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  RIAA throws a fit, goes after P2P end users 
  Jul 03, 2003, 09:30am EDT 
 
By: Sander Sassen

The music industry as we know it is slowly fading into oblivion. Although the big execs and legal departments of all of the major record labels are trying hard to prevent this from happening, there’s not much they can do to stop it. But like any business that’s seeing his revenue drop it should start looking for ways to remain competitive and offer products or services that people want and can afford to buy. Sure, the music industry is frantically lashing out at users of peer-to-peer networks and blames them for their decline in profits. With their current campaign of allegedly going after the P2P end users they’re targeting exactly those from whom they can’t collect more than a few dollars, so what’s the point?

The category they’re now frantically lashing out at is the male teen, high on testosterone and other hormones that drive him towards adolescence, and with a healthy disregard for respect, rules and regulations. As that, a recent RIAA survey showed, is the category that's hurting their revenue most. But honestly, he won’t simply stop doing what he’s doing, especially not with all of the taxes on blank media that go towards compensating artists for loss of revenue due to pirating. He reckons he’s in the clear as he already paid a fee for being able to copy CD’s and transfer music to other media. Most of these teens cannot even be held liable for their actions as they can’t be trailed in court, let alone be sentenced for illegal activities such as distributing songs on P2P networks. And frankly if the music industry and the RIAA go after teenagers they’ll quickly alienate their statistically largest consumer base, and thus they’ll only further start losing revenue.

Others however say that the slump in their sales are caused by the weak economy, the recession, the lack of truly new and innovative material and the fact that singles seem to have disappeared completely, forcing the customer to buy the whole album. But let’s not forget about competition from things like DVDs and video games too, as people obviously have a much broader selection to choose from for roughly the same amount of money, The question really is, where do people spend their money on? I think this is a much healthier and sound explanation; after all you can’t expect to keep making the same stellar revenue and profits if the rest of the world is dealing with massive reductions in profits and income, due to a global recession. Obviously the music industry and the RIAA think that the laws of economics don’t apply to them and they just want to enforce their ‘rights’ by throwing more lawyers and multimillion lawsuits at the problem. What bothers me though is the simple fact that they apparently are able to persuade enough politicians to accept legislation that’ll safeguard their profits; when did protecting an industry’s profits become a statutory issue? I think it is ridiculous that the music industry gets away with this, and gets new laws accepted and other changed just to protect their revenue.

The problem with the music industry is that it sees the sharing of MP3s and other music formats as the root of the problem. They often use the point of the increased volume of MP3's being traded as evidence of customer demand, a demand that was supposed to be filled by these people legitimately buying records. But really, all that that point proves is that people are always looking for the best deal; because if it’s free and easy to get a hold of they’d rather go with MP3s instead, rather than pay a price premium for an album of which they only like two songs. I think a far better way to judge demand and how people like to listen to their music is by looking at the sales of playback devices, just look at any electronics store nowadays and you’ll see what I’m referring to.

Remember the last time you saw a stereo department in one of these stores? They have just about disappeared to be replaced with a big screen TV and a whole range of different home theatre setups. Furthermore, many stores now carry a broader selection of TVs and multi-channel speaker systems than they ever carried CD players or stereo sets. And when was the last time you heard somebody ask about a high-end CD player with 20bit DACs and 256x oversampling, these things are now taken for granted and people have moved on to DVD players that are perfectly capable of playing back their old CDs. DVD-audio and Super-Audio is claimed to revitalize the sales of these devices, but I doubt that, as the content featured on these DVDs/CDs in not innovative enough to justify a significant investment in the playback device. And to be honest, it is only a matter of time before generic DVD players also enable playback of these formats, we've seen the same thing happen with MP3 and SVCD playback.

Even car-audio is changing, while a CD player was a luxury upgrade over a tape-deck a few years ago, today TV sets and DVD players are becoming standard options on more vehicles every day. Thus I think it's pretty obvious that people have moved on to a more visual experience, whenever they’re in their homes or on the road. Most of the equipment being sold for listening to music is for mobile use and otherwise the home theatre has pretty much replaced the stereo-set. So the trend seems to be that people listen to music on the go, for that purpose they’re not going to carry around a bag full of CD’s if a 256MB MP3 device will carry the same amount of music in a much smaller size. So I think it is pretty obvious that with this increased mobile use of music, portable music formats have become very popular.

With copy protection schemes popping up left and right things will only start to look worse in terms of sales as people are not able to use them in any other than their original form, thus severely limiting people in the choice how and where to listen to their music, and thus preventing them from buying the original recording all together. This is also why protection schemes will fail in the end, partly because they’ll be circumvented but mostly because people will move on to other means than buying CDs if they can’t transfer their music to their format of choice. Protection schemes will cut into the revenues of the record companies and will backfire, because people will either not buy CDs which are protected or simply circumvent the protection scheme, or look for the songs online instead.

The only workable solution I see, and I already mentioned that in a previous column about this subject, is some form of subscription service that allows for paid music downloads in a variety of different formats. It also has to be affordable; you can’t charge the same amount of money for a song you download off the internet as you would charge for the single. And if you want to tap into the budgets that are left over after people spent most of their money on DVDs and video games, it has to be relatively inexpensive. The other requirement is that there has to be a very broad range of titles available, not just the golden oldies, but also the latest top-100 songs. This is simply to give the consumer a choice; download the music off of some peer-to-peer network and possibly get a file of lesser quality, or pay a small fee and get it straight from the source.

If the selection is broad enough and the prices are affordable, or rather, cheap, people will at some point prefer official downloads over shady peer-to-peer networks, just because it is less hassle and the quality is better. I think it is time for the music industry to drop their current business model and move on to greener pastures which this approach would offer, they’re fighting a losing battle here and if they want to stay afloat they’d better adapt to what the consumer wants or be doomed to fade into oblivion. The very same music downloads that they're vigorously fighting today could very well be what prevents them from going out of business tomorrow.

Sander Sassen.

 

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Re: RIAA throws a fit, goes after P2P end users Troy Siegert 3 replies Sep 11, 2003, 04:50pm EDT
Re: RIAA throws a fit, goes after P2P end users Vadim Rapp 9 replies May 18, 2004, 08:33pm EDT
Re: RIAA throws a fit, goes after P2P end users Rhort 11 replies Mar 10, 2006, 08:19pm EST

 

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