Portfolio.com has an exclusive story detailing another shoe-drop in a slowly coalescing line of music-industry thinking that ISPs should charge customers fees to compensate the labels for their losses to online downloading. That idea has been floating around for a long time, and even has a history; cassette tapes were taxed back in the day to compensate the industry for the scourge of that era, which was known as “home taping.”

The interesting twist this time, which takes it out of the no-go category, is that the fees would be voluntary, and allow those paying it to download all the music they want for free.

The thrust of the Postfolio account is that Warner capo Edward Bronfman has hired a guy named Richard Griffin, who used to run Geffen’s digital operation and who according to the story has a reputation as a “industry critic.” Here’s his money quote:

“Today, it has become purely voluntary to pay for music,” Griffin told Portfolio.com in an exclusive sit-down this week. “If I tell you to go listen to this band, you could pay, or you might not. It’s pretty much up to you. So the music business has become a big tip jar.”

Go ahead and savor those last words for a few seconds. Coming from someone in an industry that has treated its customers like an ATM machine for the last fifty years, it’s a heady concept.

As for particulars, the story says:

Bronfman has asked Griffin, formerly Geffen Music’s digital chief, to develop a model that would create a pool of money from user fees to be distributed to artists and copyright holders. Warner has given Griffin a three-year contract to form a new organization to spearhead the plan.

Later in the story, Griffin says he’ll be forming a company that in the long term will not be owned by Warner to somehow institute the plan. The story includes some critics of the idea, on the predictable grounds. A$5 per month fee is floated, but Griffin says the figure would somehow be negotiated in each country.

To Hitsville, the big problem doesn’t really get addressed. The labels’ chief raisons d’etre—finding artists, developing their careers, manufacturing and marketing their music—have all been shown to be done better by different institutions. The main effect a new cash pool like this—which Griffin speculates might raise as much as $20 billion a year—would have is to prop up an industry no one really wants or needs any more.

In this sense, the plan may be a hail mary pass by a guy leading a company, the Warner Music Group, whose stock price is about a sixth of that it was two years ago, and his buddies, all of whom are in the same sinking boat.
Griffin carefully says the industry has no set $5 a month fee in mind—that was Portfolio’s supposition—but freely uses the $20 billion figure. That’s a little strange; the music industry right now represents only half that, in the U.S. at least, down from about $15 billion in the 1990s. (He may be talking globally.) But if you were running a music company in today’s climate, wouldn’t you love something that would take you back to your revenue levels before the digital tsunami hit?

To which a consumer might respond: Your idea has merit—but how about we institute it without you?

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Previously in Hitsville:

Should the record industry tax ISPs?