Mon, September 22, 2003

Recently, the Recording Industry Association of America (RIAA) settled a suit against 12-year-old Brianna Lahara for $2000 and a promise that she'd delete any unlawfully downloaded music from her computer. Reports indicated that most of the music she downloaded consisted of TV show theme music, which makes me curious whether the RIAA can sue for the infringement of copyrights its members don't hold. (I don't get the sense from their recent behavior that they'd stop to check.) Anyway, it's a somewhat preposterous case and the $2000 settlement is disconcerting considering the fact that Brianna and her mom live in low income public housing.

Fortunately, many groups have stepped forward to pay Brianna's fine for her, including a group representing open source peer-to-peer file sharing networks. (A nice statement is made, that the settlement is ridiculous, but since the RIAA still gets its money, the statement lacks teeth.) The money will go toward the RIAA's ongoing war with music customers, which has taken on a shotgun approach of shutting down music sharing by whatever means possible.

I don't deny that music sharing is a violation of copyright law and essentially represents a variant of theft. But Napster was not the first shot fired between the recording industry and its listeners. Record labels like to paint the picture that they were devotedly churning out music to make people happy when some miscreants showed up and started trying to drive them out of business by taking the one thing they can make a living from – songs – and giving them away for free. But, for some time now, the record industry hasn't been about the listeners and it hasn't been about the artists. It's been about the record industry.

Artists have been getting the short end of the stick pretty much all along, because they're forced to pay for most of the production and marketing costs on their albums themselves. Studio fees and concert fees must be paid back before the record label starts paying the singer for his or her record. The record label specializes in distribution and hype, monopolizing relationships with music stores and radio stations in order to get their songs played and keeping down independent labels in the process. And artists don't own the rights to their own material, so they're out of the loop when it comes to creative decisions such as licensing a song to play in a movie, or allowing another band to cover it. But, since independent labels can't compete, artists have little choice but to sign with the majors.

Listeners didn't fare much better in the relationship with record labels, but it really started smarting around the time CDs came into being. Prices took a huge jump and at first everyone attributed it to a new medium which was still gaining a foothold. Once more people were buying CDs, the production costs would decline and the retail price would drop just like it had with cassette tapes. But instead, the record industry realized that people were still buying $20 CDs, so it left the price around $20. When production and distribution prices went down, that just meant more profit.

Besides that, everyone suffered from the homogenization of the music world via the same means that have dumbed down the cineplex. Pencil-pushing MBAs in suits were deciding creative matters using focus group testing rather than a natural instinct for what makes good music. Take a look at American Idol. Contestants must not only display singing talent, but they must have "the look" to become a pop star. Simon isn't just making this stuff up. The photograph on any CD cover of a major artist will show you – hype and sex appeal sell records more than songs do. And because of their size, markdown-resistant volume, and pay-for-play radio deals, the big record companies decide what music the rest of us get, like it or not.

Along comes the Internet. Once technology finally reaches the point where songs can be compressed into small enough files and transfer speeds get fast enough to move them around, people start sharing songs online. Like you might share songs by making a mix tape for your friend, but more songs at better quality faster. And, in the online community, a larger number of "friends." This doesn't represent a direct and intentional response to the overpriced album format, slapping ten dumb songs on a disc along with two good ones and expecting the whole thing to fetch $18.98 at Virgin, but if not for years of such dissatisfaction, downloaded music wouldn't be a worthwhile alternative. No artwork, no liner notes, lower quality, illegal, and (at least at first) not portable – downloaded music sounds pretty useless on paper. But it's a way to cut through the album bloat and build your music library á la carte, and it's a way to sample new artists you'd otherwise never hear on the radio or see at the listening booth of Barnes & Noble.

Sure enough, the recording industry took notice. But rather than evaluating a changing marketplace and looking for opportunities to add value to their services, they chose to get petulant. Is it too cliché for me to invoke the Five Stages of Grief here? I submit that it is not!

Denial. For some time, the industry just seemed not to notice. They assumed that file-sharing was an underground thing that would never reach significant volume and that most music listeners would shy away from "stealing" music. Popular online search engine Lycos offered MP3 searching. Nobody was jumping up and down suing anybody. There was not yet a Walkman-style MP3 player on the market.

Resentment. Suddenly, the music industry realized that Napster represented its core audience (college-aged kids) going critical mass with online song-swapping. Suits were filed, there was much screaming and yelling, and we all learned what the RIAA was for the first time. Napster was shut down, and from its ashes sprung open-sourced peer-to-peer networks that were owned by no company and written by no one person. Networks simply existed for the sharing of information, whatever it might be, and most of those files just happened to be songs. The RIAA spent some time frothing over this and trying to sue Internet Service Providers (ISPs) like Earthlink who provide downloaders with their connection to the Internet. This didn't fare well, and thus the recent slew of subpoenas to users themselves. Refusing to engage the problem and address the shortcomings of the current system (which would surely result in short-term losses while new distribution methods were investigated and new – less profitable – deals were struck with artists), the RIAA has decided to battle its own customers in court, leading to terrible press and a poisonous relationship between record labels and their listeners. This is the stage in which a multinational conglomerate sues a 12-year-old girl.

(Which is not to say that the RIAA isn't continuing to target the peer-to-peer networks that enable file-sharing as well. They're falling all over themselves trying to find any avenue of attack. Recently, the RIAA stood before a congressional panel to assert that peer-to-peer file-sharing networks can be used to exchange child pornography and therefore should be subjected to harsh government restrictions. You can send kiddie porn through the mail, too, does that mean we should shut down the Post Office?)

Bargaining. We've bled over into this stage as well. Unfortunately, rather than the kind of bargaining that might ultimately prove useful, this is the bordering-on-resentment bargaining. The RIAA has announced an amnesty program (did I mention shotgun approach to ending piracy?) in which users can download and sign an affidavit which states that they will destroy all copies of illegally downloaded material on their computer and never download another song. Ostensibly, this simultaneously guarantees them immunity from prosecution for their transgression, but if you analyze the fine print it's clear that there are still many ways the RIAA can come after you, and now that you've admitted wrongdoing, don't think that makes it any harder. If you're looking to atone for past thefts, Holiday Inn's amnesty program is a safer bet. The most laughable part of this approach is that the RIAA, no stranger to the PR nightmare that its name conjures up, is publicizing the amnesty program through a new website called musicunited.org, which directs users straight to riaa.com. It's cute for printing on pamphlets, but don't they think we'll figure it out?

Depression. I think we're sort of in this stage, too. At least according to the RIAA, and the weepy statistics of plummeting CD sales they say they're experiencing. I'm partial to the theory that the underlying figures that prop up these exaggerated numbers result as much from the slagging economy, high CD prices, general decline in album quality, and gradual defection from the outdated album format as they do from people downloading music they would otherwise have purchased. I'm sure that accounts for part of it, but only part. I think the majority of downloaders are stealing music they can't find at the record store, standalone songs they'd never purchase a whole album for, or songs they end up buying on CD after "previewing" illegally. DVD sales are strong despite the file-sharing craze, because their quality makes for a worthwhile purchase; once the record industry realizes that CDs should be more than the sum of their parts, CD sales will increase again.

Acceptance. The announcement by Universal Music Group that they'll be lowering the prices of most of their catalogue toward the $12 range after the success of Ashanti's CD at a $10 price point indicates that acceptance is not far off, either. Apple's revolutionary iTunes Music Store, which combines the freedom of à la carte song selection and virtually-unlimited use with a pleasing price tag while still being legal, is another step in the right direction. A reorganization that places listeners and artists closer together, levels the playing field for smaller fringe bands, re-thinks distribution away from the album format and toward the Internet, and reduces the music industry's cut by lowering prices and paying artists more is still needed. Whether it can be achieved depends on whether the RIAA can truly enter the acceptance stage.

The reality is that any industry that must resort to suing its customers to stay afloat is an industry in decline. The twisted-arm monopolizing of the music world represents a business plan that is quite simply no longer viable, and rather than organically changing focus to thrive in a changing marketplace, the stodgy old-world megaconglomerate music labels would prefer to fight back against the people they need most right now – their own customers. New technology always causes a fuss, particularly among the purveyors of the old technology. When cassette tapes came out, there was concern that listeners would copy their friends' albums and never buy music again. The VHS revolution caused the same panic in the movie industry until studios realized the enormous profits to be made selling movies on video. Now TiVo is causing a stir with the TV networks. The resounding lesson is clear: Time and time again, success comes from embracing and understanding change. If you can see why the market is changing, you can fit your company into that trend and reap the rewards; if not, you'll be left behind when the real profits start flowing.

***

I owe a correction to a recent column on Warren Zevon, or at least a clarification. I used the fact that I planned to buy a CD of Zevon's final album "The Wind" (rather than download it) as a jab at the RIAA's misleading claim that file sharing has caused a decline in album sales. The purchase will in fact run counter to RIAA's plaintive whining, but its proceeds won't be lining their pockets. "The Wind" is distributed by Artemis Records which is not a member of the RIAA. pH7 media regrets any implication that I had, in fact, sold out to the Man.

© onebee · all rights reserved