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Manx P2P for 'one Euro a year'?

Minister floats blanket music tax

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Exclusive The Isle of Man's e-commerce minister says he wants to legalise P2P music file sharing - taking just one Euro a year from broadband subscribers.

Tim Craine told us today that such a scheme would be voluntary. The Manx government is hopeful that blanket P2P schemes would be rolled out in other countries - including the UK.

"If you take a Euro a year from millions, then that's a lot of revenue," Craine told us.

"There is an opt-out for people who don't want a compulsory charge. We would envisage an opt-out - there would be a public reaction against it," he explained. "But you have to compete with free."

"You have to create an entry level that tempts people off illegal downloads or this just isn't going to work. We've got to be aware of how we sell this, and what the public reaction is going to be. We've got to convince the public this is a positive move."

While the initiative may make the Isle's much-admired telecomms infastructure attractive to potential service providers, there are perils. Ripping up copyright law and shredding the exclusive right to copy a sound recording - in defiance of the rights holders - would also drag the Isle into a mire of international lawsuits.

Then there's the gap between blanket income and what the artists and recording rights holders receive today. Currently the UK record business is worth around £1bn a year. But with just a Euro a year from 16.5m connected households, then a compulsory P2P regime would raise just £15.48m. And with Bittorrent legalised, that's about all they can expect: there would be little incentive for punters to buy CDs or shop at Amazon or iTunes.

How would they bridge this gap, we wondered?

Craine hoped it would come from "value added services" - but it isn't clear what these may be.

"It may be that there's a sliding scale on quality, or the breadth of services you need access to," he suggested. "The Euro a year is a suggestion, it's a starting point, and the labels and artists we need to work the model through."

What's music worth?

The plans - devised by music manager Peter Jenner - met with widespread opposition from within the industry when outlined at a recent Music Tank event last year, as we reported.

"At first sight, the Isle of Man project seems a very different proposition from these commercially-negotiated licensing deals like Comes With Music and the music service run by Danish ISP TDC - namely a state-imposed blanket tax on music," a spokesman for recording industry group IFPI told us.

"An experiment in a small territory such as the Isle of Man might be quite interesting from an academic point of view, but applying a compulsory license in larger markets is not going to prove a workable solution.”

Other music business sources poured scorn on the Euro-a-year fee.

"This proposal was made in Cannes, where a bottle of wine in a half-decent restaurant costs €45. So one Euro a year is all that music is worth?" asked Paul Sanders, whose PlayLouder MSP service is designed to bring legal P2P on an opt-in basis.

Sanders told us the belief that "value added services" would make up the missing 98 per cent of revenue was wishful thinking.

"I think Peter Jenner has underestimated the investment required and the complexity of developing compelling value added services, and the scale and difficulty of creating a platform which can support them," he told us.

"It seems naive in the extreme to discount your core asset - the music - and then just hope that services come forward which actually do generate new value and also deal responsibly with the supply chain and accounting back to the creators."

"Beyond that, as a strategy it fundamentally misunderstands the role of Value Added Services in the ISP business model. VAS is not a free for all; no ISP would risk their quality of service and core network on untried and untested applications on the off chance that they might make some money for musicians."

"A more rigorous approach would serve both industries far better as they start to explore commercial opportunities together."

We'll bring you more reaction as we get it. Now tell us yours.

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