Sympathy for the Devil

by Philip Liew

As the RIAA (Recording Industry Association of America) continues its fairly successful litigious rampage against music downloaders, a backlash is brewing. The RIAA’s aggressive lobbying on the intellectual property front and the coercive legal tactics they use to bully file sharing service providers and their members have inspired a growing coalition of activists, lawyers, and universities. But this article isn’t about that. In the true spirit of “know thy enemy”, I’d like to explore what motivates the RIAA to be so evil.   The RIAA is a trade association that represents the interests of major American music labels.  According to their official website, RIAA members are the record labels and distributors who “create, manufacture and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States”.  Until the late 1990’s, this meant that if you wanted to distribute or buy music, you had to go through the RIAA.

Enter the digital music age.   MP3 encoding allowed for compressed audio storage. This meant whole albums could be copied to your hard drive and take up a fraction of the space they did under previous formats. The advent of MP3 software, such as Nullsoft’s free Winamp, combined with increasing public access to higher internet bandwidth and an explosion of young college-age internet users, forged almost all the conditions conducive to what music industry executives call audio piracy.  Once peer-to-peer networks such as Napster and LimeWire went online, music exchange became easy and popular.

We’ve all made mix tapes in the past, lent albums to our friends, and copied CDs when the 10 – 30$ price tag seemed too steep.  However a particular combination of technologies has expanded this process to the point where mp3 trading reduces a significant portion of potential profits from the hands of RIAA members. So, shouldn’t record companies just adapt given how practical and pervasive digital music is? Rather than label RIAA members as inept, it’s important to review their objectives to understand why they take the stance that they do.  Simply stated, the record industry is trying to achieve the following goals:

1.  Retain its role as the main distribution channel

2.  Prevention of the devaluation of music

From funding the artists, to promoting and distributing their content.  Large music companies traditionally maintained a stranglehold on activities in this area and prevented most musical acts from getting noticed without their help.  With this leverage, music labels have historically taken the lion’s share of album sales. Artists were left to make the majority of their income from concert sales. Direct digital music distribution gave artists an alternative. Once a band records their music, they could use peer-to-peer networks to promote their music directly.  The music creates buzz, which increases traffic to live shows and website sales. Circumventing the music labels distribution network meant that money went directly into the pockets of the artists instead of the record company.

This results in more artistic freedom.  Digital music is also cheaper music. The medium eliminates the physical product and the production and storage expenses that go with that. This has made music production more accessible for the artists and increased the amount of content available to the consumer. Stripped of their control on the production side and the consumer side, where does this leave music labels? And more importantly, how will our long term consumer habits change the music industry?

Traditionally, we’ve always paid a price for music. The intrinsic value for “free” access to music was gauged by what we had to do in order to listen to it. Although we don’t pay for non-satellite radio access, we do listen to commercials between songs. Radio stations pay a licensing fee for the privilege to broadcast. Enjoying music in the comfort of our homes legally requires that we purchase records, cassettes, compact discs and now digital downloads.   Over the last ten years, a generation of young people is being raised without much guilt about music piracy.

According to the RIAA’s own consumer statistics, there was a steady decline in album sales for people under 30 since 2002 until 2005, when they stepped up their effort to persecute and prosecute people who share music files. Famous cases include Jammie Thomas, who was being sued by the RIAA for allegedly sharing  1,702 songs through the Kazaa network. A federal jury sided with the RIAA and returned a verdict of $222,000 US. At the time of this writing, that judgement has been nullified by a U.S. district court judge. Artists, consumers and institutions are also fighting back by questioning served subpoenas and the lobby efforts of the RIAA.

CRIA, the Canadian equivalent of the RIAA, reports that the proliferation of file-swapping coincided with a 41 percent decrease in retail sales of pre-recorded CDs and cassettes between 1999 and 2005. That’s about $541 million dollars. A study done by research group Pollara estimated that 1.6 billion music files are swapped online annually in Canada. The OECD reports that Canada had the largest online piracy rate per capita in the world in 2006. CRIA criticizes the federal government for dragging its feet when it comes to intellectual property. They argue that in a small market such as Canada’s, music piracy results in a reduction in sales and investment in new domestic talent. There is also a cascading effect that affects retail stores, new record labels, sound engineers, CD factory workers, band managers and graphic artists.

As the climate changes, so do the actors within the music industry. There has been emergence of new revenue generating models such as Ad-supported music (i.e. Imeem, and MySpace) and the burgeoning ringtone industry.  Major artists, such as Trent Reznor of NIN, are leaving behind their labels to distribute their own music. While it’s obvious that music industry execs are most concerned about the bottom line, protecting the social value of music seems fair in light of artists making a living and the costs of production.

There was a time when record companies were the vanguards of their artists by making sure that talent was rewarded. When radio emerged as a new medium in 1939, musical works were being broadcasted without permission or royalties. The Broadcast Music Incorporation (BMI) was founded to ensure artists were paid for their works.  A balance needs to be struck between the interests of content providers, public listeners and artists so that everyone can make a living and have access to an ever-increasing amount of creative music.true lies dvdripreal mccoy the divx movie online