WASHINGTON, D.C. --  The wild, wild West of Internet anarchy that was the first decade of the new century has a new sheriff.  And she paid a visit to the 10th annual Future of Music Policy Summit with a  badge bearing a 33-point strategy for restoring law and order.

The summit concluded Tuesday after three days of presentations and spirited dialogue among tech heads, policy makers, artists and recored-label executives plotting a new future for the music industry. But it was a visit by President Barack Obama’s new copyright czar, Victoria Espinel, that was the talk of the conference.

Espinel was appointed by Obama earlier this year as the nation’s first-ever U.S. intellectual property enforcement coordinator.  A few months ago she introduced a strategy for dealing with Internet file-sharing  (or “smash and grab” as it was described by Vice President Joe Biden), which has been linked to a 50 percent decline in music-industry revenue over the last decade.

The music industry’s implosion has become a cause that even the federal government can't ignore because the same issue – unfettered exchange of Internet files – has bled into the movie and publishing industries. Now any intellectual property that can be digitized can also be shared/stolen/cannabalized within seconds of hitting the Internet, and multibillion-dollar businesses -- most of them with roots firmly planted in the pre-digital 20th Century -- are crying foul.

WASHINGTON, D.C. – The music industry is trying to survive and possibly reinvent itself. Artists want to get paid. And consumers want music quickly with no strings attached. Are all three goals achievable, and if not, who will lose out? Can unfettered access to the Internet co-exist with artist's desires to get paid for their music? Can the music industry hack its way through a maze of legal obligations and create a new business model that entices fans before all those fans disappear into the digital underground, where music runs wild and free?

These questions dominated the Future of Music Policy Summit in the nation’s capital, an annual gathering of some of the industry’s leading thinkers and innovators, alongside representatives of the music, technology, business and government communities.

The conference, which concluded Tuesday, addressed the biggest question in music today: how to create a legitimate digital marketplace for music. How that question is resolved will determine how music is distributed and by whom, how fans will hear that music and at what price, and how artists will get paid -- if at all.

 The summit’s driving force is the Future of Music Coalition, a nonprofit education, research and advocacy group for musicians. The coalition has been a consistently progressive and forward-looking voice during a difficult decade for the music industry, when sales of recorded music plummeted even as more listeners gained access to more music than ever through countless digital platforms, many of them unsanctioned. 

 At the top of the summit agenda was net neutrality, the principle that keeps the Internet equally accessible to all users. A few major corporations have advocated tiered access to the Internet based on the ability to pay, a notion strongly rejected in keynote speeches by Sen. Al Franken (D-Minn.) and Federal Communications Chairman Julius Genachowski, who will oversee the rulemaking process on net neutrality getting underway in the next few weeks. But Franken and Genachowski also said that any Internet activity that violates artist copyright could not be tolerated.

“Enforcement of copyright and laws of network openness can and must co-exist.” Genachowski said, but how file-trading could be monitored for illegal activity while unimpeded Internet access is maintained remains to be seen. Several European governments have already approved or are considering regulations that would restrict or deny Internet access to users deemed to be swapping copyrighted files. President Obama recently appointed an overseer of copyright, Victoria Espinel, but she’s expected to steer a moderate course on Internet usage. After a decade of punitive but largely ineffective measures against file-sharers, many industry veterans are calling for business models that embrace the historic tide of music listening facilitated by the Internet.

“Copying can’t be stopped,” said artist manager Peter Jenner. “I have an interest in getting paid, but we have to stop thinking of the Internet like a shop and more like a radio station.” The industry is clinging to a business built on mass-produced “small bits of plastic” sold inside physical stores. “The less we think about how we did it in the past, the faster we’ll figure out how to make money,” he said.

 The Future of Music Coalition argues that strong guidelines that favor net neutrality will make Internet access less costly and more widely available to more people, and serve to drive consumers to legitimate digital music stores that will put more money in the pocket of artists. But first there must be stores that offer more attractive products than free peer-to-peer networks. As U.K. singer-songwriter Billy Bragg wrote in a recent editorial, “…we will not be able to marginalize the pirates until we can offer accessible, easy to use, fairly priced alternative business models that people will actually want to buy their music from.”

 One such service could be Spotify, which debuted in Europe last year. Daniel Ek, the Swedish founder of Spotify, has created a music platform that is fast, easy to use and more versatile than traditional music stores. It offers consumers a variety of options in accessing, paying for and sharing music, and shares revenue with artists from a pool of revenue created by downloads, advertising and subscriptions.

 But Ek said the service’s U.S. debut is still a few months off as it works through a maze of licensing issues with publishers, labels and collection agencies. To create a new above-board music platform in America under current copyright law requires big reserves of money, lawyers and perseverance.

 “The Internet is a simple distribution platform … [but] we’ve made things unnecessarily complex,” said Johanna Shelton, senior policy counsel of Google Inc. Calls for a music rights organization, a one-stop shop to deal with all licensing issues, have gone unheeded. Meanwhile, artists who have moved outside traditional record deals are forging alliances that allow them to be more agile in responding to consumer behavior.

 Radiohead, which released its latest album, “In Rainbows,” through its Web site and ended up selling more than 3 million copies, has been leading the way. Since then, the British quintet has released a steady stream of digital music, some of it for free, and engaged fans to participate in making videos. Brian Message, a member of the band’s management team, said, “There’s a globe out there to be reached. It’s not about protecting the copyright-trading game. Sometimes it can be good to give away music.”

 He sees a more fluid, flexible relationship involving bands, fans and investors, “merged together with no rules.” Somewhere between the flexibility of the world’s Radioheads and the rigidness of 20th Century rights holder, lies the path to a new business model.

greg@gregkot.com

WASHINGTON, D.C. – The Future of Music Policy Summit wrapped Tuesday. We’ll have a full report soon on the annual gathering of the music, technology, business and government worlds up soon. In the interim, here’s a sampling of what went on at some of the panels:

Spotify is (almost) here: The music platform is sweeping Europe with its speed, ease of navigation, and access to a motherlode of great music while ensuring that artists get paid through a revenue pool of funds from downloads, subscriptions and advertising. But after debuting last year, the service is finding it slow going entering the U.S. market while clearing a maze of licenses to publishers, collection agencies and labels. I spoke briefly to the site’s Swedish founder, Daniel Ek, before his presentation, and he says he hopes to bring Spotify to the U.S. market by early 2010 at the latest, but not until the licensing issues are resolved. He’s offering a service that consumers are going to love, and that will put money in artists’ pockets. At this juncture, it looks like the first major advance in the digital market since iTunes was introduced in 2003. Can’t wait.

The congressman is a Girl Talk fan: Rep. Mike Doyle (D-Pa.) espoused his support for a congressional initiative that would clear the way for a proliferation of low-power radio stations to serve small communities. He also lauded fellow Pittsburgh native Gregg Gillis, a k a sample-based composer Girl Talk, for his innovative music.  Gillis’ music, which samples hundreds of pieces of copyrighted music without paying clearance fees, is “transformative,” Doyle says, and therefore not in violation of copyright law. A narrow interpretation of the law in favor of rights-holders would “stifle creativity,” the congressman says.

 Ian MacKaye  is not on Twitter: The elder statesman of punk (Minor Threat, Fugazi, the Evens) says he’s not really a Luddite, but it’s safe to say he’s not opening a Twitter account anytime soon. “Technology in recent years has dominated everything and the content suffers. … The obsession with software is insane. I just want to write a song.”

 greg@gregkot.com

WASHINGTON, D.C. – Can the notion of a free Internet co-exist with the rights of music copyright holders, whose intellectual property is being shared – often without consent – by a wired generation of music fans?

That question fired a contentious debate Monday at the Future of Music Coalition Policy Summit.

In a keynote address, Federal Communications Commission Chairman Julius Genachowski declared that the commission would begin the process of creating guidelines on net neutrality this month, beginning with citizen input. He came down firmly in favor of keeping the Internet “a blank canvas where anyone can paint ideas … without permission,” rather than creating a hierarchy of access (as some corporations have favored) based on the ability of users to pay.Genachowski also said a major initiative would get underway to ensure that broadband access is available to every American, with an emphasis on under-served rural and inner-city areas.

“Achieving universal broadband access is the major infrastructure challenge of our generation,” he said.

But, like Sen. Al Franken (D-Minn), who spoke before him, he was more circumspect on the issue of how to deal with peer-to-peer file sharers who may be engaging in illegal music commerce.  “Enforcement of copyright and laws of network openness can and must co-exist,” he said. It was unclear how the two issues would be reconciled, but powerful forces within the recording industry later advocated that the notion of a free and open Internet should only go so far.

Steve Marks of the Recording Industry Association of America hammered away at the notion that while “there is plenty of appetite for music out there, nobody is paying for it.” Hal Ponder of the American Federation of Musicians went one step further and said encryption of digital data allowing regulators to monitor musif-file traffic may be one way to allow artists to support net neutrality while still protecting copyright.

 But a host of voices at the summit suggested that any sort of policing of what is or is not a “legal” file would lead to a morass of legal and ethical issues, and force the activity further underground. Instead, they said that the industry should focus on compelling consumers to use legitimate services. “I feel like this is ‘Ground Hog Day,’ ” said Michael Petricone of the Consumer Electronics Association. “I wish we’d spend less time trying to figure out how to filter and control [data on the Internet] and more time on building sustainable business models by which everyone can profit.”

 greg@gregkot.com

WASHINGTON, D.C. – Big day Monday for the Future of Music Coalition summit, with Sen. Al Franken (D-Minn.) and Federal Communications Commission Chairman Julius Genachowski both scheduled as featured speakers. The primary topic: Net neutrality, the principle that the Internet should not discriminate against any data carried over it.

Franken said he sees a groundswell of support in Congress to pass legislation that would ensure that a handful of Internet service providers do not get to play God in determining which users will command the most band width. He added that the Obama administration is also in favor of keeping  the ‘Net the “town hall of the 21st Century,” where everyone’s voice, from “citizen bloggers … [to] media conglomerates” has equal access.

The Senator was less forceful in addressing the notion of peer-to-peer file sharing of intellectual property. At an earlier panel, Bertis Downs, longtime manager of R.E.M., expressed his distaste for the record industry’s campaign to sue file-sharers. “Essentially that’s what the Internet does, provide a place for people to trade files,” he said. In 2007, R.E.M. created a Web site to document a series of concerts in Dublin in which the band road-tested 11 new songs for its forthcoming major-label album. Fans used the Web site to post videos and MP3 files of the performances, and he said the band decided to allow it, even though the band’s label wasn’t thrilled. “It was going to happen anyway,” he said. It led to a two-year series of events: a studio album (“Accelerate”), a tour and a live DVD that fed off the enthusiasm created by those initial concerts, and how they directly invested the fans in the band’s music.

Franken acknowledged that as a copyright holder himself, both as an author and former talk-show host, he believes that artists are entitled to legal protections. He stated that “Internet service providers must retain the right to control unlawful usage of the Internet,” but he stopped short of saying how he defined “unlawful usage.” The murky issue of how to compensate copyright holders and how to deal with file-sharing is among the most pressing concerns of the music industry, in many ways the central debate of the last decade. But in a brief question-and-answer session after his net-neutrality speech, Franken joked that he isn’t really qualified to determine what the best way would be to distinguish what constitutes digital infringement, in an era when file-sharers have been assessed millions of dollars in fines in court cases.

It’s troubling that Franken didn’t really take a stand on the issue, but at a time when debates on health care and Afghanistan are dominating the headlines, it’s clear that Internet file-sharing is pretty low on the list of priorities in Congress. That could change with the recent appointment of Victoria Espinel as the Obama administration’s new overseer of copyright, but major traction on the issue is at best months away.

Genachowski is up next, and I’ll have more later today on his speech.

 greg@gregkot.com
 

WASHINGTON. D.C. – The Future of Music Coalition Policy Summit got rolling Sunday, an annual meeting of musicians, tech-heads, artist managers, academics and music-biz entrepreneurs. The summit’s forward-looking approach is all about making the best of the new reality created by Internet technology and how that might be affected by government policy decisions.
   
 Sounds like heavy stuff. But wonkiness goes hand in hand with the myriad possibilities that await artists in a music industry very different from the one that existed a decade ago, before peer-to-peer file sharing came along.

We''ll have plenty more in upcoming days, but as a backdrop for the summit, here are a few tidbits of information shared by publicist Ariel Hyatt about U.S. album sales in 2008: More than 115,000 albums were released, but only 110 sold more than 250,000 copies, a mere 1,500 topped 10,000 sales, and fewer than 6,000 cracked the 1,000 barrier -- further evidence that sales of recorded music are not the way of the future for artists. Instead, it increasingly appears that recordings will be more like adverstisements for opportunities that actually do make money: live performances, merchandise, licensing to movies, commercials and video games, ring tones, etc.

 greg@gregkot.com