Original URL: http://www.theregister.co.uk/2008/03/28/griffin_wmg_p2p_deal/

US students, alumni to get legal P2P

The beginning of the end of the file-sharing wars?

By Andrew Orlowski

Posted in Media, 28th March 2008 13:28 GMT

Exclusive US colleges and their alumni may be offered the right to P2P file-sharing under one of the most radical copyright reforms in a hundred years, The Register has learned.

The amnesty would be part of a "covenant not to sue", covered by a collective licence that offers the right to exchange major label repertory over a participating college's campus network. Rights holders would be compensated from a pot of money drawn from students' tuition fees.

Today, many US universities participate in a compulsory Napster or Rhapsody program; these only offer time-limited DRM-encumbered songs, though, and students are still liable for prosecution by the RIAA or its biggest members. Unexpectedly, the deal would extend outside the campus network to college alumni, too.

However, the proposals, which are still at the planning stage, have already drawn concern from publishers and smaller labels. Digital deals, and specifically collective licensing deals proposed by major labels typically offer songwriters little or no compensation, and leave the burgeoning independent sector as an afterthought.

An even greater concern is that a "covenant not to sue" would destroy the market for innovative business models built on collective licence. As explained last week, a one-time deal gives neither the music supplier nor the network operator any reason to innovate to produce more attractive services for music lovers.

And a venture that makes life harder for major label competitors, and that hampers rival initiatives, is correctly better described as a "shakedown" than a new era in music licensing.

The plan is the brainchild of copyright reform advocate and EFF Advisory Board member Jim Griffin, and has been the music business' worst-kept secrets. Warner Music Group hired Griffin to head up the initiative before the Midem show in January.

The former head of digital at Geffen Records, Griffin has long advocated that the music business must "monetize the anarchy" of music flows over digital networks, rather than attempt to control behavior or punish the public - or simply wish that digital networks went away.

(See our 2004 interview with Griffin here - or his 2000 testimony to Congress here. Since 2000, Griffin has favoured a voluntary approach.)

Griffin's group would resemble a joint venture, one not solely owned by Warner Music Group.

The View from the Indies

"The fact of Jim being hired by Warners is quite positive - he is of the new world," Alison Wenham, chief executive of indie label alliance AIM told us today.

But indies will wait and see just how inclusive the proposal is, when it finally emerges:

"It will either deliver a proprietary, bespoke solution or an industry solution. I don't think a proprietary solution will be quite as elegant and seamless as one designed for everyone."

"But if the major labels would like to continue to play the game to kick everyone else down, then all we've demonstrated is that we're no further down our neanderthal path. That's no solution to anyone," she added.

"What we want is for the fan, the punter, in quiet enjoyment of our music. They should not be hassled or fussed with how it got to them. It's incumbent on the indstry to deal with all the income splits, distribution and accounting."

Nice network you've got there. Shame if something happened to it

While Paul Sanders, of legal P2P network PlayLouder MSP welcomed the move to license music, rather sue users, he warned the music business against short-sightedness.

"The positive point is that what Jim's doing is an essential part of a network music service. It doesn't make sense to bundle the service with a network unless you include that waiver on private use."

"And vice-versa. You can't allow some rights owners to pick up the covenant fees and still sue the customers."

However he cautioned that a Covenant must be the start of the process, not the end - or music lovers would be short-changed. Unless the system evolved beyond a simple convenant, he argued, it would be impossible to create a market for cool new music services.

"It's hard to see how anyone could look at the situation, where the network is paying a low basic fee, and want to do anything other than an ancilliary service. No one is going to want to invest in anything coherent. The network provider has no incentive do anything other than minimize costs. Once you've paid your covenant - why spend a penny more?"

And as the music business' focus switches from preventing use to monetizing it, it brings in new challenges.

The public would be rightly confused and aggrieved, he thought, if they owned a Nokia ComesWithMusic phone - but were still liable for infringement on their home network. Then there's the consequences of a historic shift in emphasis that the move implies:

"You can easily see this as a shake-down. The first target of a covenant might a university in the States. Given that there's a limited amount of resources in the RIAA where do you think the resources are going to be targetted? If you're a rights-holder, you stop chasing the biggest infringers, and go after the richest networks."

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