When Will The Record Industry Get It Together?

by Cory Treffiletti, Feb 19, 2003, 12:00 AM

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Late last year a settlement was reached in the case of the Recording Industry vs. the Attorney’s General of New York and Florida (who were later joined by 39 other states). The case alleged price fixing by the Recording Industry in the late 1990’s and it appears that most of what was alleged was true, judging by the outcome. The settlement includes paying a refund of $5-20 to every consumer who purchased a CD during that period (for more information, check out http://www.musiccdsettlement.com).

This price fixing on CDs is just one more example of the perversity and lack of forethought by an industry that, if for just one instant had thought straight, would have benefited exponentially by the development and growth of the Internet.

The development and proliferation of P2P software in the wake of Napster has proven that the Internet is still the single most important way for the average consumer to learn about new music. In the late 1990’s, sites ranging from MP3.com to IUMA to Sonicnet emerged to help people learn about new music, whether the acts were signed or unsigned. Many of these sites have had their importance significantly reduced in the last few years as a result of lawsuits from the Recording Industry and artists like Metallica, which has helped to drive a loss of creativity in music.

What is wrong with these people? Are they really so blind as to not see what the Internet could do for their business or are they just so ignorant and frightened of the future that they would rather shoot off their own noses to spite their own faces?

The Internet, if utilized properly, could still become the greatest tool for testing out new music. If the Recording Industry would get their act together they would realize that they have the greatest single A&R rep and street team available for a fraction of the cost of previous methods for artist development and market testing. By distributing singles and EPs via the Internet for free, the Labels would be able to get feedback on artists from the people who would be directly responsible for their success. What better focus group than the actual consumer? Why bother pressing a limited run of an album and paying out the distribution costs for an album that may not yet be ready for the market? Record Labels would be able to reduce the risk associated with new acts. Why not have the Labels set up Developer Networks in the same way that Microsoft and other technology companies have done? Let the core group of consumers, those responsible for purchasing the most albums each year, be directly involved in the development of new acts by giving them access to demos and upcoming albums prior to their release? If they like it, they spread the word. If they don’t, then they provide their feedback to the artists. We know this model works, just ask 50 Cent and Jay-Z or any other artist that has debuted at number one on the Billboard charts despite early bootlegs making their way onto the Internet weeks before their official releases.

Rather than use the Internet in a logical way, the Industry has decided to stifle development and attack the actual consumer. I recently read about proposed legislation that would make it legal for labels to digitally attack the hard drives of any IP address that is found to be downloading music off of the various file sharing services. This may not be easily implemented or easily enforced, but the simple fact that this was proposed is scary. Why further disassociate yourself with the very people that you are trying to court on a business to consumer relationship? This smells of desperation and does not bode well for the future of an Industry that I have followed for years and have been involved with from time to time.

The Recording Industry of America needs to wake up and realize that technology is moving ahead without them. There are a number of officially sanctioned efforts coming to the fore but this seems like round 3 of the fight and for some reason I have my doubts as to whether this round will be successful or not. Why can’t the visionaries of the Industry who have been responsible for past successes lead the Industry into the future that includes the Internet? Why can’t people like Clive Davis or Ahmet Ertegun, who helped shape the Recording Industry over the last 25 years, see the future for what it is?

I hope they see the light soon. If they need some help, have them call up any passionate music fan. The lights are bright from our end, we can see pretty damn clearly.

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