WMG’s Jim Griffin has been busy. It looks like 3 of the 4 majors have signed on to Choruss, a diabolically brilliant scheme predicated on blackmail.
While details are still sketchy, from the reports it looks like Choruss could work like this:
The first target is Universities. A school would agree to join the Choruss program and would pay a per student monthly fee (TBD). For that fee, the students get to use P2P programs to download all the music they want. In exchange for the monthly fee, Choruss agrees not to sue the school or the students.
The school would run some software (TBD) that will try to sample what songs are being downloaded and then some portion of the monthly fee (TBD) would be distributed by Choruss to the various rights holders due payment.
Lots of details (TBD) missing but enough there to see where it’s all going.
SO WHY IS CHORUSS SO BRILLIANT?
1) Choruss avoids all bandwidth and quality issues. Music is already readily available on P2P networks and all the bandwidth costs are hoisted on the ISPs and University. No extra cost for the labels. Free money!
2) By starting with Universities, Choruss has picked the perfect testing pot. Adding (e.g.) $200/year to a tuition that already costs $25,000 is not likely to cause a huge firestorm. It’s a rounding error in an already huge annual cost. Try tacking on $200/year to a $600 annual ISP bill and the backlash would be massive.
3) Universities’ demographics pretty much ensures that the majority of the sampled music will be new releases and urban music, ensuring that the major labels grab a disproportionate share. No worry that the independent Jazz labels gets a piece. They collect the money, pay themselves for running the program, then distribute most of the money to themselves. Voila!
4) It keeps the labels relevant in a world where they are quickly becoming much less so. The labels are, once again, toll booths collecting cash.
That’s all well and good. It makes the labels money, gives the students and schools immunity, and maybe even gets some cash to a few artists.
SO WHY DOES CHORUSS SUCK?
1) It seems to be compulsory. Perhaps there will be a mechanism where a school isn’t required to pay the monthly fee on behalf of all of its students — maybe just students living on campus, etc, but it doesn’t appear to be a student based decision. There’s a certain percentage of students who are heavy P2P users and a certain percentage who don’t ever use P2P. Bell curve. The heavy users will be subsidized by the non-users. Like EPSN on basic cable. And look at a graph of ESPN fees over the past 12 years.
2) The premise is terrible. We won’t sue you if you pay us. Blackmail is ugly. There is no extra benefit, no high-bit rate availability, no seeding by the labels. Just an agreement not to sue. Sure, it’s not a strong point but it’s there. Especially because they aren’t offering anything else in exchange. The very minimum should be the requirement they seed 256kb non-DRM files with complete tag info.
3) The major labels are the last group an artist should trust to handle such a program. These aren’t just the same guys who sue fans, they are the same ones who charged for “breakage” on mechanical deals long past the days of fragile vinyl. Any artist who believes that Choruss will be an independent, well-run, lean organization is out of their mind.
4) This so-called sampling software to determine the frequency of downloads by artists is asking for trouble. Who wrote the program? How is it audited? Who gets the data? Allowing the majors to control that is bound to end in a whole host of ugly lawsuits.
5) How can the four majors — assuming UMG signs on to make it four — speak on behalf of everyone else? They can only promise that they won’t sue. Unless they sign on everyone else or get some legislation or some blanket license ability, the legal issues will be a significant hurdle.
IS CHORUSS A BAD PREMISE?
No, it’s not. It could be a true all you can eat program without DRM. It kicks the snot out of subscription programs and makes a la carte pricing obsolete. It would also send Apple scrambling to adapt iTunes to hook into P2P. It’s the holy grail.
If the major labels are truly willing to move to an unlimited DRM-free music world, it makes me wonder where ASCAP is with all this. There is no way that the major labels will operate Choruss in an efficient, fair manner. Artists will get screwed. Small labels will get screwed. Overhead will be huge. The sampling software will suck. Lawsuits will fly.
But if the majors truly agree to the premise, I wonder if they would agree to let someone else — beside themselves — run it. Radiohead and NIN and the others who have made a smart and concerted effort to rid themselves of the less-than-useful major labels should be afraid. Very afraid.
This is an attempt by the labels recreate themselves as the toll booth collector once again. They’ve lost their ability and relevancy to profitably sit between the artist and the fan and they’re trying to re-insert themselves as the keeper of the monthly fee. And for that, they will take their piece and wield power and control.
It’s a brilliant move by Jim Griffin. After all, students and universities are easy targets for a .0002% tuition increase, they get NOTHING but a Get-Out-Of-Lawsuits card, and it costs the labels nothing. Meanwhile the labels get to reassert themselves in the new system and get to be the keeper of the big bag of cash.
Artists should worry. They are certain to be the big losers here regardless of the party line coming from the labels. But are there enough collective voices to stand against the Gang of Four? Probably not.