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Tuesday, Nov 10, 2009
RIAA chief Hilary Rosen defends the music industry's recent litigation against Napster and MP3.com.
May 1, 2000 | It can't be easy being Hilary Rosen. As the CEO of the Recording Industry Association of America, Rosen has the unique privilege of being the most visible spokesperson for the entire music industry. Unfortunately, this privilege comes at a price; and as the record industry has fought a very public battle with online music companies like Napster and MP3.com, Rosen has been the lucky one who must address the growing sentiment against the record industry that is emerging online.
In the past few weeks, the controversy has been fast and furious about Napster, the innovative file-sharing software that lets fans trade MP3 files free of charge. The RIAA filed suit against the company, and musicians like Dr. Dre and Metallica have joined in with separate lawsuits. Yet Napster is still growing like mad; a dozen clones, such as Gnutella, have emerged, bands like Limp Bizkit and Public Enemy are stepping up to proclaim their support -- and the RIAA is gaining few fans among the online communities that support these software innovations (and all the free music they can get).
At the end of a month packed with daily news about Napster and a legal victory over MP3.com, Rosen was as careful with her words as any diplomatic industry representative embroiled in several lawsuits should be. What does the industry think it's going to gain by suing Napster? Shouldn't the industry itself be helping to innovate new technologies and business models for music? And is it really frustrating to be Hilary Rosen right now? Rosen offered us her measured response and thoughtful nonanswers.
What do you think will happen if you actually win the Napster lawsuit? Do you think you can rid the Net of the entire file-sharing concept?
While ultimately I don't think litigation is the right business strategy over the long term, I do think that Napster is guilty of copyright infringement, and we will have both a favorable court decision and some precedents set for companies that try and commercialize file sharing.
There is certainly a lot of intrigue in the notion of file sharing -- for community reasons and for marketing reasons and for putting like people with like-minded interests together. Clearly I understand all that. But those issues really should be divorced from the very unique and specific issue, Does a company have a right to create a system that is so deliberately designed to take other people's work?
It's interesting in court -- the Napster lawyer tried to make the argument that file-sharing services like Napster actually bring the Internet back to its original purpose and history, which was when university researchers would share their research with their colleagues around the world. That was a very valuable and exciting thing that happened, but there's a principal difference between that activity and what businesses like Napster are engaged in -- it was those professors' works that they themselves were sharing!
As a practical matter going forward, lawsuits get a lot of headlines and they raise a lot of passion -- I understand that. But ultimately the future of music on the Internet is not going to be about legalities and litigation, it's going to be about how are we bringing music to fans -- new music, established artists -- what are the new business models that people are adopting and how do you make all the new opportunities win-win.
But even if you win the Napster case, there are a dozen Napster clones and some that are decentralized, like Gnutella. How do you plan to stop this?
I don't think anybody has illusions about controlling all transmissions online. The question is, How do you compete if services available to give it away without regard to the creators are allowed to flourish with such customer-service-friendly tools? Gnutella is a little harder to use than Napster, but there also ways to enforce against Gnutella users that you don't have with Napster.
So what are the new business models for the industry? Many accuse the record industry of trying to stop new innovations, rather than come up with ideas on their own. Are Napster and online distribution of music causing the record industry to rethink or change its business models?
It doesn't necessarily change -- it expands. I personally believe people will want to buy CDs for a long time to come, but I also believe they want to have subscriptions, kiosks in stores and airports, digital downloads ... I believe the expansion is where the conflict and the opportunity arrives. It behooves technology innovators to help develop those concepts in partnership with the music community. It's not accurate to say that the record industry says no.
There's no question that the industry has been slow to the marketplace, but it's too simplistic to say that the slowness or speed is out of some fear. It's more accurate to say that these are very complex transitions with a lot of interests and players involved -- artists and publishers and distributors and retailers and technology partners. There are a whole host of changes, and new structures that have to be created to move into these worlds.
It's not necessarily what people always want to hear, but I do believe that it is complex.
