Tuesday, March 29, 2011

The Amazon Challenge: The Music Industry at the Crossroads

According to this well-sourced report, the music industry is toying with the idea of allowing Amazon Cloud Drive & Player to accept illegal downloads for cloud access ... as long as they can extract a fee.
It is of the utmost importance that the industry not even for one minute countenance the idea that any of these new cloud services, which give people better ways to use their counterfeit songs, are OK.  If the record industry as the copyright holder (and fiduciary for the artists whose rights they hold), ever asserts, even implicitly by entering into negotiations, that it might be okay for someone to use ill-gotten songs, they have  thrown their whole argument of the last 10 years out the window and they will never get it back again.  What will then be wrong with a user stealing some new downloads?  What will be wrong with sharing Rhapsody or Spotify  passwords?  Or methods of copyright infringement to be invented in the future?  The user will always be able to rationalize, “Well, the record companies didn't like it for a while but eventually they went along with it.”  

Is Amazon any less aware than Limewire was (or indeed Napster was) that illegal downloads are being served by their servers?  There are an estimated multi-billions of illegal downloads still out there from activity of the last 15 years.  Right now, they are stuck on hard-drives and not widely available for mobile except on iTunes clunky side-loading system.  But, thanks to Amazon's nifty Cloud Player, these same illegal downloads are about to go "uptown".

Taking money from Amazon is like taking a bribe to look the other way.  It does not fix the problem.  How do we fix the problem?  As always, innovation.  Like everything else wonderful about the internet: you innovate.  Solve the problem!  Do not just cover it up.

But if no one bothers to even look at the problem, it will not get fixed.  If the users are greedy on one hand and just want free music by whatever means necessary and the record labels, on the other hand, just want up-front cash to help with the next quarterly earnings report, the problem will never get solved.

Innovation!  Such as that represented by the DCE.  The first steps of which are: 

  1. All parties (anyone who touches music) cooperate through an opt-in exchange*.  
  2. Agree to share user registration info and require that each user who wants access to a song be a Verified Accessor.**   
Immediately, users are happy because they have cloud access to all their stuff (video and books as well as music, physical as well as digital, and unlimited, not just 5 GB), and the value of counterfeit (illegal) downloads is reduced.  Music is valuable once again!  Mind you, the counterfeits are still out there, still on people's hard drives.  Just not quite so valuable.

A method like this has been used for decades successfully in the securities industry.   It’s reasonable to ask services like Amazon Cloud Player to require DCE-style verification before people enjoy their music in a newfangled way. Since verification is easy, they have no excuse.   But why aren't the labels insisting upon this?  Why aren't their artists insisting that they insist??


*An Exchange by definition allows competitors to compete fairly and creates efficiency.

**A Verified Accesor is an end user who has been verified to have access to a particular song by means of ownership, borrowing, or by such other rights as may be approved by the lawful copyright owner of the song.

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