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'...offering carrots and wielding sticks...'
By Jon Newton,
(more articles from this author)
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"The migration of music from shiny disks to the online arena has personalized debates about intellectual property rights once reserved for lawyers, turning passive consumers into political activists in increasingly large numbers.

"Having discovered the virtues of the new online form, many people are demanding the freedom to sample, trade and make available music in ways that were never before possible."

The above is a quote from a June 8 New York Times story. What else is new? But nonetheless, it makes fascinating reading.

Written by Amy Harmon, "Industry Offers a Carrot in Online Music Fight" says for the first time, label suits are addressing online music lovers directly by both "offering carrots and wielding sticks" to persuade them to, "buy their product again" and "how well they succeed is likely to determine the way music is produced and consumed for years to comes

Amy certainly got that right. And, "The technology has destabilized us, it has hurt us," she quotes Doug Morris, Vivendi's Universal Music Group's chief executive, as saying. "But now it's going to take us to new heights."

New heights? It's a pity the companies didn't realize years ago they could have been working with, and encouraging, the people who've been developing the technology, instead of trying to sue them to death and/or buy them out so they could use the news apps, ideas and people as if they were their own creations.

And much of the blame for blowing things rests squarely on the head of the record labels' Hilary 'Reach Out' Rosen who has consistently misread and misled.

She had it all figured out. After all, the people who were coming up with all these cool ideas (not to speak of the so-called pirates) were mainly teenagers and younger. And she and the RIAA (Record Industry Association of America) could easily handle a bunch of kids, n'est ce pas?

Wrong. She didn't, and still doesn't, have a clue. And Amy's story, replete with quotes from industry names, is an indication that the labels are starting to realise that letting Reach Out be their public face wasn't such a hot idea.

Reach Out is leaving the RIAA - or she's been given the boot, depending on who you listen to - but it's going to take a lot of hard work to repair the damage she and her minions have wreaked. However, the music industry will get there in the end - at least, as far as the general population is concerned.

"With the unveiling of the Apple music service in April, the major record firms have overcome much of their fear of cannibalizing compact disc sales with cheaper, easily copied digital downloads," Amy writes. "They licensed their catalogs to Apple on more liberal terms than they had in the past, letting the new Apple music service sell songs for 99 cents. In just over a month, the service has sold more than 3 million tracks, far exceeding the record industry's expectations."

Sony and Universal sold their jointly owned online music subscription service, pressplay, to Roxio, the company that purchased Napster's name and assets and, as Amy points out, "The pressplay service, in which the two record labels retain a stake, is expected to be reintroduced soon bearing the Napster name - an acknowledgment by Sony and Universal that the service would be easier to sell to consumers under the brand that most epitomizes file-sharing.

"And RealNetworks announced last month that its subsidiary was dropping the price it charges subscribers to its Rhapsody online service to buy songs online to 79 cents."

"If people are criminals I'm not concerned about alienating them."

But looking at things in a new, creative light isn't part of the plan, if the suits quoted in Amy's story are to be believed. They're bent on following up on their recently introduced policy of nailing individuals to acquire, and then maintain, control of online music sales.

Certainly, RIAA clones around the world are putting the frighteners on school admin boards and going after students to try to stem the flow of 'pirated' music. Last month, three Australian students became the first people to face criminal charges for alleged internet music piracy and, "We have the right to control the property we own the way we want to," David Munns, EMI Music North America chief executive says in the NYT piece. "To be successful I have to listen to what the consumer is telling me, but if that means me going broke that's not the answer. You've got to do what you've got to do."

The first lawsuits are likely to be filed this summer, states Amy's article, quoting Morris: "We're going to continue to address this with harsher and harsher means. If people are criminals I'm not concerned about alienating them."

However, she adds that the Electronic Frontier Foundation is organizing a campaign to rally students to push Congress to create alternative approaches that would legalize some forms of file-sharing. One approach would require record companies to license their entire catalogs to anyone who wants them for a fee set by the government, she says, while another would, "levy a tax on Internet service providers and, perhaps, other related businesses to create a fund that would be used to compensate copyright holders based on a measure of how frequently individual songs are downloaded. For consumers, the tax would be less noticeable than directly charging for the music."

As part of the campaign, the EFF has paid for an ad to go in Rolling Stone and other publications in June. It'll show five people standing in a lineup with headphones on. "Tired of being treated like a criminal for sharing music online?" it reads. "Filesharing is music to our ears."

Roger Ames, the chief executive of Warner Music Group, said any plan that handed control of the industry's licensing to the government would simply shrink its revenues and prevent it from financing artist careers. [Financing artist careers? Riiiight.]

As for the taxation idea - "It sounds like communism," he said.


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