[Online exclusive] RIAA needs new business model, not lawsuits
Lawsuits often represent the last desperate gasps of those unwilling to take real, substantive actions. Case and point, the Recording Industry Association of America sued 532 more people last week for illegal file sharing. In their continuing attempts to scare freebie-loving Americans away from their precious Avril Lavigne mp3s, the RIAA is doing more harm than good.
It is not just that they have alienated their consumer base, they are hurting their own long-term financial prospects by not pursuing new and innovative ways of working with the technology they are so hell bent on destroying.
The most recent string of lawsuits, together with the 261 lawsuits in September, mark a shift in the RIAA’s strategy. Previously, the RIAA focused their attack on the programs that make file sharing available. They are now prosecuting the individuals which make peer-to-peer possible.
Suing your user base can be seen as either a stroke of genius or a mark of idiocy. In this case, I would tend to argue for the latter. While the mere fear factor might be enough to make some people stop downloading music illegally, it doesn’t get to the heart of the matter. CDs are quickly becoming obsolete and consumers are begging for a better alternative with every illicit download.
Napster was brilliant not for its unlimited access to free music, but for its “any song, any time” interface. You were literally a double-click and a few seconds away from hearing any song you desired. The hype surrounding the new Napster demonstrated that people will gladly pay for this convenience.
Unfortunately, however, Napster and other pay-for-use alternatives like Music Match have been completely deficient, coming nowhere close to offering the selection a comprehensive downloading program needs. These programs have not taken off because they are second-rate – not because of competition from free alternatives.
Apple’s iTunes has shown that when consumers are presented with a comprehensive and legitimate program with which to get their mp3 fix, they will rock toward it. Released just nine months ago, iTunes surpassed the 25 million song mark as of December at a current rate of 75 million songs a year.
Apple’s catalog offers more than 400,000 songs from all the major labels plus all your anti-MTV favorites from over 200 independent labels. They created a legitimate downloading service with a selection that rivaled that of Kazaa, and in turn, became instantly competitive with Kazaa’s 2.4 million downloads a week – shocking.
Perhaps if the music companies had collaborated earlier to make this kind of selection possible, they would have realized that lawsuits were unnecessary to make people pay for music again.
In focusing on lawsuits to turn the digital tide, the music industry has been closed-minded in looking for alternatives. Stronger moves are needed to break into the online music world. A monthly subscription-based service may make the RIAA cringe, but that is because they fail to see the big picture. Musicians do not make money solely by the number of CDs or iTunes sold. The old business model of charging $13.99 for a CD with 11 tracks and pretty album art will not work in this day and age.
The music industry is in the unique position of having an audience willing to pay to listen to a song live in concert, even if they’ve heard it a million times on their Winamp. They could be using the widespread propagation of file sharing systems as cheap advertising for the artist, instead of merely bundling and selling the songs they sing. Encourage people to share and experience music freely, and expand the familiarity of a popular song to the concert and merchandise aspects of music. In music, familiarity can pave a road straight to the bank.
Nobody is trying to argue that the downloading of music cannot hurt profits – at least in the obsolete CD market. Still, there are numerous ways in which file-sharing can increase profits and even more ways for the RIAA to get a piece of the action.
For example, however much record companies lose in making a CD, how much do artists gain on the t-shirts, concerts and boosted CD sales from a song’s popularity online? If you really want something to think about, consider that the top three downloaded artists of 2002 (Eminem, Nelly and Avril) were also the top three selling artists of the year.
The RIAA is missing the point; lawsuits will not stop the direct-access revolution. Ease up on the courts and just follow the clicks – a new business model is just around the corner.
Moon is a second-year psychology student. E-mail him at jmoon@media.ucla.edu. Send general comments to viewpoint@media.ucla.edu.

