I've been holding my tongue a bit on the subject of UMG's demand that Microsoft cough up more than a buck per Zune sold, and Microsoft's acquiescence to what amounts to a tax on portable media devices. When coupled with Cary Sherman's recent slash and burn attack on fair use rights, and UMG chairman and CEO Doug Morris calling you a thief in Billboard Magazine, it's pretty clear that the RIAA and its member companies are beginning to circle the wagons for an all out attack on the way you pay for music.
Sean Ryan quips in Forbes, "The next question is whether they will demand a $1 royalty for each of my children, since they have ears, which can hear music, and a brain, which can store it. Or would that be $2 since they each have two ears?" But, does he put forward a proposition that is all that far fetched, or that much different than what UMG has demanded? Assuming most children the age of Sean Ryan's will own a portable media device (at least one) in their lives and, assuming that Universal Music Group gets a buck for each player sold (as they wish to do, and are doing in the case of Zune) then, the tax has already been passed. You didn't get a vote, you don't get a say and, unless you're willing to go totally old school and listen to your vinyl records in the dark ages, you'll be forced to pay up.
As much as Morris, Sherman, and a host of other industry wet blankets would like for it to be illegal for you to trans-code that CD you own into a format compatible with your Zune or your iPod, the laws of the United States beg to differ with them. Fair use is still fair use, and you still have every right to rip that CD you paid for, and listen to it anywhere you wish. You had that right with cassette tapes, the vinyl records that came before them and, aside from the DMCA making it illegal for you to crack the DRM on a bought and paid for digital download, you still have the right to listen to the music contained within that file in any way (and in any place, or any format) that you see fit.
What UMG has done is lay the first piece of framework for putting the kibosh on the democratization of the music industry. The RIAA labels have owned distribution in the United States (and made it difficult if not impossible for many small labels to get distribution) for decades and, just as a market for distribution sprang up that existed outside of their domination, they've managed to secure a loophole that will again put small independent labels on the sidelines.
1. Spot on. This is all about the record industry cartels trying to strongarm their way back into the kind of profits their used to.
The record labels rode the huge tail of vinyl/cassette-to-CD upgrade path right into the mid-1990s, managing to sell users the same content all over again. But this upgrade path has effectively been closed to them. CD is crystal-clear, digitally encoded and completely unprotected. Why would we want another format? Fair use ensures our CD collections can be ripped and converted to just about any available format.
This is in stark contrast to the motion picture industry which after the boom of DVD is now able to resell the same content all over again in 'High Definition'. And it's no coincidence that copy protection is one of the key features of the HD formats. And people wonder why Sony bought a film studio...
The record industry is now trying to recover the ground it lost when it panicked over filesharing and handed Apple the keys to the kingdom. Five years after the launch of the iPod, the labels have realised that the constantly evolving digital music player market is where the growth is, and now they want a slice of it. But it's largely too late. The only reason they can get a dollar out of Microsoft is because they desperately need all of the lables onboard in order to make Zune anywhere near competitive with iTunes/iPod. But so long as Apple and other competitors refuse to be blackmailed into giving up a portion of their profits, the record labels will be forced to look at new revenue sources, and maybe even new business models.
The cartels would love to remove fair use rights, either through the courts, or through root-kit-style CD protection. But that won't work for a number of reasons. Challenging fair use in the courts would be nearly impossible. Copy protection has always proven to be easy to circumvent, and stealth protection hasn't gone down well with the public after Sony's root-kit debacle. Add to this the fact that there are millions and millions of completely unprotected CDs already in circulation, and the cartels know their onto a loser.
You never know, the record industry might have to rely on selling *new* product.
Posted at 7:38AM on Nov 15th 2006 by GJD