Earlier this week, we posted a link to a proposal by the Songwriters Association of Canada, a non-profit advocacy group that represents the interests of songwriters.
The proposal, which essentially provides a model that would make money for rights holders off of file-sharing, has been called an attempt at “control" by P2Pnet and looked at skeptically elsewhere, so we sat down with SAC President Eddie Schwartz to discuss their proposal in greater detail.
Our conversation has been edited for content and clarity.
WAMM: This is essentially a slight modification of a proposal that SAC drafted in 2007, and I'm just wondering if you could kind of explain to the readers how this proposal deviates from or improves upon that one.
E.S.: I hope that it's an improvement. The original proposal was a legislative approach, meaning a new law would have to be passed in Canada, which created a right for remuneration for the use of file sharing. And the way that would work was that it would be a levy that would be imposed on internet fees—access fees. And that levy would be... we didn't have a specific amount then, we don't have a specific amount now, but it would be a few dollars a month, and it would be pooled, must like performing arts societies pool money these days, from broadcasts, you know, and other revenues, and then a pro rata distribution would be made out of that based on how much any particular songwriter or artist's songs is being sponsored. There's a third party company that you are probably aware of based in Los Angeles called BigChampagne, and they monitor P2P usage, and do so very accurately from everything we've seen. So if you have a pool of money, and you have information about how much any particular artist's particular songs are being file-shared and you do a pro-rata distribution to share the wealth of the creators.
That was the original plan, and in the months and years since we introduced that, we've had a lot of feedback from consumer groups, from international legal experts, from ISPs, from government, we've had conversations with all kinds of people about it. And we thought the people made a lot of good points.
One of the first points that consumer groups made was that if you don't file-share, why should you have to pay a levy? And we thought that was a pretty good point. I mean, if you don't file-share, I don't think you should have to pay. So we moved the proposal away from this idea of a levy to what we now think a much more agreeable approach for all parties concerned, which is a license fee. So again, if you need to file-share, under our proposal we'd like to see you pay the fee. But if you don't use the net to file-share, you would pay zero for that. You know, you wouldn't have to pay any fee.
The other thing that we learned in extensive talks with some of the most knowledgeable intellectual property attorneys in the world is there's no copyright legislation actually required in order to implement a system like this. You don't have to create a new right of remuneration in law. Existing rights and laws will cover it.
We decided to veer away from lobbying government, both specific legislation that monetize music file sharing, and looked more in the business to business approach where we can hopefully partner with ISPs, and say, “Look, if you guys help us make a collection of this optional license fee, we'll put something in it for you." They would share in the revenue for their trouble, and if you have a legal use of file-sharing systems, it actually saves them money. Because rather than having people go out into the Internet, using bandwidth to find songs that are in other people's computers, which is really expensive as it's really bandwidth-intensive, if it's legal they can cache the most popular most popularly shared songs on their own servers. If they cache them on their own servers, they're saving a lot of money and bandwidth. So those are a couple of the key new re-engineering that we have in our model that we've been doing in the last couple of years.
I first got wind of this story by reading two stories, one in P2PNet and the other in the Montreal Gazette. Both articles' authors, for whatever reason, seemed to be under the impression that your proposal would only compensate the song-writers, that it wouldn't compensate the other rights-holders like the label or managers or whoever else might be involved in owning a piece of the copyrights. Could just set the record straight here? Everybody gets compensated in this proposal, right? Both the C and the P rights-holders get compensated here?
Absolutely. This is one of the fundamental, deadlocked principles that we support, you know, unequivocally: this is about all of the various rights holders, and creators, being paid. And even though I live in Nashville, I am Canadian, and I still spend a lot of time in Canada, and in Canada we have the neighboring right, where even members of the musicians union now get something out of broadcasts. Swe don't see why everyone doesn't deserve to be compensated. That said, I think you and I both know that that's a discussion that we have to have there about how that split goes down, assuming we get to the point where we have some money to divide.
The Gazette piece featured a quote from a Graham Henderson, who's sort of the mouthpiece for the major recording industry players up in Canada, which made him seem lukewarm on this idea. Have you had any private talks with the labels on this subject?
Well I've actually had both private and public talks with representatives of the RIAA in the States and CRIA in Canada over the years, and you know they do have a difficult transition for them. You're absolutely right that they're banking on, they have been banking on other models. We're talking about subscription services, streaming services, every year we go back, you know every five, six, seven, eight years, I think every year you'll find some great white hope for the music industry. If it wasn't Nokia Comes With Music, it was Pandora. I can't remember them all, but every year it's just everyone fluffing about the great white hope of the music industry. One year it was Spotify, but of course Spotify has not generated much income for anybody. It looks good on paper, but I think it people realize that the advertising model that Spotify was initially pursuing has not generated that much revenue, unfortunately.
But to get to your question, I was on a panel with Carey Sherman where I did a presentation based on the papers on the website, and they put us on the same panel, this was at Vanderbilt Law School maybe not more than 2 months ago. And I think they put us together because they were looking to see some sparks fly, and when I finished my presentation, which was basically exactly what we're talking about, Jerry turned to me and said “Look, Eddie, I don't agree with everything you're saying, but basically what you're looking to describe is kind of an idea and we're willing to try anything. Because basically we're at the point now where we have to try."
Graham's a smart man, I've known him for many years, and he used to be, I hope he doesn't mind me saying this, pretty overtly hostile to this idea. So if he's lukewarm now, I think he's actually moving in the right direction.
As a final thought, it does seem to me like the implementation of this system would essentially involve a paradigmatic switch from ownership and towards access. And I'm just wondering, as someone who is a songwriter, and as someone who works in this world, and has worked in this world for a long time, how you feel about the idea that this system would essentially move the music industry away from ownership? What are your feelings on this subject?
I think the way I'm envisioning this, and I think we say this to some extent in the proposal, I see this as an ownership model. We do see a lot of people using peer-to-peer technologies at the moment, to acquire music, and when they do that, the copies end up on their hard drives, so they do actually end up with a copy of the song.
One of our fundamental tenets was: no behavioral modification required. So now, having worked with bittorrent clients to acquire music, I've seen how incredibly seamless, effective, how well they actually work. But they end up with a copy on their computer, and then they use iTunes to get it onto their phone or their iPod or whatever. So I guess I'm not seeing much behavioral modification in terms of that.
I also see the same kids, and again these are musicians who are in bands, they're going to do whatever—they don't listen to me when I say that they shouldn't do that, because they're 18, 19 years old, they're going to do whatever they want. But they will go maybe the next day, maybe the next hour, to a Mom-and-Pop vinyl record store around here and spend three hours going through the vinyls, buying a stack of vinyl records.
I guess what I'm trying to get at is that this is real consumer behavior. I don't think we can change it, I don't know that we have to change it. I believe, in fact, we don't have to change consumer behavior, we just have to monetize it. And I think this is just like the argument over whether the VCR was going to destroy the film industry. Guess what? The VCR didn't destroy the film industry. And it's one of those things where I think the lesson we learned over the years is that if you embrace new technology, and work out some reasonable monetization system for them, they'll find a place among all the other ways people access with music and film.
The proposal, which essentially provides a model that would make money for rights holders off of file-sharing, has been called an attempt at “control" by P2Pnet and looked at skeptically elsewhere, so we sat down with SAC President Eddie Schwartz to discuss their proposal in greater detail.
Our conversation has been edited for content and clarity.
WAMM: This is essentially a slight modification of a proposal that SAC drafted in 2007, and I'm just wondering if you could kind of explain to the readers how this proposal deviates from or improves upon that one.
E.S.: I hope that it's an improvement. The original proposal was a legislative approach, meaning a new law would have to be passed in Canada, which created a right for remuneration for the use of file sharing. And the way that would work was that it would be a levy that would be imposed on internet fees—access fees. And that levy would be... we didn't have a specific amount then, we don't have a specific amount now, but it would be a few dollars a month, and it would be pooled, must like performing arts societies pool money these days, from broadcasts, you know, and other revenues, and then a pro rata distribution would be made out of that based on how much any particular songwriter or artist's songs is being sponsored. There's a third party company that you are probably aware of based in Los Angeles called BigChampagne, and they monitor P2P usage, and do so very accurately from everything we've seen. So if you have a pool of money, and you have information about how much any particular artist's particular songs are being file-shared and you do a pro-rata distribution to share the wealth of the creators.
That was the original plan, and in the months and years since we introduced that, we've had a lot of feedback from consumer groups, from international legal experts, from ISPs, from government, we've had conversations with all kinds of people about it. And we thought the people made a lot of good points.
One of the first points that consumer groups made was that if you don't file-share, why should you have to pay a levy? And we thought that was a pretty good point. I mean, if you don't file-share, I don't think you should have to pay. So we moved the proposal away from this idea of a levy to what we now think a much more agreeable approach for all parties concerned, which is a license fee. So again, if you need to file-share, under our proposal we'd like to see you pay the fee. But if you don't use the net to file-share, you would pay zero for that. You know, you wouldn't have to pay any fee.
The other thing that we learned in extensive talks with some of the most knowledgeable intellectual property attorneys in the world is there's no copyright legislation actually required in order to implement a system like this. You don't have to create a new right of remuneration in law. Existing rights and laws will cover it.
We decided to veer away from lobbying government, both specific legislation that monetize music file sharing, and looked more in the business to business approach where we can hopefully partner with ISPs, and say, “Look, if you guys help us make a collection of this optional license fee, we'll put something in it for you." They would share in the revenue for their trouble, and if you have a legal use of file-sharing systems, it actually saves them money. Because rather than having people go out into the Internet, using bandwidth to find songs that are in other people's computers, which is really expensive as it's really bandwidth-intensive, if it's legal they can cache the most popular most popularly shared songs on their own servers. If they cache them on their own servers, they're saving a lot of money and bandwidth. So those are a couple of the key new re-engineering that we have in our model that we've been doing in the last couple of years.
I first got wind of this story by reading two stories, one in P2PNet and the other in the Montreal Gazette. Both articles' authors, for whatever reason, seemed to be under the impression that your proposal would only compensate the song-writers, that it wouldn't compensate the other rights-holders like the label or managers or whoever else might be involved in owning a piece of the copyrights. Could just set the record straight here? Everybody gets compensated in this proposal, right? Both the C and the P rights-holders get compensated here?
Absolutely. This is one of the fundamental, deadlocked principles that we support, you know, unequivocally: this is about all of the various rights holders, and creators, being paid. And even though I live in Nashville, I am Canadian, and I still spend a lot of time in Canada, and in Canada we have the neighboring right, where even members of the musicians union now get something out of broadcasts. Swe don't see why everyone doesn't deserve to be compensated. That said, I think you and I both know that that's a discussion that we have to have there about how that split goes down, assuming we get to the point where we have some money to divide.
The Gazette piece featured a quote from a Graham Henderson, who's sort of the mouthpiece for the major recording industry players up in Canada, which made him seem lukewarm on this idea. Have you had any private talks with the labels on this subject?
Well I've actually had both private and public talks with representatives of the RIAA in the States and CRIA in Canada over the years, and you know they do have a difficult transition for them. You're absolutely right that they're banking on, they have been banking on other models. We're talking about subscription services, streaming services, every year we go back, you know every five, six, seven, eight years, I think every year you'll find some great white hope for the music industry. If it wasn't Nokia Comes With Music, it was Pandora. I can't remember them all, but every year it's just everyone fluffing about the great white hope of the music industry. One year it was Spotify, but of course Spotify has not generated much income for anybody. It looks good on paper, but I think it people realize that the advertising model that Spotify was initially pursuing has not generated that much revenue, unfortunately.
But to get to your question, I was on a panel with Carey Sherman where I did a presentation based on the papers on the website, and they put us on the same panel, this was at Vanderbilt Law School maybe not more than 2 months ago. And I think they put us together because they were looking to see some sparks fly, and when I finished my presentation, which was basically exactly what we're talking about, Jerry turned to me and said “Look, Eddie, I don't agree with everything you're saying, but basically what you're looking to describe is kind of an idea and we're willing to try anything. Because basically we're at the point now where we have to try."
Graham's a smart man, I've known him for many years, and he used to be, I hope he doesn't mind me saying this, pretty overtly hostile to this idea. So if he's lukewarm now, I think he's actually moving in the right direction.
As a final thought, it does seem to me like the implementation of this system would essentially involve a paradigmatic switch from ownership and towards access. And I'm just wondering, as someone who is a songwriter, and as someone who works in this world, and has worked in this world for a long time, how you feel about the idea that this system would essentially move the music industry away from ownership? What are your feelings on this subject?
I think the way I'm envisioning this, and I think we say this to some extent in the proposal, I see this as an ownership model. We do see a lot of people using peer-to-peer technologies at the moment, to acquire music, and when they do that, the copies end up on their hard drives, so they do actually end up with a copy of the song.
One of our fundamental tenets was: no behavioral modification required. So now, having worked with bittorrent clients to acquire music, I've seen how incredibly seamless, effective, how well they actually work. But they end up with a copy on their computer, and then they use iTunes to get it onto their phone or their iPod or whatever. So I guess I'm not seeing much behavioral modification in terms of that.
I also see the same kids, and again these are musicians who are in bands, they're going to do whatever—they don't listen to me when I say that they shouldn't do that, because they're 18, 19 years old, they're going to do whatever they want. But they will go maybe the next day, maybe the next hour, to a Mom-and-Pop vinyl record store around here and spend three hours going through the vinyls, buying a stack of vinyl records.
I guess what I'm trying to get at is that this is real consumer behavior. I don't think we can change it, I don't know that we have to change it. I believe, in fact, we don't have to change consumer behavior, we just have to monetize it. And I think this is just like the argument over whether the VCR was going to destroy the film industry. Guess what? The VCR didn't destroy the film industry. And it's one of those things where I think the lesson we learned over the years is that if you embrace new technology, and work out some reasonable monetization system for them, they'll find a place among all the other ways people access with music and film.
