New Details Revealed of Music Industry Plan to OK P2P

Spearheaded by Warner Music Group, the plan aims to get internet service providers to pay a few dollars per user per month into a fund that would then be divided among rights holders. The scheme would essentially give P2P users a get-out-of-jail-free card for file sharing activity. has learned that industry consultant Jim Griffin, hired by Warner to implement the idea, has already set up an independent company to act as a digital-rights clearinghouse. Griffin's company would be like an ASCAP for the internet, collecting fees from ISPs and divvying them up among rights holders.

In addition, BigChampagne, a company that measures digital-media consumption, would be one of the major sources supplying the necessary data to track file sharing activity.

The hoped-for result: a truce in the music wars. 

"The music industry has no choice," says Bob Kohn, a music-licensing expert and CEO of RoyaltyShare, which manages digital revenues for both majors and indies. "It's significantly weaker than it was in 2000. And the longer this drags on, the more difficult it will be to succeed."

In the last 10 years, sales of CDs have plummeted as digital downloads have exploded, and the U.S. music business has shrunk from about $15 billion to $10 billion.

The idea of charging a flat fee for 'all-you-can-eat' downloads is beginning to take off.