Limewire Loses Major Case to the RIAA-But Will that make a Difference in Record Sales?

A couple of articles to peep around the issue of  file sharing…The first talks about the recent court ruling against Limewire where the RIAA is happy as heck as it validates their long held complaints about how file sharing is ruinning the music biz..

  The second story is the exact opposite. It talks about how yet another study been published that shows there is no correlation between illegal downloading and record sales..  This is a hard pill to swallow for many in the industry. The thought of having to find another cause to explain low album sales is daunting for those who are still yearning for the old glory days of the industry where money and album sales was plentiful. Them days will not be returning anytime soon..

There are far too many cats in this biz who have totally forgotten about handling the basics which centers around relationships.  They refuse to go out and create a solid community. Instead of seeing fans as friends and allies, they see them as mindless consumers  who they accuse of morphing into despical theives when they don’t sucumb to the charms of a cheesy marketing plan. Too many executives and artists forget that a good relationship will be rewarding, not punitive.

There’s a very vocal segment of the music industry that reminds me of the proverbial loud mouth artist  who is barely known on his block but will be the first to complain that his lack of success is due to downloading… He’s the first to show  up and say “no’ to technology, but the last to show up and put in the hard work of shaking hands, kissing babies and leaving a lasting impression.

Everytime I hear this type of charcter whine, I feel like holding up a sign that says;

‘Son fallback..Nobody knows or cares  who you are..Ain’t nobody on Limewire looking for your joints..’

Sadly in an industry full of insecurities and egos, my line of thinking will rub some the wrong way.. no matter how true the assessment.

The reality is far too many artist refuse to really put in work and sincerely reflect the realities of the people they want to purchase their music. They wanna stand around and talk big like they’re entitled to the next fat check when they never really put in work. These types of folks need to go the way of the dinosaur.

Fortunately there’s a growing segement that has learned to embrace change. These are the types that consistently take every challenging situation and turn them into a fertile opportunity.

For example, I recall LA Hip Hop pioneer Egyptian Lover talking how his peers were moaning about getting bootlegged. He said he understood early on the bootleggers were there to stay and the best thing he could do was create a situation where it could work to his advantage.  Instead of woofing he said basically saw the bootleggers as a street team. They become promoters. He figured he was gonna need one earlier, might as well let the bootlegger do the work..  Egypt  put on his creative thinking cap and did what so many The record labels execs and artists have forgotten to do because they’ve become too comfortable. He  figure out how to ‘flip the script’.

Something to ponder

-Davey D-

LOS ANGELES — File-sharing software company LimeWire has lost a long-running court battle to the major recording companies.

A judge with the U.S. District Court in New York ruled this week that the company and its chairman, Mark Gorton, were liable for inducing copyright infringement.

The decision in the case, which began in 2006, doesn’t mean the site will shut down right away. The record labels and LimeWire are to meet with Judge Kimba Wood on June 1 to determine the next steps, such as a possible deal to work together going forward and a potential award for damages.

Recording Industry Association of America Chairman Mitch Bainwol said in a statement Wednesday that the ruling was “an extraordinary victory” against one of the largest remaining file-sharing services in the United States.

The RIAA said more than 200 million copies of LimeWire’s file-sharing software have been downloaded so far, including 340,000 in the last week alone.

The ruling could pave the way for a deal, similar to the way Napster was sued out of existence in 2000 but was reborn and is now under the ownership of Best Buy Inc. with licensing deals with all the major recording companies.

“This isn’t about getting something shut down, it’s about getting something licensed and legal,” said Steve Marks, general counsel for the RIAA.

LimeWire CEO George Searle said in a statement that while it “strongly opposes” the court’s decision, the company held out hope for a deal. The company sells an “Extended Pro” version of its free software for $34.95 a year, leaving open the possibility that a new business model could emerge in cooperation with the music industry.

“LimeWire remains committed to developing innovative products and services for the end-user and to working with the entire music industry, including the major labels, to achieve this mission,” Searle said.

original source: http://www.huffingtonpost.com/2010/05/12/limewire-loses-riaa-case-_n_574338.html

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Another Study Vindicates Filesharing

By Jerry Del Colliano

http://insidemusicmedia.blogspot.com/2010/05/another-study-vindicates-filesharing.html

Steve Meyer, who as I have often said is the smartest observer of the record industry, knocked my eyes out in a recent issue of his publication Disc & DAT (Digital Audio Technology).

Yet another study that exonerates filesharing as the culprit in today’s music industry.

It’s a lack of innovation — not filesharing – that’s the conclusion.

I’m sure that doesn’t come as a surprise to you, but it may be to the record labels who are acting like it is 1999.

Professor Nico van Eijk of the University of Amsterdam conducted the latest study and his conclusion speaks volumes:

“The entertainment industry will have to work actively towards innovation on all fronts. New models worth developing, for example, are those that seek to achieve commercial diversification or that match supply and end-user needs more closely. In such a context, criminalizing large parts of the population makes no sense. Enforcement should focus on large scale and/or commercial upload activities. . . Introducing new protective measures does not seem the right way to go…”

In other words, filesharers are consuming all media especially concerts, films and games – not just copyrighted music.

I’ve linked to the 55-page report here.

Let me comment on a few of the findings my friend Steve Meyer highlighted:

“The study concludes (among other things) there “isn’t a clear relationship” between the decline in sales and file sharing, while also finding that fear of evolution prevented the recording industry from adequately adapting their business models to the broadband age. While the recording industry is having problems, argues van Eijk, it has less to do with file sharing, and more to do with the fact they’ve been “abstaining from innovation” — as the study phrases it”.

Think about it.

The labels could have bought Napster, not annihilated it, thus avoiding creation of the Napster vacuum that was promptly filled by bit torrent sites, etc.

The labels could have innovated along with Steve Jobs when the Apple CEO caught them off guard with his offer to help stop piracy. That offer was the iPod and iTunes store. He played to their fears. They allowed him to become the de facto Big Kahuna of the Record Industry.

They could have laid off streamers and come up with an easy to swallow royalty payment schedule that would have grown music consumption instead of dampened it.

Could have launched its own cloud.

Could have done Pandora itself as an industry consortium – that is, if they could have gotten along together for a minute. Bet Steve Jobs would have loved to own Pandora. Bet he still does.

More from the report:

“Turnover in the recorded music industry is in decline, but only part of this decline can be attributed to file sharing. Conversely, only a small fraction of the content exchanged through file sharing networks comes at the expense of industry turnover. This renders the overall welfare effects of file sharing robustly positive.”

Innovation scares the record industry.

God forbid, they had a new idea other than CDs.

If record labels had to run the space program, they would find themselves doing a soft landing in Camden, New Jersey instead of the moon because they cannot figure out which way is up.

Now, record labels really need to know which way is out.

Because Steve Jobs is running their show.

Setting the rates, making the new age “record players” if you will. For all practical purposes, he’s eliminated the album (although you wouldn’t know that by Lady Gaga).

Apple is about ready to launch cloud-based instant access to iPods, iPads and iPhones – while record labels can brag about instant access to – well, suing people. And, by the way, the labels are opposing Apple’s iTunes “cloud”, too as witnessed by this recent article in The Wall Street Journal.

So expect the RIAA to raise a commotion and argue the latest study that looks at filesharing as the lesser of evils.

The worst being – a lack of music industry innovation.

As Meyer pointed out in his piece, Steve Jobs says “Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.”

That’s a great quote — not that Jobs ever admits a mistake (like in the current version of Apple TV).

Still wisdom of the quote is right on.

And Steve Meyer wrote this in 2003 when he launched his newsletter:

“Any software programmer will tell you the hard core (ugly) truth is this: anything that can be encoded digitally can be decoded and replicated with a little work. It’s time the labels recognize this fact, accept it, and now spend time brainstorming on how new revenue streams can be created within the framework of all the technology at hand.”

Okay, so don’t admit to past mistakes. We understand.

But, wake up and look around.

My USC students used to be split about whether filesharing was stealing. They had many excuses – some good (“I use it to preview what to buy”) and some bad (“the money never gets to the artists anyway”). I’ve often wondered about these rationalizations.

But there is no denying that one could also look at filesharing as today’s radio.

A source of music discovery.

And now we have yet another carefully considered report that explains the phenomenon if not the unfortunate response of the record industry.

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