7 December 02004

Jim Griffin on paying for music

At this Playlouder/Music Ally event last night, Jim Griffin from Cherry Lane Digital presented a very concise and simple argument for change in the way music is paid for. This is how it went, based on my notes, with editorial comments in [square brackets].

It has become voluntary to pay for music — that's a technical fact, not a legal argument or ethical judgment. It's a choice for listeners. Peer-to-peer (P2P) technology is one reason for this, but not the only one: see piano rolls, blank tapes, and CD-Rs for previous examples. The issues is not any one technology, but the family of technologies — the Bug was also mentioned — that make up an increasingly 'frictionless' world for accessing media.

Very few will buy music without hearing it first. But if you can hear lots of music for free, why buy it?

This dilemma is only going to get worse [it's been with us for decades, but has been getting worse faster recently]. Buying music is going to get more voluntary. The technology industry builds new engines faster than the music industry and the law can build new speed bumps.

The dilemma is not restricted to the content industry. Civilised society cannot tolerate voluntary payment. At the same time it makes no sense that technological advance should leave access to culture to the better-off, and not make it more widely accessible.

Marshall McLuhan argued that no generation understands the media it lives in: instead, he suggested that we look to history, the 'rearview mirror'. If we do this, the move from acoustic to electrical in the early 20th Century looks bigger than that from electrical to digital. And that suggests a solution based on the 'actuarial' economics of collection societies used for broadcast licences (rather than a levy or tax).

There's a longer, more legalistic version of this argument, written in 2001, here on Jim's web site. The gist is similar to Andrew Orlowski's recommendations and even to my half-joking suggestion that we should get the BBC to licence all recorded music and make it available on-demand to licence-payers.

Earlier in the evening, Paul Hitchman from Playlouder proposed a nice analogy that also connects with the Griffin argument: yes, branded mineral water demonstrates that people will pay premium prices for an 'enhanced' product, but at the same time the whole population should have always-on access to large volumes of 'utility' water at as low a price as possible.

Martin Mills from Beggars Group responded positively to Griffin's challenge of "How do you monetise [how I hate that word!] the anarchy whereby consumers choose what they pay for?". Mills pointed out that record labels have traditionally had four revenue models:

  1. price per unit;
  2. sub-licensing tracks (e.g. for compilations);
  3. flat fee for films, sync etc;
  4. public performance fees, supported through collection societies.

He agreed that it may be impractical and inefficient to continue the 'old way' whereby the labels seem to want to apply only the first of these models to all agreements on digital formats.

Posted by David Jennings in section(s) Future of Music, Music and Multimedia on 7 December 02004 | TrackBack
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