Posted on 01/19/2003 7:18:43 PM PST by Leroy S. Mort
CANNES, France (Reuters) - A top music executive said on Saturday that telecommunications companies and Internet service providers (ISPs) will be asked to pay up for giving their customers access to free song-swapping sites.
The music industry is in a tailspin with global sales of CDs expected to fall six percent in 2003, its fourth consecutive annual decline. A major culprit, industry watchers say, is online piracy.
Now, the industry wants to hit the problem at its source -- Internet service providers.
"We will hold ISPs more accountable," said Hillary Rosen, chairman and CEO the Recording Industry Association of America (RIAA), in her keynote speech at the Midem music conference on the French Riviera.
"Let's face it. They know there's a lot of demand for broadband simply because of the availability (of file-sharing)," Rosen said.
As broadband access in homes has increased across the Western world, so has the activity on file-sharing services.
IMPOSSIBLE TO ENFORCE
The RIAA is a powerful trade body that has taken a number of file-swapping services, including the now defunct Napster, to court in an effort to shut them down.
Rosen suggested one possible scenario for recouping lost sales from online piracy would be to impose a type of fee on ISPs that could be passed on to their customers who frequent these file-swapping services.
Mario Mariani, senior vice president of media and access at Tiscali, Europe's third largest ISP, dismissed the notion, calling it impossible to enforce.
"The peer-to-peer sites are impossible to fight. In any given network, peer-to-peer traffic is between 30 and 60 percent of total traffic. We technically cannot control such traffic," he said.
Rosen's other suggestions for fighting online piracy were more conciliatory.
She urged the major music labels, which include Sony Music, Warner Music, EMI, Universal Music and Bertelsmann's BMG, to ease licensing restrictions, develop digital copyright protections for music, and invest more in promoting subscription download services.
Pressplay and MusicNet, the online services backed by the majors, plus independent legitimate services such as Britain's Wippit.com, sounded somewhat optimistic about their longterm chances to derail free services such as Kazaa and Morpheus.
But they also acknowledged they cannot compete with the "free" players until the labels clear up the licensing morass that keeps new songs from being distributed online for a fee.
LEGAL STEP
Officials from Pressplay and MusicNet, which are in their second year in operation, declined to disclose how many customers they have.
"We haven't really started yet," said Alan McGlade, CEO of MusicNet, when asked about his subscriber base.
Michael Bebel, CEO of Pressplay, said his customers tally is in the tens of thousands. He added that the firm, backed by Universal and Sony, could expand into Canada in the first half of the year, its second market after the U.S. He didn't have a timeframe for Europe.
Meanwhile, Kazaa and Morpheus claim tens of millions of registered users who download a wide variety of tracks for free.
Rosen hailed a recent U.S. court decision which ruled that Kazaa, operated by Australian-based technology firm Sharman Networks, could be tried in America, as an important legal step to halting the activities of file-sharing services.
"It's clear to me these companies are profiting to the tune of millions and millions of dollars. They must be held accountable," Rosen said.
I've been involved with the media industry (both music and movie/broadcast) for a long time, and spend part of my time now as an executive in the industry. I'm hoping that through careful and deft maneuvering I can save the industry from itself, or at least make sure that it doesn't take the world of media with it when it goes down. I consider most of what I do in this regard charity work, as it is not related to my primary business interests. Nonetheless, it is much easier to make things happen if you are in a driver's seat. :-)
The corruption and gross inefficiency of the whole industry really bothers me, but unlike some people, I think it can be salvaged even though the transition will probably be very painful for many people. I am in an unusual position because I am not really a true insider, but I wield quite a bit of leverage.
Well.... Looks like we're going to be stuck with these schemes... thanks to the Napster and Kazaa users' collective inability to obey copyright laws.
Blaming the whole public, or significant sets of it, is a folly. This IS is world we live in, with the people here at the same time for us. At the least it suggests the problem to be solved is elsewhere.
Sure it does... The problem is that, if nobody is looking, a large number of Americans will break the law. It's a sign of morality decay within our society. And I don't know how to fix that.
I'd suggest to you that there is a great joy and good-feeling to be had in producing goods and services that others take to use. No freeload of stuff can substitute for that sense either.
Be what you must be, but consider that too.
OK, Captains Courageous... If you think it's so patriotic and admirable to break laws which you deem unjust, just post your name, address, and list of laws broken on this thread. (I'm giving you an opportunity to be a real brave patriot here.)
Early in the 90s, the liberal rot really set in the music business. Interestingly Talk Radio became really popular from Rush to Howard Stern leading the pack when the music started to suck. You got more talking along with canned music shlock in the music radio stations. I am surprised that the music companies are not blaming Talk Radio for their self-inflicted woes for not being able to sell garbage.
Who are the "parasites" and "hanger ons" you refer to? The songwriter? The producer? The studio musician? I suppose you think these people are insignificant factors and it doesn't matter if they're getting screwed. Is that what you call compassionate conservatism?
Fact checker's correction.
Just as a point of information, do your feelings on this extend to the unauthorized reposting of source articles on FreeRepublic, which some claim derives the originator of advertising income? Or is that a separate situation altogether?
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