Our Proposal:  Summary

(Updated January 2011  En français

People have always shared music and always will.
The music we share defines who we are, and who our friends and peers are. The importance of music in the fabric of our own culture, as well as those around the world, is inextricably bound to the experience of sharing.

Rather than continuing to engage in increasingly futile efforts to stop people from using new technologies to share music, we at the Songwriters Association of Canada believe this massive use of creators’ work should be licensed just as live performances and broadcasting, also initially considered infringement, were ultimately licensed in the past. In both these previous examples, new business models, dynamic growth, and decades a wonderful music ensued.

The key components of the model we propose are:

1) We favour a “Business to Business” approach. Existing rights are sufficient to enable the monetization of music file-sharing activity, and therefore no new legislation is required.

2) Private individuals and households who wish to music file-share would be licensed to do so in conjunction with an agreement to pay a reasonable monthly license fee. The license would cover the private, noncommercial sharing of music, between two or more parties, using any Internet-based file-sharing client.

*It is important to note that a license fee differs fundamentally from a levy or tax in that consumers may opt out if they self-declare not to music file-share.

3) Only those who wish to share copies of musical works without motive of financial gain would be covered by this license. Parties who receive, or seek to receive financial compensation for file-sharing, or other commercial purpose, would not be covered, and would be required to obtain the appropriate licenses and/or approvals from those bodies who license commercial music use.

4) Any Internet-based technology could be used for music file-sharing, including current technologies such as torrents, social networking sites, etc., as well as new technologies as they become available. No behavior modification whatsoever is required on the part of the consumer.

5) Existing collectives would license consumers. License fees would be pooled and pro rata distributions based on non-intrusive data collection would be made to performers, songwriters, and rights holders.

6) ISPs would partner with collectives in order to facilitate the licensing process. Access and content could be bundled. The proposed license fee would appear as a line item on monthly Internet access statements sent to consumers by ISPs.

7) ISPs may deduct a reasonable collection fee before forwarding net revenue to collectives for distribution to music creators and rights-holders.

8) Net revenues would be split between performers, songwriters, and rights-holders. Any particular musical work would attract a pro rata share of the entire revenue pool based on the number of times that work was file-shared. Once that pro rata share was determined, the performer, songwriter, record label and music publisher would split that amount based on an agreed upon formula and contractual obligations.

By monetizing behavior rather than any specific technology, music creators and rights-holders will lay the foundations for a business model that can continue for decades rather than attempting the almost impossible task of trying to monetize the ever shortening cycle of changing technology.

Thanks to the existence of a global network of societies that collect and distribute royalties, the infrastructure to license music sharing on a global scale and make distributions to music creators and rights-holders is already in place.

Canada, due to its favourable regulatory and legislative environment, would be an excellent choice of territory to test the specific business to business model we have presented in this document, or explore variations. A real world test of the model is crucial to determine where further modification and re-evaluation may be necessary. Currently, we at the S.A.C. are working with other stakeholders groups to initiate a pilot project in Canada to do so.

A monetized music file-sharing system would give consumers access to the world’s entire catalogue of recorded music, and at the same time fairly compensate creators and rights-holders. We invite our colleagues in the music industry, consumers, ISPs and all stakeholders to join with us in helping to realize this exciting vision of the future.

If you agree with this summary of our proposal please click:  I Agree.

If you need more information please read:  Our Proposal:  Detailed

If you would like to submit comments on the proposal, please send to:  advocacy@songwriters.ca

Note: The S.A.C. brought forward this proposal to stimulate discussion and get feedback and we very much appreciate your input. Your comments will help to shape the discussions moving forward. Unfortunately due to unprecedented interest in this proposal we may not be able to answer every email. Thank you for offering your input and comments.