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I’m at the Licensing panel at the Bandwidth Conference. The moderator is Fred von Lohmann, and the panelists are Todd Gascon, Marc Morgenstern, Tuhin Roy, and Colette Vogele.

Q: What trends do you see?

Tuhin: We’re seeing the emergence, in the last 6 months, of mobile-based sales of permanent downloads. In the permanent download world, the rates are pretty steady. Of the $1 the consumer pays, the distributor gets about 70%, then the label gets paid out of that, and is responsible for the mechanical. In the mobile phone downloads, the breakdown is worse, since the carriers have more leverage. They take a bigger bite, but they’re selling downloads for twice as much. There’s a lot of negotiation and jockeying yet to be done in the subscription licensing area.

Q: How does eMusic fit into this?

Tuhin: It doesn’t have a negative impact on sales in other channels, so it’s a lot like a record club. We don’t put everything in, but it generates real revenue, even though the amount we get is smaller.

Q: From the artist’s perspective, are you seeing new trends in licensing to big download stores? Is it cookie-cutter?

Todd: Digital looks pretty good — no worries about not getting checks, less delay, more income from digital sales. The things you heard about in the 90s are starting to come true.

Q: What about interoperability? Will there just be one interoperable solution, or give up on DRM?
Marc: eMusic makes their money on breakage — those who don’t use their fill. This business model apparently works for them. It’s too difficult to make everything work together — PDAs, cell phones, etc. If you create a new rights bundle with a new price point — a higher price point — we’ll give you windows, AAC, and mobile formats. This solves the consumer’s problem. The consumer is speaking very loudly, saying that they don’t like being walled in. So we need to make the walls lower.

We don’t care about DRM. We distribute MP3s when our clients want to. The majors aren’t there yet, though. You’ll see some experimentation with baby bands, but frankly there’s a long way to go.

Q: MP3 blogs and podcasts are taking over. What’s going on?

Colette: Users are generating their own content, and are mixing it with other people’s content. People are using Creative Commons licenses. [Fred explains CC licenses.]

Q: The latest Decemberists pre-release leaked. What would you do?

Tuhin: It’s understandable that fans want to hear it, but I’d say people should respect the artist’s wishes. I wouldn’t get heavy about it, but you can communicate with your fans about your wishes.

Colette: The practical solutions are probably better than the legal solutions — the RIAA lawsuits have shown us that.

Marc: Rather than being punitive, you should create a way to make your fans legitimate sellers. Let the biggest seller meet the band.

Q: Thoughts on the user-generated video revolution?

Tuhin: The film and TV industry learned a lesson watching RIAA. YouTube now is like Napster at its height. But they’re fully engaged in a licensing conversation. The mashups, you can do some licenses, but there are still issues. The 14 year olds should be allowed to do what they’re doing, and YouTube should just share revenue with the copyright holders.

Audience questions.

Q: What about artists’ moral rights? Is that deep-sixed?

[Fred explains moral rights.]

Tuhin: Musical artists have no moral rights under American copyright law.

Q: Music publishers are poorly run. Like, Dickensian. Is anyone going to do something about that?

Colette: I look at these contracts and think, “How did this become the most efficient way for this to happen?”.

Marc: Having been at ASCAP for a few years, part of the situation is getting tougher — there are split copyrights. On a hiphop song, you could have 12 writers with 12 different publishers. It takes forever.

Fred: They’re trying to change the system. You might see some reforms. But it’s slow. It would eb great if there was one-stop shopping, but we’re far away.

Q: Publishers are still using index cards. The S1RA was pretty bad. Is there anybody who’ll go to bat and put together something better?

Marc: The owners of the music distribution services have clout, and are starting to push.

Tuhin: Sticking the onus on the label works pretty well. They already have contact with the publishers.