Artists benefit in at least three ways. First, artists will now be paid for the file sharing that has become a fact of digital life.
Second, independent artists no longer need a record deal with a major label to reach large numbers of potential fans — so long as you have any fans who are sharing your music online, others will be able to access your music on equal footing with major label content. In other words, digital distribution will be equally available to all artists.
Third, when it comes to promotion, artists will be able to use any mechanism they like, rather than having to rely on major labels to push radio play. Anything that makes your works popular among file sharers gets you paid. There would still be a role for the record industry — many artists will still want help with promotion, talent development, and other supportive services. With more options for artists to choose from, the contracts will be more balanced than the one-sided deals offered to most artists today.
What about antitrust?
Because a collective licensing solution will depend on a single collecting society issuing blanket licenses covering all (or nearly all) music copyrights, there will need to be some antitrust regulation of the collecting society to ensure that it does not abuse its market power. Both ASCAP and BMI, for example, have been subject to a court-administered antitrust consent decree for many decades. The regulation need not be extensive, as the collecting society will essentially be selling only a single product at a single price to all comers. Regulators will keep a close eye on the collecting society to make sure that it deals fairly with artists and copyright holders, most of whom will rely on the collecting society for compensation for noncommercial filesharing.
How do we ensure accurate division of the money?
Transparency will be critical — the collecting society must hold its books open for artists, copyright holders, and the public to examine. The entity should be a nonprofit, and should strive to keep its administrative costs to a minimum. There are examples of similar collecting societies in the music industry, such as ASCAP and SoundExchange. We should learn from, and improve upon, their example. Giving artists a bigger voice should help ensure that their concerns with the current collecting societies are addressed.
When it comes to actually figuring out relative popularity, we need to balance the desire for perfect "census-like" accuracy with the need to preserve privacy. A system based on sampling strikes a good balance between these goals. On the one hand, in a public P2P network, it is relatively easy to find out what people are sharing. Big Champagne already does this, compiling a "Top 10" for the P2P networks. This kind of monitoring does not compromise user privacy, since this monitoring does not tie songs shared to individually identifiable information. At the same time, this general network monitoring can be complemented by closer monitoring of volunteers who will serve as the "Nielsen families" of P2P.
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