Click to Start – Slow Thinking Music Dinosaur

I’ve been following with interest the articles on Arts Hub about music downloading and song swapping. Plus tracked the main issues in my Blog as they arise in the media. And the more I read, the more depressed and amazed I become.

Depressed because apparently the only way the music industry knows how to achieve progress in their business plans is to take court action against teenagers. Amazed because we’re clearly dealing with a dinosaur, out of date and slow thinking.

I’m not going to re-cap the issue at hand, I’m sure we are all aware that the music industry around the world has been gearing up in a public relations frenzy to protect the intellectual property of its artists, by suing people who use file swapping systems like Kazaa and Napster to trade illegal copies of songs. At least that’s the music industry’s position – protection of copyright material, and through that, revenue for artists.

The industry’s madness, and incompetence knows no bounds. Take the infamous black marker copyright breaking tool. In 2002 Sony introduced it’s "Key2Audio" anti-copying system on millions of audio CDs. It was based around a special security track around the outer edge of the disk. Til some enterprising person discovered you could just cover the track using a black marker. Worked like a treat.

Or SunnComm Technologies taking court action (later dropped) against a Princeton University graduate who posted information to the Net which described a serious hack to circumvent that company’s patented copyright protection system. Wait for it. Press the Shift Key. Yup.

And why is it that, despite taking legal action against hundreds of scared teenagers across the globe for supposed music piracy via file swapping networks, many of the big music companies pay for market research information from a company (Big Champagne) which specialises in monitoring the popularity of songs on those networks? Apparently they find it invaluable intelligence when mapped with other statistics such as airplay. So if a particular song is played on the radio, they can then check the ratings on the networks like Kazaa.

At the end of the day, this is all about money, and when money is the focus, as always, all is fair in love and war.

One of the best commentary pieces I’ve seen so far on the subject, written by Umair Haque on Red Herring says:

"The music industry fails to understand that a primary reason that consumers illegally share music files is that they want insurance against the music industry itself. File sharing is as much about risk sharing as it is about the theft of value. Technology makes file swapping possible – but the music industry’s business model, which is at odds with the implicit contract it signs with listeners, is what makes it probable." 1

Umair argues that the problem is one made by the music industry, and it’s natural that when an alternative came on the scene – the Net – consumers grasped the opportunity with gusto.

Artificial pricing – leading to a complete lack of connection between price and real product value; record companies pursuing self-serving interests; a total information feedback disconnect between the industry and the consumers. All inform an understanding of why consumers prefer to search and download music from the Net.

In the latest amusing twist, Kazaa’s owner Sharman Networks has won the right to sue the music industry for copyright infringement.

"Sharman, targeted by studios and record companies because its software is used to trade music and video files, has sought to turn the tables on the industry, accusing it of misusing Kazaa software to invade users’ privacy and send corrupt files and threatening messages."   2

The International Federation of the Phonographic Industry, which represents hundreds of record producers and distributors around the world, recently claimed a breakthrough in its ‘battle against illegal music downloads’, saying that they are seeing a large migration of people moving away from the ‘illegal’ downloads, and to the ‘legitimate’ online music purchase arena.

"The number of music files available illegally on the Internet at any one time fell by 20 per cent over the past nine months to 800 million in January 2004, having doubled to one billion through 2002 and early 2003."  3

Yes, but the ‘legitimate’ services – led by the Apple iTunes business – have only just come on the scene. One reason people used pirate systems was because there simply wasn’t an alternative. The web has been around for ten years now, and swapping networks for probably close to half of that in one way or another. So it’s taken the music industry four or five years to get their heads around the issue, and their response was typically traditional. Prosecute people not conforming to their historical view of what is ‘right’, and perpetuate their business model by licencing companies to offer music for sale, track by track, album by album.

The big boys continue to make a mess of it. Telstra BigPond just launched an online music store. Except they’ve decided that Microsoft is the way to go, and the whole thing is based on a proprietary Microsoft music file format. Which doesn’t work with iPod. Great thinking there guys. In fact, the 15% of the population who use Macs can’t even use the web site. Wow, what a business plan! Start with the premise you are going to lock out 15% of the potential customers from the beginning – and a market segment which actually probably has a higher proportion of cultural creatives, the Mac being the machine of choice for most multimedia designers, music makers and so on.

Look at the numbers – hundreds of millions of files available for swapping, tens of millions of people swapping them. And the best the music industry can do is just more of the same. Distinct lack of imagination. It’s only going to take one enterprising person to dream up a viable model, and the music industry will be back to square one. It happened with Napster, and Kazaa, albeit they both bore the brunt of the industry backlash. But they were the pioneers, the first ones to put their heads above the ramparts and invite the slings and arrows. More players will inevitably emerge, armed with the knowledge and experience of the pioneers, and new ideas with which to lay siege to the music honchos.

Shawn Fanning, the creator of Napster, has been beavering away quietly for the past few months, with funding from one of the original investors in Napster, on a new business called Snocap.

"Snocap’s plan, which involves identifying music files being traded through file-swapping networks and then attaching a price tag to them, is resonating well with music industry executives. "   4

Fanning changed the world with Napster, and it’s odds-on he can do it again.

In the meantime those of you who don’t use Macs can buy songs from BigPond (but not listen to them on the best music player on the market, the iPod). And those of you out there – you know who you are – who use file swapping networks, can keep looking over your shoulders for the long arm of the music industry dinosaur.