It ain't over till the fat lady sings: but she is warming up

File-sharing has holed the record industry below the waterline. says The Observer

On a blazing hot day in California five years ago, the boss of Yahoo, Terry Semel, rose to his feet to address a technology conference in which he lambasted record companies for being 'paralysed' by the threat of online music. Semel's words were met with rapturous applause from an audience made up largely of new media executives from Silicon Valley with a vested interest in the digitalisation of music.

The timing of his words was significant: the music industry had just succeeded in shutting down Napster after a court ruled it should stop offering pirated music over the net. The Napster case infuriated Semel and others who believed that the music majors were showing a lack of imagination about how the market could expand via new technologies.

Its fascinating to me that few people really looked into why people were file sharing? What were the opportunities of living in a digital world? And of course mobile is just around the corner. Well in fact its not its here already preparing to deliver another devasating blow to our analogue world.

Critics say that instead of embracing the internet by hiring visionary and innovative individuals, the firms turned to their lawyers in a fruitless attempt to crush illegal downloading before it could get off the ground.

Chris Parry, founder of radio group Xfm and Fiction Records, says: 'Of course the industry has a duty to protect copyright, but for too long executives were fixated by the idea of selling CDs via a retail distribution network. Legal challenges are legitimate, but the majors should also have taken the initiative by recruiting people who were internet-savvy. Few did so at the time.'

2005 was the year music broke free from the stranglehold of the corporation

And that is the point. In our white paper on mobile being the 7th Mass Media SMLXL writes

About eight to ten years ago, if someone mentioned to any major media executive companies called Google, eBay, Amazon, or Yahoo, most would not have known what these were. AOL did exist, but was known as more a discussion service, a "bulletin board" internet and e-mail company. Today they form the five biggest Western companies on the internet. About eight to ten years ago most media executives would have had serious doubts about the internet becoming a serious threat to their TV, newspaper, magazine, motion picture, radio and music publishing companies. Napster shook up music, and today all traditional media are concerned about the internet and digitalization of their content.

Within this context you wonder what those highly paid executives were doing. And of course the Genie is out of the bag. The Observer article reflects on rampant illegal file-sharing

According to the IFPI, the international music industry lobby group, 40 songs are being downloaded illegally for every legal download. Put another way, they say 20 billion songs were downloaded illegally in 2006 and the situation is set to worsen following the spread of broadband to eastern Europe and other emerging markets.

These digital technologies of co-operation as Howard Rhenigold describes them, can be used as effectively for good as well as not so good causes. But the fact remains they exist, and they are potent. So, one has to sit down and say - How can we effectively use these new technologies? How can we create value with these new technologies? How can we create something that people really want to be a part of and share with their friends?

More reading on music

'Big step forward in music revolution' hailed as EMI drops copy protection

Comments

[johnarama]

The problem here is the price of CDs; people don't want to spend $20 for something that should only be sold for $7...too many middlemen in this business! Another problem, which the music industry seems to have never addressed, is the video game industry! Kids/teens/some adults are more excited about buying an overpriced video game than an overpriced CD that they can easily get a free copy of.

Until they reduce prices, people are going to keep swaping music. Especially since a lot of new companies (such as ours) feature software that lets music lovers exchange large files with their friends in a private, encrypted environment.

[Alan moore]

Dear John,

Thanks for posting :-)

We have often argued that consumers in the past have been "Gouged by big corporations" and yes that is why many people have adopted file sharing. You have it lucky in the US double the $20 figure in the UK.

However what we are seeing is the impact of a new digital economy. As shops now are selling CD's for $10 a piece, 5 years ago this would have been unheard of.

Alan

[TeresaHawkins24]

Cars and houses are expensive and not every person can buy it. However, personal loans are invented to support people in such hard situations.