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01.28.09 Legal P2P Coming Soon? By Bruce Houghton The buzz last week at Midemnet was that legal P2P was just around the corner. Some believe that licensing downloads at the ISP level and thus monetizing a currently illegal practice could be the savior of the music industry. But ISP Virgin Media, controlled in part by ex-music man and entrepreneur Richard Branson, had been deep into negotiations to create a service for the U.S. or Europe tentatively called Virgin Music Unlimited. Now Virgin has dropped the initiative due to unreasonable demands by the major labels. According to the Register, at least two majors, Universal and Sony, "demanded that Virgin block uploads and downloads of songs from subscribers' PCs." In other words, while Virgin envisioned legal P2P; the labels just want an ISP version of unlimited or metered downloads like Nokia's Comes With Music. Smart IT For Tough Times - Click here ANALYSIS: As much a the more forward thinkers at Midem pontificated about legalized P2P; most others pinned their hopes on less radical solutions. Better monetization of the direct artist to fan relationship was the conference theme and initiatives like mobile downloads, music in the cloud, ad supported music and even subscriptions were all touted as revenue streams. The concerns of record labels, publishers and licensing societies, as well as, a myriad of contractual and legal obligations deeply entrenched in the industry will all have to shift dramatically before ISP licensed P2P becomes a reality. As desperate as the music industry may be, the bulk of the industry talk from the cafes of Cannes to boardrooms in LA is still more about monetization and control than it is about creating the freewheeling online marketplace that some consumers have come to expect. Comments About the Author: Bruce Houghton is a 25 year music industry veteran who owns booking agency Skyline Music and the tour marketing company Skyline Innovations. http://www.hypebot.com

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