MEMORANDUM

To: Jonathan Aronson

From: Lewis Haidt, Cory Doctorow, Jennifer Urban, Jonathan Taplin, Joanna Demers, John Gillian, Aram Sinnreich

Date: February 26, 2007

RE: Request for Workshop Meeting to Further Proposed Artist Collecting Society for Digital Music

We would like to propose a working meeting to develop and advance a collecting society to compensate music artists for the digital distribution, reuse and remixing of their musical works.

Brief Background

Despite the promise of the digital format, licensing costs and barriers to permissions are presently insurmountable barriers that keep most follow-on musicians from creating new music and innovating new musical forms. The traditional label response to digital media has been to develop complicated and onerous digital rights management and licensing systems that undermine traditional user rights in copyrighted music. The traditional response has not, however, benefited anyone. It has not benefited the labels: the public is wary of DRM-locked music and prefers peer-to-peer systems, and CD sales continue to fall. It has not benefited sound recording artists, who miss out on the lucrative residuals claimed by music composers. It has not benefited individual music lovers, who are left with the choice of either risking lawsuits and computer spyware by using peer-to-peer systems or buying broken music that locks them into a proprietary system and that must be “re-bought” over and over.

A collecting society system—similar to that used for musical composition performance rights in the US,[1] and performers’ rights in Europe—coupled with a generous license, would, we think, fix these problems. Customers would buy blanket licenses to all participating artists’ music from the collecting society. Statistical sampling technology would estimate the rate of use of any particular piece of music; the collecting society would pay out to artists accordingly. Artists would get paid, where now they often do not. Follow-on creators could add to the rich cultural pool of music, where now they are chilled by fears of expensive copyright lawsuits and caselaw that is anti-sampling. And consumers could buy music that they can own, including transferring to different formats, remixing and reusing it.

We would like to develop this idea and follow a two-pronged approach: 1) target independent and sympathetic artists (who would clearly benefit from such a model) as early adopters; and 2) work to develop broader industry buy-in of the collecting society model. Target early-adopter customers for the license are universities, who presently feel threatened by music lawsuits: under the collecting society scheme, they could buy blanket licenses for a small per-student fee, and no longer worry about what students are doing with the music. Because of the traditional wariness of all relevant industry players—labels; telecom companies (who could buy and resell blanket licenses at the ISP level); device manufacturers and the tech sector (who will help create the statistical sampling algorithms) —we believe that a candid conversation with these entities is important to appropriately developing the system and getting buy-in.

Meeting Request and Purpose

As such. we request funding and support (venue, etc) for a working meeting to develop the idea of funding digital music through a collecting society. The purpose of the meeting would be to bring relevant industry leaders into a conversation that we hope would result in concrete information that can be used for a white paper. Participants in the meeting would include high-level representatives from record labels (both majors and smaller labels, such as jazz and classical specialty labels); telecom/ISPs; device manufacturers; academia (e.g., Terry Fisher) and legal. Given that labels have been extremely wary of collecting society ideas, we expect that we would run the meeting according to the Chatham House Rule.

We would be delighted to develop a budget as appropriate. We expect that it would mirror budgets for similar Annenberg events, such as the Network Neutrality retreat.

Meeting Workproduct

We anticipate an interdisciplinary Annenberg Center white paper coming out of the proposed meeting that would supplement any more general white paper work we do related to this idea. The ultimate goal, however, is to create all the tools and the push for a collecting society and licensing scheme to get off the ground and be adopted for music.