Christian L. Castle, Attorneys -- Austin, Texas

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Choruss Hits A Sour Note, by Rick Carnes and Chris Castle

(This article first appeared in the December 30, 2008 edition of Content Agenda)

In early December (2009, Wired reported that some music labels were talking to universities about building a flat fee for file-sharing into tuition, allowing students to continue downloading music “without fear of legal reprisal”. The fees would be collected by a non-profit organization, Choruss, which would then distribute revenues back to participating record labels.

      The proposed Choruss music service appears to be an idea whose time has passed. While creators work hard to support cooperative business models that respect copyright and economic rights online, Choruss essentially waves a wand of legality over bandwidth-hogging file “sharing” programs without any of the accountability required of legitimate services like iTunes and Hulu.

     Creators are unable to control the distribution of their recordings through file “sharing” on university networks, and Choruss offers nothing to change that affront. Legitimate services such as iTunes have been wildly successful operating within the laws and recognizing the economic rights of artists while offering a great consumer opportunity. If Choruss “legalized” illegal file “sharing”, why would any user ever go to iTunes again? What would happen to the considerable investment already made in legitimate music and video services online, not to mention the network infrastructure that delivers content to consumers?

      The promoters of Choruss would have universities hide a music “tax” in student tuition bills paid by all students—whether they download illegally or not. (This charge would presumably be paid by scholarships, student loans and parents alike.) Choruss promoters rely on granting universities and students a “covenant not to sue” by some rights holders--a nuanced, untested, flimsy, and complex legal strategy that does little to shift the risk of prosecution for copyright infringement away from users. Choruss would have students believe their legal theories magically allow users to continue downloading without fear of consequences—and the nuances of the legal theory will be lost until the student ends up in the courtroom wondering what happened. 

      Why is the theory doomed to fail? Because there will be thousands of copyright owners who do not participate in Choruss. It seems highly unlikely that Choruss will be able to sign up all copyright owners in the universe, or even most. And note—the word “indemnify” does not appear in Choruss’s pitch materials. If the Choruss legal theory is such a great idea, why doesn’t Choruss indemnify the universities and students from any claims? What are the students paying for exactly?

       The gravest concern to creators, however, is that Choruss would have virtually no accountability to the songwriters, artists, musicians and vocalists who fuel the Choruss business model. The program offers no solution to accounting to creators for file “sharing” uses—campuses would merely “estimate” usage. Choruss stands in stark contrast to ASCAP, BMI, SESAC and SoundExchange, all of which spend considerable effort in tracking actual usage of the works they are permitted to license to be good fiduciaries to their members.     

     What will the long-term effects be on the music business? Under the Choruss model, “estimates” of p2p traffic will suffice for “success”—which means that major label records will be rewarded because p2p is a reactive technology, meaning that users typically go to an illegal service to look for a specific track, not to find out about new music. “Estimates” will inevitably reward artists who are getting or have gotten a big marketing push from major labels—not indie or niche artists.

     Choruss seems to plan on extending this plan to ISPs if it is “successful” on college campuses. It is hard to see why any ISP would want to be the collection agent for Choruss when the legitimate music services could easily be wrapped into a broadband or other ISP offering. 

     While legitimate services offer all of the accounting resources and control necessary to run a successful business, Choruss is lost searching for spare change under the cushions in a house of cards.

 
 

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