A Bad Idea That Would Make a Worse Law

As the May issue was being put to bed, the Internet was all aflutter over a proposal by digital strategy consultant Jim Griffin to have Internet Service Providers (ISPs) levy a $5 surcharge—a "network licensing model"—on all broadband users. Under this model, Griffin proposes that ISPs collect the fee, which would then be paid into a pool to "compensate music-copyright holders." Griffin says that consumers who do not download digital music files would not be forced to pay the surcharge, but that he anticipates "70–80% would pay" for all the content they could download.

Griffin doesn't say how the pool would determine which copyright holders would be compensated, a rather thorny issue that has not been solved in the seven years since Napster paid $120 million into such a pool—or, for that matter, in the two years since KaaZaa paid in $120 million and Bolt.com anted up $30 million. No copyright holders have received any of the money earmarked to compensate the "content providers," as the RIAA likes to call them.

Nor, as far as we can tell, has Griffin suggested how the ISPs would separate the downloaders from the non-downloaders. One suspects that broadband activity would be monitored, but how then to distinguish, say, customers who are buying iTunes or Amazon.com music files (and are already paying artist royalties) from those who are participating in peer-to-peer (P2P) trading?

It sounds to me as though we'd need a new bureaucracy to organize Griffin's scheme—and we all know how efficient those are at paying people. That challenge doesn't daunt many music-industry insiders, however. In January, U2 manager Paul McGuinness spoke at MIDEM in Cannes, calling for ISPs to decline service to customers the music industry deemed offenders. "If ISPs do not cooperate voluntarily, there will need to be legislation to make them cooperate," said McGuinness.

C'mon, guys, the record industry already has a toxic image with its constituency—resorting to threats like Ve haff vays to make you cooperate is most emphatically not the answer.

I have a hard time swallowing the combination of a preemptive tax and content-sniffing technology—sounds way too much like Big Brother to me. And no, I'm not concerned about being monitored because I have something to hide. I don't illegally download, and I have nothing in my buffer that I wouldn't want my mommy to see. I just don't think I should be forced to have a nanny.

The senior staff attorney of the Electronic Freedom Foundation (EFF), Fred von Lohmann, says that a collective licensing solution does make sense, but only as long as it's voluntary. He likens it to the way songwriters get paid for performances of their music on radio stations, and in concert halls and restaurants. There's no compulsory "restaurant tax" that applies to all dining establishments, whether or not they play music—there shouldn't be a compulsory Internet tax either. (You can read von Lohmann's thoughts here.)

At the risk of sounding like a broken record (sorry, Mikey, but there's no digital, um, analog), the record labels are panicked because their business model is broken. The old model of making massive amounts of physical product, shipping that product all over the world, collecting all the unsold product, and fixing the books later just doesn't work any more.

Yes, the instant gratification of free downloads hastened the death of that paradigm, but only because the recording industry so willfully ignored the need to reinvent itself eight years ago, when downloading became popular—and there was no legal alternative. To compound the error, the industry hyped the hit single to the point that consumers no longer purchased albums—in fact, they distrusted them as being examples of filler attached to one or two good songs. I suspect that when we look back on this benighted era, the de-emphasis of the long-playing record will be seen as the biggest component in the music industry's meltdown.

Recently, I've been reading The Act You've Known for all These Years, Clinton Heylin's struggle to place Sgt. Pepper's Lonely Hearts Club Band in its historical and cultural contexts. I was 14 when the Beatles released that bombshell; contemplating the complete recording occupied many an hour, and deeply imprinted on me the notions that albums were meant to be devoured whole and that the sequence of an album's songs represented a series of profound artistic choices. Heylin is about 10 years younger, and his first exposure to the Beatles was The Beatles: 1967–1970, an anthology that contains four songs from Sgt. Pepper: the title track, "With a Little Help from My Friends," "Lucy in the Sky with Diamonds," and "A Day in the Life." Not only was the young Heylin not convinced that Pepper was the greatest rock record of all time, he wasn't even convinced it was rock.

Then Heylin's junior-high English teacher dubbed him a cassette of the whole album—and his perspective changed drastically. Note the delicious irony of that "illegal" dub leading not only to musical satori, but to a life-altering change. Perhaps Heylin would have become a music critic without it, but we'll never know, will we?

I and most passionate music lovers my age have one album that we connected with—musically, lyrically, or emotionally, the details don't matter—and that was the moment our passion was imprinted on us for life.

Music fans today experience that connection in a different way, but it's the connection that's important, not the medium. Radiohead proved that with its In Rainbows experiment, offering the music to casual browsers at no charge, and offering increasing levels of fidelity and/or special packaging at increasing prices. Trent Reznor of Nine Inch Nails went them one further: Without a label backing him, he offered Ghosts I–IV in a variety of formats, including a limited LP edition with artwork for $300. In two days, Reznor had sold out the entire edition of 2500 sets—a two-day gross of $750,000, if you're keeping score.

You could argue that Reznor has the advantage of being an established act with a long career behind him, and that an unknown act couldn't move those numbers. That is undoubtedly correct, but Reznor also has going for him the currency of authenticity. His fans have forged a connection with him, and they know he isn't going to sell them a $300 box containing only one or two good songs. That credibility is precisely what the record industry lacks—and why they want to tax you for not buying into their broken business model.