Critically assess the strategy of the music industry in response to the problems of file sharing

M ost hinge on the idea of a centralized body that collects taxes and decides how to distribute them to copyright holders. A similar mechanism already exists in most countries, to collect songwriting royalties on broadcasts and performances; ASCAP and BMI in the US, Britain has PRS, Germany GEMA, etc. Y ou don’t have to look far to find problems with these schemes: since a centralized body can’t measure the real popularity of works, royalties are distributed unfairly. ASCAP probably errs in the favour of successful mainstream artists.

A n alternative that favoured smaller artists would open the way to «spam artists» creating hundreds of worthless CDs that no one wants to hear, just to collect royalties. The only way compulsories will work is if everybody is in — in other words, if there are no analog or digital holes in the system. M usic business is big business, and the big labels are the ones who have the most to lose, in dollar terms. T he major labels presently do business by competing against one another — and so if there are to design a new system, we have to ensure that everyone is signed up and unafraid of what the competition might be doing.

O therwise, we will be left with the present paltry smattering of good-quality licensed download systems. P erhaps the music industry is afraid of compulsories because it will level out the competition and force monies to be divided by consumer decisions on artist quality, rather than on the quantity of marketing effort behind the promotion of an artist.* A compulsory licensing system would certainly necessitate big changes to established practice, and perhaps this is the real reason for the resistance experienced. I t is imperative that efforts should be concentrate on a solution that will permit music lovers to enjoy their favorite artists' work in the format of their choice, and without fear of the appalling legal action that brought subpoenas to children. B ut in our haste to avoid such oppression, it should be careful to examine any solution presented and seek expert opinion on potential anticompetitive implications.

it should be avoided, at all costs, leaping to an easy compromise if this may in fact bring through the back door. A compulsory license system throws out the markers, the lighthouses if you will, that canhelp guide the prices in these markets. A compulsory license regime requires that pricesand revenues be set in some arbitrary manner. S etting prices and revenues are the veryquestions that any economic system answers by its choice of rules. T

he evidence of thelast century has led almost all commentators to agree that markets are superior atallowing consumers to determine which goods producers produce, how much isproduced, and at providing incentives for quality improvements, compared to commandand control methods. There are good reasons to believe that mispricing the compulsory license will be a moreserious problem for the record industry than it might have been for other markets thathave adopted some form of compulsory license. A nd there would be no safety value inthe record industry compulsory license to limit damage. For example in Ireland. four musical companies and Internet provider Eircom have agreed about teamwork on suppression of illegal downloading of music. F

our sound recording companies have agreed to give Eircom IP-addresses of Internet users engaged in illegal downloading of music. F rom its part Eircom has agreed to carry out in three stages — informing of the subscriber if their IP-address has been defined as breaking copyrights, the prevention of the subscriber that if it does not stop it will be disconnected, and, at last, switching-off of users which on have listened to preventions. The majority of experts considers that the created mechanism can be bypassed technological means. The American company Attributor has started service which can trace occurrence in a network the Internet of the objects breaking the copyright. Service looks through in total 100 million information web sites and can trace occurrence on them of materials or their fragments protected by a copyright. T hus the list of sites constantly replenishes, and results of search are ranged by quantity of visiting.

I f on a site illegally placed materials are found out, service can send itself to the manager of a resource the letter with the requirement to clean the text or to pay the penalty. In Canada, levies are applied to blank recordable audio recording material such as CDR, CD audio, audiocassettes and minidiscs. T he levies are designed to compensate copyright holders for revenues lost due to the private copying provisions, which allow Canadians to make audio copies for personal use.

T o the extent that they do not already do so, revenue from these levies could be used to compensate artists for revenues lost due to file-sharing, as well as downloading. S ee CPCC website for more information on the private copying tariff. I

t should be noted, however, that the distribution of these levies is an issue: concerns have been raised that the CPCC’s method of distributing levies (based on «representative samples of radio airplay and album sales») tends to benefit large corporate copyright holders and a few heavily promoted artists to the detriment of independent and new artists (who use blank media and must therefore pay the levy).Digital service Qtrax offers the catalogue from more than 25 million songs — each of them the user can download on the computer, is free and without restriction by quantity. Record companies stake that music fans in exchange for lawful access almost to any song will be ready to reconcile to certain quantity of advertising round this virtual musical automatic machine. Service will work on the basis of the report peer-to-peer. T o this network will get not only hits, but also rare tracks and records of live performances of the most known executors from every corner of the globe. Placed on Qtrax files are supplied by a control system of the digital rights (DRM) — thanks to it the company learns, how many time loaded each song and how many time listened. E xecutors, the sound recording companies and publishers will receive the deductions proportional to popularity of their music (without considering percent from advertising profit).Developers Qtrax have spent for creation of a resource of 5 years. D uring presentation of service which has taken place at musical exhibition MIDEM in Cannes, they have promised that intrusion of their child on the market of sound recordings which now worries recession, «will change game rules» .For many analysts, the behavior of the copyright industries appears misguided.

I n thisview, the current corporate entities that are trying to enforce current copyright laws areseen as antiquated behemoths unable to move with the times. C ritics have suggested thatthe current set of institutions, including copyright law and the firms that largelyadminister the business associated with copyright, do not effectively address the interestsof creators or usersAnalyzing methods that uses record companies it is possible to draw a conclusion that actions the download directed on an interdiction are not effective. T he most effective methods in our opinion are the methods directed on legalization downloading.

F irstly, it is necessary to develop service where music is officially accessible to downloading for a small payment. S econdly, record company should continue to combat with illegal services by imposing of penalties. It is necessary to notice that in the Russian market to enter the given system will be much more difficult, than in the western countries. Literature listDouglas MacMillan The Music Industry’s New Internet Problem//

http://www.businessweek.com/technology/content/mar2009/tc2009035_194.htmKaren Yolevski //

http://www.cippic.ca/index.php?page=file-sharing/#faq_music-industry-respondingKoleman Strumpf File-Sharing and Copyright, 2009Why compulsory licensinghttp won’t work://vigilant.tv/article/3264/why-compulsory-licensing-wont-workБесплатно скачать 25 млн музыкальных файлов, оставаясь в ладах с законом //

http://www.inopressa.ru/times/2008/01/28/13:00:28/musicБесплатно скачать 25 млн музыкальных файлов, оставаясь в ладах с законом //

http://www.inopressa.ru/times/2008/01/28/13:00:28/musicПираты компьютерного века

http://gameslife.ru/pirates/index.htmlПроблема незаконного скачивания в музыкальной индустрии//

http://www.naturlich.ru/internet/2009/g0201−1.htmlРебрина Л. Запущен сервис поиска нарушителей копирайта//

http://www.rollingstone.ru/articles/2974/22Стивен Джобс/ Голливуд против компьютеров//Эксперт, 2009. № 12 (319)/25