In Case You Missed It: The Sky is Falling, RIAA Victories, Kazaa Counters
It seems everywhere we turn these days, we are being told the sky
is falling right on top of the music industry. Fresh in my mind
is the recent interview with Jack Valenti, President of the
Motion Picture Association of American (MPAA), stating with some
confidence that the music industry is dead. To quote, "The music
industry now is suffering nine, ten, fifteen percent losses in
revenue. When you compound that over the next three or four
years, the music industry is dead. I don't see a future for it.
After awhile, who's going to produce it?" Good point, Jack. He
makes it sound so simple, and in a way, perhaps it is. Revenue is
the bottom line, and what corporation is going to continue
producing records when it's a guaranteed financial loss?
- Valenti'S Views: "The Music Industry Is Dead"
But, you know, I'm not sure it really is that cut and dry. The
music industry will come around, won't it? Yes, I think it will,
but we will also see a transformation in how the industry does
business. There HAS to be a change. Whether that means current
industry leaders make adjustments, or whether new companies tuned
into the realities of our connected world enter the scene, the
industry will survive. There *is* a better business model out
there, and some future millionaire is going to find it.
Still, there is going to be serious pain associated with this
transformation. Lee Black, a music industry analyst with Jupiter
Research, was right on track when he stated that "It's pretty
difficult to kill a multibillion-dollar industry." Still, as U.S.
News reported in their article "Singing the Blues,", 2003 is
going to be a bloodbath. It's going to be a pivotal year in the
- Singing The Blues
Even now, the industry is experimenting with new approaches to
marketing music. Six large record store chains, including Tower
Records, Virgin Entertainment, and Hastings, are to soon offer
customers digital music downloads in their stores. They're
calling this joint venture "Echo" (http://www.echo.com) and
hoping the service will bring customers into the stores to burn
But will customers really go for that? Who is going to bother to
go to a store to burn music? Echo has a few other obstacles to
overcome as well, namely getting music licenses from record
labels who might see Echo as a competitor to its own online
ventures, PressPlay and Rhapsody.
- Six Retailers Join To Offer Digital Music Downloads
- Not The Echo They Were Looking For
On other fronts, you just can't talk about industry news without
covering the latest from the RIAA. The RIAA web site was hacked,
yet again, which at this point happens so frequently it isn't
really news anymore. So I'll leave that alone.
However, the RIAA did win a key battle against Verizon, which
would force it (as well as other Internet Service Providers,
potentially) to reveal the identities of subscribers using their
connection to trade music files over peer-to-peer networks.
Verizon, of course, appealed the judges decision.
- Verizon Appeals RIAA Victory
The RIAA is also continuing to go after universities whose
students trade music on the Internet. 175 students at Indiana
University were told to delete music and movie files from their
computers or they would have their Internet access shut off and
be reported to a judicial board.
- RIAA Trains Anti-Piracy Guns On Universities
The RIAA also wants Internet Service Providers to pay up for
giving their customers access to free song-swapping sites.
Hilary Rosen (who just stepped down from her position as RIAA
Chairman) stated: "We will hold ISPs more accountable. Let's face
it. They know there's a lot of demand for broadband simply
because of the availability (of file-sharing)"
- RIAA: ISPs 'Should Pay' For Music Swapping
Finally, we're still seeing a lot of buzz about Kazaa, and I
expect that to continue for some time. The entertainment industry
at large sees Kazaa as one of it's biggest threats, as the
file-swapping service now boasts over 185 million downloads of
its software, far more than now-defunct Napster ever had. The
industry has been attempting to shut Kazaa down, and recently a
judge approved a lawsuit against Kazaa aimed to do exactly that.
Now, Sharman Networks, owner of Kazaa, is filing a countersuit
against the entertainment industry, stating that though the
owners of Kazaa have made every effort to go 'legal,' the
industry at large refuses to cooperate with them. Sharman is
asking the judge to declare the copyright holders guilty of
antitrust violations, and to bar them from enforcing any of their
copyrights. What an interesting twist!
- KaZaa Strikes Back At Hollywood, Labels
- KaZaa Looks To Legitimate Arm To Survive
- For KaZaa, Bad Press Is Good Press
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