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The UK government's Digital Economy Bill is deeply flawed.

As the person who coined the term The Digital Economy in my 1995 book of that title, I feel obliged to comment on the UK government’s Digital Economy Bill, which was unveiled last Friday.   The proposed law is fundamentally flawed because it punishes Internet users who share songs. File-sharing a classic example of a disruptive technology, and we’ve got to get over this mindset that peer-to-peer sharing of music is stealing. The government should help the recording industry find a new business model that encourages music fans to enjoy a wide variety of music and compensates artists fairly for their talents. Sadly, obsession with control, piracy, and proprietary standards on the part of large industry players will only serve to further alienate and anger music listeners.

The solution is to stop trying to sell songs at a set price.  The music industry needs to think Wikinomics. Music should be a service, not a product. Here’s one scenario: instead of purchasing tunes, you would pay a small monthly fee for access to all the songs in the world – say $5 per month. Recordings would be streamed to you when you want to any appliance – your laptop, mobile device, car, home stereo, via the Internet. Call it Everywhere Internet Audio. Every customer has the Me Channel and could slice and dice the massive musical database anyway you like – by artist, by genre, by year, by songwriter, by popularity, and so on. The Me Channel would know what you like, based on what you’ve chosen in the past. You could even ask your Everywhere Internet Audio service to suggest new artists that resemble your known favorites or to create a new playlist of  Mick Jagger’s favorite tunes.

Musicians, songwriters and even their labels would be compensated through systems that track their popularity. All the music would be pooled and using actuarial economics the total pie would be divided up according to the number of times the songs of a given artist were streamed. Technologies and companies already exist that can do this.

Everywhere Internet Audio would make the problem of copyright protection vanish. No one would ever ‘steal’ music. Why would you take possession of a song when you can listen to any song at any time on any device? But rather than build bold new approaches for digital entertainment, the industry persists in a business model that turns their customers into criminals. And the industry that brought us the Beatles is now hated by its customers and is collapsing.

Author: Don Tapscott

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  1. Firstly, I completely agree – nice post!

    Secondly, as well as the service argument, another argument that strikes me is one based on resources. It goes like this: Assume (for a second) the recording industry's key resource is new music and new artists. And that in order to produce something original, an artist requires a reasonable appreciation of the music that has gone before, in order to not appear hopelessly naive and derivative and get cut down by critics. Then, as music back-catalogues get bigger every year, how much money would an 18 year old have to spent in order to have a properly rounded musical appreciation? Has anyone in the record industry ever done an estimate?
    Of course, if the recording industry's sole purpose is to make money, then it's in their best interests to sell us the music that's already been created, endlessly repackaged… but is that really a sustainable business model? Really?

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  2. Go Don… go go Don… but deja vu, n' est ce pas? Didn't we do this before a packed house at a Toronto music week session in ummm, 2002 or 2003?

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  3. That's exactly the only business model that solves the 'media piracy' issue. I see no reason why this couldn't be extended over all digital media: movies, tv programmes, e-books, magazines, computer games and software. Provide a single platform for all content producers, setup the popularity tracking offices, put a tax on internet connections and we're done. The reduction in prices for the end customers will be nothing but fair, considering that in the P2P/Torrent era they are the ones that cover the costs of media distribution anyway. Also, as there will be no need for middlemen in this arrangement (aside from the popularity tracking offices, which should be non-profit government agencies anyway), there should be more money available for artists/content producers in such arrangement. And the media market would finally be driven by the choices of the customers and not media conglomerates pushing increasingly tasteless garbage…

    All in all you can be sure that the media dinosaurs will resist this with all their power for as long as they exist – which will most likely turn out to be way too long if they are supported by corporate sellout governments.

    Still, there's a bit of hope: governments should at some point realize that allowing the use of government means to persecute people who use technology to work around an outdated business model puts them at conflict with the voters. This is much worse than just falling popularity ratings as once people get to feel that the governments they elect don't stand for their rights – and that there's no one to vote for that could change this (the Pirate Party tries, but is obviously suppressed using all available means) – an erosion of democracy is imminent. When governments loose touch with the people the result is either anarchy or totalitarianism (for now the latter seems to be more likely). Neither works in the long run – so as long as governments are still capable of thinking ahead (optimistic, I know), they may want to address this issue to the advantage of their voters for a change.

    We'll see how it develops, but one thing is obvious and that is that the awareness that such an alternative business model exists should be increased – and not just among media consumers. Which is why it's very encouraging to see it posted at such a high profile blog as yours, Don. Cheers

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