8 January 02005

Collective Blanket Licensing: simple and usable?

Collective Blanket Licensing (CBL) is the term given to a proposed solution to the media downloading/sharing dilemma. As described in this new report from the Digital Media Project at Harvard Law School,

Rights holders would form a collective blanket licensing (CBL) organization, and, rather than attempting to collect per-use fees for each specific item, would offer consumers a flat-fee license to access and use all works, without restrictions over copying or further distribution. The CBL organization would count the uses and remit payment to rights holders accordingly.

You can think of it as similar to the model whereby a pub landlord pays a one-off licence fee to the Performing Right Society and is then entitled to 'share' an unlimited amount of music with his customers, in the sense of playing it in his pub.

The CBL model appears on the face of it to have simplicity on its side, and almost certainly has usability advantages over the more draconian 'lock-down' solutions of Digital Rights Management and enforced constraints on sharing. In at least some quarters, it looks to be building up a head of steam.

Some of CBL's proponents include Jim Griffin and Andrew Orlowski. In this review Orlowski acknowledges the influence of both Griffin and William Fisher, whose book Promises to Keep has just come out, and argues the case for a CBL approach. It just so happens that Fisher is also the 'Principal Investigator' of the Digital Media Project. He's not one of the authors of the new report, but it can't be coincidence that the report addresses CBL, and considers it mostly favourably. The champions of this approach may still be fairly few in number, but they have influence (and see postcript). When put on the spot at an event last month, Peter Jamieson of the BPI said his organisation was potentially supportive of any initiative looking at fair and resonable means of remuneration for digital music.

The Digital Media Project report compares the CBL approach and three other models: the Digital Music Store (e.g. Apple's iTunes Music Store), the peer-to-peer (P2P) Store (in a legally sanctioned incarnation, such as that being developed by Peer Impact), and finally an 'Ancillary Products and Services' model, whereby all music is totally free by default and musicians and their management make money from live performance, merchandise, fan clubs and endorsements/advertising etc.

I suspect the main purpose of this last one is mainly to avoid making CBL appear at the 'extreme' end of the spectrum. Though the Grateful Dead often traded this way latterly, once they had a large established fan base, it's hard to see how generalisable their experience could be to other contexts. Although it's good to see the innovative Magnatune getting some serious attention, it's unclear that their offering entirely fits into the 'Ancillary' model.

I won't review the whole report in detail. In overview, it identifies three policy interventions — sueing perpetrators of illegal distributors, Digital Rights Management (DRM), and 'interfering with' (i.e. constraining) P2P services — and assesses their impact on each of the four models. The table summarising the impacts is shown on the web page.

If I were a politician in this area, I'd see the current state of artist, industry and consumer opinions as a stirred-up hornets' nest, and the last thing I'd want to do is wade in right now. Much better to stand back and wait to see if tempers cool. Hence, I'd be reassured to read the report's conclusion that, "Aggressive legislative action to privilege any business model above others at this point would be problematic… [i]ntervention… is currently premature".

That said, the main arguments for CBL over the Digital Music Store or P2P Store approaches are that the latter will always struggle to compete with, or rule out, rights-infringing behaviours that make music effectively free. And "the legal regime is most successful when it is consistent with prevailing norms and practices". As it stands, the law is at loggerheads with increasingly common user behaviour. Opinion is divided over whether technology, through DRM, can successfully enforce constraints on user behaviour. Even if it could, technology is also most successful when it supports and enables users' desired behaviour. This is where legal, technical and usability issues start to overlap.

In this context CBL has the primary advantage that, for a blanket licence fee (estimated to be around $5 per month), it licenses common user behaviour (sharing downloaded files) under certain conditions. Exactly what those conditions are is for further discussion and debate: the report includes a detailed eleven-page appendix outlining how a CBL scheme could work, including voluntary or compulsory, industry-led or government-mandated options. There are still problems to address, such as people who persist in sharing music without paying for a licence. But the overall aim of CBL is to work with the grain of what users/consumers want to do, while providing a revenue stream for musicians and rights-owners.

There are also many secondary advantages. By removing the need for DRM and reducing transaction costs (i.e. one monthly payment, rather than separate payments for each purchase from an online store) CBL moves closer to the 'frictionless market' espoused by no less a DRM-proponent than Bill Gates. By widening access to music, CBL also offers the promise of enriching the social and creative realms.

Will CBL ever happen, and if so when? One appendix to the report concludes:

The likelihood of a CBL being implemented depends largely on the extent to which illegal downloading plagues the industry in the future and what measures arise to combat it. If the copyright holders try to exert too much control through DRM and the Digital Media Stores and P2P Stores do not succeed, compulsory CBL could appear as a legislative response.

If I have one criticism of the report, it is that it focuses exclusively on US regulation and on US markets. While many countries' rights regimes are effectively harnessed to the US 'lead' through WIPO and other multilateral agreements, there will continue to be discrepancies (not least in that there is no equivalent yet to the Digital Millenium Copyright Act in many non-US territories). What happens if one major market moves towards CBL while others do not? How will the transnational architecture of the Internet deal with that? Are there advantages for the markets concerned in being 'first mover' or 'last mover'?

Postscript:- Literally as I was writing this article, I got an email about Gerd Leonhard's latest blog posting, that says, "the only way to monetize people's actual behaviour and underlying desires on digital networks is to give them a simple, no-brainer blanket deal, an all-in offer or a flat-fee bundle — without wanting to sound like EasyGroup's Stelios: make it EASY".

Posted by David Jennings in section(s) Future of Music, Music and Multimedia on 8 January 02005 | TrackBack
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