A scheme that would shift the cost of digital music from users to Internet service providers is gaining international support. August 26, 2005
Though legal forms of digital distribution of music like iTunes and Rhapsody that charge users to listen to songs are gaining steam, some experts propose a more radical system for collecting revenues: making Internet service providers pay.
“There should be a tax on the people who really make money off the free music, which is the computer makers, the CD burner makers, the MP3 player makers, [and] the ISPs,” said Steve Gordon, an entertainment lawyer and author of The Future of the Music Business.
One new ISP, PlayLouderMSP, set to launch later this year, is bundling unlimited downloads with the regular cost of broadband. It announced its first deal with a major label, Sony BMG, early this week (see U.K. ISP Wins Music Contract).
RIAA Coming Around
File-sharing, the bane of the entertainment industry since the late 1990s, hasn’t been all bad—even for musical artists and labels. Peer-to-peer (P2P) technology for quickly and efficiently distributing files is now catching on for legitimate purposes, though major labels remain cautious and resistant.
Following the U.S. Supreme Court’s ruling against the business practices of P2P file-sharing networks in June (see Grokster Loses), even Mitch Bainwol, chairman and CEO of the Recording Industry Association of America, had kind words for legit P2P.
“The Supreme Court has helped to power the digital future for legitimate online businesses including legal file-sharing networks,” said Mr. Bainwol. He called the decision “an opportunity that will bring the entertainment and technology communities even closer together.”
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