December 28th, 2007
Music Recording Industry Will Be First Traditional Media Industry To Be Utterly Destroyed By Digital Technology
The maxim goes that new technologies don’t kill off old media — radio didn’t kill newspapers, TV didn’t kill radio, etc. But it’s not clear this maxim will hold true in the digital age. The first industry to suffer the slings and arrows of digital technology was the music recording industry, back when MP3s and Napster gave birth to digital music sharing. Now it seems likely that if digital technology is capable of utterly destroying an old media industry, the music recording industry will be its first victim.
In a desperate, senseless, lunatic attempt to save the collapse of their business, the recording industry has declared jihad on their own consumers — trying to literally to sue their customers back into the stone age. This war on consumers has taken a bizarre and potentially fatal twist as the music recording industry has declared it illegal to to copy legally purchased music to a computer for personal use.
Yes, you read that right:
Now, in an unusual case in which an Arizona recipient of an RIAA letter has fought back in court rather than write a check to avoid hefty legal fees, the industry is taking its argument against music sharing one step further: In legal documents in its federal case against Jeffrey Howell, a Scottsdale, Ariz., man who kept a collection of about 2,000 music recordings on his personal computer, the industry maintains that it is illegal for someone who has legally purchased a CD to transfer that music into his computer.
The industry’s lawyer in the case, Ira Schwartz, argues in a brief filed earlier this month that the MP3 files Howell made on his computer from legally bought CDs are “unauthorized copies” of copyrighted recordings.
And you thought you actually owned the digital bits on the CD you bought. No, silly. The recording industry owns them. Who knows if you even have the right to listen to the music when you have friends over. Maybe they all need to bring their own copies. Maybe you need to buy a copy for each room of your house, or one for listening in the morning and one for listening in the evening, or…
The implication of course is that virtually every individual who owns both a CD and a computer — and thus has likely copied that CD to the computer — can be subject to a lawsuit by the recording industry. Imagine the revenue potential from suing hundreds of millions of people, i.e. suing every one of your customers.
Is it possible for an industry to develop a business model based entirely on litigation?
More likely is that both consumers and recording artists alike will continue to abandon major record labels at an accelerating rate, causing at least one major label to declare bankruptcy and shut down, perhaps even in the next 12-24 months.
There is a simple, if cliched lesson in the recording industry’s bizarre death spiral, which every media company needs to carefully note:
CHANGE OR DIE
“Change” means that you should assume, worst case, that everything you know is wrong, that nothing that has worked in the past will continue to work, that complacency and resistance to change = failure, and that anyone who doesn’t get with whatever the new program is needs to be show the door as quickly as possible.
Of course that’s stating it in the extreme, but never has the disruption of technology moved so rapidly and with such extreme impact as it has in the media industry.
Don’t become the buggy whip — or the music recording industry — of the digital age.