Legal broadband subscription services that permit file sharing may appear on the market by the year’s end, according to music industry sources – after government intervention brought both music suppliers and ISPs to the table.
The UK would become the second country after South Korea where the music business has agreed to offer licenses to file sharing services in a bid to reverse declining revenues. The co-operation follows the intervention of “Brown’s Fist”, the former advisor and Parliamentary Under-Secretary at BERR (the Department for Business, Enterprise & Regulatory Reform) Baroness Shriti Vadera. Vadera is understood to have threatened both the ISP and music businesses with reform and policy intervention, threats which encouraged both parties to open negotiations.
The government is understood to be extremely reluctant to intervene with legislation as it threatened to do earlier this year, and cross-industry agreement to offer attractive consumer broadband music services would mean it wouldn’t have to.
No deals have been signed yet and significant details have yet to be addressed. These include the royalty share between mechanical, sound recording and publishing rights holders, and administration issues. A significant amount of music released has never been licensed digitally – so should a music service provider ignore it, or attempt to pay the owners? As for price, this will be determined by the ISPs. However, sources are confident that Q4 2008 or Q1 2009 will see such the first of these offered to the public.
The move would represent the most radical supply-side reform ever considered by the music business in the modern era.