Eliot Van Buskirk has published what he calls “A Modest Proposal” for webcasting royalties at Wired.com. He’s got some excellent ideas, but spends the bulk of the article ignoring one of opening premises: “Label representative SoundExchange appears to hold all of the cards.” The problem here is not that SoundExchange and the webcasters can’t come to an agreement, it’s that SoundExchange knows that it can use the force of government to get essentially whatever agreement it wants. As a multi-billion dollar company, SoundExchange has far more ability to lobby, and thus influence, governmental and bureaucratic bodies then some guy streaming music from his home computer.
Without the guns of the federal government on its side SoundExchange, or more likely the labels or artists themselves, would be forced to actually negotiate with webcasters in order to determine rates. Should a webcaster refuse to pay the mandated royalties or refrain from playing SoundExchange music under our current system, SoundExchange needs merely encourage the government to spend the money of all US residents to arrest, prosecute and imprison the offender. In a free market SoundExchange itself would be responsible for the costs of enforcement actions. Does anyone truly think this would make them less likely to negotiate reasonably?