Wednesday, October 03, 2007

The CD, not file sharing, is the true target of the music industry

The media always treats the music industries attacks on file sharing as though these were the real story. Wrong. File sharing is a side-show now. The music industry has pretty much eliminated file sharing as a true revenue threat, in fact that threat really died when the first, largest, MP3 file sharing service died. Everything since has been mop-up operations, but the industry has been very smart to keep the focus on "file sharing". The real battle lies ahead.

The industry's real problem is the CD, and the massive music collections people have copied from CDs already. The quality of the music on the CDs considerably exceeds what most people can appreciate, so there's no technical innovation on the horizon that will render existing CDs worthless.

Those CDs are passed around, music libraries are exchanged, and the music industry gets nothing. Even if the music is not illegally exchanged in this way, CDs are resold, people marry and share music, parents put their music on their children's iPods, and people stop listening to their old CDs and instead listen to their iPods.

The industry needs all of this to stop - eventually. That's the true target.

That's what SONY's lawyer is admitting when forced to speak under oath ...

Sony BMG's chief anti-piracy lawyer: "Copying" music you own is "stealing"

... Pariser has a very broad definition of "stealing." When questioned by Richard Gabriel, lead counsel for the record labels, Pariser suggested that what millions of music fans do is actually theft. The dirty deed? Ripping your own CDs or downloading songs you already own.

Gabriel asked if it was wrong for consumers to make copies of music which they have purchased, even just one copy. Pariser replied, "When an individual makes a copy of a song for himself, I suppose we can say he stole a song." Making "a copy" of a purchased song is just "a nice way of saying 'steals just one copy'," she said.

Countless studies have shown that the majority of music on portable music players like the iPod comes from sources other than download services. For most people, that music is comprised primarily of songs "ripped" from CD collections to MP3 or some other comparable format. Indeed, most portable music players comes with software (like iTunes) which is designed to facilitate the easy ripping of CDs. According to Pariser's view, this is stealing....

How can the music industry eliminate the CD? Short of implementing a police state they can't do it for existing music, but they can stop releasing new music on CDs. They need to do that as quickly as possible, which means they need electronic distribution to become very popular -- even at the cost of impacting short term revenues. So today the industry needs the iPod, and for now they even need Amazon's DRM-free distribution and Apple's iTunes store. These are the key drivers reducing interest in the CD -- and the CD has to go.

Once CD sales really fall, then the industry can stop releasing new music on CDs. Only then can they kill the iTunes music store, the iPod, DRM-free distribution, music that lacks owner identification, etc.

It will be a tough fight, with lots of slow retreating under file -- until the CD dies. After the CD dies, then the tide turns.

I think they'll make a good go at it.

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