Tangled Webs

    Let the Music Play
Issue 6.2
Apr 17, 2001

Technological Defeat

From the beginning, it was clear that distributing music over the Internet was going to be big business and that the Recording Industry Association of America (RIAA) wanted to control it. RIAA has consistently insisted that its heavy-handed tactics have been the only way it could protect the rights of the artists, but to many observers, their actions seemed more focused on eliminating possible competition.

RIAA's attempt to control the technology used for digital music has been a disaster. In 1999, the RIAA and some of the largest music, software, and consumer electronics companies launched the Secure Digital Music Initiative. The SDMI was announced amid a flurry of press releases declaring that these industry powerhouses would work together to develop a secure music file format that would replace MP3, which was already in widespread use.

There were actually several secure music file formats available when the SMDI was formed. The group, however, was determined to create their own and force the industry to adopt it. Unsurprisingly, it hasn't happened. Most members of the SDMI have been squarely focused on their own agendas, and two years later all the SDMI has to show for its efforts is a preliminary draft of guidelines that has virtually no adoption even its own members. Over the last few months, many members have left the alliance, and more are expected to follow suit.

Legal Victory

RIAA's defeat on the technology front was more than compensated for by their successful legal blitzkrieg. Many of the early music-related sites were run by volunteers or by small groups. Most of these organizations went down without a fight since they lacked the resources required for a protracted legal battle. In many cases, the sites were not even informed of the details of their alleged legal violations.

Better-funded sites like MP3.com and Napster fought RIAA in court, but ultimately lost. While Napster was piracy plain and simple, sites like MP3.com actually wanted to pay royalties. The RIAA, however, refused to grant these companies what is known as a compulsory license. A compulsory license would give a site the right to sell any song it liked provided royalties were paid. Without such a license, the sites were forced to negotiate separate agreements with each record company before they could offer songs online.

RIAA spared little expense in advancing their agenda and hired a team of ex-congressmen lead by former Sen. Bob Dole to lobby for them. As early as 1995, RIAA ensured that radio stations, which already had rights to broadcast music, would not have those rights on the Internet.

RIAA lobbing resulted in special restrictions being placed on radio stations that broadcast over the Internet. These radio stations must pay the record companies royalties for the broadcasts, even though no royalty payments are required for traditional broadcasts. Furthermore, web-based broadcasters are not permitted to announce their play lists in advance, and they are not permitted to play more than three songs in a row from a single album. Most important of all, they cannot allow users to request songs. Online interactivity is effectively prohibited by law.

Strategic Suicide

With the independent Internet music delivery systems out of the way, the road was clear for RIAA to take control of online music distribution. There was just one problem. While RIAA controls the rights to the sound recordings, they don't actually own the rights to the songs themselves. The music publishers hold those rights.

In a turn-around move that left all corners of the industry slack-jawed, RIAA petitioned the US Copyright Office to grant it a compulsory license to all publishing rights. In its petition, RIAA claimed that the lack of compulsory licenses made it difficult to distribute music over the Internet. While this was undoubtedly true (after all, refusing to grant compulsory licenses was how RIAA eliminated potential competition in online music delivery), the irony was not lost on the industry heavyweights.

Unfortunately for RIAA, National Music Publishers Association (NMPA) could not be steamrollered as easily as the dotcoms. Within weeks of the petition several major publishers were suing RIAA for distributing music online without protecting the rights of publishers, and the RIAA found itself squaring off against the Digital Media Association, the National Association of Recording Merchandisers and the very powerful Consumer Electronics Association. A consensus was building that the RIAA was more interested in constructing on online monopoly than in protecting the rights of the artists it represents.

Perhaps the final blow to RIAA's plans to be in full control of online music distribution has been the Senate Judiciary Committee hearings that started in early April. These hearings are being convened to examine the copyright issues involved in online music and video distribution. Committee Chairman Orrin Hatch has clearly indicated that he favors less restrictive licensing arrangements.

Since the beginning of April, Yahoo, RealNetworks, Microsoft, and Viacom have all announced separate plans to distribute music online. It's worth noting that all these efforts are being done via partnerships with some of the largest record companies, so at the moment, the field is still far from open. However, is seems that in the very near future, consumers will finally have some legitimate options for downloading mainstream music online.

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© Copyright 2001, Tim Romero, t3@t3.org
This article fist appeared in the Feb 11th edition of The Japan Times.
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