Monthly Archives: January 2010


The following piece was adapted from an interview conducted by Steve Gordon, Esq., which is available at

The main reason I left EMI is because I felt like the major labels were spending more time restricting people’s access to music than they were actually spending promoting the music. They were figuring out all these different ways to prevent people from listening to music and to me that’s sort of anathema to what a music company should be doing.

DRM was pointless but it was more—for example I had some instances where a radio station would be playing a song for one of my records, but it wasn’t at the time that the label wanted them to be playing it so EMI would actually send a cease and desist. Just all sorts of ways of trying to combat what they deemed “piracy.”

The way in which most people hear music and buy music has just changed. I don’t really see piracy as being a problem. I see “piracy” as the way that a lot of people hear music they otherwise wouldn’t hear.

The truth is that no one sells that many records. We should have been trying to make as much unfettered access to music as possible, making the music as widely available as possible and without applying any restrictions to peoples’ use of it.

I don’t want to get too philosophical, but if you look at the history of institutions, almost every one, whether it’s a church, a political party, a music movement or a record company, tends to start to serve a specific need or solve a specific problem. But at some point, the goal of the institution becomes keeping the institution in business. Record companies came into being because for a long time they were the best way of getting music from the musician to the audience. That’s the sole way they could justify their existence. And that made a lot of sense. They needed to understand the logistics of how you record an orchestra, how you record a band. And how you press up vinyl and get it into the 50 thousand record stores in the United States. But it seems like most record companies justify their continued existence by saying “we’ve been around for a long time, therefore we should continue to be around.” You take a Philosophy 101 class and it’s called the is-ought fallacy, that because something is, it ought to be. I’m not the first person to say this, but record companies either need to reinvent themselves top to bottom or go away.

The labels that we partner with are labels that I think have done quite a good job in establishing their viability in the present. For me, I mean as we both know, the main functions of a record company for the longest time were production and distribution. Now I look at the sales on my most recent record and in the UK literally 90 percent of sales are from 3 retail outlets. The role of the record company now is marketing.

Mute, the label that my own label partnered with to release Wait For Me, is amazing. They actually listen to the records and get passionate about them. They don’t have a cookie cutter approach to marketing. So many people at record labels are so overworked that they just market everything in the exact same way. At Mute, every artist gets their own specific marketing plan and the people who work at Mute really think about and care about the music. They keep working on records six months or a year after they’ve been released.

I have never in the course of my life had immediate success with a record. Play went to Number 1 in Europe eleven months after it was released. The biggest hit single I had in France came eighteen months after the record was released. In hindsight, I think the demise of the record companies began when they started quarterly reporting. A record would come out and if the record didn’t basically prove itself in the first month and a half the label would move on. If that ethos had been prevalent in the 70’s, Fleetwood Mac would have been dropped. Prince would have been dropped. Bruce Springsteen would have been dropped. None of these people had immediate success with their first record.

Who knows what EMI will do with Mute? Who knows if the people who work there will continue to work there? Making predictions about who you’re going to work with in a couple of years in the music business I think is akin to making predictions about who you’re going to be fighting next to in Vietnam in a couple of years.

One of the reasons I engage with fans online is because I like communicating with people. Sure, MySpace and Twitter are great places for marketing but first and foremost I like communicating with people. One of the really nice things about having my own label now is the decisions – the professional decisions- we make are hopefully done for the right reasons. When we think about touring the first thought is not how much money we can make, the first thought is how can we put on a really good tour and reach the right people and create something that has integrity, something that everyone is going to be happy with. I know that might sound like insincere lip service, but that’s the way we approach things. It’s not that were all enlightened, it’s just that neither one of us is very good at being mercenary. The first song on this record was an obscure song that would never get played on the radio with an obscure video by David Lynch that will never get played on TV. We gave it away for free because it seemed like the right thing to do.

I started as a way to give music away to independent film makers and independent film students. The impetus to do so came from a conversation I had with a friend of mine who is an indie filmmaker. He was complaining about how difficult it was to license music for the movies. If you have no budget and you want to license a song from one of the major labels, they are not going to return your calls. If they do, they are going to quote some outlandish exorbitant fee for whatever title you want to license, and once you do that you have to go to the publishing company. It’s this huge expensive thing and I just wanted to you know help out people who are trying to make independent films. It’s not completely free. If the film becomes commercial and if the music is licensed commercially they have to pay a small commercial license, but I’ve structured it so I can never make money from it. Whatever money is generated goes to the Humane Society. The reason for doing that is that if I can never ever make a penny from it, then I know I’m doing it for the right reasons.

I understand that there are a lot of musicians that want to get paid as much as they can for their music. I fully respect that and I would never criticize them for having that attitude. I got lucky because, over the years, I’ve saved and invested pretty well. I’ve lived in the same apartment and the same studio for a long time.

Today, the savvy musicians have diversified revenue streams. They figure out how to produce other artists, do remixes, DJ, play live, write film scores and all sorts of different things. I’ve found that the best way to have success is to do what you love.

I just find that there’s this almost like inverse relationship between profitability and creativity. To me, music is sublime. Music can change a persons’ life, it can make them move across country and cut their hair. Or grow their hair. And it can make them – it can make death more palatable. It can be sexy. It can be celebratory. It can be all these different things, and so I think our ultimate goal as people in the music business is existing in service to music. And if you get rich for it, great, more power to you. The Beatles and the Rolling Stones– the reason that they’re so iconic and so successful is that they made amazing, beautiful records that meant a lot to people. So basically, I hope the record companies can top to bottom reinvent themselves and be more successful then ever. But the way to reinvent yourself is not to put a new coat of paint on an old business plan.

I was talking about this with a friend of mine who has been in the music business for a long time and we were saying that a record company wanting to be a merch company is sort of akin to your plumber wanting to fix your car. The record companies, you know, their only experience is making records. So again, I see a lot of remarkably smart people in the music business who are starting new and amazing companies and they’re reinventing themselves based on market place values in 2009. I just don’t see these old sort of ossified, huge, monolithic companies having the flexibility to adapt to the market in 2009.

Moby was born in New York City, but grew up in Connecticut, where he started making music when he was 9 years old. he started out playing classical guitar and studied music theory, and then went on to play with seminal Connecticut hardcore punk group ‘The Vatican Commandoes’ when he was 14. He then played with post-punk band ‘awol’ while studying philosophy at the university of Connecticut and SUNY Purchase. He started dj’ing while attending college, and was a fixture in the late 80’s New York house and hip-hop scenes, dj’ing at clubs such as Mars, Red Zone, MK, and the Palladium.
He released his first single, ‘Go’ in 1991(listed as one of Rolling Stones’ best records of all time), and has been making albums ever since. His own records have sold over 20,000,000 copies worldwide, and he’s also produced and remixed scores of other artists, including David Bowie, Metallica, The Beastie Boys, Public Enemy, among others.
Moby has toured extensively, playing well over 3,000 concerts in his career. He has also had his music used in hundreds of different films, including ‘Heat’, ‘Any Given Sunday’, ‘Tomorrow Never Dies’ and ‘The Beach’, among others.
Currently he is touring in support of his most recent album, ‘Wait for Me’, as well as working closely with a variety of different charities, including The Humane Society and The Institute for Music and Neurologic Function.

Michael Masnick, Floor64

It’s no secret that there’s a lot of concern these days about what the music industry will look like going forward — especially from those who work on the label side of the business and have been around for a bit. A variety of things have caused rapid change in the market. Competition from other forms of entertainment, such as the internet, movies and video games, have put more pressure on the industry, as consumers have been presented with significantly more options for their entertainment attention and dollars. And, of course, there’s the ever-present specter of unauthorized file sharing — or, as the industry prefers to call it (accurately or not), “piracy.”

While the industry spent many years fighting the rise of the internet as a distribution and promotion method for music, it was eventually forced to recognize it. The labels eventually licensed music to Apple and iTunes (as well as some other stores). It took them way too long to recognize that people wanted DRM-free music, but they’ve finally come around to recognize that as well.

But the big new questions are all about licensing. New services are starting to show up on the scene, such as the industry’s new darling, Spotify. Then there are attempts, such as those by Choruss and Warner Music, to set up something that is somewhat akin to a blanket license. For the most part, the industry hasn’t shown much willingness to do these sorts of deals in manners that allow the underlying companies to survive, let alone profit. Numerous innovative startups have suffocated under burdensome licensing terms — and as each one fails, it just gives consumers fewer and fewer reasons to actually use these services, wondering how long each will last until it goes out of business.

However, there is another solution: stop worrying and learn to embrace the business models that are already helping musicians make plenty of money and use file sharing to their advantage, even in the absence of licensing or copyright enforcement.

In simplest terms, the model can be defined as:

Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model

Sound simple? It is, if you understand the basics — and it can be incredibly lucrative. The problem, of course, is that very few seem to fully understand how this model works. However, let’s go through some examples.

Trent Reznor, the man behind the band Nine Inch Nails, has done so many experiments that show how this model works that it’s difficult to describe them all. He’s become a true leader in showing how this model works in a way that has earned him millions while making fans happy, rather than turning them into the enemy.

Reznor has always reached out to his fans, and has an amazingly comprehensive website, with forums, chat rooms and many other ways of interacting. He encourages fans to better connect with each other as well. While companies like Warner Music forced all the music videos of their artists off YouTube for many months, Reznor actually aggregates all the videos his fans take at concerts (he encourages them to bring cameras) on one page on his own website. He does the same for photos. He released a (free) iPhone app that allowed fans to locate each other, and communicate with each other, while sharing photos and videos as well. It’s all about connecting with those fans, and helping them better connect with each other, so they feel like a part of a club.

From there, he gives fans real reasons to buy. Lately, he’s taken to releasing everything he records for free online, knowing that the music will show up on file sharing sites anyway, so he sees no reason to fight it. Yet, he adds many other options that people might want to buy. With his release of the album Ghosts I-IV, he released all the tracks under a Creative Commons license that allowed anyone to share them online for free. Yet, he also set up some cool “reasons to buy.” You could get the two disc CD, if you wanted, for just $10. Above that, though, was a Deluxe Edition Package, for $75. It was, effectively, a box set, but around a single album. Beyond the two CDs, it also included a DVD and a Blu-ray and a photobook of images.

Where the experiment got even more interesting was that he offered up the $300 Ultra-Deluxe Limited Edition Package — of which there was a limit of just 2,500 available. This was an even more impressive “box” that also included the songs on high quality vinyl, and some beautiful giclée print images. But, most interesting of all was that that limited set of 2,500 were all signed by Reznor himself.

It took just 30 hours for all 2,500 to sell out, bringing in $750,000 in just over a day.

For music he was giving away for free.

But, by connecting with fans, and giving them a reason to buy, they did. In the first week alone, combining all the other offerings for Ghosts I-IV, Reznor brought in $1.6 million. Again, this is for music he was giving away for free.

The idea that you “can’t compete with free” or that free means there’s no business model is a myth. As Reznor and others have recognized, when the music goes free, it opens up new opportunities for better, stronger, more efficient business models.

Reznor’s next album, The Slip, was released just a few months later, and again, was given away entirely free, but it was released the very same day as he announced his next Nine Inch Nails tour. All he asked, if you wanted to download the music, was that you provide an email address. He then gave fans the option of what quality to download the songs — all the way up to lossless FLAC files. All for free. But, if you downloaded the files, you also learned about the tour, and the tickets were quickly snapped up.

The free music didn’t hurt Reznor’s ability to earn money. It enhanced it.

By connecting with fans and giving them a reason to buy, he’s been able to thrive.

Some have complained that Reznor is not a representative example. After all, that huge fanbase came about in large part because of his success under the “old” model, where he was signed to a major record label who helped promote his album and turn him into an international rock star. While some may quibble with how much the label actually helped Reznor, it’s worth exploring how this model has also worked for many other artists — from the superstars to new up-and-coming acts.

Josh Freese is a session drummer based in Los Angeles, who appears on well over 100 albums and performs with many different bands. He’s played with (among others), Nine Inch Nails, Guns ‘N Roses, Sting, Devo, The Vandals, the Offspring. Yet, outside of certain musical circles, he doesn’t have a huge individual reputation with fans. So, when he released his first solo album, called Since 1972, in March of 2009, he decided to set up a system similar to Reznor’s Ghosts I-IV experiment, but made it more fitting to his own personality — which meant making the options extreme and hilarious.

There were cheap options to get the music and CDs, but at $50, you would also get a personal 5 minute “thank you” phone call, where he said you could ask anything you wanted (his suggestion: “Which one of Sting’s mansions has the comfiest beds.”) There was a limited $250 option to get lunch with Freese at a PF Changs or a $500 chance to get dinner with him at Sizzler. The lunches sold out in about a week.

Then Freese took the model to a different level altogether. At $2,500 (limit of 5 available), he would provide a drum lesson, where you’d get to keep one of Freese’s snare drums. You’d also visit the Hollywood Wax Museum with Josh and one of a rotating list of his rockstar friends (depending on who was available). Finally, you’d get to take and keep any three items from Josh’s closet.

At $10,000, you’d get dinner with Josh and a rockstar friend, before hanging out at Disneyland (where Josh’s father worked for many years, and where Josh got his start as a professional drummer) with Josh. And at the end of the day, you would get to keep Josh’s Volvo station wagon — after dropping him off at home. Obviously, there was only one of those available.

There were also $20,000 and $75,000 options available, including many more offers, like having Josh join your band or be your personal assistant for a few weeks. You’d also get to go on tour with Josh. He would also write and record a five-song EP about you. A teenager in Florida actually purchased the $20,000 option, and spent a week with Josh, including a night on the Queen Mary cruise ship, a pizza party at Mark Mothersbaugh (of Devo)’s house and a game of mini-golf with the singer from Tool.

Once again, by connecting with his fans, and giving them something of scarce value, Freese was able to create a business model that worked.

Connecting with Fans (CwF) plus a Reason to Buy (RtB) worked again.

However, some still complain that he’s a product of the “old” industry, even if he was little known outside of it.

The next example is Jill Sobule, who had a hit song in 1995 with “I Kissed A Girl” (not the Katy Perry song). Since then, however, she’s been dropped from two record labels and had two independent labels she was signed to go out of business. When it came time to record her latest album, she decided to get her fans to help fund it. She’d already done an excellent job connecting with her fans, regularly interacting with them on Facebook, where she would hold fun contests each day and actually chat with them and respond to questions.

She launched a website called “Jill’s Next Record” that — like Reznor and Freese — offered up many options for how her fans could support her to fund a new album. They could pay $200 and get free access to any shows for a year. They could get their name mentioned on a “thank you” song. At $5,000, she would do a home concert at your house. She even noted you could charge for that one, and maybe even make some money. She ended up doing five or six such concerts. At $10,000 (described as the “weapons grade plutonium” level) you could sing on the album. This was meant to be a joke, but a woman in the UK purchased it, and Jill had her flown out to LA where she did, in fact, appear singing backing vocals on the album.

Her goal was to raise $75,000, and she had no idea if she’d be able to reach that number at all. Yet, she broke through that number and ended up raising over $80,000 in just 53 days. With that, she was able to go into the studio and record a full scale production, including hiring famed producer Don Was to handle production.

CwF+RtB worked again.

Again, some complain that Jill is not representative, due to her hit song in 1995 — though, again, they’ll ignore her being dropped from two record labels and and having two others go out of business.

So, let’s look at Cory Smith. In the earlier part of this decade, Smith was a high school teacher, playing open mic nights on weekends. But then, he started focusing on building his music career. He started playing numerous live shows, and really worked hard to connect with fans. He gave away all of his music for free off of his website, and used that to drive more fans to his shows. On top of that, he offered special $5 pre-sale tickets to many shows, which has a useful side effect: his biggest fans would convince many others to go as well, building up his fan base, and getting more people to go to more shows. He tried pulling his free music off of his website as an experiment, and saw that his sales on iTunes actually dropped when he did that. In 2008, mostly thanks to live shows, Cory was able to gross nearly $4 million. While giving his music away for free. Connecting with fans and giving them a reason to buy worked wonders.

Jonathon Coulton was a computer programmer. In September of 2006, he decided to write, record and release a new song every week for a year — with all of the songs being released under a Creative Commons license, so anyone could share them. And share them they did. Coulton became a cult sensation, and was making a good living within months of this decision. His fans were supporting him along the way, even creating music videos for every song he released. He started using services like Eventful to more strategically target concert opportunities. If enough people requested a show in a certain location, he knew it would be profitable and started “parachuting” in to do shows that he knew would make him money. Again, by connecting with fans and giving them a real reason to buy, he was able to build up a great following and make a good living.

Moto Boy is a singer/songwriter in Sweden on the wonderfully named label “Songs I Wish I Had Written.” Moto Boy and his label purposely put all of his songs on file sharing networks — including The Pirate Bay (the label’s founder, at times, has shared an office with one of The Pirate Bay’s founders). But, Moto Boy has worked quite hard to connect with fans. He has a great website, where fans can interact, and he encourages sharing his music in creative ways. When a bunch of his fans started filming his concerts and putting them on video hosting sites like YouTube and Vimeo, his label found the best such vidoes, and put them all together into a “YouTube concert.” Compare that to record labels like Warner Music forcing their content off of YouTube. While all of Moto Boy’s music is free, he’s continued to connect with fans in fascinating ways. Last year, he began selling wind-up music boxes, that play one of his songs. Just recently, he launched a limited edition (only 25) of those music boxes in beautiful, hand-crafted wooden boxes, signed by Moto Boy, with a CD and the music notation inside the box. Connecting with the fans and giving them a reason to buy beyond just the music has turned Moto Boy into a star in Sweden.

Amanda Palmer is a singer who made a name for herself as a member of the “punk cabaret duo” The Dresden Dolls. While she put out a solo album on Roadrunner Records (a subsidiary of Warner Music), she found that they had little interest in promoting her, and took things into her own hands. She reached out directly to fans on services like Twitter, often setting up “flash gigs” where people would show up wherever she wanted to perform. In June of 2008, one such flash gig at a beach in Los Angeles ended up with an impromptu, beautiful, music video for a song that Palmer had just learned that morning, due to a suggestion from a fan on Twitter. And she’s doing a good job making money, as well. Bored in her apartment one evening, she started twittering with fans and came up with a jokey t-shirt suggestion, and set up an immediate store, selling $11,000 worth of t-shirts in days. Another night, she started a live video stream from her apartment, and started an impromptu online auction for various items in her apartment associated with a recent tour, often with a personalized twist. In three hours, she brought in $6,000. Connecting with fans and offering them something fun and unique to buy worked wonders. To date, she hasn’t received a single royalty check from Warner Music on her album.

Matthew Ebel is a singer in Boston who started building a fanbase by playing live and actively participating in social networks and other sites. He started regularly performing in Second Life, for example. At one point, he decided to set up a “subscription” backstage pass offer, whereby fans could pay $5, $10 or $15/month to get various benefits — including access to new songs every couple of weeks, as well as having new recorded shows sent to them. Depending on the level of support, they could get access to special shows, gift bags or other opportunities for unique offers not available to others. Ebel has discovered that he’s making enough so that music is his full-time job. Subscription revenues represent nearly 40% of his income, which is about equal to live gigs and sales of CDs and digital songs combined. Connecting with fans and giving them a real reason to buy has made it so that he can have career as a musician.

Moldover is an electronic musician based in San Francisco. Being in such a high tech hub, he had an interesting idea for his next album. Along with the music itself, the CD case would be a working circuit board, with all the songs spelled out in soldered electric circuits. These connected various components to make the CD case itself an instrument. Pushing a button on the side of the case, would light up the center and make a noise, which could be modified through a pair of light sensors, creating a virtual theremin. The case even had a line out jack, so it could be plugged into a computer or an audio system. The CDs themselves were sold for $50, and Moldover discovered the demand was far stronger than he expected. Yes, even though we’re told that no one will pay for music (without strict copy protection), this less well known artist is doing brisk business selling $50 CDs.

Of course, these are just musicians, but these sorts of models impact the wider ecosystem. Companies like TopSpin, Nimbit and Kickstarter are making this work today (for artists big and small). TopSpin has helped enable musicians to better connect with fans and give them a reason to buy over and over again — and found that, when it’s done right, people absolutely buy. One of TopSpin’s artists recently had an average transaction price of over $100, and multiple artists have seen their average transaction price at over $50. The claim that fans just want stuff for free is not borne out by these examples. Across all of TopSpin’s artists, they’ve seen an average transaction price well over $20 — more than the cost of your average CD. By enabling bands to connect with fans while giving them something of unique value to buy, beyond just the music, these bands are thriving.

And, of course, there’s a role for labels to play as well. Terry McBride runs Nettwerk, a Canadian-based label that has tremendous success embracing these sorts of models with a bunch of different artists. McBride has declared that copyright won’t even matter within a decade, and he’s acting accordingly. But he’s making sure that his acts really do connect with fans. With a recent album release by the hip hop artist K-OS, before the album was released, they released all the stems from the songs to let the fans do their own mixes. These weren’t “remixes” because the original mixes weren’t even out! Rather than worrying about an album leaking, K-OS and Nettwerk purposely got the core of the music out themselves and let fans do what they wanted with it. They then set up a system to submit the fan mixes and to vote on them, such that the best mixes were then put on their own album, and both the “professional” and the “fan mixed” albums were released at the same time — leading many fans to buy them both. Both albums, separately, but at the same time, ended up in the top 50 on the charts.

As you look through all of these, some patterns emerge. They’re not about getting a fee on every transaction or every listen or every stream. They’re not about licensing. They’re not about DRM or lawsuits or copyright. They’re about better connecting with the fans and then offering them a real, scarce, unique reason to buy — such that in the end, everyone is happy. Fans get what they want at a price they want, and the musicians and labels make money as well. It’s about recognizing that the music itself can enhance the value of everything else, whether it’s shows, access or merchandise, and that letting fans share music can help increase the market and create more fans willing to buy compelling offerings. It’s about recognizing that even when the music is shared freely, there are business models that work wonders, without copyright or licensing issues even coming into play.

Adding in new licensing schemes only serves to distort this kind of market. Fans and artists are connecting directly and doing so in a way that works and makes money. Putting in place middlemen only takes a cut away from the musicians and serves to make the markets less efficient. They need to deal with overhead and bureaucracy. They need to deal with collections and allocation. They make it less likely for fans to support bands directly, because the money is going elsewhere. Even when licensing fees are officially paid further up the line, those costs are passed on to the end users, and the money might not actually go to supporting the music they really like.

Instead, let’s let the magic of the market continue to work. New technologies are making it easier than ever for musicians to create, distribute and promote music — and also to make money doing so. In the past, the music business was a “lottery,” where only a very small number made any money at all. With these models, more musicians than ever before are making money today, and they’re not doing it by worrying about copyright or licensing. They’re embracing what the tools allow. A recent study from Harvard showed how much more music is being produced today than at any time in history, and the overall music ecosystem — the amount of money paid in support of music — is at an all time high, even if less and less of it is going to the purchase of plastic discs.

This is a business model that’s working now and it will work better and better in the future as more people understand the mechanisms and improve on them. Worrying about new copyright laws or new licensing schemes or new DRM or new lawsuits or new ways to shut down file sharing is counterproductive, unnecessary and dangerous. Focusing on what’s working and encouraging more of that is the way to go. It’s a model that works for musicians, works for enablers and works for fans. It is the future and we should be thrilled with what it’s producing.

Mike Masnick is the founder of Floor64, editor of the award-winning Techdirt blog, and a frequent commentator and speaker on issues related to innovation, business models, technology policy and economics.

Michael Pettis

Our focus is so intensely on finding and developing the artists that
honestly I haven’t paid a whole lot of attention to the financial
side of music distribution, and don’t think I can really write
anything useful on the subject. We do distribute both physical CDs
and via paid downloads, but we also know that everything we put out is
available for free on the internet sometimes the same day we go on
sale. We are focusing our revenue efforts on sponsorships, concerts,
merchandise and other related sources. Our working assumption is that
over the next few years a new profit model will develop and we will
participate largely to the extent that we own the rights to the most
important recordings of the key artists in the burgeoning music scene.

Michael Pettis is a finance professor at Peking University and a Senior Associate at the Carnegie Endowment for International Peace. He also advises a number of funds and investment groups on emerging markets. In addition to his finance-related responsibilities he is the owner of Beijing music club D22 and the principle owner of Bing Ma Si/Maybe Mars, the second largest independent music label in China, specializing in underground rock, experimental and avant garde music, and folk and ethnic music. In 2008, when London-based Wire Magazine listed the fifteen most important albums in China, seven of them were Maybe Mars productions.
Pettis spent fifteen years as a banker and trader on Wall Street and taught at the Columbia University Business School and at the School of Economics at Tsinghua University, in Beijing. He has published widely and is the author of Is China Vulnerable? The Causes and Consequences of Financial Fragility (Tsinghua University Press, 2003), and The Volatility Machine: Emerging Economies and the Threat of Financial Collapse (Oxford University Press, 2001).
He received an MBA in Finance and an MIA in Development Economics from Columbia University.

Max Davis,

Based upon life experiences and simple common sense, we at DataRevenue.Org believe a creator’s rights are protected by our Constitution. So, congressional legislation is warranted based upon the Internet and related technologies’ disruption and undermining of our copyright laws. It should have been done at the ISP level before the Internet was unleashed for mass public uses. In our opinion that is highly unlikely to happen now as Pandora’s box is already open.

However, the solution does lie in mobile networks, the new frontier. Eventually mobile Internet transactions will far outnumber tethered Internet transactions. Now is the time to apply statutory rates to mobile networks on behalf of a creator’s rights as stated in our Constitution.

Its that simple………..common sense. DataRevenue.Org has a plan for implementation. –

Max Davis, Director

Max Davis has been writing and publishing musical and literary works for over 30 years. He began to research and develop Internet properties in the late 90’s. Max lives in Bell Canyon, California and has a passion for embracing and utilizing today’s new tools in creating tomorrow’s innovations.

Matt Coleman, Let The People Speak Entertainment, LTD

Let the People Speak manages up to 10 of New Zealand’s largest Rock and Pop acts, in our experience the internet has been invaluable with igniting original core fans outside of any television or radio exposure in these markets.

Depending on genre of style this also has a real effect on downloads, Hip Hop/Rap acts seem to have a larger following online and on mobile in NZ outside of the larger Pop and Rock acts, as the population in this market can afford mobile phones and not computer access.

The ease of the mobile Internet also has its advantages where it makes it easier to preview, purchase and download on the go in real time. Although distribution can be made worldwide for free, an independent act has the choice to give their music away for free or offer 30 second sound samples with links for purchases or provide added value propositions. At the end of the day, the Internet and mobile Internet is the perfect distribution platform that must be monetized.

I think the first fundamental mistake was that the Internet was not embraced and I believe most industry colleagues would agree with this comment. If you don’t get it right at the forefront the opportunity is usually lost. Napster has been a great example of this; sue the entrepreneurs and the innovator then buy their company when you lose and then sue the fans if all else fails – wow that’s a great strategy! It’s not a good look. Kids have rebelled against the major labels now, and now take the music as if it is free.

Regulation and mandates I would say will be a very difficult approach. I think that if the labels and acts keep feeding the mobile and ISPs without a remedy for the future out side of a revenue share it will only get more difficult to solve.

A monthly entertainment or music allowance should be tabled ASAP, although it would have to take into account movies and music for future consumption and the entire entertainment industry will be required to agree on the strategy moving forward.

I think an opt in service will not solve or offer much in terms of compensation, as it is impossible to filter content. Mobile/Cell phone accounts are the perfect opt in service devices, I would suggest a $ per month charge for unlimited downloads Vs a compulsory monthly fee for ISP Internet user accounts.
Key Points Of Consideration

• Long term agreement with options (10 years)
• Added Value Content – which can include bonus tracks, artwork, advance concert offerings and merchandise offerings
• Touring and Merch sale offerings need to be included to give the act/label/ISP/Mobile carrier higher pricing

– This can be done either my credit card offerings or mobile billing depending on the carrier or ISPs strategy

– If you could design the best music service you can imagine using technologies widely available today, what would it look like? How would it make money?


1. Music on the GO and made available in real time to consumers is what is required via mobile phones or the internet
2. This should include concert ticketing and merchandise sales as well as music
3. Major car corporations should be developing and installing instant purchase mechanisms with car stereo systems
4. Major manufactures of stereo and radio systems should develop click to purchase mechanisms to enhance sales (Sony)

– What do you think of the relationship between the recorded music business, the live music business, and the music licensing business (which licenses recorded music for use in commercials, films and theatrical productions)?
The touring companies are taking on the labels with their rich offerings to major acts like Madonna and there are millions of independent artists are doing it on their own and trying to make it but for a small few how many of these acts will really make it and what does really making it these days mean.

For the majors there does seem to be a coordinated approach when it comes to Soundtracks and for TV, there is a move towards independent music which is much more cost effective than a major label act.

So in essence there is still a huge move for independence for everyone, another shake up will really put this on ice or on fire and save the industry for the future years ahead.

About LTPS (Let The People Speak Entertainment) Founder

Matt Coleman has been in the music industry for over 20 years, working with some of the biggest acts in the industry; instrumental in the development and launch of many new and significant artist’s careers.
Let The People Speak is a full-service musical entertainment management company specialising in breaking new acts, bookings, promotions, sponsorship and overall artist management, including the hit makers Midnight Youth, Ivy Lies, Dane Rumble, Artisan Guns!
Matt Coleman can be contacted at: or

Marty Lafferty, Distributed Computing Industry Association

Monetization of unlicensed music file-sharing traffic should not be viewed as an end,
but rather as a pragmatic – and interim – means to commercially advancing the still
nascent digital music distribution marketplace.

Indeed, the introduction of a recurring monthly fee to compensate music rightsholders
for unlicensed music tracks that are shared among users of open file-sharing
programs should be undertaken as a preliminary step in a more comprehensive

Otherwise, neither the music industry nor the technology sector should be expected
to support this, because of its inherent limitations as a standalone approach to the
full economic potential of both creative works and distribution technologies.

This overall initiative has to have more advanced goals than merely generating
revenue from an activity that has to date proven insusceptible to enforcement efforts
aimed at curtailing it, and that most industry observers believe will persist and
continue to grow despite such efforts.

And it must have more carefully defined strategies and tactical components that are
proven workable and attractive to labels, artists, publishers, and composers on the
one hand, and software investors, distributors, developers, and marketers on the

This is not to say that this new revenue stream will not be important. It alone can
easily generate five billion dollars per year – the music industry’s share of the
twenty-five billion dollars the entertainment industry claims is now lost in total
annually to infringement.

However, this would be an unacceptable step to take if it represented a ceiling for
the maximum revenue that can be generated from online music distribution in
myriad formats and models, including those that capitalize on live P2P streaming and
download P2P technologies to minimize cost and maximize quality and reliability.
What else is needed?

More than anything, a new system that responds to the reality that, thanks to the
Internet, there are exponentially more potentially viable and qualified music
distributors than in any previous era.

Arguably, the most important aspect of such a program should be the “licensing
migration path” for new digital distribution platforms from their early developmental
phases through technology and market trials to launch and commercial release.

We call upon the growing number of companies that provide technologically
enhanced and automated rights management solutions to work with us and the
companies that provide the tracking and accounting software that will be used to
track downloads (and eventually individual plays) of music tracks in order to allocate
the correct portion of proceeds from the monthly fees to rights-holders.

The basic idea would be to make it possible for literally thousands of independent
developers and small distribution technology firms to obtain acceptance swiftly,
efficiently, and equitably; and to migrate from their pre-licensed state to fully
authorized status relatively early in their life-cycles.

The needed new solution will have these basic characteristics: it will enable filesharing
and similar digital music distribution platforms to obtain necessary licensing
through an online registration and payment system while they are still small – which
means the upfront payments should be affordable – and before the issue of musicindustry-
demanded restitution for being associated with a large volume of infringing
music transfers complicates matters.

This automated licensing solution must offer terms-and-conditions to cover
promotional, ad-supported, sponsor-bundled, subscription, paid download, as well as
new, original, and innovative business models. It needs to enable the software
distributors to make projections and arrange for periodic payments and account
reconciliation. It also has to provide the opportunity for rights holders to stipulate
qualifications (such as the use of filters for pre-release and geographically banned
content, for example).

It should also reflect volume discounts based on consumer adoption and the ability
to opt into customized non-automated licensing arrangements over time as growth

It also needs to interface with the tracking and accounting systems that will
essentially perform an automated auditing function to validate payments and provide
reporting to music rights-holders for the allocation of funds based on transactions
from these distributors.

It also should give rights-holders flexible options for how hands-on they would like to
be in approvals, with the goal of making online distribution licensing practical and
desirable for all parties on an unprecedented scale.

We believe the necessary building blocks for this envisioned solution already exist,
but must be assembled, integrated, and tested.

Initially, this would bolster monthly fees with additional revenue and, more
importantly, in the fullness of time, help show the way to the most viable online
music distribution models, substantially overtaking the monthly fees line with much
higher levels of profitable revenue generation.

If enough vendors, music rights-holders, and software developers show interest, the
DCIA will facilitate either a sub-group of our active P3P Working Group (P3PWG) or a
new working group totally focused on this project.

Monetization of video file-sharing traffic should also be viewed as a very high priority
given the size of the opportunity represented by this latest global trend and its
strong upward momentum.

The prospects for video are very different from music where, due to the relative
maturity of consumer behavior, a recurring monthly fee to compensate rightsholders
for tracks distributed via open file-sharing programs should be introduced at
this point as a critical stop-gap measure.

For video programs and clips, where online distribution is a much newer
phenomenon, a combination of advertising, subscription, and paid-download models
can still be introduced – which in many ways could mirror established business
models for broadcast and cable television as well as home-video.

Like for music, however, this overall initiative should have carefully defined
strategies and tactical components that are proven workable and attractive to
studios, TV programmers, performers, and screenwriters on one hand, and
distribution software investors, distributors, developers, and marketers on the other.
A critical feature must be the enablement of provisioning and integration of usergenerated
content (UGC) with professionally produced video in a wide variety of
ways that reflects today’s technical capabilities with respect to digital video-capture
and editing.

The initiative also needs to be able to accommodate and incentivize delivery
platforms including the most promising content delivery network (CDN) solutions
that take advantage of peer-to-peer television (P2PTV) technologies, including live
P2P streaming and on-demand P2P download technologies to minimize costs and
maximize quality and reliability.

Thanks to the Internet, there are now exponentially more potentially viable and
qualified video creators and distributors than in any previous era.

If the established motion picture, broadcast, and cable/satellite industries can move
aggressively to respond to this sea-change in production and distribution, a
successful initiative will expand their horizons by encompassing the new wave of
content originators and delivery providers and harnessing their enormous energy.
Once again, we strongly encourage the growing number of companies that provide
technologically enhanced and automated rights management solutions to work with
us and the companies that provide accounting software that can be used to track
downloads (and eventually individual plays) of video content streams and files in
order to allocate revenue to rights-holders.

Individual videographers and uploaders, as well as independent TV/film producers
and software developers, and small video production studios and distribution
technology firms all need to be able to provide and obtain licensing or otherwise
enter into commercial terms-and-conditions swiftly, efficiently, and equitably. These
patterns need to be established as soon as possible, and become habitual.

The needed new solution will have a fundamental characteristic in common with the
stop-gap approach for music: it will enable file-sharing and similar digital video
distribution platforms to obtain necessary licensing through an online registration
and payment system very early in their life cycles.

This automated licensing solution must cover traditional as well as new business
models. It should be derived from and bear homage to the existing sequential
distribution practices for premium video, such as the industry-leading example of
feature-length films, and also be able to support a collapsing of these windows based
on the responsiveness of rights holders to marketplace conditions.

It needs to enable distributors to make projections and arrange for periodic
payments and account reconciliation. It also has to provide the opportunity for rights
holders to stipulate qualifications (such as the use of filters for pre-release and
geographically banned content, for example).

It should also reflect volume discounts based on consumer adoption and the ability
to opt into customized non-automated licensing arrangements over time as growth

It also should give rights-holders flexible options for how hands-on they wish to be in
approvals, with the goal of making online distribution licensing practical and
desirable for all parties on an unprecedented scale.

As with the interim online music monetization monthly fee, we believe the necessary
building blocks for this envisioned solution already exist, but must be assembled,
integrated, and tested.

Adoption of P2P technologies by games publishers for online distribution of games
and delivery of updates is already more advanced than for music or video content.
In many ways, this is not surprising given the relatively high degree of technical
sophistication and know-how among games developers in contrast to the norm for
other entertainment content production communities that have a substantial legacy
dating from the pre-digital era.

Monetization of games file-sharing traffic should also be viewed as a high priority
given the scale of this activity and its growth trajectory.

By contrast, for music, as we have discussed previously, due to the relative maturity
of consumer behavior, a recurring monthly fee to compensate rights-holders for
tracks distributed via open file-sharing programs should be introduced at this point
as a critical stop-gap measure.

And for video, where online distribution is a much newer phenomenon, a
combination of advertising, subscription, and paid-download models can still be
introduced – which could mirror established business models for broadcast and cable
television as well as home-video.

In the case of games, however, given the higher level of familiarity with and
implementation of P2P by rights-holders, timing seems right for an inter-industry
initiative focused on advancing and accelerating commercial development of P2P for

Gamers represent nearly 70% of the US population and spend over $25 billion
annually on gaming.

As with related proposals for other genres of creative works, the DCIA’s initiative for
P2P and games, the new P2P-for-Games Working Group (PFGWG), has carefully
defined strategies and tactical components that are now in process of being proven
workable and attractive to games developers, publishers, and aggregators on one
hand, and delivery software investors, distributors, and marketers on the other.
A critical feature is that enablement of provisioning and integration of usergenerated
content (UGC) with professionally produced game formats is supported in
a wide variety of ways that reflects today’s technical capabilities for multiplayer

This effort will also be able to accommodate and incentivize delivery platforms
including the most promising content delivery network (CDN) solutions that take
advantage of P2P technologies, including live P2P streaming and on-demand P2P
download technologies to minimize costs and maximize quality and reliability.
The initiative is focused around developing and disseminating a standardized set of
voluntary practices for using P2P technologies to deliver online games and updates
that are optimized to provide transparency, control, and value to consumers.

The first area of work centers on developing a written work-product acceptable to
key constituencies setting forth a regimen of such optimal procedures for
implementing P2P technologies for the delivery of games and updates to end-users.

There is a consumer-centric focus to this effort addressing such critical issues as user
resources (e.g., device memory and bandwidth) and customer communications (e.g.,
clear-and-conspicuous notice and informed consent), among others.

The basic driver for this initiative has been that acceptance of and adherence to a
well-developed program of best practices by industry participants will foster
acceptance, usage, satisfaction, and trust among games users.

Consumer confidence with respect to the use and deployment of P2P technologies for
games will be advanced by demonstrating consideration for users through this
initiative’s principal directives.

We strongly encourage interested qualified parties from the games and P2P
industries to join with us in this historic effort. Share wisely, and take care.

Marty Lafferty is CEO of the Distributed Computing Industry Association (DCIA).
Previously he was CEO, Zoom Culture; CMO, StreamSearch; Marketing VP, Microsoft TV; and President, FutureVision. He was also CEO of NBC’s Olympics joint venture with Cablevision. And as VP of TDBS, he led Turner Broadcasting’s adoption of signal-scrambling security technology.

Leron Rogers, Hewitt & Rogers

Like many large corporate entities, the large record companies were slow to realize that their core business model must evolve and adapt to the changing consumer acquisition patterns. Unfortunately, many record companies chose to fight inevitable technology advancements instead of embracing them then focusing on figuring out a way to monetize those technology advancements.
Certainly peer to peer technology has changed the paradigm of the consumer and diminished the perceived monetary value of the content being consumed. However, the failure of record companies to both recognize the changing consumer patterns and work to monetize the changing behavior, and punish the changing behavior instead, is the root of the music business’s problems. As everyone now sees, it is impossible to stop the wave of changing consumption patterns via peer to peer technologies. Only now that it has become painfully obvious that the industry must adapt to the changing technology, are we seeing some movement towards focusing on the true issue, which is to monetize consumers’ actual consumption patterns. Collective licensing at the ISP level is only one of the mechanisms the industry has been discussing in an effort to monetize consumer music consumption patterns.
Recorded music will always have demand and consumers will always prefer to consume recorded music in the manner in which they individually prefer and not necessarily how traditional record companies want them to consume the music. More specifically, those that prefer consuming music via CDs, music services such as Rhapsody, or using peer to peer services will likely continue their current consumption pattern in which they prefer. With that said, the record business cannot rely on one technology or collective licensing mechanism, but must seek to serve its consumer in all of the ways its consumers desire to consume its product. Record companies must work harder to service their consumers than they have ever had to in the past, but must remain steadfast in that goal.
Only recently has a financial model been developed to provide some insight into the possibilities of the collective licensing model. The Price for Music financial model ( strives to provide artists and music rights holders a mechanism to determine the monetary possibilities for music content consumed via the internet, addressing the revenue gap arising from digital content being downloaded via non-legitimate channels. The model provides a wide range of settings that can replicate a large number of scenarios across both physical and digital music sales with the objective to stimulate debate by providing stakeholders and commentators with the ability to estimate the financial impact that different services may have on music industry revenues over time by use of a collective license.
Content creators will have greater control over the ownership, branding and distribution of their product as the distance between content creators and their fans becomes increasingly more direct. Those content creators that are best able to use the efficient means to build their brand directly to the fans will have less need for a traditional record label, or will be in a position to choose a la carte services from the traditional record companies, yet retain a higher level of ownership and control over their project.
Record companies will always have a place in the industry because many content creators do not have the business savvy team or monetary resources necessary to take advantage of the opportunities available to go at it without a record company. However, as more content creators are able to finance their own project or find financial sources other than the traditional record label (some sources may include live touring companies, publishing companies and consumer product companies), the less content creators will need or even want to do business with the traditional record companies.
Contrary to what some music consumers think, creating content is not free. Accordingly, content creators are dependent on all available revenue sources in order to recoup their investment. There is and will continue to be a convergence of these previously segregated music services as the music business feels its way through this transition within the industry. What the best combination will be is yet to come, but recorded music, live music and music licensing will be tied to each other as viable revenue sources needed in order to justify the expense of creating content.
My advice to content creators is to treat yourself as a brand because creating music is no different than any other product or service targeted towards consumers. Educate yourself on your product, the market, the best way to target your brand to your target market, and the value of obtaining metrics on your consumer. Going through this exercise will open up opportunities and leverage to get better terms with record companies and the option to obtain quality services, once only reserved for traditional record companies, but now available on an a la carte non-cross collateralized basis to content creators. For example, as a content creator, you can now contract with separate entities to obtain financing, digital distribution, physical distribution, marketing, publicity and other branding services, touring, merchandising, as well as the ability to acquire statistical metrics on the project and your fans. By separating these services, content creators can control the expenses while eliminating the risk of cross-collateralizing your profitable revenue streams against non-profitable or marginally profitable revenue streams, all while maintaining a high level of services from companies that provide the very same services to traditional record companies.
To content owners: focus your efforts on adding value to content creators. Often times now, record companies simply finance recorded music projects while the content creator and their team is expected to create their own content, create the image and branding strategy as well as coordinate all the necessary elements to a successful release. At some point the content creator will realize they do not need the record company.
Traditional record companies have the resources to bring together the best and brightest experts across each required sector necessary to release a successful music project and spread that cost across numerous artists. If record companies are more willing to be a one stop shop providing great services to content creators for a reasonable price, content creators will have less reason to abandon them when the content creator realizes they are doing all of the heavy lifting while seeing little return from the record company.
Provide a means by which content creators are your partners. Currently content creators look at record companies as “the bank” and often seek to break the bank. If both the record company and content creators have incentive to put out quality content, control costs, and maximize revenue then more projects then the odds of success will have increased significantly.

Leon Rogers is a partner in the law firm of Hewitt & Rogers in Atlanta, Georgia. Leron counsels entertainment, technology and media companies and is recognized for representing high profile entertainers and athletes in their professional and business ventures.

KamranV, Spaceland Recordings

KamranV – IAEL ISP Collective Licensing Opinion
Sadly, it may take the government to cut through Music Business egos, but my opinion is that the ISPs/Cable Companies/Mobile Carries should package music into services and initially eat (what should be relatively small) costs as customer acquisition and retention.

For instance, the first LARGE carrier to offer unlimited streams and open mp3 downloads via the phone and Internet with their latest and greatest, reasonably-priced service package would win big if the decision-makers could care about 5 year plus, long-term benefits instead of looking at their yearly bonuses. When fans can truly rely on free music with a consistent iTunes-like browsing experience bundled into bills that they’re already paying, piracy would be irrelevant. “Downloading vs. Streaming” would be irrelevant. The business friction would be removed to allow artists to make better livings and most importantly, more music! And what becomes of music business middle-men like myself? Well, we can either get more creative or flip hamburgers. Some may dismiss this vision as utopian but the reality is that music is already free and it’s only sensible to make the business about making free music easier.

When I was starting the mobile business for Interscope and Universal Music Group with Roy Kosuge and Courtney Holt back in the early 2000s, we pushed for this as part of 3G rollouts but the distraction of initial mastertone revenues were far too big of a distraction for both the carriers and label group lawyers to make any real effort. The win for the casual music fans, avid music fans and musicians is the raw fact that we would someday live in a world where everyone had a high-speed, data connected mobile device; phone numbers would be people, not places. Music could be available anytime, anywhere. For all intents and purposes we are in that world today. I’m optimistic that the music business of the future will look back at this debate in the same light as the “world is flat” debate.

KamranV has built an elegant bridge between technology and artistry creating Interscope’s multi-million dollar mobile business and serving as producer for DVD-Audio projects of NIN, Sting and Beck. He’s also a strategist for companies including Gibson, ElectronicArts, and Quiksilver while continuing to produce concert films and albums for his company Spaceland Recordings and most recently NIN’s last ever concert film.

Joel Schoenfeld, eMusic

It seems like an unfair added- on cost to the majority of ISP subscribers who, unfortunately, do not purchase or otherwise consume, music. While I recognize the dire economic health of many music companies, I don’t think the response should be a government bailout.

The alternative proposal may appeal to users of P2P and bit torrent sites for unauthorized music files, but what happens to the individuals who revert to using them?

My overriding concern with approaching this issue at the ISP level is net neutrality. If the ISP’s are in the business of selling music, will the customers of Amazon, iTunes, eMusic, etc. have access to the same band width as the customers of the ISP music store? Will the ISP’s get the same arm’s length terms and conditions as these other online stores or will the ISP’s derive an unfair advantage?

Joel Schoenfeld is Chief Legal Office & General Counsel for, Inc. and for Dimensional Associates, the private equity fund that owns eMusic and other digital entertainment companies.
Schoenfeld is a thirty year veteran of the music business and is recognized as an expert on international intellectual property, licensing of digital rights, competition, and privacy issues. He is known for having negotiated and implemented the first successful pan-EU Authors’ Society licensing scheme for internet downloading of music. Joel is also an Adjunct Professor of Law at New York Law School and has taught Entertainment Law and Music Law courses.
Joel previously served for over a decade as General Counsel and Senior Vice President at BMG Entertainment, the entertainment division of Bertelsmann AG, with a twenty-six person department and responsibility for all legal and business affairs of BMG worldwide. He has worked with the IFPI for nearly twenty years, and served on its Board of Directors from 1990 to 2002. He was elected Chairman of the IFPI Council in 1999, and served in that role for 4 years. As a member and chairman of the IFPI Rights Committee, Schoenfeld has become very familiar with Authors’ Societies rights issues and with the senior management of most EU Societies.
Schoenfeld has also focused on policy matters impacting the entertainment business, and particularly e-commerce. In recognition of this, he was appointed one of twelve Commissioners on the Industry Advisory Commission to the World Intellectual Property Organization.
Schoenfeld has also served as a co-managing director of Dimensional Associates, Inc., as well as President and CEO of Dimensional Music Publishing, a company built on the assets of DreamWorks Music Publishing.

Jeff Dachis, Dachis Group

I don’t have many answers around how best to compensate intellectual property rights holders for the distribution and use of that property over internet or otherwise.

What I can say however is that the current/historical mode of compensating rights holders is not only outmoded and antiquated, but wholly unsuitable for an information and networked economy.

This gets at a much deeper core structural problems built into and inherent in the existing media businesses as we know them today. A big part of the problem lies in the outmoded constructs around specific media forms and silo distribution environments. When the physical form of media and its specific distribution channels were unique to those forms, unique rights structures and payment for those rights were created to compensate those involved in the creation and distribution of those forms.

Any attempt to try and replicate those previous payment structures in some form would be unacceptable. These structures, as artifices of another century, are completely and wholly inappropriate and unacceptable in an environment where data is data. The distribution is completely uncoupled from the form, and the structures in place to create and distribute that data have become nearly barrier-less and completely commoditized.

Any structure put in place to protect the previous system or structure of doing things will by its very nature fail. We are seeing this in the music industry, the newspaper and magazine business, and now the movie and television business as those businesses go through gut wrenching structural change to try and adapt to a networked information economy- kicking and screaming trying to protect the status quo only to find that someone has moved their cheese.

Oddly the video game business is still thriving in an environment where its content/intellectual property is still largely coupled to its distribution platform. This has more to do with the high levels of processing power needed to consume ever more technically sophisticated game play while the more basic games of bygone era are available for free. This will change too.

The software business seems to have figured out the “freemium” model, the “Saas” model and other innovations and have not had to resort to government mandates or no sue fees. Why is the music business having such a tough time?

Unfortunately, the two modes suggested for collecting payments from users are regressive and don’t imply any forward thinking solution to the problem and inevitably will fail. Government mandate or a no sue fee are both silly ideas rooted in record companies trying to protect an antiquated way of doing business without acknowledging that that business has completely and thoroughly changed forever. Silly.

Music and media companies have brought all of this on themselves, and need to figure out new ways to bundle the media/data itself with additional value options they can charge for that aren’t based on “physical” copies, as those copies actually don’t exist anymore.

Currently, as CEO of Dachis Group, Jeff’s leadership and vision helped establish the digital services industry when he co-founded global interactive services firm Razorfish. Jeff has appeared in the New York Times, the Wall Street Journal, Business Week, and on CNBC, CNN, 20/20 and 60 Minutes. Honors include Ernst &Young’s Entrepreneur of the Year, among others.