New tune: Napster goes Legit; Kazaa offers deal

Knight Ridder/Tribune News Service (KRT)The re-emergence of Napster as a legitimate online music vendor grabbed attention last week for good reason. The former bad boy that Santa Clara-based Roxio Corp. bought after recording companies drove it under will offer 500,000 tunes, selling downloads for a dollar and jukebox subscriptions by the month.But another press conference was just as intriguing – and perhaps, in the long run, more significant.An organization representing the parent company of Kazaa, the most popular file-sharing network since Napster’s demise, threw out an offer and an olive branch.It proposed a plan to stop piracy by enabling music companies to sell music to their customers over Kazaa and other file-sharing services. Internet service providers would monitor and bill for songs that customers downloaded.The details are sketchy and, at this point, the idea appears far-fetched. ISPs have expressed no interest in serving as file-sharers’ bookkeepers, and the music industry would rather break Kazaa’s back than break bread with it.But it may also signal the opening move in Kazaa’s effort to deal with the music industry’s complaints and forestall retribution from Congress. And other file-sharing services and some consumer groups are pushing a simpler idea that deserves a look, notwithstanding the labels’ initial opposition: some form of compulsory licensing of music over the Internet.Under that concept, all Internet users would pay a monthly fee, perhaps based on the speed of their Internet connection, entitling them to download and trade whatever tunes they want. An independent body would distribute royalties based on artists’ market share of downloads.That’s how it works in radio and with public performances: ASCAP and BMI license copyrighted works and, through extensive sampling, parcel out the money.There are legal precedents, an economic rationale and a technological argument for compulsory licensing.Peer-to-peer networks, with decentralized control and redundancy, are a technological advance and should be embraced, not demonized.If the formula for distributing royalties is fair, musicians will make more money. Once everyone pays a levy or fee, piracy disappears, and consumers are treated as customers again, not bandits.For now, the labels are ignoring the file-sharing services’ overtures and pursuing a double-edged strategy of suing big file swappers while striking deals with a growing number of vendors like Napster and Apple’s iTunes. The labels’ commitment to selling music over the Internet, though belated, is real. But their refusal to consider including peer-to-peer networks may be self-defeating. Millions of young people continue to swap files illegally, notwithstanding the labels’ modest success in scaring them through litigation. The lost revenue is staggering.The labels may never see peer-to-peer as a cure to their troubles. But Congress should take a detached view, weigh the benefits of new technology and explore options like compulsory licenses.