Is it too late to find a peaceful compromise in the digital music revolution between record labels and consumers? It is not just record labels that are refusing to find a middle ground between ease of sharing digital music and ensuring listeners pay for it. Consumer attitudes and actions are not helping matters any. Has the gap between the two sides widened past the point of identifying a resolution?
The issue is enormously complex because it doesnt fit squarely into any one category. It is a business concern because record companies are rapidly losing revenue in sales of compact discs. And in 2006 at least, the industry is claiming that online music purchases did not make up the difference.
It is a technology concern because the industry leaders are still insisting that digital rights management, DRM, be incorporated into any digital music sales essentially protecting digital content from being copied and shared. So far, no one solution has successfully satisfied the consumer and the music industry. There is a minute push among the big labels to partner with major online distributors like Yahoo and Amazon.com to release digital downloads free of DRM. But the biggest push is a model much closer to that of Zune or iTunes a closed system that allows only for sharing of tracks among its own products.
It is a legal issue too, one of ownership and copyright violation, that has resulted in legal action against downloaders and file trading networks. Under the Audio Home Recording Act of 1992, consumers could make analog and digital recordings for personal use. That was back when music sharing was making a mix tape off of the radio, and didnt threaten record label revenue.
It is a political issue because the government has once again introduced a bill that aims to regulate digital music commerce. On January 11, the U.S. Senate introduced the Platform Equality and Remedies for Rights Holders in Music Act. This is the second iteration of the same bill that was originally introduced in April 2006, and it is plainly a major score for the recording industry. The act basically requires that music providers, including satellite radio and cable providers, take whatever means available to prevent music theft. For consumers, that means no more burning tracks to CD.
What is at stake is the relationship between the music industry and the consumer. Any faade of goodwill is rapidly crumbling. Even in the face of undeniable backlash from consumers, music execs are not any closer to offering a viable solution. The record labels are loath to describe it as a war on consumers. But consumers have taken the war to the record companies by freely and without qualm passing around digital tracks by e-mail and cell phones and portable music players.
Its probably useful to note that independent record labels and the artists themselves have freely distributed tracks to consumers without DRM. But the big record labels argue, rightly, that giving music away is not much of a business plan. And to drive the point home, a global pool of independent record labels announced a deal to negotiate terms en masse with download sites through an agency called Merlin. The move ensures that the indies will have a market share in fee-based digital music sales. Because at the heart of the argument is a very simple notion; listeners should pay for the music they hear.
This week at MIDEM, a music industry trade fair, the music industry will continue to debate endlessly its stance on digital music distribution. Whether it is fair or not, it is up to the music industry executives to find a solution to the problem. Consumers have drawn a line in the sand, and the record labels would be wise to find a way to make it work. There needs to be a system that is profitable for them and convenient for the purchasers.
The alternative is a move towards an entirely free and fluid music sharing system. As it is, we are already one foot in the door to that outcome. A generation of listeners has grown up in the age of free digital music sharing. Who will be able to convince them to go back to paying for the privilege? Its not too far-fetched to suggest that is it already too late to compromise.
Andrew Marx uses his legal education to provide practical information on how the everyday person can access legal resources. His weekly column can be read at http://features.smartremarx.com/