January 3, 2007

Getting It: Music Industry Finally Starting to Embrace the Digital Age?

"And I don't know why you're dying, long before your time has come," Chris Cornell muses on "Your Time Has Come," the lead track from Audioslave's 2005 album "Out of Exile." Although Cornell was not talking about the recording industry, it seems disturbingly appropriate given the conflict and turmoil in the business over the last several years. Quick to blame the rise of digital proliferation in the form of readily accessible and transferable audio files for declining record sales, the RIAA seems to have set the wrong priorities from the start. By waging war with the end consumers of their products, they set forth a dichotomy of us versus you, seemingly before considering the potentially lucrative benefits of working with and improving the very technology that has been cursed as the bane of their corporate livelihood.

For example, Ars Technica reports on how the secretive price-fixing strategies of the RIAA are being challenged in a current lawsuit initiated by them to seek damages for illegal file-sharing. The article discusses how the private figure is speculated to be around 70 cents per track. Then there is this report from Slashdot, pointing to a recent $1.65 trillion case against a Russian company which owns and operates AllofMP3.com, a site which allows users to download songs and albums for a fraction of the cost of other services. That amounts to $150,000 in retribution for each song downloaded, times 11 million downloads, between June and October last year. While the legalities of the case are complex, $150K per song seems extravagant and unjustifiable.

But even still, there is hope and perhaps even salvation for an industry ever thrusting itself into obsolescence with it's misdirected consumer warfare. Billboard reports on how the bigwigs are looking to capitalize on proven platforms:

Labels are striking licensing deals with sites like YouTube so that fans can post copyrighted content or include it in videos they make themselves. Additionally, labels are expected to start releasing new types of content -- such as unused clips or video montages -- specifically created for fans to manipulate in new ways.

By doing so, record labels can then share in the advertising revenue these sites collect. Rather than just suing YouTube and its ilk for how their sites are used, the music industry can now profit from them, not to mention reap the promotional benefits.

Welcome to the new era of Digital Democracy, RIAA. It appears as though they were listening when TIME Magazine declared that end user content creators have changed the infrastructure of media content and distribution. Let's hope this is the first of many steps in that direction. Check out the full article for the details on how a few different technologies will be adopting and managing this new venture. Because good news is always better in pairs, hop on over to this piece (also from Billboard) on how the industry may finally be easing digital copyright standards, long after the discovery and realization of the failure to protect or serve the integrity of the digital music marketplace.
In 2007, the majors will get the message, and the DRM [digital rights management] wall will begin to crumble. Why? Because they'll no longer be able to point to a growing digital marketplace as justification that DRM works. Revenue from digital downloads and mobile content is expected to be flat or, in some cases, decline next year. If the digital market does in fact stall, alternatives to DRM will look much more attractive.
Read the full article for further exploration of where the DRM battles will be fought and won and how this might shape the future of online music retail. Overall there is a long and treacherous road to be traveled for the musicians, the industry, and the fans in order to mitigate their vastly different perspectives. Obviously, the primary burden falls on the RIAA, which has not quite got a grasp on it yet. But these last two examples are important, because they evince the RIAA's willingness to finally stop refuting the inevitable and instead climb on board the high speed train of the Web 2.0. By harnessing the unbounded power of emerging technological landscapes with the environment of cooperation and sharing, everyone stands to reap rewards:
Additionally, music companies have the chance to let their fans actually sell music to one another via playlist-sharing services and peer-recommendation sites. Word-of-mouth marketing is exploding online through user-generated activity, creating a new generation of tastemakers. How well labels tap this effective source of music discovery will be a barometer of their overall digital strategies.
The results remain to be seen, but the playing field is set. The revolution started a long time ago, but now may be the pivotal time in which its full effects are realized. 2007 will prove to be an instrumental year in this regard.

For more on the RIAA's legal activities see: The Recording Industry versus The People

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