1 Choruss: A New Business Model for Digital Music Jim Griffin March 3, 2009

2 Introduction The current system of monetizing music is failing Technology is not the solution This is not a new problem Past solutions offer lessons So do current experiments We plan a new set of experiments

3 Myth 1: Choruss Relies on ISP Guesses and No Data Reality: Choruss will work with, and is discussing the application of, an extensive array of digital music technologies, and we are open to evaluating all approaches. We will work with universities to advance the state of the art in music data collection, such as Audible Magic. We are also working with leading firms in network technology, and we encourage our academic partners to publish their work.

4 Myth 2: Choruss Seeks to Legalize Peer-to-Peer Sharing Reality: Like most everyone, we see the potential and the reality. For a long time we have been in favor of leglaized – that is, licensed – P2P, but that is not our focus in Choruss. We are interested in actuarial monetization ideas and network fee approaches.

5 Myth 3: Choruss Needs Compulsory License Added to Copyright Law Reality: An ASCAP (BMI, SESAC) license has real value. None represent all the rights holders, nor do they in aggregate cover every songwriter nor all the rights to the music they represent. None was created by law, nor are their licenses compulsory, and yet they absorb much uncertainty and offer real value to their licensees, not to mention billions to incent creativity. Choruss seeks to preclude government compulsion and hopes to achieve a similar effect with a voluntary approach.

6 Myth 4: Choruss Is a Network Tax Unfair to Non-Infringers Reality: While there are many mandator approaches to media fees – and none so mandatory as advertising – Choruss will experiment and will not apply any one-size-fits- all approach. We will include opt-in, opt-out, and all-in systems, with lower fees spread evenly across campus, like library or gym fees. Many campuses already require residents to pay for cable TV, assessing student fees in diverse ways.

7 Myth 5: If You Can Count Music You Can Filter It Reality: Accounting after the fact with sampling and database matching is far different from real- time interception of the light-speed flow of digits, and the trend towards encryption renders census or complete filtering unachievable and getting worse. In our conversation with technology providers, they all agree that it is far easier to sample and to count music traversing networks to arrive at a fair set of payments than it is to identify and to block for complete control.

8 Myth 6: Choruss Is an Interesting Idea That Can’t Work in the Real World Reality: We are driven by what we believe are an important set of concepts and principles, but we are totally focused on making this vision a reality. We have been engaged in extensive in- depth discussions with key players throughout the connected digital music ecosystem who will shape the implementation. We are working very hard to address all the details needed for trial implementations, including research methodologies to maximize learning.

9 Conclusion “Control” is a self-defeating goal Go with the flow Example: Copyright Clearance Center New business models, not tech police The scarce resource is time, not money Challenges are opportunities