The orphan works problem in copyright is real and serious. Several congressional hearings and a Copyright Office inquiry that drew hundreds of thoughtful comments---not to mention countless articles and blog posts---attest to that fact. This attention is heartening, and while orphan works legislation seems to have died this year, I'm optimistic that the next Congress will address the issue. As is often the case in Washington, however, such a victory might only mark the beginning of the next battle. The way I see it, the DMCA might create a second orphan works problem.

As you may know, an orphan work is a work under copyright the owner of which cannot be found. For example, say you come across a self-published political manifesto from 1967 in a Berkley archive or garage sale. You'd like to excerpt extensively from it in a book you're writing about the Summer of Love. You try every possible avenue to locate the pamphlet's author to get persmission, but you fail. That manifesto is an orphan work: it's under copyright, but you can't find the copyright's owner.

The problem with orphan works is that if you nevertheless use the work without getting permission from the owner, you expose yourself to an infringement lawsuit if the owner later appears. Because statutory damages can run as high as $150,000 per infringing use, most orphan works go unused. This is a loss not only to the potential user, but also to society at large because it will be deprived of the promotion of science that would have resulted from a derivative work. Perhaps worse, an orphan work might be lost altogether because making an archival copy---say from fragile film to a more stable digital format---can be considered an infringement.

I have previously proposed a solution to the orphan works problem that would create an orphan works affirmative defense to infringement similar to fair use. Under this scheme, if you could show that you took every reasonable step to find a copyright owner and came up empty, you would not be liable for infringement. The Copyright Office made a similar recommendation, but instead of serving as a defense, showing a reasonable search for the copyright holder would merely limit the possible penalties for infringement. A bill based on that recommendation passed the Senate in September but never got a vote in the House before it adjourned earlier this month.

So what does this all have to do with the DMCA? My concern is this: Even if a strong orphan works bill were to pass Congress so that one would no longer have to worry about liability for copyright infringement, the work might still be unusable if in order to gain access to it one had to circumvent a technological measure in violation of the DMCA.

This is not a far-fetched idea. The Internet Archive has already successfully argued for a DMCA exemption for "Computer programs and video games distributed in formats that have become obsolete and that require the original media or hardware as a condition of access, when circumvention is accomplished for the purpose of preservation or archival reproduction of published digital works by a library or archive." It needed this exemption to legally preserve legacy software stored on fragile floppy discs. Without that exemption, it would violate the DMCA even if it did not violate copyright.

You can see this problem presenting itself again. For example, the Prelinger Archive serves to collect and preserve ephemeral films of historical significance. According to its web site, "Included are films produced by and for many hundreds of important US corporations, nonprofit organizations, trade associations, community and interest groups, and educational institutions." Today its collection is composed largely of videotapes and films, but there will come a time when one-of-a-kind movies will be on CSS-protected DVDs. Similarly, Amazon recently introduced its Digital Text Platform, which allows users to self-publish books that can be purchased and read on the Kindle. This means that there will soon be many books that will exist only as DRM-protected e-books. Therefore, even if we address the orphan works problem so that a user must no longer fear a surprise infringement suit from a previously impossible-to-find copyright holder, the user might still fear a DMCA suit.

The triennial exemption process provided in the DMCA will likely not provide sufficient relief because the Copyright Office is limited to exempting particular "class[es] of copyrighted works." Just as it has refused to exempt "fair use works" because that is not a "sufficient" or "cognizable" class, the Copyright Office probably won't recognize orphan works as a class that can be exempt. The sort of classes it will recognize will be very narrow, such as the one in the "obsolete video game or software" exemption. Not only is this exemption for one particular type of work, but it only applies to circumventions made for archival purposes.

Additionally, as Tim Lee points out to me, another way the DMCA might exacerbate the orphan works problem is by preventing the conversion of works into open and widely supported formats---the digital equivalent of what Prelinger is trying to do with film. Most of the proprietary DRMed formats we see around us today are likely to drop out of commercial use within the next couple of decades. As a result, people will gradually forget how to read those formats at all. By 2108, even if the DMCA has been reformed, no one may have any clue how to decrypt a PlaysForSure-encrypted audio file from 2002. Digital libraries in the near future need to be able to say "Boy, this format isn't commercially supported any more, we're going to convert it to MP3/MPEG/PDF so our patrons can continue enjoying it." If they're not allowed to do that, DMCA reform in the distant future may not matter.

I'm afraid I don't have a ready solution short of abolishing or limiting the DMCA. One approach might be to include a limit to DMCA liability in the proposed orphan works legislation. However, I wouldn't want to endanger that legislation's political viability to address what is still a speculative problem. It won't be long, however, before we find out if DMCA protections cause a second orphan works problem, metastasizing the harm visited on culture and society by that regrettable law.

Stephanie Lenz's case will be familiar to many of you: After publishing a 29-second video on YouTube that shows her toddler dancing to the Prince song "Let's Go Crazy," Ms. Lenz received email from YouTube, informing her that the video was being taken down at Universal Music's request. She filed a DMCA counter-notification claiming the video was fair use, and the video was put back up on the site. Now Ms. Lenz, represented by the EFF, is suing Universal, claiming that the company violated section 512(f) of the Digital Millennium Copyright Act. Section 512(f) creates liability for a copyright owner who "knowingly materially misrepresents... that material or activity is infringing."

On Wednesday, the judge denied Universal's motion to dismiss the suit. The judge held that "in order for a copyright owner to proceed under the DMCA with 'a good faith belief that the use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law,' the owner must evaluate whether the material makes fair use of the copyright."

The essence of Lenz's claim is that when Universal sent a notice claiming her use was "not authorized by... the law," they already knew her use was actually lawful. She cites news coverage that suggests that Universal's executives watched the video and then, at Prince's urging, sent a takedown notice they would not have opted to send on their own. Wednesday's ruling gives the case a chance to proceed into discovery, where Lenz and the EFF can try to find evidence to support their theory that Universal's lawyers recognized her use was legally authorized under fair use—but caved to Prince's pressure and sent a spurious notice anyway.

Universal's view is very different from Lenz's and, apparently, from the judge's—they claim that the sense of "not authorized by... the law" required for a DMCA takedown notice is that a use is unauthorized in the first instance, before possible fair use defenses are considered. This position is very important to the music industry's current practice of sending automated takedown notices based on recognizing copyright works; if copyright owners were required to form any kind of belief about the fairness of a use before asking for a takedown, then this kind of fully computer-automated mass request might not be possible, since it's hard to imagine a computer performing the four-factor weighing test that informs a fair use determination.

Seen in this light, the case has at least as much to do with the murky epistemology of algorithmic inference as it does with fair use per se. The music industry uses takedown bots to search out and flag potentially infringing uses of songs, and then in at least some instances to send automated takedown notices. If humans at Universal manually review a random sample of the bot's output, and the statistics and sampling issues are well handled, and they find that a certain fraction of the bot's output is infringing material, then they can make an inference. They can infer with the statistically appropriate level of confidence that the same fraction of songs in a second sample, consisting of bot-flagged songs "behind a curtain" that have not manually reviewed, are also infringing. If the fraction of material that's infringing is high enough—e.g. 95 percent?—then one can reasonably or in good faith (at least in the layperson, everyday sense of those terms) believe that an unexamined item turned up by the bot is infringing.

The same might hold true if fair use is also considered: As long a high enough fraction of the material flagged by the bot in the first, manual human review phase turns out to be infringement-not-defensible-as-fair-use, a human can believe reasonably that a given instance flagged by the bot—still "behind the curtain" and not seen by human eyes—is probably an instance of infringement-not-defensible-as-fair-use.

The general principle here would be: If you know the bot is usually right (for some definition of "usually"), and don't have other information about some case X on which the bot has offered a judgment, then it is reasonable to believe that the bot is right in case X—indeed, it would be unreasonable to believe otherwise, without knowing more. So it seems like there is some level of discernment, in a bot, that would suffice in order for a person to believe in good faith that any given item identified by the bot was an instance of infringement suitable for a DMCA complaint. (I don't know what the threshold should be, who should decide, or whether or not the industry's current bots meet it.) This view, when it leads to auto-generated takedown requests, has the strange consequence that music industry representatives are asserting that they have a "good faith belief" certain copies of certain media are infringing, even when they aren't aware that those copies exist.

Here's where the sidewalk ends, and I begin to wish I had formal legal training: What are the epistemic procedures required to form a "good faith belief"? How about a "reasonable belief"? This kind of question in the law surely predates computers: It was Oliver Wendell Holmes, Jr. who first created the reasonable man, a personage Louis Menand has memorably termed "the fictional protagonist of modern liability theory." I don't even know to whom this question should be addressed: Is there a single standard nationally? Does it vary circuit by circuit? Statute by statute? Has it evolved in response to computer technology? Readers, can you help?

People have been heaping blame on Yahoo after it announced plans to shut down its Yahoo Music Store DRM servers on September 30. The practical effect of the shutdown is to make music purchased at the store unusable after a while.

Though savvy customers tended to avoid buying music in forms like this, where a company had to keep some distant servers running to keep the purchased music alive, those customers who did buy – taking reassurances from Yahoo and music industry at face value – are rightly angry. In the face of similar anger, Microsoft backtracked on plans to shutter its DRM servers. It looks like Yahoo will stay the course.

Yahoo deserves blame here, but let's not forget who else contributed to this mess. Start with the record companies for pushing this kind of DRM, and the DRM agenda generally, despite the ample evidence that it would inconvenience paying customers without stopping infringement.

Even leaving aside past mistakes, copyright owners could step in now to help users, either by enticing Yahoo to keep its servers running, or by helping Yahoo create and distribute software that translates the music into a usable form. If I were a Yahoo Music customer, I would be complaining to the copyright owners now, and asking them to step in and stand behind their product.

Finally, let's not forget the role of Congress. The knowledge of how to jailbreak Yahoo Music tracks and transform them into a stable, usable form exists and could easily be packaged in software form. But Congress made it illegal to circumvent Yahoo's DRM, even to enable noninfringing use of a legitimately purchased song. And they made it illegal to distribute certain software tools to enable those uses. If Congress had paid more attention to consumer interests in drafting the Digital Millennium Copyright Act, or if it had passed any of the remedial legislation offered since the DMCA took effect, then the market could solve this Yahoo problem all on its own. If I were a Yahoo Music customer, I would be complaining to Congress now, and asking them to stop blocking consumer-friendly technologies.

And needless to say, I wouldn't be buying DRM-encumbered songs any more.

UPDATE (July 29, 2008): Yahoo has now done the right thing, offering to give refunds or unencumbered MP3s to the stranded customers. I wonder how much this is costing Yahoo.

James Grimmelmann has an interesting new essay, "Copyright, Technology, and Access to the Law," on the challenges of ensuring that the public has effective knowledge of the laws. This might sound like an easy problem, but Grimmelmann combines history and explanation to show why it can be difficult. The law – which includes both legislators' statutes and judges' decisions – is large, complex, and ever-changing.

Suppose I gave you a big stack of paper containing all of the laws ever passed by Congress (and signed by the President). This wouldn't be very useful, if what you wanted was to know whether some action you were contemplating would violate the law. How would you find the laws bearing on that action? And if you did find such a law, how would you determine whether it had been repealed or amended later, or how courts had interpreted it?

Making the law accessible in practice, and not just in theory, requires a lot of work. You need reliable summaries, topic-based indices, reverse-citation indices (to help you find later documents that might affect the meaning of earlier ones), and so on. In the old days of paper media, all of this had to be printed and distributed in large books, and updated editions had to be published regularly. How to make this happen was an interesting public policy problem.

The traditional answer has been copyright. Generally, the laws themselves (statutes and court opinions) are not copyrightable, but extra-value content such as summaries and indices can be copyrighted. The usual theory of copyright applies: give the creators of extra-value content some exclusive rights, and the profit motive will ensure that good content is created.

This has some similarity to our Princeton model for government transparency, which urges government to publish information in simple open formats, and leave it to private parties to organize and present the information to the public. Here government was creating the basic information (statutes and court opinions) and private parties were adding value. It wasn't exactly our model, as government was not taking care to publish information in the form that best facilitated private re-use, but it was at least evidence for our assertion that, given data, private parties will step in and add value.

All of this changed with the advent of computers and the Internet, which made many of the previously difficult steps cheaper and easier. For example, it's much easier to keep a website up to date than to deliver updates to the owners of paper books. Computers can easily construct citation indices, and a search engine provides much of the value of a printed index. Access to the laws can be cheaper and easier now.

What does this mean for public policy? First, we can expect more competition to deliver legal information to the public, thanks to the reduced barriers to entry. Second, as competition drives down prices we'll see fewer entities that are solely in the business of providing access to laws; instead we'll see more non-profits, along with businesses providing free access. More competition and lower prices will mean better and more effective access to the law for citizens. Third, copyright will still play a role by supporting the steps that remain costly, such as the writing of summaries.

Finally, it will matter more than ever exactly how government provides access to the raw information. If, as sometimes happens now, government provides the raw information in an awkward or difficult-to-use form, private actors must invest in converting it into a more usable form. These investments might not have mattered much in the past when the rest of the process was already expensive; but in the Internet age they can make a big difference. Given access to the right information in the right format, one person can produce a useful mashup or visualization tool with a few weeks of spare-time work. Government, by getting the details of data publication right, can enable a flood of private innovation, not to mention a better public debate.

A new study by Michael Piatek, Yoshi Kohno and Arvind Krishnamurthy at the University of Washington shows that copyright owners' representatives sometimes send DMCA takedown notices where there is no infringement – and even to printers and other devices that don't download any music or movies. The authors of the study received more than 400 spurious takedown notices.

Technical details are summarized in the study's FAQ:

Downloading a file from BitTorrent is a two step process. First, a new user contacts a central coordinator [a "tracker" – Ed] that maintains a list of all other users currently downloading a file and obtains a list of other downloaders. Next, the new user contacts those peers, requesting file data and sharing it with others. Actual downloading and/or sharing of copyrighted material occurs only during the second step, but our experiments show that some monitoring techniques rely only on the reports of the central coordinator to determine whether or not a user is infringing. In these cases whether or not a peer is actually participating is not verified directly. In our paper, we describe techniques that exploit this lack of direct verification, allowing us to frame arbitrary Internet users.

The existence of erroneous takedowns is not news – anybody who has seen the current system operating knows that some notices are just wrong, for example referring to unused IP addresses. Somewhat more interesting is the result that it is pretty easy to "frame" somebody so they get takedown notices despite doing nothing wrong. Given this, it would be a mistake to infer a pattern of infringement based solely on the existence of takedown notices. More evidence should be required before imposing punishment.

Now it's not entirely crazy to send some kind of soft "warning" to a user based on the kind of evidence described in the Washington paper. Most of the people who received such warnings would probably be infringers, and if it's nothing more than a warning ("Hey, it looks like you might be infringing. Don't infringe.") it could be effective, especially if the recipients know that with a bit more work the copyright owner could gather stronger evidence. Such a system could make sense, as long as everybody understood that warnings were not evidence of infringement.

So are copyright owners overstepping the law when they send takedown notices based on inconclusive evidence? Only a lawyer can say for sure. I've read the statute and it's not clear to me. Readers who have an informed opinion on this question are encouraged to speak up in the comments.

Whether or not copyright owners can send warnings based on inconclusive evidence, the notification letters they actually send imply that there is strong evidence of infringement. Here's an excerpt from a letter sent to the University of Washington about one of the (non-infringing) study computers:

XXX, Inc. swears under penalty of perjury that YYY Corporation has authorized XXX to act as its non-exclusive agent for copyright infringement notification. XXX's search of the protocol listed below has detected infringements of YYY's copyright interests on your IP addresses as detailed in the attached report.

XXX has reasonable good faith belief that use of the material in the manner complained of in the attached report is not authorized by YYY, its agents, or the law. The information provided herein is accurate to the best of our knowledge. Therefore, this letter is an official notification to effect removal of the detected infringement listed in the attached report. The attached documentation specifies the exact location of the infringement.

The statement that the search "has detected infringements ... on your IP addresses" is not accurate, and the later reference to "the detected infringement" also misleads. The letter contains details of the purported infringement, which once again give the false impression that the letter's sender has verified that infringement was actually occurring:

Evidentiary Information:
Notice ID: xx-xxxxxxxx
Recent Infringement Timestamp: 5 May 2008 20:54:30 GMT
Infringed Work: Iron Man
Infringing FileName: Iron Man TS Kvcd(A Karmadrome Release)KVCD by DangerDee
Infringing FileSize: 834197878
Protocol: BitTorrent
Infringing URL: http://tmts.org.uk/xbtit/announce.php
Infringers IP Address: xx.xx.xxx.xxx
Infringer's DNS Name: d-xx-xx-xxx-xxx.dhcp4.washington.edu
Infringer's User Name:
Initial Infringement Timestamp: 4 May 2008 20:22:51 GMT

The obvious question at this point is why the copyright owners don't do the extra work to verify that the target of the letter is actually transferring copyrighted content. There are several possibilities. Perhaps BitTorrent clients can recognize and shun the detector computers. Perhaps they don't want to participate in an act of infringement by sending or receiving copyrighted material (which would be necessary to know that something on the targeted computer is willing to transfer it). Perhaps it simply serves their interests better to send lots of weak accusations, rather than fewer stronger ones. Whatever the reason, until copyright owners change their practices, DMCA notices should not be considered strong evidence of infringement.

The RIAA's head technology guy says that the move away from DRM (anti-copying) technology by record labels is just a phase, according to a Greg Sandoval story at News.com:

"(Recently) I made a list of the 22 ways to sell music, and 20 of them still require DRM," said David Hughes, who heads up the RIAA's technology unit, during a panel discussion at the Digital Hollywood conference. "Any form of subscription service or limited play-per-view or advertising offer still requires DRM. So DRM is not dead."

...

Last January, when Sony BMG became the last major recording company to sell DRM-free tracks at Amazon, plenty of observers considered the technology buried. Since then, a growing number of online stores have begun offering at least some open MP3s, including Walmart.com, Zune's Marketplace, Amazon, as well as iTunes.

Not so fast, said Hughes, who predicted that DRM would reemerge in a big way. "I think there is going to be a shift," he told the audience. "I think there will be a movement towards subscription services, and (that) will eventually mean the return of DRM."

The imminent success of subscription services with DRM is more or less what the record industry was predicting several years ago. It didn't happen, mostly because customers found the services clunky and inflexible – DRM at its worst. Nothing has changed to make DRMed subscription services more attractive. If anything, these services look even worse in light of the trend toward selling DRM-free tracks.

I can see the argument for selling large bundles of music rather than selling one track at a time. Bundling makes economic sense, given the huge storage capacity of today's devices. The iPod of the future won't be filled one track at a time.

But clunky DRM-based subscription services aren't the only way to sell bundles of songs, and there are probably good ways to sell subscriptions without DRM. If you're worried that a customer will subscribe for one month, download a zillion songs, cancel the subscription and keep the songs,then you can limit the number of downloads per month, or require a longer subscription period. If you can sell songs without DRM – and we know now that you can – there ought to be a way to sell a friendly subscription service too.

On this issue, the RIAA's members may be ahead of the RIAA itself. There are encouraging signs that some of the major record companies are recognizing the need to rebuild their business strategy for the Internet era.

Reihan Salam has a new piece at Slate about voluntary collective licensing of music (which was also the topic of an online symposium organized by our center at Princeton). I'm generally a fan of Reihan's work, but this time I think he got it wrong. His piece starts like this:

What would you do if a bully—let's call him "Joey Giggles"—kept snatching your ice-cream cone? OK, now what if Joey Giggles then told you, "If you pay me five bucks a month, I'll stop snatching your ice cream." Depending on how much you hate getting beaten up, and how much you love ice-cream cones, you might decide that caving in is the way to go. This is what's called a protection racket. It's also potentially the new model for how we'll buy and listen to music.

[...]

Now Big Music is mulling the Joey Giggles approach. Warner Music Group is trying to rally the rest of the industry behind a plan to charge Internet service providers $5 per customer per month, an amount that would be added to your Internet bill. In exchange, music lovers would get all the online tunes they want, meaning that anyone who spends more than $60 a year on music will come out way ahead. Download whatever you want and pay nothing! No more DRM! Swap files to your heart's content—we promise, we won't sue you (or snatch your ice-cream cone)!

This idea, that collective licenses amount to extortion – pay us or we'll sue you – is often heard, but I don't think it's a valid criticism of collective licenses. The reason is pretty simple: if this is extortion, then all of copyright is extortion. The basic mechanism of copyright is that the creator of a work gets certain exclusive rights in the work. Exclusive rights means that there are certain things that nobody else can do with the work, without the creator's permission. "Nobody else can do X" is another way of saying that if somebody else does X, the creator can sue them. When you buy a licensed copy of a work instead of downloading it illegally, what you're buying is an enforceable promise that you won't be sued (plus the knowledge that you're playing by the rules, but that is intimately connected to the lawsuit protection). So the basic mechanism of copyright involves people paying a copyright owner for a promise not to sue them.

To put it another way, if you accept our current copyright system at all – even if you accept only a streamlined, improved version of it – then you've already accepted the kind of "extortion" that would be used to sell voluntary collective licenses. The only alternative is a complete redesign of the system, more complete even than a voluntary collective license.

Reihan does recommend a redesign. He endorses Terry Fisher's suggestion of a government tax on broadband access, with the revenue used to pay musicians based on the popularity of their songs. This system has its benefits (though on balance I don't think it's good policy). But if you start out worried about strong-arm extraction of money from citizens, a mandatory tax scheme is an odd place to end up.

This is the fundamental problem of copyright policy in the digital age. It's easy for people to get copyrighted works without paying. So either you forgo payment entirely, or you give somebody the mandate to collect payment. Who would you prefer: record companies or the government?

Today we're kicking off an online symposium on voluntary collective licensing of music, over at the Center for InfoTech Policy site.

The symposium is motivated by recent movement in the music industry toward the possibility of licensing large music catalogs to consumers for a fixed monthly fee. For example, Warner Music, one of the major record companies, just hired Jim Griffin to explore such a system, in which Internet Service Providers would pay a per-user fee to record companies in exchange for allowing the ISPs' customers to access music freely online. The industry had previously opposed collective licenses, making them politically non-viable, but the policy logjam may be about to break, making this a perfect time to discuss the pros and cons of various policy options.

It's an issue that evokes strong feelings – just look at the comments on David's recent post.

We have a strong group of panelists:

• Matt Earp is a graduate student in the i-school at UC Berkeley, studying the design and implementation of voluntary collective licensing systems.
• Ari Feldman is a Ph.D. candidate in computer science at Princeton, studying computer security and information policy.
• Ed Felten is a Professor of Computer Science and Public Affairs at Princeton.
• Jon Healey is an editorial writer at the Los Angeles Times and writes the paper's Bit Player blog, which focuses on how technology is changing the entertainment industry's business models.
• Samantha Murphy is an independent singer/songwriter and Founder of SMtvMusic.com.
• David Robinson is Associate Director of the Center for InfoTech Policy at Princeton.
• Fred von Lohmann is a Senior Staff Attorney at the Electronic Frontier Foundation, specializing in intellectual property matters.
• Harlan Yu is a Ph.D. candidate in computer science at Princeton, working at the intersection of computer science and public policy.

Check it out!

Jim Griffin, a music industry consultant who is in the unusual position of being recognized as smart and reasonable by participants across a broad swath of positions in the copyright debate, revealed last week that he's working to start a new music industry organization that will urge ISPs to bundle a music licensing fee into their monthly service costs, in exchange for which the major labels will agree not to sue (and, presumably, not to threaten suit against) the ISP's customers for copyright infringement of the music whose rights they own. The goal, Griffin says, is to "monetize the anarchy of the Internet."

This idea has a long history and has at various times been propounded by some on the "copyleft." The Electronic Frontier Foundation, for example, issued in April 2004 a report entitled "A Better Way Forward: Voluntary Collective Licensing of Music File Sharing". This report even suggested the $5 per user per month ($60 per user per year) that Griffin apparently has in mind.

According to the OECD, there were roughly 60 million broadband subscriptions in the United States as of the end of 2006. If each of these were to pay $60 a year, the total would be $3.6 billion a year. I know that broadband uptake is increasing, but I remain unsure how Griffin figures that the proposed system "could create a pool as large as $20 billion a year." Perhaps this imagines global, rather than national, uptake of the plan? If so, it seems to embody some optimistic assumptions about how widely any such agreement could plausibly be extended.

Some prominent blogs have reacted with ire—Michael Arrington at TechCrunch, for example, characterizes the move as an "extortion scheme." Arrington argues that a licensing system will hinder innovation because the revenues from it will be constant irrespective of the amount or quality of music published by the labels, and will flow to an infrastructure that, once it begins to be subsidized, will have little structural incentive to innovate. He also argues in a later post that since the core of the system is a covenant not to sue, it represents a "protection racket."

I think this kind of skepticism is poorly justified at this point. If the labels can turn their statutory right to sue for damages after copyright infringement into a voluntary system where they get paid and nobody gets sued, it strikes me as a case of the system working. And the numbers matter: The idea of a $20 billion payoff that would triple the industry's current $10 billion in annual revenue does not seem reasonable, but unless I am missing something it also does not seem probable.

There are two core questions for the plan. First, what will it cover? The idea is that it will let the industry stop suing, and thereby end the antagonism between labels and customers. But unless a critical mass of the labels agree to the plan, users whose ISPs are paying in will still face the risk of suit from non-participating copyright holders. In fact, if the plan takes off, individual rights holders may face an incentive to defect, since consumers are equally likely to infringe all popular music regardless of which music happens to be covered by the plan (since they aren't likely to track which music is covered).

Second, how will the revenue be shared? Filesharing metrics, provided by analysts like BigChampagne, are at best approximate, and they only track downloads that occur via the public, unencrypted Internet–presumably a large share of the relevant copying, but not all of it, especially in the context of University and other networks. The squabbles will be challenging, and if past is prologue, then the labels may not prove themselves an amicable bunch in negotiating with each other.

Finally, it's important to remember that the labels' power depends, in the very long run, on their ability to sign the best new talent. If the licensing system proposed by Griffin takes off, it may preserve the status quo for now. But if the industry continues to give artists themselves a raw deal, as it is so often accused of doing, artists will still have the growing power that digital technology gives them to share their music without a label's help.

Warner Music will sell music through Amazon's online store without DRM (copy protection) technology, according to a New York Times story by Jeff Leeds. This is a big step for Warner, given that earlier this year Warner CEO Edgar Bronfman said that selling MP3s would be "completely without logic or merit."

The next question is whether Warner will make a deal with Apple to sell MP3s on iTunes too. The NYT article says Warner plans to do so, but the LA Times implies the opposite. The two other majors that sell MP3s are split on this point, with EMI selling MP3s through multiple stores including iTunes, and Universal Music selling MP3s through other online stores but refusing to do so through iTunes. Is Warner willing to inconvenience its customers in order to undercut Apple?

By the way, the Times article makes a simple but common mistake, in saying that "the industry faces increasing pressure to bolster digital music sales as its traditional business — selling CDs — suffers a sharp decline." CDs are digital too, and they lack DRM (attempts to add DRM to CDs failed disastrously), but news stories and commentary often ignore these facts. I guess "Warner to adopt another DRM-free digital format" wouldn't seem quite so newsworthy.

Three of the four majors (all but SonyBMG) now sell MP3s. It's only a matter of time before the last domino falls, and the industry can move on to the next stage in its evolution.