Jim Griffin says ISP music tax only one possibility

The controversy over whether an internet service provider should charge for music is once again coming to a boil.

Pundits, music-industry insiders and members of the public are bashing Warner Music Group exec Jim Griffin after he acknowledged in a interview that he is working on a plan to collect music fees from consumers via their ISP bills.

I haven't seen backlash like this since rocker Trent Reznor told me in an interview two months ago that an ISP tax might be a good idea. It didn't matter to some that Reznor also made a seemingly conflicting statement in the same interview when he said perhaps music should be given away for free.

This kind of off-the-cuff musing was enough to make Reznor a target of widespread criticism. Nobody seemed to care that the leader of the band, Nine Inch Nails, was a digital-music innovator and had long called on the record industry to improve its treatment of fans. What happens is that people hear the word "tax" and objective analysis goes out the window. People condemn and vilify. Out comes the torches and pitchforks.

Nearly two weeks after our Q&A appeared, Reznor disavowed his statements about the ISP tax. Griffin now appears to be tip-toeing away from some of his comments.

"We are in the earliest stages of what is a dynamic conversation about licensing opportunities in the global digital marketplace," Griffin said in a statement issued by Warner Music on Friday. "It would be unfortunate if a creative and fruitful dialogue were sidetracked by a rush to judgment about what was simply my own illustrative example of one of many concepts I have in this space."

The proposal outlined in the interview Griffin gave Portfolio.com suggested that ISP fees could create a $20 billion pool that would go to artists and copyright holders. Consumers would have the option of paying the fee or submitting themselves to advertising.

"All stakeholders stand to benefit from the kind of process that results from the willingness to consider a variety of raw concepts without prejudice," Griffin said in the e-mail.

But there's plenty of prejudice and Griffin should know this. The reality is music fans are distrustful of record companies. They resent talk about charges being quietly tucked into their monthly bills.

Griffin could have hardly done more to stoke paranoia than to attempt to sell his plan with comments such as this: "Music will feel free," Griffin told the magazine (the italics are mine).

He could be a digital-music genius for all I know. But Warner Music should have been smarter in broaching the subject of ISP fees than to allow Griffin to casually toss out ideas in print if--as he said in his e-mail--this is only one of "many concepts" the label is considering.

Warner Music now has a firestorm on its hands and few are trying to assess the idea dispassionately. That's too bad because the label, like its top three competitors; Universal Music Group, Sony BMG Music Entertainment and the EMI Group have appeared to be headed in the right direction of late. They've been experimenting with models and ideas they flat out rejected not long ago.

The labels have finally embraced open MP3s and struck deals to offer ad-supported music (albeit only in a streaming version) with social networks Imeem and Last.fm.

"There's a lot of experimentation in the marketplace right now and that's ultimately a good thing for the industry and for fans," said Mitch Bainwol, chairman and CEO of the Recording Industry Association of America. "It's important to note that all of the many ideas being floated out there involve voluntary payment systems, and not a government-imposed compulsory license. This would be the marketplace at work."

Bundling subscription fees into ISP bills on a voluntary basis may prove to be a bad idea. At this point, nothing is certain so shouldn't every proposal at least be explored?

We won't know if the public will embrace an all-you-can-eat music service from the ISPs until the music industry presents a formal plan, one that will hopefully be coolly and carefully analyzed.