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.
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.
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
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
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.