BERLIN, GERMANY — The Popkomm Music Conference here wrapped up with a half-day conference on media and P2P hosted by the Distributed Computing Industry Association (DCIA). It drew a good crowd, although by my panel (the last) we were getting into Friday evening and more than a few souls, understandably, had drifted off. It was a very impressive collection of speakers DCIA collected, but there was also a bit of discord, because while many speakers were focused on how to get P2P accepted as a legitimate service and licensed by labels, others remained quite proud of their infringing business models.

The latter was represented by the COO of Limewire and the CEO of a new infringinging P2P site. I won’t name him or his site because I don’t want to give him advertising, but DCIA gave him their pioneer’s award. (Side note, he was honored for developing a new P2P distribution platform, but he couldn’t get his MacBook to work with the slide projector.)

My panel was on what I consider the heart of the issue, music licensing and what options are out there to see more licensed P2P services. This panel came after speaker after speaker — all of them operating unlicensed P2P services or at least not licensed by major labels — had chastized labels for not licensing them. “We’ve got all of the music fans,” they would say, with the Limewire COO claiming 90 million active users. “We’re where the action is at, they need to come to us.” There was little talk about how exactly the labels would monetize that licensing, other than “fans want music for free and they deserve it for free.” So I guess, then, after licensing we’d have the status quo for labels — music downloaded for free and nothing for them — but the P2P operators would be free of lawsuits (something Limewire, sued by the major labels, would probably like).

I said that it was the labels that had what P2P users wanted; they didn’t use P2P because they like the technology, they used it to obtain songs. So maybe, just maybe, P2P operators should extend an olive branch to license holders and try to come up with ways to encourage them to participate, rather than just criticizing them.

There was of course some talk about monetizing with ads. What I hear every six months at Digital Hollywood is that Madison Avenue simply won’t pay decent rates for online ads; they don’t trust them. I also used to work for CNET, a company that relied almost solely on ad revenue. They remade their news pages so you could barely see the text because of the massive ads, but they still saw their stock decline so absurdly that they were bought recently by CBS for about $10 and a pack of gum.

That said, there’s no harm in trying out new revenue models, including advertising. That’s what QTrax is doing. It made a bit of a mess of itself at Midem in January when it announced it’s launch with the four major labels and then hours later said that they actually didn’t have those labels on board. That must have made that chilly French winter even colder for them. Being there, I was mostly stunned that they would go to such PR lengths to promote something they in fact didn’t have. But they didn’t take their ball and go home, they have plugged away at it, they now have some major label music licensed and I’m told they do a pretty good job of keeping the network closed to songs that aren’t licensed. I very much want QTrax to succeed, if only to show those infringers that there are honest ways of doing business.

I told all of this to the Popkomm audience, but also noted that I don’t think the focus should be on how to better P2P providers. There are only two things that matter: 1) Giving consumers music the way they want, when they want it, at a price point they find reasonable. 2) Ensuring songwriters, artists and their publishing and distribution partners are rewarded for their efforts. There are experiments going on in this area using technologies other than P2P, such as subscription services, songs bundled on devices, paid download, limited-time unlimited downloading, etc.

Being technology-agnostic, I said, if it turns out the most efficient way of delivering music to fans is to duct-tape 8-tracks to rocks and drive around throwing them through windows, then that’s the distribution method I’ll support.

I dismissed the suggestion of a global compulsory license, which was even easier to do than normal, because so many people have approached me at this conference sharing horror stories about how they believe they are owed money by some collection agency in some other country and they can’t get it. Look, any time you eliminate the market and try to have some centralized collective running the show, you guarantee one thing — every party in the transaction will be dissatisfied.

As I said on a similar panel at CES in January, I have no objection to P2P technology. It’s as old as the TCP/IP protocol itself, and was used extensively by scientists and educators long before we heard about it in the music context. It is incredibly efficient, and while it’s a bandwidth hog there are smart minds in the tech and entertainment spaces working on a more efficient P4P approach. Asked by Sari Lafferty about the future 2-3 years from now, I said it seems likely you could have some more licensed P2P services, assuming they respected rightsholders and promised a revenue stream. There are some short-term licensing deals for various services that should be up for renewal around that time, so if P2P can come to the table with the right proposal, I can’t imagine why pragmatic license holders wouldn’t listen.

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This entry was posted on Saturday, October 11th, 2008 at 2:25 am by Patrick Ross and is filed under advertising, internet, licensing, market forces, p2p, piracy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.