SXSW: Music Execs Ponder ISP Licenses, Darknets, Kids Today

What the record companies are talking about doing.
By Eliot Van Buskirk March 21, 2009, Wired.

AUSTIN, Texas -- It has become abundantly clear to everyone in music that the business is in drastic need of an overhaul, as consumer habits have outpaced its ability to adapt. Jim Griffin, managing director of OneHouseLLC, has been hired by Warner Music Group to help license first universities and then ISPs, so that students and subscribers can download whatever they want with impunity for a monthly fee of $5 or so, with the proceeds split between rightsholders.

Griffin and four other music luminaries debated the topic at a SXSW panel called "Is Collective Licensing for P-2-P File Sharing a Future Source of Income for the Music Industry?" on Saturday. In my decade or so of digital music coverage, this was among the more interesting panels I've attended.

SXSW_2009 There's a lot to like about this bold approach, called Choruss: it lets people consume music in whatever way they see fit, while making sure that long hours spent in a practice space (and on social networks) eventually result in some form of payment for artists. However, as panelist Dina LaPolt of the entertainment law firm LaPolt Law PC said three or four times over the course of the panel, "the devil is in the details."

This isn't just about music -- it's about the future of the internet, and even democracy.

"We're the first people who have been hit with the problem of anonymity depriving us of our ability to make a living," said Rick Carnes, president of the Songwriters Guild of America. "The way we solve this is going to determine the future of democracy, believe it or not. That's how big these issues are."

And they are slippery issues, to be sure. In order for ISP licensing to work, some sort of system would have to exist for determining who listens to what -- whether it's packet sniffing or client-side software -- in order to divvy up the money properly. This loss of anonymity could lead to Lawrence Lessig's vision of a dystopia in which the internet, which began as an anarchic, open network, could become the perfect tool of control.

In France, suspected copyright infringers receive three letters of warning before their ISP boots permanently them from its network, as part of a "three strikes, you're out" policy. LaPolt proposed an interesting twist on this: three strikes and you're in.

"The first time [you're found infringing copyright online], you get a letter, the second time you get a more aggressive letter, and the third time, your [ISP] fees double," she said.
griffin_sxsw
Jim Griffin is trying to help labels, ISPs and publishers build the music business of tomorrow.
Photo: Keith Axline/Wired.com

Griffin (pictured to the right) said the problem with that plan is that encrypted "darknet" P2P traffic renders such a system ineffective, because it prevents ISPs from monitoring what their subscribers are doing. His idea, which he emphasized would not be a one-size-fits-all solution but could be tailored to each university or ISP, is to monitor "lightnet" traffic in order to compensate songwriters, recording artists, publishers and labels.

Technology is not the only area of the music business that's in drastic need of an overhaul. The music business also needs to reevaluate its entire approach to marketing to younger music fans.

"The millennials -- these kids are amazing," said LaPolt. "I had a conversation with a 21-year-old kid in Starbucks the other day, and he was talking about going to school for organic farming. When I was 21 years old, I was talking about hookers and coke. These are a whole new generation of people... whose issues are so much more deeper than the things that you or I may have grown up with. We're trying to pimp our bands or sell our CDs to them, and they want to know, 'What do you believe in? Where did you come from?' They want to know your story -- 'who do you like, what are your causes?' These are the people that we're dealing with. As an industry, we're trying to sell these kids things. They're too smart for that."