I did a pointer post on the innovation law blog yesterday, regarding this Globe article. We’re supposed to do mostly pointers, and the posts are supposed to be short–three sentences or so. My three sentences were on the long side, and even so, I have more to say.
The Globe article basically says that streaming music companies like Pandora are being priced out of the Canadian market, because between the cuts demanded by SOCAN (which collects and distributes fees to composers and music publishers) and Re:Sound (same kind of function, apparently, but for record labels/producers and performers. As an aside: despite the DH’s involvement in the music industry and his studies of the music business etc, I actually hadn’t really heard of Re:Sound until now). Re:Sound is asking for a cut based on one of two different figures–whichever is the higher–either 45% of gross revenues, or 7.5 tenths of a cent for every song that is streamed in Canada. And this is on top of the SOCAN fees, mind. This kind of narrowing of providers’ margins have meant that we don’t have access to many such streaming services. Other streaming services claim that they would be undeterred by the prospect of having to give that kind of cut–but that they’d simply be passing along the higher cost to the consumer, which in turn would mean that they’d get fewer subscribers.
I really believe that composers, musicians, producers et al. all do deserve a slice of the pie. I think there is an intangible property right inherent in each of those contributions to the finished product. That’s not controversial to me at all. What I have a problem with is the short-sightedness of demanding such a high cut. No-one is benefitting from streaming music providers staying out of Canada because the desired fees are too high: 45% of 0 is 0. Production companies don’t get a return on their investment–and musicians and composers don’t get any royalties.
Given that, I’d love to hear the rationale for demanding this kind of take. Otherwise, it just comes over as poor advocacy skills–which would be particularly unfortunate if they actually have good reason or solid numbers to support why they want such a large take. The portrayal of their position in the Globe article has overtones of stubbornness–like they’re digging their heels in and saying, “if the Copyright Board approves, then we must be right–oh and some other countries have a similar fee structure” (but do they have streaming media deals and a second group for composers also taking a separate cut?). It might just be bias on the part of the Globe, of course, especially given that the only comparators they cite are the ones provided by the streaming music companies–namely, radio and fitness clubs, both of which have a far better deal. Or, maybe those are the correct comparators, and Re:Sound et al. needs to start doing the math on how well zero divides into itself.
A final point in the article had to do with Canada’s reputation as an illegal music downloading haven, presumably thanks to the popularity of peer-to-peer technologies, which makes it far easier for people get music illegally than to pay for it. The iTunes/iPod success story has some bearing for me, here. I think that if you make it easier for people to pay for something and legally download it than it is for people to get it illegally, then they will pay. By easier, I’m talking about some combination of price point and format. ITunes’s brilliance comes from its integration with the iPod interface. It’s slightly (or significantly) more of a hassle to go to a peer-to-peer program, search out a song and possibly make several unsuccessful attempts to download it then import it into iTunes (not that I would know about any of *that* firsthand), than it is to go to iTunes, download for a nominal fee, and have it seamlessly load onto your iPod. Plus, I do believe that it makes a lot of people feel good to know that they’re putting money towards a band or musician whose music gives them pleasure. The feel-good factor might not win out over ease of process (if it’s easier to do the illegal thing), but it adds positive reinforcement to the legal route, if all the other factors are aligned.
Make it affordable and easier than the alternative, and most people will do it.