The Big Four Reckless Labels

By Jerry Del Colliano

(On the road with the Flyers NHL playoffs in Philadelphia pictured with my daughter, Daria and wife, Cheryl).

A few weeks back the RIAA was dealt a blow in a music piracy case. Perhaps you saw it.

A judge in the Atlantic vs. Howell case ruled that the sole act of making a music file available in a "shared folder" does not violate copyright laws.

The RIAA had been arguing that a sound recording that is ripped to a computer and stored in, say, a shared folder, constitutes unlawful use. Even the RIAA doesn’t consider ripping illegal but putting it into a shared folder that can be accessed by peer to peer software is – in their view.

The judge in the case denied the RIAA’s appeal for summary judgment that would render a quick and favorable ruling on its face. Instead, he rejected the RIAA’s theory of file distribution where digital files didn’t change hands.

This simple ruling could make it harder for the RIAA to proceed in other suits and make it more difficult to prosecute file-sharers.

A good question is -- why are the labels even trying to win these cases. It's a reckless policy and doesn't solve as much as one of the many problems the music industry currently faces.

The record industry will certainly lose even if they win every court case – and now, that’s not even assured.

On a college campus you don’t have to look far to see that young people take great pride in finding ways to steal music. Some – I estimate half of the ones I’ve polled – know that it is stealing and that it hurts the record labels. Many have a Robin Hood attitude that they are not hurting the poor artists, just the labels who they rationalize also don’t have the artists’ best interests in mind.

Good or bad, right or wrong – programs to deliver free music to the computers of a new generation are proliferating. These young folks want for nothing when it comes to music.

Should the music industry even be trying to dissuade young people from stealing music since they cannot control the delivery systems?

These are not like the Sam Goody days when if you walked out with a CD you didn’t pay for you likely got caught.

There is no way to safeguard the integrity of music recordings that I know of. Everything can be hacked. Everything can be shared.

It may be wrong. It may be unethical, immoral and maddening, yet it is the reality of the music industry today.

Why don’t the big four reckless labels simply declare victory and withdraw their lawyers.

It might look like defeat – like leaving Vietnam or Iraq without accomplishing the mission – but there really isn’t an alternative. At least a good one.

I have come to believe in the past few months that musicians and artists really do need the record labels, but not as they are defined today.

Look at some of the recent evidence:

Radiohead gives up on its tip jar approach – an admission that it is better as a band than a band of rebel record execs.

Paul McCartney having sold only 100,000 CDs in his much ballyhooed Starbucks deal, is now reverting to giving them away – Prince style – in the pages of London tabloid newspapers. Maybe he will sell more concert dates. It worked for Prince. Neither sold records.

Madonna is doing a deal with Stub Hub to get a piece of the second-hand ticket trading that goes on with her concerts. This has got to rankle music fans who already hate the high cost of going to live events.

Now Madonna is scalping the scalpers, wonderful!

Live Nation doesn’t look like an alternative to a record label to me. It is a concert venue that is locking up classic acts for expensive long haul deals. Lots of luck. Even Bono and U2 did an extended Live Nation deal and kept the distribution part separate – for their record label. You can’t fool a global warming theory advocate like Bono, can you?

One of my gifted students, Meredith Jung, wrote me recently with some good ideas that I think ought to be considered:

1. Albums done on the fan's dollar. Rabid fans would be willing to pay a couple hundred dollars toward their favorite artists' new album in exchange for a private performance or an exclusive ringtone or something cool and of value.

2. The other possible future she sees is like Amie Street. For $25 a fan/investor gets $50 to spend on Amie Street. Nothing costs more than 99 cents and most is cheaper. Once a fan/investor owns a song, they can recommend it to anyone and everyone. If everyone and their brother decides to buy the song after it is recommended, the person doing the recommending gets money they can spend on music. At some point, you don't have to put money into the system. The system starts covering a good chunk of a fan’s music purchases.

3. This is a great way to sell music to a generation that a) loves the opinions of others and b) feels 99 cents is too expensive for music. It doesn't feel so expensive when you're not spending your own money but the money you make from sharing your opinion (which Gen Y loves to do) about the music they’ve bought.

4. Bonus: they recommend new music to you and put the new music on sale for half off on Tuesdays. There's really no other way to go.

Even if you don’t like Meredith’s ideas, you have to admit – at least they have more potential than suing file-sharers in a hopeless attempt to stop piracy.

Only a lawyer could like that strategy.

Then, again, who do you think runs the record industry. Case closed.

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