The Money: Dividing It Up
The money collected would then be divided between artists and rights-holders based on the relative popularity of their music.
Figuring out what is popular can be accomplished through a mix of anonymously monitoring what people are sharing (something companies like Big Champagne and BayTSP are already doing) and recruiting volunteers to serve as the digital music equivalent of Nielsen families. Billions in television advertising dollars are divided up today using systems like this. In a digital environment, a mix of these approaches should strike the right balance between preserving privacy and accurately estimating popularity.
The Advantages
The advantages of this approach are clear:
Artists and rights holders get paid. What's more, the more broadband grows, the more they get paid, which means that the entertainment industry's powerful lobby will be working for a big, open, and innovative Internet, instead of against it.
Government intervention is kept to a minimum: copyright law need not be amended, and the collecting society sets its own prices. The $5 per month figure is a suggestion, not a mandate. At the same time, the market will keep the price reasonable — collecting societies make more money with a palatable price and a larger base of subscribers, than with a higher price and expensive enforcement efforts.
Broadband deployment gets a real boost as the "killer app" — music file sharing — is made legitimate.
Investment dollars pour into the now-legitimized market for digital music file-sharing software and services. Rather than being limited to a handful of "authorized services" like Apple's iTunes and Napster 2.0, you'll see a marketplace filled with competing file-sharing applications and ancillary services. So long as the individual fans are licensed, technology companies can stop worrying about the impossible maze of licensing and instead focus on providing fans with the most attractive products and services in a competitive marketplace.
Music fans finally have completely legal access to the unlimited selection of music that the file-sharing networks have provided since Napster. With the cloud of litigation and "spoofing" eliminated, these networks will rapidly improve.
The distribution bottleneck that has limited the opportunities of independent artists will be eliminated. Artists can choose any road to online popularity — including, but no longer limited to, a major label contract. So long as their songs are being shared among fans, they will be paid.
Payment will come only from those who are interested in downloading music, only so long as they are interested in downloading.
How does this help artists?
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