Time To Scrap All Music Industry Licensing Schemes
It's impossible to be a legal innovator in online music these days. No matter what you do, you will run afoul of some kind of music licensing issue. That's because of the way that copyright law is designed.
Context & Ripple Effects
This editorial is the logical endpoint of a years-long arc in tech-press coverage: after the industry's abandonment of mass litigation suits failed to slow file-sharing, commentators concluded that even free distribution can't outcompete piracy (free still losing to piracy), and proposals shifted from enforcement to collective funding models like an ISP music tax. The argument here inverts that: rather than patching licensing, scrap it entirely — because the thicket of rights (composition vs. recording, performance vs. reproduction) means any new online music service must clear so many separate licenses that legal innovation is effectively impossible.
First-order effects
- Startups building new online music services — streaming, interactive radio, mashups — face immediate, near-unavoidable licensing risk: any product touching recorded music requires negotiating multiple rights-holder layers before launch.
- Rights holders retain veto power over distribution innovation: because each license is negotiated separately and copyright law defaults to 'all rights reserved,' incumbents can stall or kill competing business models simply by refusing terms.
Second-order effects
- The harder legal innovation becomes, the more activity migrates to unlicensed channels — pushing policymakers toward blanket-license or tax-based alternatives like the proposed music tax on ISPs as the pragmatic fallback.
- Artists and smaller labels caught between systems may increasingly bypass traditional labels and licensing intermediaries altogether, experimenting with direct-to-fan monetization since recorded-music revenue expectations are already eroding.
Third-order effects
- If the pattern holds, the industry's structure could shift from per-use licensing of recordings toward compensation mechanisms decoupled from individual transactions — voluntary blanket licenses, ISP levies, or direct artist patronage — with copyright law itself becoming the contested variable rather than a fixed backdrop.
- A systemic lesson for other media industries: when licensing complexity exceeds what innovators can navigate, enforcement-first strategies collapse, and the durable question becomes whether rights frameworks get redesigned around access or defended until obsolescence.
The trend: This piece is one data point in the longer shift from enforcing per-copy music sales toward collectively funded, access-based compensation models as digital distribution drives recorded music's price toward zero.