Rethinking Illegal File Sharing

About the only media company that cannot be robbed blind by cyberpirates is Apple.

Think about it.

It’s damn hard to pirate anything from the iTunes store -- songs, apps, books, software.

That is because Apple locked down the exit doors of the Internet and made it virtually impossible for people to steal from Steve Jobs.

Not so with record labels whose only security is when they sell songs through iTunes and other protected sites. Meanwhile, everything else is available online for the low, low price of -- free.

In Europe, especially France, we keep hearing of draconian steps being taken to stop the theft of intellectual property. European countries are having various battles to win this control but nothing done to date has put an end to sharing what can be made freely available on the Internet.

Putting ethical issues aside -- and lots of consumers easily do that -- you can understand two things.

One, it is difficult to batten down the hatches to prevent cyber theft.

Two, theft to you may be promotion to someone else as there is mounting evidence that free exposure even through file sharing and/or free plays actually sells music for record labels.

In Spain recently the courts have dealt a blow to companies trying to stop file sharing.

The Barcelona Reporter describes the case that went to the judge:

“Torrentfreak, the ever-vigilant blog focusing on BitTorrent and file-sharing issues, points to a recent lawsuit in Spain that ended quite favorably for both P2P users and link sites and dedicated search engines, and that found both use-cases to be perfectly legal in the country.

The subject of the lawsuit isn't particularly important in the grand scheme of things. A fairly small eDonkey and BitTorrent link site called was sued almost a year ago by a local music industry group, SGAE (Sociedad General de Autores y Editores), for alleged copyright infringement on the site.

The group initially tried to get a court injunction on the site, to take it offline before a full hearing of the case, but the request was denied by the presiding judge, Raul N. García Orejudo, claiming that P2P networks by themselves didn't violate copyright law”.

The judge ruled that as long as there were no financial benefits to sharing music, file sharing was, indeed, legal.

The judge may have also been persuaded by the fact that the defendants did not have advertising in their sights as a direct link to revenue.

The judge also proclaims individual users downloading copyrighted material from peer-to-peer networks without a profit motive are doing so legally in Spain.

The record industry had a chance to nip file sharing in the bud back when Napster came onto the scene.

An interview on NPR not too long ago featured former RIAA President Hilary Rosen admitting to the coolness of file sharing. She tells the story of what happened when record execs met to try Napster and discusses the missed opportunities for record labels that could have embraced file sharing -- or at least had a say in how it developed. (The interesting transcript is linked here).

The gist of the interview which also includes other music industry types is that no one knows what the future will bring -- certainly not the labels.

But I’d like to take a swipe at it, if you will:

Spotify (the European company) or Rhapsody-type services will not make it here if Apple offers a “cloud” option that allows consumers to access their music on mobile devices anywhere and everywhere.

A subscription-based plan by Apple (or should I say, app-based plan) that makes a listener's music libraries available without waiting for downloads on the “cloud” may very well work.

A new form of music discovery also available on the “cloud” with instant access could compete with traditional terrestrial radio if Apple makes a better deal with the labels than stations, streamers and satellite radio now has for royalty payments.

Unlicensed music will thrive five or more years from now.

The record labels were the biggest disincentive for new acts in the past when they controlled the recording studios, pressing plants and access to the radio airplay. Now that these things are no longer necessary, any artist can produce a song and get exposure. Terrestrial stations would be wise to get in on the unlicensed music craze especially with the music industry trying to win Congressional repeal of its performance royalty exemption.

The thing that will save the music industry is not obsessing over file sharing, Apple’s increasing dominance or buying music to feed starving musicians.

That old argument that file sharing hurts sales is -- well, unbelievable and unsubstantiated as new research continues to disprove this emotion-charged argument. Lady Gaga is disproving that misconception with just about everything she gives away.

The only sure way to save the music industry is to make better music and get as much democratic exposure as the Internet and mobile revolution allows.

File sharing is not going anywhere and neither is a record label that doesn’t embrace it.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.
Thanks for forwarding my pieces to your friends and linking to your websites and boards.