Music may be like water — but it’s not water. Applying a tariff for all users of digital devices misunderstands consumers, music, the industry — and water.

One of the debates I get dragged into quite regularly is the Music Like Water thing — the idea that if everyone pays a little bit of money as a kind of flat tax (or the way we pay utility bills) and then listen to whatever they want over the internet, the music business will be just fine and dandy.

I’m skeptical.

I was interviewed via email for Denmark’s largest music community:, and with their permission, I repost the entire interview here for your entertainment — and hopefully to spark a bit of debate in the comments.

My interviewer writes: The debate on the whole music-like-water has been very one-sided in Denmark and everyone seems to think it’s a good idea. Inspired by your blog post on the subject, I would like to ask you a few questions.

Fire away.

Is the idea of making a music-like-water-system not a way of trying to make a legal alternative to p2p? Or is it simplifying things, forgetting the fans who use music in different ways?

It’s not so much an alternative to p2p as it is a way to make it not matter to the labels whether the music was sourced via p2p or as a direct download. If everyone’s paying a set fee every month, and all music is suddenly fair game for download, then the ways in which they choose to come by their digital music wouldn’t matter. Theoretically.

That said, record labels would still want consumers to download direct from them under this system, because downloading from them is a good way for them to collect valuable market research information.

The purpose of the flat fee ‘music-like-water’ system would be to reinforce, rather than eradicate, the current power structures of existing labels and media outlets. It would simultaneously make sure that major labels get the lion’s share of music revenues, take away a lot of the marketing incentive for many of their acts on the basis that customers would automatically download any new Coldplay album — since they’ve paid for it after all, whether they like it or not — and would make cutting through that music deluge harder for independents and niche artists.

I imagine a scenario where all the promotion a major label will have to do is send one email to 100 million people and say ‘This month, these three bands have new albums. Download? Yes/No’ and that would be it. The vast proportion of the sums collected by this new globalised music revenue collection agency would be siphoned straight into the Big 4’s coffers, thanks very much.

Worst of all, it would entirely remove the incentive for those larger labels to innovate. The economics of the ‘star’ system would prevail and it would be far more cost effective for these corporations to have a million people download one album by one mega pop artist than it would for them to invest in a dozen artists ‘giving away’ 100,000 copies apiece.

Want to guarantee that popular music becomes irrevocably bland and featureless? Set up a flat tax for music downloads.

And yeah — it completely overlooks the fact that consumption is actually quite a complex thing, as I’ve discussed at length on New Music Strategies. People don’t just buy and listen to music. They do a whole range of different things, depending on all sorts of cultural and economic factors. Simplifying things and pretending that everyone wants music in exactly the same way is not the answer — catering for increasing complexity is the only way forward.

Do you think it’s even possible to make a subscription service with everyone paying a fixed amount each month for free download?

Sure. We have globally networked music revenue collection bureaucracies already in place for royalty collections. It’d be a big job to set up another, but all it needs is political will, which is why it’s so frightening that the ‘music-like-water’ argument is so convincing.

What kind of obstacles would such a system meet, eg. different record labels, publishers, different regions etc?

If they’re smart, most record labels will oppose this. It seems like the easy solution, and letting it through would mean just collecting the cheques each month rather than battling the rather messy world of the online music environment… but it would be the death warrant for a large proportion of independent music and further reinforce the idea that music is valueless.

I believe that there’s a good argument to be made that music should be free — but I don’t think that’s even in the same league as suggesting that it has no value. Ironically, generating larger revenues for the industry as a whole by imposing a flat tax will have the effect of making it seem worthless. And that’s going to be bad for music across the board — live and recorded.

Giving music away as a gift, as bands like the Charlatans and the Crimea have done recently — not to mention Radiohead’s little experiment — reinforces the value of their work and is genuinely appreciated by their fans, who act in a reciprocally generous fashion.

Charging everyone a flat fee and pretending that all music is free has exactly the opposite effect.

To prevent p2p and direct download from melting together, it seems impossible to avoid watermarks and maybe even DRM. One of the main reasons for “freeing” the music. What’s your take on that?

I’m a little pessimistic here. I think we’re going to see watermarking as an ‘acceptable face’ of DRM, but what we might have fixed in terms of inter-operability, it looks like we’re making up for in customer surveillance. I’m not comfortable with it, but it doesn’t seem to be an issue that consumers are rallying around — and I’m concerned that the labels seem likely to get away with it.

To boost the Indies and motivate the minors, wouldn’t using existing platforms such as MyMusic, MySpace, Facebook etc. be part of the answer? Letting the future of music be about creative promotion and marketing – and the music. The one with most plays and downloads gets the bigger piece of the pie. Let the best man win?

It doesn’t work like that though. Promotional cultures are not organic ecologies or meritocracies. Like it or not, whoever spends the most on advertising and marketing will probably do the best. And the people who will be able to do that are the ones who already have the edge. And it’s not always true that the best music is that which is championed by the corporations with the most to invest in promotion.

In fact, some would argue that the opposite is true.

I have no problem with a profit share notion along the lines you suggest: that, say, a proportion of Rupert Murdoch’s MySpace advertising revenue is split between artists whose songs are played on the MySpace platform on a proportional basis. I’m less comfortable with all internet users being charged whether or not they visit MySpace, and with all artists being forced into a situation where they MUST have a MySpace page if they want to share in a single revenue stream.

Consumption is quite a complex thing yes, but couldn’t the answer just be to make a basic model, a deluxe model, and furthermore let people continue to buy LP’s box sets etc. as they wish on top of their subscription?

And then we could let them purchase vinyl 12″s to play at clubs, second hand discs from specialist stores, autographed CDs on eBay… and if they want to have a physical collection or engage with music in any way other than the prescribed download method or format, then they can pay more again.

I’m a big advocate of this sort of payment model for public broadcasting. I don’t think it works for music consumption. Public broadcasting allows for types of radio and television that a) are an important addition to culture and society; and b) simply would not exist in a commercial environment. I don’t think applying a public broadcasting payment model to the commercial music sector is warranted or appropriate.

Now, if that money was being put towards the creation, promotion and distribution of musics that would otherwise never be heard, I might be more sympathetic — but this is purely and simply an industry who is struggling to adapt to a changed technological environment requesting mandatory financial support from the general public, and to me, that’s outrageous.

In Denmark we have public service television which everyone is paying for. Same principle but it doesn’t feel free, and it definitely doesn’t feel as if it has no value. Why wouldn’t a collective system give the music value instead of decreasing it – we all pay for it, right?

Again, public broadcasting is a public good. Commercial music is a commodity item. That doesn’t mean it doesn’t contribute to culture and society — not at all — but if record labels want to be funded on a public broadcasting model, then let them be subject to the same criteria and imperatives as public broadcasters. All of the same criteria.

Popular music will sound very different if that’s the way they want to go…

In fact, you know what? I think I’ve talked myself into the flat licence fee / music-like-water concept, if that was a condition it came with. Wow. A public media approach to the music industry. Of course, they’d have to be not-for-profit entities for that to work…

An additional note though: Last week Jens-Otto Paludan, the chairman of IFPI Denmark stated that a subscription service is coming next year and will be carried out as licensing to the ISPs and internet, mobile phone subscription etc.

I was under the impression that these things were negotiated at the level of government policy and law-making. Either some back-room deals have been going on, or there’s a level of confidence here that isn’t backed up by actual events.

That said, it wouldn’t surprise me if it came to pass. But it can and will only be instigated as a piecemeal endeavour, and not as the global, totalising panacea for the music business that Gerd Leonhard envisages.