Embrace file-sharing, or die (part4)
Record Company Complicity
It could be argued that the record companies are responsible for their current predicament. Again, how did they turn themselves into one of the most hated corporate sectors, and what are they going to do about it? Five years ago nobody gave a second thought about record companies; now they are reviled. Record companies need to realize that music is now viewed as a commodity with a shelf-life of 90 days, and that they made it so. As Prince recently put it:
"So are most citizens really being completely disrespectful of the value of art and the need 2 provide appropriate compensation 2 the artists 4 their works? We've said it b4 and we'll say it again: the rise of digital technology and peer-2-peer file sharing has little 2 do with people's intrinsic respect 4 art and artists, and everything 2 do with the cynical attitude of big industry conglomerates, which have consistently pushed 4 more and more commercial, highly profitable products at the xpense of authentic art and respect 4 artists.
"If people do not feel enough guilt 2 prevent them from making digital copies of the latest episode of a popular TV show or hit pop song, it is precisely because the industry giants have succeeded in making these works purely commercial products, with little or no consideration 4 their actual artistic value. It is precisely because these companies have been consistently promoting commercial products at the xpense of artistic works.
"The fact that actual works of art still manage 2 seep thru the cracks of this huge profit-driven industry does not change anything about the fundamental equations that have been driving and still drive the industry, 2day more than ever -- i.e. that art = money, artists = money-makers, and art lovers = consumers.
"As a simple xample of how little music is valued as an art 4m by the industry, it is estimated that only about 20 percent of music ever recorded is currently available -- and, of this 20 percent, what proportion is actually readily available 2 music lovers? What proportion is not the current 100 top albums on the SoundScan charts?
"It simply appears that the instinctive reaction of the lover of art (b it music, TV shows, movies, or other 4ms of art) is such that, if the industry has no respect 4 his or her identity as an appreciator of art, then he or she has no reason 2 have any respect 4 the industry as a purveyor of art. By making digital copies of so-called cultural products, many people r not demonstrating their lack of respect 4 art and 4 artists, but r xpressing -- consciously or not -- their frustration with the way the entertainment industry profits from art at the xpense of both art makers and art lovers.
"The consumers of the commercial products of the entertainment industry r only as cynical as the industry has deliberately made them, by dumbing down their products, by xploiting artists, by making profit-driven choices and decisions, and by providing their own kind with obscene compensations and legal impunity that r completely out of touch with the real world of ordinary people."
There is good reason for consumer cynicism. AOL Time Warner owns Warner Bros. Records (along with America Online, Time, Life, Fortune, Elektra, Sports Illustrated, HBO, Turner Broadcasting, CNN, Cinemax, Entertainment Weekly, New Line Cinema, Warner Bros. Studios, In Style, Warner/Chappell Music, Time Warner Cable, WBN, ICQ, Warner Music Group, Netscape, People, Reprise, Rhino, Atlantic, WEA, TNT, MapQuest, WinAmp, In Demand, Erato, Moviefone, and Road Runner). AOL makes a lot of money as an Internet service provider. There is no question that a large portion of the people using AOL's service are downloading the very music that Warner Bros. Records claims as being stolen. There is no question that the executives at AOL Time Warner know this. Also, let's not forget that it was AOL that bought Time Warner. Service trumped content.
The conglomerates are reeling from the impact the Internet and digital downloads are having in changing how the consumer thinks. But it is not the downloads that are wrecking the music business, it is the inability of the conglomerates to adjust to the Internet and the new ways consumers want to consume music. AOL Time Warner just posted a year-end loss for 2002 of $98.7 billion. Sony, the only multinational corporation to have interests in both the music and consumer electronics worlds, has relinquished its leadership in the portable market to Apple's iPod due to Sony's conflicting interests in music copyrights (Sony Music) and in hardware. Sony hardware comes with anti-copying features, making it cumbersome and inflexible. For example, as reported in the Wired magazine article "The Year the Music Dies," the five major music companies sold $20 billion worth of music last year, but Sony alone had $42 billion in electronics and computer sales, making their music business much less significant. "If Sony wants to sell MP3-capable cell phones -- a big thing in Japan and potentially worldwide -- how much attention will it pay to Sony Music's protests?"
In another recent article in Wired magazine Frank Rose writes:
"As a member of the Consumer Electronics Association, Sony joined the chorus of support for Napster against the legal onslaught from Sony and the other music giants seeking to shut it down. As a member of the RIAA, Sony railed against companies like Sony that manufacture CD burners. And it isn't just through trade associations that Sony is acting out its schizophrenia. Sony shipped a Celine Dion CD with a copy-protection mechanism that kept it from being played on Sony PCs. Sony even joined the music industry's suit against Launch Media, an Internet radio service that was part-owned by -- you guessed it -- Sony. Two other labels have since resolved their differences with Launch, but Sony Music continues the fight, even though Sony Electronics has been one of Launch's biggest advertisers and Launch is now part of Yahoo!, with which Sony has formed a major online partnership. It's as if hardware and entertainment have lashed two legs together and set off on a three-legged race, stumbling headlong into the future."
Sony is also the largest manufacturer of writeable CD drives. It, along with Philips, co-developed the CD and collects royalties from various CD patents. All CDs, whether used by commercial replicators or bought by the general public, are subject to these royalties, which currently stand at $0.033 per disc. There were over 500 million blank CDs sold last year. The advantage of being a multinational corporation is the ability to use one asset to create another asset. Sony may make less money on music but is using it to make money elsewhere.
Similar internal conflicts exist within AOL Time Warner, Vivendi Universal, and the Bertelsmann polygon. Nevertheless, they continue to engage in businesses that infringe on their own copyrights. They are trying to have it both ways, in all ways. Instead of dealing with their own inconsistencies, they direct and fund the RIAA to lobby politicians to support legislation like the "Peer to Peer Piracy Protection Act." This act gives record companies the right to invade your hard drive (an otherwise illegal activity) if they suspect that you have illegally obtained their copyrights, their music. This anti-piracy law is actually an anti-privacy law, and it also limits fair use and threatens academic freedom. The RIAA and the music business are trying to legislate profitability. NARAS needs to take a position with respect to the copyright issue, but it should be an independent position. NARAS should come up with its own ideas. The RIAA is acting irrationally.
Also, the record companies recently settled a price-fixing suit in which they admitted they were overcharging consumers. This point seems to be overlooked by the RIAA in its attempt to place all blame for the woes of the music business at the feet of file-sharing. Is it possible that the decrease in CD sales is related to the conspiracy by the major record labels to fix inflated prices? |
