*Record labels should make MP3s free, and freely shareable* By Milo Yiannopoulos, 19 Jul 2010 http://www.telegraph.co.uk/technology/news/7898359/Record-labels-should-make-MP3s-free-and-freely-shareable.html
A few days ago, with no small amount of glee, Ray Beckerman from the Recording Industry vs The People blog suggested that $16m in legal fees had netted the Recording Industry Association of America less than $400,000 in court judgements against pirates in 2008. (You can see for yourself just how much glee Beckerman felt<http://recordingindustryvspeople.blogspot.com/2010/07/ha-ha-ha-ha-ha-riaa-paid-its-lawyers.html>by reading his post title, which is: “Ha ha ha ha ha. RIAA paid its lawyers more than $16,000,000 in 2008 to recover only $391,000!!!”.) But beyond the gloating blog posts, there's a truth emerging: aggressive legal tactics against pirates simply aren't working. Worse, they're turning into a PR disaster for the recording industry. Illegal downloading is costing record companies – and, ultimately, artists – a lot of money in lost sales. No one would seriously deny that (though they may argue over just how much it's costing). But if suing pirates isn't the answer, what is? There are two main technical problems for content producers in a digital age. The first is called the analog hole. It’s the point at which the 1s and 0s become something human beings are capable of understanding: for example, a sound or a picture. It’s at that point that – regardless of the technical restrictions on playback or distribution of content, the signal can be intercepted or captured. As soon as you have a digital copy of the movie or song, the second problem rears its head: digital content can be instantly, infinitely copied and distributed, near-instantaneously, to millions of other people. Both of these problems are, ultimately, insoluble. And that’s why, after the lawsuits, the scary TV ads, the technical measures like deep packet inspection, the (small) legal victories, the new legislation in the USA and Europe, the hundreds of millions of dollars thrown at combating online piracy, we are no closer to stamping out file-sharing. Piracy cannot be eradicated. It doesn’t matter if every BitTorrent tracker is shut down, every server hosting every torrent directory seized. Determined pirates will just switch to a new type of technology – such as streaming via sites like RapidShare – and the mainstream will eventually follow. (It’s already happening in France, where streaming is the new file-sharing.) That’s how the internet is: it’s a fast-moving, hyper-connected network of highly intelligent, resourceful people. There is always a way around any restriction; always a fix for any bug; always a way to get what you want for free somehow. So if we accept that file-sharing is unstoppable, and that attempts to curb it might leave us with something even worse, wouldn’t the logical consequence would be to make MP3s free, and freely shareable? Yeah, I know. But take a deep breath and think about it for a second. And yes, I do realise I'm not remotely the first person to come up with this. But I'm perhaps the latest person to be won over to it. Giving MP3s away would require that record labels basically give up on studio recordings as a revenue channel. On the face of it, it sounds heretical and preposterous. I mean, they’re record companies because they make records, right? Technology and music journalists have been banging on for years about broken business models and the need for record companies to wake up. There’s an increasing realisation, though it may not have filtered up to industry executives yet, that the internet has created an insuperable obstacle to the idea of charging for a copy of a file. Edit, copy. Edit, paste. That’s how you make a copy of something on a computer; you don’t buy a new version of the file. It’s hard-wired into anyone who knows how to use a PC. It doesn’t matter how many lawsuits you file against grandmothers; that understanding doesn’t suddenly stop when the file extension is .mp3 instead of .doc. There will always be a market for “premium” physical stuff, along with all the associated merchandise. But if the RIAA (I’m omitting the MPAA, because movies are an entirely different kettle of fish – a subject I’ll return to in a future column) gave up on trying to sell digital copies of recorded music, they and associated bodies in other markets could drop existing lawsuits, fire their overpriced lawyers and refocus their attention on their artists. Authorised streaming services offer an exciting potential replacement revenue stream. You can charge people something like $10 a month for services like Spotify. People seem happy-ish with that. $10 seems to be the “sweet spot”. So make those services valuable – for example, by making local versions of files available for offline use and build decent clients for all the major operating systems and mobile handsets. People will pay for convenience and good software. And then of course there’s live music. In 2007, when her existing recording contract came to an end, Madonna signed an extraordinary $120 million deal with Live Nation. But Live Nation isn’t a record company; it’s a tour promoter. Madonna has proven that if you put on a good enough show you can charge whatever the hell you want and you’ll sell out, night after night, tour after tour. I know, I know, nobody listens when a gay man starts evangelising about Madonna. But really, the numbers speak for themselves: at the end of 2007, Madonna had raked in $194.7 million from her Confessions tour, having played in front of 1.2 million people. A few years later, she’d refined the formula: 2008/9’s Sticky and Sweet made a staggering $408 million. That dwarfs the profit she made on the album itself, which sold 3.8 million copies. What Madonna, Michael Jackson and more recently Lady Gaga have most in common is their larger-than-life personas; the cults of personality they erect around themselves that find their fullest (and most commercially lucrative) expression in live tours. Ask anyone who had a ticket for Bad or Blonde Ambition and they’ll likely tell you it was one of the most extraordinary nights of their life. And people will pay stupendous amounts of money for those sorts of live experiences. But they’ll also pay good money for more pedestrian experiences, if they have that live feel to them. Cinemas, despite the rocketing prices of their tickets, are experiencing a phenomenal renaissance. According to my friends in the industry, it’s not just recession behaviour and there’s no sign of a slowdown. Martin Spence, assistant general secretary of BECTU, the UK’s media and entertainment trade union, told me a few months ago, in reference to the Digital Economy Act, that “politically, no ground has been given over the fundamental understanding that illegal downloading and file-sharing are forms of theft, and that the industry cannot stand by and watch it happen”. That position might be a horrible, perhaps even fatal, mistake. I reckon the record labels that will survive will be the labels that reinvent themselves as talent scouts and tour promoters. Artists like Madonna are perfectly placed to prove the business case. Indeed, I think she already has.
_______________________________________________ network mailing list [email protected] http://lists.fosscom.in/listinfo.cgi/network-fosscom.in
