[Ecommerce] Blanket digital licence fails in France

[Michelle Childs]

http://www.theregister.co.uk/2006/03/14/france_p2p_plan_fails/
Blanket digital licence fails in France
Carry on pirates, carry on DRM
By Andrew Orlowski in San Francisco
Published Tuesday 14th March 2006 09:56 GMT

Under heavy pressure from the French government, the country's parliament
has voted against introducing the world's first blanket licence for
sharing digital media. A section that would have permitted internet users
to freely exchange copyrighted material, effectively legitimizing file
sharing, and hastening the demise of digital rights management (DRM)
software, had passed an earlier reading in a vote last December.

The measure proposed a levy of between =808 and =8012 for a compensation po=
ol,
had won cross-party support - with strong backing from the left, the
Greens, and the centre right UDF inside parliament- as well as the backing
of consumer groups. MPs walked out in protest after the blanket license
proposal was struck down, AFP reports, leaving the government to carry the
day.

Although a similar model of compensation has been historically adopted for
the public performance of recordings (such as in pubs), for radio, and
most recently for satellite TV and webcasting, the consequences of the
French vote would have been dramatic and far-reaching.

With a billion songs exchanged illegally each month on the P2P networks,
the most immediate answer is that artists continue to lose out: it's taken
Apple three years to sell a billion songs.

But the implications for technology companies would have been fairly
immediate.

The need for digital rights management software would have vanished,
replaced by an even more urgent need for the kind of counting technology
being devised by Snocap. Snocap intends digital services companies that
use its software - such as Mashboxx - to be able to identify the songs
being traded on the illegal networks and turn them into legitimate
transactions. Today's digital music services, which offer a limited
choice, encumbered with digital restrictions, all for a much higher
subscription "fee", would have had to drastically alter their business
models. They'd find themselves in the business of collecting "finder's
fees", earned good editorial judgement and fulfulling music lover's needs
- rather than services based on artificial scarcity, and technological
restrictions.

Direct compensation through a broadband fee works out much cheaper to the
citizen than a commercial for-profit service. In his book Promises To Keep
published last year, Professor Terry Fisher of the Berkman Center at
Harvard Law School estimates that a $6 per month fee for broadband users
would compensate both the recording and movie companies for 20 per cent of
their revenue - more than they've ever claimed they lost through digital
piracy.

But the strongest opposition came from the record labels at the top of the
physical distribution chain - with the most vociferous opposition coming
from the biggest- Universal Music Group.

Speaking at the Digital Music Forum in New York a fortnight ago, flat fee
advocate and former Geffen executive Jim Griffin said he could see why UMG
opposed a blanket license.

"I agree with Larry Kenswil [UMG's digital supremo] - this would be bad
for Universal. When you've reached 30 per cent market share, when you've
pulled off the last big merger, when you've built up the barriers, there's
not a lot of benefit from equalizing access," he said.

"But what's good for UMG isn't good for everyone else."

For now the prosecutions, the DRM, and the illegal file sharing which
leaves artists with no reward - all look set to continue. However,
France's long debate is sure to embolden campaigners, as it makes the once
unthinkable suddenly seem very practical. And next to the value
proposition of a flat license - wider choice at a lower cost - even the
best of today's digital subscription services look pretty shabby. =AE



--
Michelle Childs -Head of European Affairs
Consumer Project on Technology in London
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