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Day on an Online Music Copyright Clearinghouse

By Lawrence Solum

Brian Richard Day (The George Washington University Law School) has posted Collective Management of Music Copyright in the Digital Age: The Online Clearinghouse on SSRN. Here is the abstract:

Today, the process by which we license digital music is both cumbersome and complex. The problem has been exacerbated by the growing prevalence of illegal music sharing online, as well as the multiplicity of new ways to distribute music electronically. The music industry remains in turmoil despite infringement actions brought on behalf of copyright owners attempting to combat the effects of illegal music distribution. Thus, many in the industry have recognized the need to effectively compete with illegal distribution technologies instead of simply fighting to shut them down. Acquiring the legal rights necessary to broadcast and distribute music on the Internet, however, has proven to be a difficult endeavor. Those seeking to obtain music licenses argue that the current music licensing structure is inefficient and requires reform in order to establish a healthy digital music marketplace.

This paper seeks to reconcile the existing music licensing structure with new technologies by positing a novel method of digitally licensing music copyright ? an online music licensing clearinghouse, made up of all current (and future) music copyright licensors. Today, consumers regularly rely on sites like Expedia and Travelocity to fulfill a wide variety of travel needs, including flight bookings, hotel reservations, and car rentals. The interests of disparate travel licensors are centrally managed, but not combined. Such an arrangement provides the benefits of ?one-stop shopping? while avoiding collusion concerns. In much the same way, an online music clearinghouse would provide a central location for obtaining music copyright permissions without the anti-trust concerns which have plagued industry joint ventures in the past. An online clearinghouse promises to preserve the valuable, divided music-licensing infrastructure and lower transaction costs for industry and consumers alike. When the process of obtaining music licenses is streamlined, obstacles are removed, and the legal distribution of music online can flourish.

Full post as published by Legal Theory Blog on April 21, 2009 (boomark / email).