Online music distribution is set to grow significantly over the next
few years, forcing industry to reconsider their business models and
posing regulatory challenges to governments, according to a new OECD
report on the digital music industry.
A ‘re-evaluation’ of music distribution needs to happen to achieve a
balance between consumers’ desire to access digital music and the
industry’s copyright protection concerns…. Instead of paying a set fee to download an individual song, music
downloads might become part of a subscription package from a cable
television company, internet service provider or mobile-phone carrier,
the OECD said.
A key requisite for the creation of efficient online music
delivery is a competitive and wide-spread access to broadband
infrastructure. The delivery of online content also necessitates new
technologies and an environment that facilitates the creation,
acquisition, management and delivery of content. Effective and secure
(micro)-payment systems are needed.
Alliances between content providers, broadband and technology
providers that come up with new business models play a critical role in
driving the adoption of licensed content services.
A diversity of interoperable content, standards and hardware are
likely to prove most beneficial to efficient online content markets.
With vertical integration, lock-in of consumers to certain standards,
and difficult access to certain content, an environment where small and
innovative players can compete should be maintained.
The OECD notes the importance of government actions to take steps
to address online piracy. Around one third of Internet users in OECD
countries have downloaded files from P2P networks. While, in principle,
file-sharing software is a new and innovative technology, piracy is an
important impediment to legitimate online content services. The most
important is to find equilibrium of available legitimate and innovative
uses of new technologies and the necessary protection of associated
intellectual property rights (i.e. copyrights).
The Internet already provides new forms of advertising at lower
cost, lower barriers to entry for artistic creation and lower costs of
finding new talent. However, the effects of authorised and unauthorised
file-sharing and digital music services with pay-per track offers on
artists and the music supply are not yet obvious and need further study.