Tom at Barbelith has some interesting things to say about MP3s and encryption. I don’t see any reason why his plans wouldn’t work, but I do see that they’d enforce copyright protection more tightly than has been the case since before the tape recorder came in. MP3 sharing on the same limited basis as mixtape-making is definitely good for both music industry and community: it lets word spread quickly about good music.
An MP3 file, being intangible, cannot be lent, only copied, but some kind of limited lifespan for non-encrypted files would allow this beneficial music sharing to continue. Alternatively songs from the same ‘album’ (a meaningless word in a post-physical music industry, but unlikely to die out nevertheless) could have some kind of protection which only allows one to exist on a computer unencrypted. Caveat: I’m about as untechnical as it gets, so I can’t assess the practicality of this.
All in all though, I’m still more in favour of a museum-charges style honour system, provided of course bands aren’t as monumentally arrogant as Stephen King, and throw in the towel if less than 75% of listeners like their work…..