December 30, 2008

Choruss, a proposed non-profit organization that would collect fees from universities while granting the right to download music "without the fear of legal reprisal," got a harsh vote of no confidence in a ContentAgenda post by Rick Carnes (president of the Songwriters Guild of America) and Chris Castle (managing partner of Christian L. Castle Attorneys).

Why is the theory doomed to fail? Because there will be thousands of copyright owners who do not participate in Choruss. It seems highly unlikely that Choruss will be able to sign up all copyright owners in the universe, or even most. And note—the word “indemnify” does not appear in Choruss’s pitch materials. If the Choruss legal theory is such a great idea, why doesn’t Choruss indemnify the universities and students from any claims? What are the students paying for exactly?

The gravest concern to creators, however, is that Choruss would have virtually no accountability to the songwriters, artists, musicians and vocalists who fuel the Choruss business model. The program offers no solution to accounting to creators for file “sharing” uses—campuses would merely “estimate” usage. Choruss stands in stark contrast to ASCAP, BMI, SESAC and SoundExchange, all of which spend considerable effort in tracking actual usage of the works they are permitted to license to be good fiduciaries to their members.

There are a few holes in the pair's arguments. For example, previous investments in "legitimate music and video services" should not prevent the adoption of alternative models. What has been spent is in the past and does not necessarily indicate the best path forward (otherwise the best business plan would always be the one with the greatest investment). And Choruss would not disproportionately reward artists backed by the largest marketing budgets. Indie artists are downloaded on P2P and on other "reactive" technologies. The majors would be at no greater advantage.

But overall, the post lays out some shortcomings of Choruss. Without the participation of all rightsholders, Choruss would not be able to provide indemnification to a university or ISP. The Choruss "covenant not to sue" is, as Carnes and Castle wrote, "a nuanced, untested, flimsy, and complex legal strategy" that would leave participants open to legal problems.

Then again, the four majors are the busiest litigators. As long as they are on board, universities and their students have far less reason to worry about lawsuits. And I doubt Choruss would be able to move forward without the blessings of all four majors, a good portion of indies and most major music publishers. Too much needs to be agreed upon to leave anybody out.

Another wrinkle in the Choruss story is the RIAA's recent decision to stop suing individual downloaders. To many people, the goal of Choruss -- a blanket license for unlimited downloading -- is to bring a sensible end to consumer lawsuits. The need for new distribution and payment models is almost an afterthought. With the threat of consumer lawsuits now gone, there is less pressure on universities and ISPs to adopt the Choruss plan. The RIAA has already granted downloaders indemnity in exchange for emails to be sent by ISPs to repeat offenders (I expect little toughness toward their customers on the part of ISPs). Where's the incentive to lift a finger for the music industry? Self-regulation is always better than enticing Washington's involvement, but the U.S. government is unlikely to get involved to the extent of the UK and French governments.

I was on vacation when recent news about Choruss hit, so if you aren't familiar with the proposed plan read this article at Epicenter by Eliot Van Buskirk.

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Posted by Glenn at 2:35 PM |

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