The traditional record company’s main income has for over a hundred years been selling as many copies as possible. The move from this traditional model to a completely new model is now happening, a model in which the music company’s main revenue comes from the number of plays on digital services rather than the number of sold copies.
Traditionally the business model have been relatively straightforward, the more copies sold, the more revenue. This model was initally also transferred to the digital reality through services such as iTunes Store, CDON and mobile services such as 3 and Telenor. The listener paid for “downloading” a copy, which in practice means that you paid for the right to create a local copy. The more copies fixed on people’s hard drives and mobile phones, the more revenue to the music company.
The control over copies in the copyright law has long been important for the business models designed to create revenue for music. One might even say that copyright law awarded a specific model of income, i.e. revenues based on the control of reproduction. But, this model is now changing and the design of reproduction rights must change along with it.
Future music companies will have to focus on increasing usage and exposure of music. The more plays, the more revenue to the music company, artists, musicians and songwriters.
It is alreade done today through services like YouTube and Last.fm. In the long term it would even be plausible that decentralized distribution and reproduction should be encouraged, since the new model is based on revenues from usage rather than the production and distribution of copies. A new generation of services such as Spotify, Telia Play, Nokia Comes With Music and Sony Ericsson Play Now Plus shows the way and could be said to be the first real change of format in the digital reality. From a-la-carte downloads to all-you-can-eat use.
Consumer electronics industries, namely manufacturers of mobile phones, mp3 players, HD set-top boxes, televisions, computers, etc, should go to the music industry and film industry associations to develop a consensus on how this transition from reproduction to usage should be designed. Although consortia, such as the old SDMI, have found it difficult to arrive at reasonable standards and good common solutions, I think it is important to join forces and develop a whole new form of revenues.
Lobby organizations should then work to influence lawmakers and international organizations such as WIPO and WTO to make them understand that the traditional reproduction rights will no longer be maintained by means of control and sanctions, as has previously been possible. This does not mean that copyright law should disappear, far from it, it means only that parts of the copyright law is changed so that it becomes an effective and truly useful copyright law rather than a law which is far from the reality that hundreds of millions of people around the world are in.
As more and more of our world is relying on intangible property, it is logical to think that intellectual property laws and regulations will become increasingly important. It is therefore essential that these laws also reflects both the technical and moral reality that society finds itself in. In a future model primarily based on revenues from the usage of music, rather than copies of it, I believe that the total revenue for the authors have a potential to increase dramatically and create a mold of creators and composers who will do anything to get people to distribute, copy, and listen to music on all kinds of machines.