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The muddled music industry

If online downloads help offline sales, why is the industry complaining?

Dan Heilman, ComputerUser editorial’s second-in-command for the last four years, is also a music maven. Dan has worked for a variety of media outlets as a music critic, and this shows in his personal music collection. His vinyl collection alone would make the folks at the Rock and Roll Hall of Fame drool. Because of his interests, I asked him to cover the online music scene back in May of 2000 and his Tracks column has been a monthly feature of the magazine ever since.

Dan’s expertise led to his serving as a panelist in a recent conference session on online music, which was part of the Strictly Business Conference and Expo in Minneapolis last week. The upshot of the session was how music has been devalued by the online world. Not only is it easier to get music, it’s easier to create and disseminate it. These fundamental shifts in the music culture change the way we think about music in general. As Dan says, “Long gone are the days when, if you heard a song you liked, you either bought it or waited for it to come on the radio again.” Now, if you hear a song you like, there are a variety of ways you can get it now. The music industry, which has maintained a tight grip on music distribution through many changes in media, has no clue how to maintain its stranglehold on what we listen to with this new medium.

As Dan says, “The mandate the labels face is finding a way to make paying for [online] music easier than swiping it. Easier said than done, because it means figuring out who owns the publishing and mechanical rights to each of the hundred zillion songs people are going to want. If they can’t pull that off, regulating online music is going to continue to be like herding cats.” So far, the industry has done a poor job of trying to regulate online music. It’s legal face, the Recording Industry Association of America (RIAA) has battled the Napsters of the world in the courts and on Capitol Hill and has an impressive string of victories. But the sense is, they are empty victories. For every Napster that gets shut down, there’s a pair of peer-to-peer technologies to take its place. Legal judgments may side with the RIAA, but legal enforcement will not kill the online music hydra. Until music lovers start seeing downloads as somehow wrong, the phenomenon will continue to grow. And as Dan says, it’s here to stay.

Now the RIAA has changed strategies, attempting to change the moral mindshare of the online music culture. This is tough when an analysis by Jupiter Media Metrix revealed last year that the downloaded music helps rather than hinders music sales. It should come as no shock that the more music audiophiles can sample, the more they will buy. As a news story over the weekend shows, the RIAA commissioned its own study to counter Jupiter’s claims and has engaged in a smear campaign to discredit the Jupiter findings. If you know anything about proper sociological research, you’ll know that the Jupiter study is valid while the RIAA’s study is suspect. The RIAA asked leading questions attempting to get desired results; the Jupiter study had all the blinds and other proper-research mechanisms in place.

If Jupiter is right and downloads do improve CD sales, why did the RIAA go to such great lengths to discredit the findings? My sense is it’s not about the money, it’s about control. The music industry wants to control all music distribution, which includes the entire cycle from labeling artists to recording to manufacturing to distributing to selling. If thousands of garage bands can record their own music in independent studios, put their stuff up on the Net for music lovers to sample, and get sales of cheap CDs as a result, the industry will lose its grip on the market and will have to resort to making money the old-fashioned way–earning the respect of artists, creating higher quality recordings, distributing them cheaply, and selling them with the aid of free downloadable samples. The very thought of this inevitability has the RIAA flailing away at the peer-to-peer hydra with every weapon in its arsenal.

James Mathewson is editor of ComputerUser magazine and

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