ART TALKS at The Artistic Forum

Make no mistake about it, the battle over music copyright infringement on the Internet is far from over, even though the Recording Industry Association of America (RIAA) scored an impressive victory in their lawsuit against Napster last year when on February 15, 2001 the Ninth Circuit Court of Appeals ruled against Napster on all counts. The only appeal of this decision is to the United States Supreme Court; a move few who know the law believe will succeed.

The legal outcome, while certain, is going to be nowhere near final, no matter what the courts say or do, and regardless of how much money is behind the RIAA. For the battle here is not between major labels and imaginative entrepreneurs, nor does it really have anything to do with copyright infringements, although that is where the legal battle has been waged and won, rather it is a battle between major recording labels and the marketplace of consumers worldwide, a hundred or so million of them, and growing ─ a very smart and industrious group of consumers ─ a group that some in the recording industry foolishly see as the enemy, but who, in fact, are the very people the industry needs to survive.

t is on this battlefield, peopled with a growing number of computer literate buyers, that the industry is going to have to adapt and accommodate if it wants to preserve its status as primary source of music; it is on this battlefield that the industry will either give consumers want they want or lose millions to a technology that will always be one step ahead of those who seek to shut it down.

New and innovative programs, coupled with a new generation of savvy consumers eager to use what technology offers, makes digital shopping for music over the Internet a major force to be reckoned with in the future. It is easy, convenient, and allows the greatest opportunity for selection available. Recording artists and producers should not only understand this, they might want to remind the people representing their interests that the future is here. Consumers are talking. Don’t fight it; adjust to it. Billions of dollars will be won or lost on the outcome.

Thinking out of the box.

Ever since the first copyright law was enacted in England in 1709, artists and those who promote artists and their work have used the laws to protect what is rightfully theirs. From then to now it’s been a battle, with congress, the courts, state legislatures and the public weighing in almost always on the side of the artist. Those who violated copyright laws were outgunned and out maneuvered at every turn, and for good reason.

So long as technology was relatively crude, reproducing copyrighted work was always on the margins ─ a problem, to be sure, but a manageable one, something the industry could grudgingly live with. With the advent of the Internet, however, and the growth of new technologies that made shopping for and downloading MP3 music in digital format easy, the problem assumed monumental proportions for the recording industry particularly. Suddenly, within a period of a few years 70 million plus people were shopping where they never ventured before, and swapping freely what every copyright law ever written was designed to protect against: pirating.

If ever there was a clear signal sent to the recording industry, it was this: consumers want options. They want to be able to select their music one song at a time, keeping only what they like, and discarding the rest, no matter how attractively it is pre-packaged.

While consumers may always have felt under appreciated and maybe even a little used, they were never able to exercise the collective clout sufficient to force the industry to scrap the packaged format that was provided. If you wanted a CD, tape or record you went to the store and bought it in the format it was presented. If you liked only five of seventeen songs on an album, too bad! The consumer had little choice. Napster changed all that and was a bonanza for consumers in that it introduced free choice and selection into the marketplace in a big, big way. It was a disaster, however, for recording artists and companies that were producing and distributing music the old way and losing, presumably, hundreds-of-millions of dollars for titles over which no royalties were ever paid.

To stem the “illegal” swapping or pirating of music the industry has devised all sorts of bells, whistles and flashing lights, including aggressive legal activity to punish those responsible for the technology that makes it happen. The results have been mixed: Napster was rendered impotent, but no sooner did Napster falter when other Internet entrepreneurs appeared with different technologies to meet the demand. The lessons of history seemed to have been lost on the RIAA: prohibition didn’t bring us a permanent ban on liquor; it brought us the 21^st Amendment. Prohibitions and blocking technology won’t bring an end to the problem of pirating of music; it will bring us new technologies to overcome it.

Curiously, instead of listening to what consumers have been saying, the industry has sought to protect the status quo, encoding CDs with new technologies to make computer copying difficult. While consumers are screaming “choice and selection” the industry packages and encodes as if the sea change occurring around them isn’t happening.

Has this approach worked? Some CDs, for example, have been encoded so they won’t play or copy easily onto a computer. The recording industry encourages all major labels to adopt this technology. Consumer reaction has been negative and predictable: somebody unlocks the code and makes the music available on a song-by-song basis on the Internet free of charge. So unpopular is industry encoding that major distributors are now identifying CDs with the new technology. Why? Because consumers are complaining and returning CDs they can’t copy for their own use or even listen to on their computers. Who gets hurt when this happens? It’s a fair bet the first thing a buyer does when they return a CD they can’t burn or play, is to go onto the Internet and see if someone else solved the problem for them.

Clearly, punitive responses from the industry are not the answer. This kind of reaction will only drive consumers further away from the very thing the industry seeks: sales. The answer to what the consumer wants is simple: give it to them. And what do consumers want? Apparently they want choice and personal selection, and they would like it for free.

The shape of the new box:

Since giving music away free is out the question, it comes down to this: can the industry find a way to give consumers the choice they obviously want, while protecting the property rights of the artist and industry, but do so by making the selection process free, fast and easy, and the downloading process profitable? I believe the answer on both counts is, they can, both at home and through established retail stores. It could be accomplished by understanding a few basics about the marketplace.

First, a new digital dynamic is developing quickly. Packaging of CDs is going to change because it has to change. Consumers have indicated in clear terms that given an option they’ll opt for choice and the ability to create their own music selections. While CD sales are still strong, 70 million users (a conservative estimate based on a snapshot view of who’s looking for what at a given moment) are demonstrating by their actions that they’d prefer to make their own music selections for their own CDs. This means both over the Internet and through retail stores. The demand can and should be met, not ignored.

Regarding store sales, the industry has an advantage the Internet can’t always provide: speed. Just as store inventories morphed gradually from records to tapes to CDs, the stores of tomorrow will be digitalized with “make your own CD” technology that is commonplace and easy to use, and on a pay per song basis. It might work this way: the consumer of tomorrow will go to a store and be able to preview a CD or CDs and select only those songs that appeal to them. They will download only those songs they choose, and then pay only for those songs. This method of selection will revolutionize the way CDs are packaged and increase the sales of good songs that can sometimes get lost in a mix of mediocre.

Second: “Play only” downloads from the Internet can be made available for those who want to listen to a particular song. In this mode, songs won’t download to a hard drive, but rather will download to a media player only. Let consumers listen first to what they want to hear from an album, free, then, let them download what they want and pay for only for what they select. Consider it a new way to listen to music; similar to a radio. The major difference here is this: by making the listen first and download option available a potential sale might arise. Internet book publishers provide this service now through their shopping baskets and the service seems to work well for them. Consumers can select and download from the Internet or go to their local retail store with a list of selections that have already been chosen and build their CD from the store faster, and maybe, I would suggest, even cheaper.

Third: Combine all music on one mega site. Consumers don’t care whether Sony, Geffen, Capitol, A&M or Atlantic produced the CD they’re interested in buying, they want the music. Need proof? Look at the success f those sites that currently trade music free. Consumers search by artist and/or title. Since the downloaded file is gong to carry a record producer’s tag, anyway, apportioning royalties among the different labels won’t be difficult. If the industry fails to make their songs and titles available as Napster and others do, on one site, the industry will suffer because the demand for a search vehicle that lets you shop by artist/title, as utilized by consumers, won’t be addressed. For instance: if someone is searching for a soundtrack album, they probably don’t want to search several sites to see which recording company produced it. They want to type in the name of the soundtrack, expecting it will be available by name.

Fourth: In the absence of the industry creating a mega site of its own, use the legal victories that have accumulated not to shut Internet sites such as Napster down, but to require that all Internet music sites provide their music in “play only” formats, still free, with the option to create a CD and own it, for a nominal price.

Conclusion:

The Industry shouldn’t fight innovative trends, but rather be thankful for them. This is not the same as saying don’t fight to protect copyrights; rather it means don’t fight the technology and innovation that comes from the marketplace. Consumers are sending a clear signal that there is a healthy and growing market for digital downloading. I am simply recommending that this digital technology (1) be expanded to record stores, and (2) that it be employed free of charge for in home use in a “play only” format over the Internet, allowing people to pick the selections they like, and create their own CDs.

Do I think these recommendations will end pirating of copyrighted music? No! On the other hand, does anyone really believe industry generated lawsuits will prevent consumers worldwide from finding a way of getting the music they want?