A Dying Industry (slightly off topic)

The BBC reported today of the next stages of the government and record companies' attempts to crack down on illegal file sharing. Persistent offenders will have their internet connections cut off. Unfortunately, the genie is out of the bottle in terms of the ability for music to be copied and shared.


In the late 90's, I founded a music company that distributed music by CD. You chose the tracks (from our catalogue) and we cut them to disk and shipped them to you. We also had digital downloads DRM protected with Microsoft's encryption. This was *before* Apple release their iTunes store. At the time, the record labels would not give us any new material and we were restricted to back catalogue and inferior content. This ultimately was the demise of the business as our customers couldn't understand why we didn't have access to any music track in the world.

At the time, the record companies' view was that providing us content that could be distributed on CD was risky and would allow people to copy the music. Well, of course it would, in exactly the same way people were *already* copying CDs purchased from record stores! Their principled approach changed when Apple rocked up with large volumes of cash for access to their catalogue and the digital download era started for real.

Now I see a music industry which for years acted in a protectionist fashion, overcharged for their content and milked the customer with countless re-releases and compilations, trying to target anyone they can in order to protect their revenue stream (a bit like when SCO sued IBM).

Unfortunately the genie I mentioned earlier is out there, alive and well and doesn't need the Internet. Music content can easily be swapped on portable hard drives, CD & DVD-ROMs, memory sticks, flash memory cards and so on. The Internet just provides the opportunity to spread music wider than physical media can.

Ultimately I think all copyrighting and protection systems, whether electronic or legal, will fail or be circumvented. We already know that artists are changing their revenue models away from the recorded content into concerts and other revenue streams. Most record companies have moved back from DRM protected content on digital downloads and Sony scored the biggest faux pas with the rootkit they deployed on CDs in 2005.

There will always be people who want something for nothing, as the release of Radiohead's recent album "In Rainbows" shows. However it also shows that people will pay (the average pay price for the album in a survey was believed to be around £4) for decent content and perhaps that represents the crux of the problem - not selling stuff people don't actually want.