] have to go before blanket licenses look like a better approach than blanket lawsuits." To put it another way: how much longer do ordinary music fans and innovators have to be treated like criminals before a better way forward is finally pursued?

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