From: ZeroGravity Sessions (zerogravitytribe_at_yahoo.it)
Date: 2003-09-12 16:57:29
The music industry has filed more than 250 lawsuits against individuals
who, it claims,
have illegally downloaded copyrighted music on to their computers.
The industry reckons that online piracy is behind a big drop in music
sales and the lawsuits are part of a
broad strategy to combat it.
TWO years after the music industry finally succeeded in shutting down
Napster,
the company that launched the craze for swapping music files free over
the internet,
it is making good on its promise to go after the individual pirates
too.
On Monday September 8th, the Recording Industry Association of America,
which represents the five music multinationals,
filed 261 lawsuits against individuals who, it says, have illegally
collected around 1,000 songs apiece through
file-swapping programs like Morpheus, KaZaA and Grokster.
The legal action, which comes after months of painstaking and
controversial investigation,
is just one part of a broader strategy to define a future for the
industry whose products
are widely available for nothing, thanks to such programs.
Last week, Universal Music Group, which is owned by France’s Vivendi,
slashed its wholesale prices,
enabling music shops in America to sell new-release compact discs for
as little as $10 and still make a profit.
And there is constant chatter in the industry that two or more
companies will merge in an effort to spread huge
overheads over a bigger revenue base.
The advent of the internet—and the software and hardware that enable
users to download music with a few clicks
of the mouse or to “burn” CDs—has had a devastating effect on the music
industry.
Shipments of recorded music have dropped by 26% since 1999.
The industry has responded with price rises, and so revenues have
fallen by “just” 14%.
The industry focused first on shutting down Napster, and then went
after file-sharing services
without a central directory, like Grokster.
But a court ruled in April that Grokster was not violating copyright
law by distributing peer-to-peer (P2P) file-sharing
software, which also has legitimate applications.
The industry is appealing that decision and, in the meantime, is going
after software users.
Over the summer, it has sought information on individuals who are
sharing files from internet
service providers and from universities. (Students, with little money
and a lot of time and internet savvy,
are among the keenest file-swappers).
And it has used sophisticated investigative techniques to try to
distinguish files that have been swapped
illegally from those downloaded legitimately.
These tactics have proven controversial. In Massachusetts, two
universities (the Massachusetts Institute of Technology
and Boston College) managed, if only temporarily, to postpone the
industry’s request for information on a technicality.
And civil-liberties campaigners are concerned about the level of access
the industry has to individuals’ computers.
The industry has run a high-profile, two-pronged campaign to persuade
users and their parents of the wrongs of file-sharing.
Some music executives have dubiously tried to equate P2P file-swapping
with “piracy to pornography”.
Andrew Lack, chief executive of Sony Music Entertainment, told the New
York Times: “As a guy in the record industry and as a
parent, I am shocked that these services are being used to lure
children to stuff that is really ugly.”
Music companies have also encouraged universities to include warnings
in campus magazines and in orientation sessions
on the criminality and potential penalties of illegal file-swapping.
The industry has also sought to persuade listeners that without
profits, it will not be able to invest in finding
and promoting the bands of the future.
But many music-lovers think the industry is just being greedy.
Monday's lawsuits were greeted with a torrent of complaints in internet
chat-rooms and on radio shows.
Fred von Lohmann, a lawyer with the Electronic Frontier Foundation, an
online civil-liberties group, criticised the industry
for going after “12-year-old kids and grandparents” in an interview
with the Wall Street Journal.
In a tacit admission that such targets make for bad press, the RIAA
quickly settled with the mother of Brianna Lahara,
a pre-teen file-swapper, for $2,000 (much less than the $750 to
$150,000 per song that it is seeking from other defendants)
and a grovelling apology.
Music consumers point out that the industry has hardly helped itself by
taking its time to make music available online
legally. Only this summer did EMI, a British music group, allow part of
its Rolling Stones catalogue to be downloaded legally
Songs by the Beatles are still not available legally online.
A number of music companies are dabbling with subscription services,
but these have failed to smother the free file-swapping
sites.
Can the industry find a subscription model that music-lovers will use?
The most important development in music downloading in the past year
has been the advent of Apple’s iTunes software
and online service. This offers a compromise business model that both
the industry and music-lovers might be able to agree
on.
It allows music to be sold on a per-track basis for a low price, and it
is widely seen as the industry’s best bet going
forward. It is already being imitated by other services.
Meanwhile, music companies continue to look flat-footed compared with
other industries affected by piracy,
such as the movie business. Warner Brothers slashed the price of its
DVDs a few years ago, spurring an upsurge in sales.
A side-effect was that some DVDs ended up being cheaper than CDs,
making the CDs, which are typically shorter and have
no visual content, look distinctly overpriced.
Universal Music Group’s price cut last week was in part a belated
attempt to close this gap.
It now hopes to compete with the likes of Wal-Mart, a low-price
hypermarket giant which sells CDs at a loss to stimulate
sales of high-margin goods.
But it looks as if the music industry will also resort to old-fashioned
consolidation and cost-cutting to preserve profits.
EMI tried to merge with Warner Music three years ago, but the European
Commission blocked the deal.
EMI has also been linked with Bertelsmann’s BMG music arm, though BMG
is now expected to pair off with Warner Music,
part of AOL Time Warner, with which it is in exclusive talks.
With so many other things to worry about, and so many online pirates to
chase, it should come as no surprise that those
talks are going slowly.
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