April 22, 2004

The Future of File Sharing

Facing the Music, moderated by Wayne State University Law School's Professor Jessica Litman, presented a number of the most popular proposals for establishing a mechanism for payment of artists, authors, and copyright holders whose works are shared on p2p networks.

Neil Netanel, of the University of Texas School of Law argued for a compulsory license for most creative works, including music, movies, and text, imposing a levy on products and services benefitted by p2p traffic such as hardware, media, and internet service providers. The billions of dollars in sales of these products and services, according to Netanel, if levied at a 4% rate would provide sufficient funds to cover any possible losses to the content industries stemming from decreased sales.

EFF's Fred von Lohmann discussed his orgainzation's proposal for a voluntary licensing scheme that would rely on collecting societies, similar to ASCAP and BMI, and would apply to the sharing of music alone. This plan, unlike the levies proposed by Netanel, would be funded solely by music downloaders. Von Lohmann was optimistic that collecting societies would have sufficient market incentives to ensure participation from file sharers.

Daniel Gervais of The University of Ottawa supplied compeling evidence that if file sharers were willing to pay, they would generate ample funds to pay artisits and copyright holders. Charging a monthly fee of $5 in North America and Europe, $0.50 in Africa, and $1 in the rest of the world would provide, assuming two-thirds of current file sharers pay, would generate $12.5 billion annually.

Verizon's Sarah Deutsch voiced the general approval of ISPs of developing a method of compensating artists for the sharing of their works. ISPs, however, tend to oppose plans that would require them to track the activity of their customers and act as a collectiion agency for payments to the music industry. Nor do they favor levies because of the likely increase in costs to their customers.

Eric Garland, of p2p traffic monitor BigChampagne, while endorsing no particular compensation scheme, provided the take-home message from this panel discussion: the solution to the p2p "problem" will not be achieved through either litigation or legislation, but rather must embrace the reality of file sharing's popularity and likely longevity.

Posted by Aaron Perzanowski at April 22, 2004 05:02 PM
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