So long as the fee is reasonable, effectively invisible to fans, and does not restrict their freedom, the vast majority of file sharers will opt to pay rather than engage in complex evasion efforts. So long as "free-riding" can be limited to a relatively small percentage of file sharers, it should not pose a serious risk to a collective licensing system. After all, today artists and copyright owners are paid nothing for file sharing — it should be easy to do much better than that with a collective licensing system. Copyright holders (and perhaps the collecting society itself) would continue to be entitled to enforce their rights against "free-loaders." Instead of threatening them with ruinous damages, however, the collecting society can offer stragglers the opportunity to pay a fine and get legal. This is exactly what collecting societies like ASCAP do today.
What about other countries?
Non-U.S. rights holders would, of course, be welcome to join the collecting society for their fair share of the fees collected from American file sharers. As for file sharers in other countries, there is every reason to believe that if a collective licensing approach is successful in the U.S., it will receive a warm welcome and enthusiastic imitation abroad.
A relatively small number of countries today account for almost all of the revenues of the music industry. So establishing a collective licensing system in just a few countries could turn around the downward spiral in music industry revenues. The music industry already has an international "clearing" system for apportioning payments between countries.
What about the authorized music services?
The "authorized music services" like Apple's iTunes and Napster 2.0 would be free to compete against the P2P services, just as they do today. In addition, they could themselves adopt elements of P2P architectures, thereby dramatically expanding the music inventories they could offer music fans.
What's to stop the music industry from charging sky-high fees?
The enforcement costs faced by a collecting society for file sharing will keep prices in line. After all, if the society attempts to charge too much, intermediaries won't be able to bundle the fees into the cost of their products ($5/mo. license on a $50/mo. broadband account makes sense; trying to tack $100/mo. license, in contrast, won't work) and file sharers will likely rebel in droves. For example, when movie studios charged $90 for a VHS movie, they faced widespread piracy. They learned that, by lowering prices, they made more money and eliminated much of the piracy problem. In other words, reasonable pricing makes the system work for everyone.
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