It must be a good time to be at the helm of the Recording Industry Association of America.
The RIAA, the primary trade association for the American recording industry with a $27.7m (£15m) annual budget, is enjoying a string of recent political and legal victories.
In last year's Grokster case, the US Supreme Court unanimously overturned a lower court's ruling that favoured file-swapping networks. Federal judges have been upholding stiff fines against individual file swappers, and the online marketplace for music is booming.
Congress has enacted new laws backed by the RIAA that target peer-to-peer pirates with federal felonies, and a Republican administration is talking up the need for even stiffer ones. (Last year's new felonies have already led to jail time for some).
Yet obstacles remain. A draft proposal in the House of Representatives to tighten copyright law has still not yet been formally announced — possibly because of opposition by technology firms — since it was reported more than a month ago. A federal appeals court has effectively blocked a move by the recording industry to ask the Federal Communications Commission to outlaw certain digital radio receivers. And Senator Ted Stevens, the Republican chairman of an influential committee, has publicly expressed scepticism about an RIAA-backed proposal that he worried would hurt his ability to use his iPod.
Mitch Bainwol, RIAA's chairman and chief executive, and Cary Sherman, RIAA's president, recently visited the San Francisco offices of ZDNet UK sister site CNET News.com to talk about the music industry, Congress, and digital rights management. (The two rank among Washington's best-paid lobbyists, with a combined salary of $1.85m in 2003.) Following are excerpts from the conversation.
How is the digital music marketplace looking from your perspective?
Bainwol: Digital sales are rising at a value that is larger than the decline in physical sales. We went through a pretty extraordinary time (recently). What you're seeing now is proof of that exercise. The promise of the digital marketplace is being realised. There's new optimism.
How much of that is because of the Supreme Court's ruling in Grokster and your lawsuits against individual file swappers?
Bainwol: Our view of Grokster is that the court struck the right balance. If you (download music) illegally, there are risks — whether they are legal or viruses.
Sherman: I'm either at risk, or I get out, or I go legit. There are a number of conversations happening about "how do I go legit?" We can't talk about what's going on, but there are a lot of conversations. There's a lot to be said for converting these businesses.
Do your view your lawsuits, even ones where you sued a 12-year-old girl or a Boston grandmother, as a success overall and do you think the process is working?
Sherman: Yes. We're feeling pretty good. There will be the opportunity for business models that are consistent with P2P networks (such as demo versions or low quality). There have been...
Talkback
Right. Basically the RIAA (and similiair parties like the BSA, etc, etc) wants to see things happen their way. Logical ofcourse. The problem however is that their focus is mainly on total control without giving that much in return (rather less if you actually understand the issues in question). Take DRM for example. That's a whole lot of restrictions designed to let you pay (often again) for something you already have. With such an attitude the RIAA (and others) are only setting up a large part of the consumer party to completely and totally turn their back on the RIAA (and others) as soon as the first possibility to do that pops up that they're aware of. Given history lessons that's bound to happen one day. In short, RIAA (and others) is a dead end and those supporting it will feel the aftermath. That's the beauty of Internet, lots of historical background information available that can haunt bad decisions in the past for decades to come. iPod is only one example as to how bad the average consumer is actually informed. What RIAA (and others) need to swallow is very plain and simple indeed: as long as overcharging and underserving (customer needs) is the goal people will rebel (which is a definite clear signal that ones market strategy isn't exactly in line with reality) and they wil jump ship permanently as soon as they can. Ofcourse the idiot (short-term) response to that is ultimate market control and lobbying politicians 24/7 but that'll get you nowhere in the end. Even if one succeeds in controliing the Western world it'll be only a matter of time until non-Western countries or unions will find ways to make a huge profit out of that extortion.
In short, find ways to deal with corporate greed of learn your children to speak Chinese (or whatever non-Western).
Yes, a bit black and white but maybe it'll turn a light bulb on here and there. Real responsible decision makers look further then just four years (or less) ahead.