Friday, June 25, 2004

U.S. Senate File Sharing Bill Progresses: Kill the Content Channel Most Liked by Consumers?

The New York Time Op/Ed pages, of all places, runs with TWO pro-file-sharing pieces in reaction to continued pursuit of consumer downloaders by the RIIA and highlighted by RIAA-supported legislation surfacing in the U.S. Senate (CNET News) to ban file sharing software. Kembrew McLeod's piece points out that CD sales increased 10.6 percent in 1Q2004 over the previous year, even as file sharing continued to surge. In other words, increases in file sharing do not seem to correlate closely with decreases in CD sales. The piece by William Fisher gets a little more to the core of the matter by noting how the entertainment industry handled similar technological challenges to content distribution far more gracefully. When U.S. commercial radio first came on the scene copyright holders encouraged its growth with royalty-free dissemination, which fueled the growth of their record sales, and then took a relatively modest royalty cut that now represents USD 300 million in annual revenues. When VCRs came on the scene, initial fears were replaced by burgeoning sales via rentals and purchases.

In the now-famous words of former President Bill Clinton, the RIAA goes after consumers "because it can," not because it is likely to have any significant impact on the industry as a whole or result in new business models that will help the music and entertainment industries to thrive. If the RIAA really cared about technologies that incited copyright infringement it could have gone after harder targets like Microsoft for the "Copy" and "Paste" functions that have been at consumer's fingertips for more than twenty years. File sharing is the new radio, filling the huge void left by the inability of the traditional broadcast industry to offer the public any substantial diversity in its musical content offerings and the inability of media outlets in general to target innovative content effectively at highly engaged audiences. Instead of trying to milk the last few miles out of outdated business models that don't provide the public what they're looking for the recording industry owes it to itself to take a look at how purveyors of professionally-oriented content have come to peace with their clients over the years and reached out for new ways to make their content valuable to their audiences in innovative ways. Sitting on a copyright doesn't do the public much good unless you can provide its value to them in a meaningful manner. The marketplace as a whole will win when innovation in content value takes the front page instead of fruitless protectionism.
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