Pete Townshend comment could be a basis for new form of royalty

Who legend, Pete Townshend, (Daily Express 1/11/11) raises an interesting thought on copyright law. In complaining about I-tunes, he claimed that writers and musicians should be expected to be paid if their work was generating money for others.
Instead of the Industry that has grown from buying copyright and then pushing for laws to persecute individuals who make back-up copies, why not simplify it along the lines suggested.
No need for artists to sign recording contracts and get stitched up by recording companies, early in their careers. No incentive for more artificially created boy bands.

Artists would produce their work.
If a publisher / recording company thought there was a market for the work then they could promote it, if they wished (i.e. be entrepreneurial instead of parasitic).
They could charge whatever they wished but they would have to factor in a percentage of Gross profits to be paid directly to the creator / artiste
Broadcasting services (radio,TV or Internet) would have to factor in a similar percentage of their gross income.
There would be no need for a vast legal network to lobby Governments and send out royalty checks based on some contrived formula.
Pirate copies would still be made but not for profit, unless the middle men were being too greedy.
Even home copying might be reduced, as customers would prefer the professionally finished product of the established middlemen, if they were cheap enough.
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