Sunday, May 11, 2008
Record companies will make big, big money online. They just need to learn to let go.
Dec 18, 2001 | I knew the fight between the record industry and Internet users was going to work out OK as soon as I saw the print ads for Apple's iPod MP3 player. Nested at the bottom of the page is a comical disclaimer: "Don't steal music." Ha ha! With its thousand-song capacity and easy-to-use interface, everyone knows iPod is a great incentive to go out and steal more music to fill it with.
Think back to three years ago, when the first portable MP3 player debuted. The Recording Industry Association of America sued Diamond Multimedia to halt shipment of its cute little Rio, which held only an hour's worth of music. This time, the major labels are willing to let Apple sell a portable player for pirated tunes (100 CDs' worth of them at a time!) in exchange for a laughable admonishment to its customers: Don't steal music, kids.
If this seems inconsistent coming from the same industry whose lobbyists brought us the DMCA and are now pushing the SSSCA bill that would require all consumer electronics in the U.S. to come with anti-piracy technology built in, it's because the record companies are pursuing two goals at once. Long term, they need to come up with a way to sell music online that consumers will buy into. In the meantime, they are desperate to keep the entire store from being pilfered.
Jim Griffin, the Cherry Lane Digital CEO who handles rights management for songwriters and movie studios, says the shouting about pirates and anti-theft devices is a deliberate short-term distraction, meant to keep the rest of us occupied until the big players can agree on a cash-flow model for downloadable entertainment. "There may be a division of Sony building encrypted players in all earnestness," he says, "but there's no way the heads of the company believe that's their long-term strategy. So much of this DRM [digital rights management] stuff is just sending husbands out to boil water while the wives have the baby."
We got a first peek at the baby last week: A little-noticed announcement by America Online was, in truth, the moment we've all been waiting for. AOL has debuted its fledgling music subscription service, MusicNet, for $9.95 a month -- less than the price of even one CD. AOL execs downplayed the launch as a beta test, but coming from the unquestioned leader in online access, a company known for the Mom-and-Pop friendliness of its software, it's unmistakably the beginning of the end for the war between the music industry and the Net.
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