Doc / Music / Proposal for a Music Coop on the Web

See also:

PenguinSong.net -- the coop itself, currently in an incipient state.

penguinsong.net/net/intro -- the most recent version of this document.

Introduction

Reality Check

There are two general types of ``change-the-world'' proposals:

1. ``First we change the world'' and we'll be able to do The Right Thing and everything will be wonderful. This type is invariably an exercise in futility.
2. ``First we do The Right Thing and if it catches on it might just change the world.'' The current proposal is of this type.

I had a great idea a few years ago, of the first sort: if one could establish that transferring a music file over the network was a performance, then royalties could be collected by ISP's and distributed by BMI and ASCAP. Piracy would vanish because it would cost no more to download a fresh file than to copy an old one -- less, because you wouldn't have to store the file.

Since then disk prices have been declining at a steady 50%/year, and a network transfer has been legally declared to be a copy rather than a performance. Fair use is on the ropes legally, because the recording industry is trying to get a fee for every copy you make, even if it's only for your own personal use, like copying a song from a CD to an MP3 player.

At the same time, peer-to-peer copying systems like Napster, Gnutella, and Freenet make it inevitable that any attempt to extract such payments will be widely (if illegally) bypassed, and there is no sign of a workable micropayment system in sight. These two facts leave the nagging question of how songwriters, composers, and performers are going to get paid, especially if they aren't signed up with a big label that will negotiate big-money deals with Napster and the like.

The system is broken

There are some serious problems with the music industry today:

• It heavily favors large publishing companies that pump major advertising money into promoting a small set of performers. A few lucky songwriters go along for the ride.
• It favors heavily-produced studio recordings over live performances, and big, expensive, heavily-produced concerts over small gigs.
• The performers themselves are exploited, because for the most part their performances are considered ``work for hire'' and the rights are owned by the recording company.
• Listeners exist only to have as much money as possible extracted from their pockets at every opportunity. As a result, fair use is under attack because the recording companies (having failed to learn the lesson of the DIVX pay-per-use DVD scheme) want to get paid for every use. If they could force you to listen to an advertisement at the beginning of every CD (the way you must at the beginning of a DVD -- ever notice that you can't skip past that?) they would.
• The publishing companies have almost total control over who can listen to what, and under what circumstances. Copyrighted music not owned by the publishers is effectively unprotected (Napster only blocks songs that the publishers complain about). Music and performers that can't be easily exploited don't get heard.

We're going to fix that.

The Dream

• Songwriters, composers, and performers get paid fairly. Nobody gets exploited, and nobody makes obscene profits they haven't earned.
• Everybody's equal. If you have only one song on line, you still get paid for downloads of that song.
• Parodies, melody re-use, sampling, and other creative re-use are encouraged, and all contributors get paid according to their contribution.
• Fair use rights are respected: listeners can make copies for personal use, and change file formats for their own convenience.
• Listeners' privacy is respected: nobody's downloads are tracked.
• Nothing ever goes out of print.

The Proposal

From the general principles above it's pretty easy to derive the obvious structure: a musician's and songwriters' cooperative. There are basically three sorts of ``members'': listeners, content providers, and server operators. To be fair, even content providers should pay a subscription fee if they want unlimited access to other peoples' work; this means that everybody is equal. Of course, anyone whose content is any good will get their fee back, and more, in royalties, but anyone can contribute, even if they have just one performance they want to share.

It will probably not be necessary to charge everyone a subscription fee at all; heavy users could be billed directly based on the number of downloads they made in the previous month. Paid subscribers might get freedom from ads, posting privileges, or some other benefit. Even non-members would get a certain number of free downloads per month.

The general idea is to build a community of music lovers -- listeners and providers -- in which a combination of community spirit and both social and financial incentives encourage people to download music when they want it, upload new music when they make it, and pass links rather than copies to their friends.

General Principles

• Content providers -- songwriters, composers, and performers -- get paid a fair, fixed royalty for their share of every copy sent over the net. Publishers also get paid, as in the current BMI system, in addition to the songwriters -- in many cases songwriters are self-published. Recording companies will be paid only for copies of the performances they recorded.
• Musical works are put into the system only by the rights-holders [unless there's a compulsory licensing system for single downloads; right now there isn't]. Once a work is in the system, however, any performer can add a cover, secure in the knowledge that the rights-holders will be paid. There should be no reason not to add recordings of live performances; it's up to the performers themselves.
• Parodies, melody re-use, sampling, and other creative re-use are encouraged; royalties will be divided up fairly among the contributors to derivative works.
• Regular listeners pay a flat monthly subscription for unlimited access, and so have no incentive to pass copies to their friends, who can download the music for themselves. Non-subscribers get limited access, but they get something, again so that there is no reason not to pass a URL instead of a copy.
• Fair-use rights are respected. Once a copy has been downloaded, the listener can copy it onto any medium, convert it into any convenient format, and even pass a copy to a friend (but of course it uses less bandwidth to just pass a URL). A standard "e-mail a link to this song" button will make it easy to do the ``right thing''. Statistics will be kept, so listeners will be doing their favorite groups a favor by passing links.
• Listeners' privacy is respected. Regular listeners' downloads don't have to be tracked; subscriptions and other revenues go into the pot, and royalties are paid according to the number of hits, not who the hits came from. Tracking is done at the server side, and micropayments are not required. Even if listeners pay per download, it's not necessary to keep track of what they listen to: everything's the same price.
• Everybody's opinions are respected: listener and peer ratings, reviews, annotations, and comments are part of the system. (Comments, unlike downloads, are of course always attributed.) Naturally, the ability to contribute to this system is one of the main rights reserved to members. Non-members get to express their opinions only through the download statistics.
• Operators of caching servers get a cut, and their users get faster downloads. Everybody wins.
• Open formats (e.g. Ogg Vorbis) and open-source software will be used. ``Copy protection'' (AKA fair-use-prevention) will not. (A logo is available to indicate freedom from DRM (digital rights management) technology.)
• Every recorded performance (track) will have a unique ``home page'' containing all the information available about that particular recording, including links to rights-holders, other versions, ratings, comments, and so on.

Implementation: Technical Details

• The system will be structured as a distributed network of archive servers and caches. Every ``object'' will have multiple locations on the network, ensuring that no single point of failure exists. I have in mind something like CPAN or the system of open-source mirror sites.
• As in SourceForge, every provider gets their own subdomain. Most of these will be virtually-hosted, but having them potentially separable makes it easy to scale the network. This also encourages diversity -- every group's site can look totally different. Groups will have mailing lists for their fans, and access to the webcasting system.
• Every subscriber gets their own e-mail alias and a home page they can customize. If they write a song and upload it, they get paid just like anyone else.
• Any member will be allowed to set up a webcast "show"; show providers (DJ's) will be able to string their shows together into "channels", working out a schedule among themselves. Webcasts, unlike downloads, are considered performances and royalties are paid via BMI, ASCAP, et. al.
• The system will include listener ratings, reviews, and peer ratings (performers rating other performers; listeners rating other listeners). For ratings, a system similar to that of Advogato will be used.
• Sound files will always include both an ISRC (a unique code identifying a recorded track) and the ``home'' URL of the track. The home URL of a track is, not the URL of the sound file itself, but the URL of the HTML web page that contains complete information for that particular recording. This is the URL one hands out when referring a friend to a song -- it guarantees that the recipient will get the music in the form most useful to them.
• Playback programs aware of the URL scheme will have a button that can bring up the recording's ``home page'' in a browser. This will allow for listener feedback; maybe even chat with the other people listening to that song. If suitably configured they will also be able to display lyrics or images, give access to a listeners' chat room, and so on.

Note that member authentication is a non-trivial problem because of the way web security is implemented -- it's no fun to have to log in again and again when flipping between sites. The most obvious technique is to configure a player as a helper application, but not everyone will want, or be able, to use a special player. In the fallback case (and during the start-up phase), the system could use a single base URL for music downloads and form-handling.

It turns out that you don't need anything special for authentication as long as you can generate pages dynamically. Once a user has been authenticated with any site in the coop, a session key can be inserted into any URL's that lead to other sites in the system. This is then used by the other site to continue the user's session.

Artist and user web pages don't need authentication, nor do track ``home pages'' -- after all, you want anyone to be able to get this information, including search engines. But any kind of interaction (comments, downloading, etc.) does, so forms and music will be on the main site.

Revenue Sources

• Subscription fees, of course.
• Usage fees and licensing fees from non-members (e.g., downloads over the monthly limit).
• Advertising.
• Sales commissions and markup on items such as T-shirts, bumper stickers, CD's, software packages, etc. Price for members will be high enough to make a profit, but less than retail. Non-members pay retail.
• Members will be able to order custom CD-R's (``albums'') at roughly the cost of a mechanical license per song, plus a constant for materials, labor, shipping, and a commission (which of course goes into the pot -- this is a coop, after all). Non-members will also be able to order custom disks, but will pay more.
• Software sales, including CD's with player software, and collections of (open source) software tools for songwriters.

Note that when revenues exceed defined licensing fees plus expenses, the excess is distributed as dividends -- this is a coop, after all. Ordinary subscribers get a rebate; providers get a bonus.

Albums

An "album" is basically an encapsulated website. Typically it has a "cover" page and an index page, both of which will typically be implemented using, say, SVG (with JPEG/HTML/imagemap as fallback alternatives), "liner notes" in HTML (lyrics and any other material the writer thinks appropriate come along with the songs), and of course the audio files. Possibly cross-platform software (Java, Squeak, Perl, ...). The idea is for it to be in a mix of free formats so it will be useable by anyone and always stay playable.

The right way to arrange things is for buying an album on an audio CD to give the purchaser the right to freely access the web version, including streaming the songs and downloading the Vorbis version. This neatly gets around the "my-mp3" rights problem. (Of course, this only applies to audio CD's bought through the coop; eliminating the middlemen keeps the price down and maximizes the return to the artists and composers.)

Note that anyone can put together a web album of their favorite music, maybe add their own notes or cover art, and even sell a CD version on their coop web page. The appropriate people get paid. There will, however, always be a place for ``traditional'' albums, which will be produced by the the artists or a recording company, much as they are now, and will be made in sufficient quantity so that they can be sold at retail rather than just on the web. The difference will be noticable, both in sound quality and production values.

Although coop members can freely download songs, we may be able to get them to pay a little for the web version of a ``traditional'' album by applying the cost to a discount on the CD version if they eventually decide they want it (the audio quality is higher, so if they like the music they'll eventually buy the CD).

Legal Points

• A work (musical or otherwise -- cover art, jacket copy, etc. are included and their creators get royalties) can be put into the system only by the members who own the rights. All rights-holders must agree to the standard licensing terms.
• Royalties for broadcast, non-interactive streaming audio (webcasting) are fixed and collected by BMI, etc. Naturally, they largely get distributed back to the providers, but it takes longer and there's likely to be some lossage. Nevertheless, this means that there should be no problem webcasting live performances even if they contain covers of works not in the coop system.
• There will have to be restrictions on the reuse of covers of non-coop songs, since their creators aren't part of the general licensing agreement. There may also have to be restrictions on downloading, if revenues aren't sufficient to pay the full amount of the mechanical license (unlikely).

Membership Classes and Benefits

non-members

• unlimited access to webcasts (Internet radio)
• access only to one version of each work
• limited streaming audio (one stream at a time)
• read access to only the last N reviews/comments
• N free downloads/month; only one quality level (the worst). Any downloads at all require (free) registration (or can be silently tracked by cookie until the magic number is reached).
• less privacy, because the system has to track usage.
• Lots of ads
• limited set of preferences (colors, layouts, etc.)

members (subscribers)

• e-mail address, member home page
• family/household rate allows multiple simultaneous streams to one IP address, and gives everyone in the family an e-mail address.
• unlimited(?) downloads; range of quality levels
• larger set of preferences -- members can design and share their own color schemes, graphical themes, page layouts, player skins, etc.
• can post reviews/comments; view archives
• access to all versions of every piece [encourages live taping and webcasting]
• collateral package (bumper sticker, T-shirt, etc.) on signup (3 months' payment in advance).
• access to band/interest-group mailing lists
• dividend on purchases [it's a co-op, remember!]
• privacy -- log data discarded; optional freedom from (most) ads. Ability to select ads by category.
• can put coop music, art, lyrics on their own web pages (in proper format -- this involves HTML text that gives proper credit with suitable links.)

providers -- performers, composers, DJ's

• peer review (like Advogato, SourceForge)
• can run mailing lists
• can sell stuff (commission goes into the pot)
• receive royalties out of the pot
• free ads (up to some limit) on search pages
• ability to webcast live performances -- because it's a webcast and not user-interactive, it can include non-coop works. [The coop pays webcast royalties via BMI, ASCAP, etc. out of the pot; some of these of course get back to the artists.]

[Note that cover art, text, etc. also gets credit. Something similar can be arranged for graphic artists, writers, software developers, etc.]

archive and cache server operators

• open-source server software
• can put ads, links on page *footers* (other places on non-member pages)
• receive a small royalty per hit; kickback per member. This encourages large providers to use a cache with coop instrumentation.
• get some free memberships with suitable hit rates or membership rates. Any ISP or campus should qualify easily (passing the memberships to their system administrators), but we don't want families getting a free ride.

publishers and recording companies

• Are welcome to make their material available, but they and their artists will be treated like any other publishers and performers -- everyone gets paid at the same rate. [it's a coop, remember!]
• In order to get their material into the system, they have to agree to the general licensing terms.
• Recording companies only get paid for their recordings, but they do get paid. This plus the publisher's share of songwriters' royalties ensures that money will be available to produce commercial recordings.
• Publishers will be allowed to sell copies of coop recordings, but the license fees will be considerably higher if use-restriction (DRM) is imposed. (We can't put any restrictions on covers because of compulsory licensing, but of course that works both ways.)

How to get started

One obvious question is ``how do you get it started?'' There are a couple of plausible techniques:

• Start in small musical communities with the right traditions: filk, folk, deadheads, jazz, sampling (share your samples), ... Encourage members to sign up artists. Post on appropriate newsgroups. Encourage members to use a coop link in their .signatures.
• mine existing venues like mp3.com -- make it easy for a group to have a presence in both.
• (advertise in / write articles for) magazines and websites
• tap into the Linux and open source communities (Linux Today, ...)
• productize the server software, the MDK (Music Development Kit, including recording s/w, compression, uploading, webcasting, web-site templates, version control, transcription, etc.), and a boxed software package for listeners (price includes prepaid membership for, say, 3 months).