The InsiderOne Daily Report

  Friday, April 6, 2001

InsiderOne's Michael Goldberg writes: You can't help but laugh at the Recording Industry Association of America. They seem to live in some bubble world bearing little resemblance to the one the rest of us occupy. How else to explain this brilliant comment from R.I.A.A. general counsel Cary Sherman, which appeared at the end of an article headlined "Napster Users Test File-Sharing Alternatives" in the April 5 New York Times? "Mr. Sherman acknowledged that Gnutella 'raises a whole set of separate issues.' But he said that the risk of viruses from shared files and the poor performance of the network would limit its appeal. In the long term, he said, 'consumers will prefer the security of using legitimate sites.'" Yeah, right. Leave it to someone who represents the music business — which as we all know has zero understanding of the Internet and even less understanding of what's been going on in the heads of music fans these past few years — to gaze into his crystal ball and come up with that hogwash. All the brainpower of Silicon Valley, the new-media companies and the business world has not been able to predict the Internet age's twists and turns, but some R.I.A.A. drone has it all figured out. I found Sherman's comment particularly interesting after I'd spent a bit of time messing around with both Napster and the Bearshare Gnutella software the other day. I'm going to be on a panel later this month at a "media and the law" conference attended by those in the legal profession. One of the things I'm going to do is show them how peer-to-peer file-sharing works. So in order to grab some screenshots, I sat down with a guy who is a whiz at putting together PowerPoint presentations, and showed him the ropes. First we headed to the site, where all kinds of file-sharing software is listed, and we linked to Ten minutes later we had the Bearshare software installed, had done a search, located a Nirvana song and began downloading it. It took about 14 minutes to download the four-minute song — not bad, really. We went to the Winamp site and downloaded their player, then sat back and listened to Nirvana performing David Bowie's "The Man Who Sold the World." At which point my associate said, "Wow. I didn't realize how easy this was. If I had, I'd have a nice collection of MP3s to listen to here at work by now. This is great." More than 60 million people have registered at the Napster site and downloaded their software (according to Napster); fears about "the risk of viruses from shared files" don't seem to have stopped a significant number of people from downloading the music they want. As for the poor performance of the network — well, Mr. Sherman, technology keeps marching forward. If I were a bettor, which I'm not, I'd wager bandwidth problems will be resolved. Also I have faith that decentralized file-sharing software will be improved in ways that will allow it to scale. At the Senate hearing the other day, superstar Alanis Morissette made a statement, from which I quote an excerpt: "Most recording artists never receive royalties past their initial advance due to the financial structure of most record company contracts. From these artists' viewpoint, their music is free, since they do not, in the end, receive money from any of the sales. That 'free' Internet distribution allows the artist to aggregate an audience and create a direct relationship with that audience, as well as develop a community among the people who love their music. This in turn allows that artist to generate compensation through other outlets such as touring and merchandise. For the majority of artists, this amounts to making enough money to be in survival mode. I believe that most artists write and create motivated by the goal of sharing their music with as many people as possible, and view the financial reward as a natural and welcome outcome, as opposed to it being their singular motivation." Artists deserve to be compensated for their work, and music fans should pay for the music they "use." But the "how" of that is not clear. Hearing a song you like on the radio and then paying nearly $20 for an album, only to discover that the album has exactly one decent song, isn't going to fly in the New World. Things could get bloody.

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Michael Goldberg is the president of He founded Addicted To Noise in 1994.

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