The Marketleap Report
Vol. 1 - Issue #4 - April 13, 2001

Music In The River - Money in the Streams
By Keith Boswell

My youthful fingers weren't fast enough. Sitting in front of the radio for hours, finger on the 'record' button, my reaction speed never matched the clarity of my planning. Instead, the first two seconds of my favorite song were cut off, the recording ruined. Saturdays floated in frustration and the top forty singles in America.

In the present, my fingers find themselves possessed. Life evolving soundtracks made up of song titles, artist names, and fragments of lyrics flow through queries in addictive Napster bouts that cloud the day-to day-world. If a file scratches or skips, there are three more that don't. Perfection through the speakers resting on my desktop.

The torrent propelling the music industry is faster. Teetering on the brink for the past five years from lack of planning, the record labels fear the digital world more than any other. They sit and watch as file-sharing technologies and a public hungry for rhythmic vibrations swallow their channels in large gulps.

Last week, as digital rights hearings invaded Washington, the dam broke. One after another, the announcements heralding legitimate digital distribution sprang forth with an urgency to reclaim the world.

MTV, RealNetworks, AOL, Yahoo, Microsoft, the big-five record labels and a few others hope to reign together. Through various initiatives, industry approved songs and albums will soon be available for purchase and download or listened to through subscription-based plans.

Some of the services will happen soon, others are still being planned. But the urgency to keep up frees executive lips to the press. No more waiting and assessing. The explosion of Napster - at its peak delivering more than 2.7 billion songs a month - convinced the industry it could wait no longer.

That and the fact that Napster use continues to grow even as it enforces filtering software to block copyright material. During the last week of March, Napster users downloaded 593 million files, up 25 percent from the week before, according to online entertainment tracker Webnoize. The same legitimate song that will be sold through the MTV web site in a few months is already available for free on Napster.

Napster claims it has blocked 275,000 file names from its service. According to the letter of the law the recording industry must provide not only the song and artist name, but also the exact name of the file they want banned.

Users change file names, the song remains the same. Free downloads continue as sales of CD recorders spike upwards.

The collision of politicians, copyright lawyers, artists and business has left an ugly impression. Their unwillingness to step forward and propose new models meant they weren't part of the equation. Software developed by teenagers created new distribution models in a matter of hours, not years.

It took decades to work through albums, eight-tracks, cassettes and finally digital CDs. The model was constantly perfected. New profits were uncovered and new outlets were created to fit the need for physical exchange.

People copying tapes or making cassettes from their CDs wasn't seen by the record companies as a real threat. People would always want to hear a pristine version that had not experienced transfer to a degraded medium. They could only find that through the radio, a new cassette or CD.

Even when CD recorders were initially released, the record companies fought the idea of distributing their music through digital outlets. They weren't even willing to consider the potential that technology was working to rewrite the equation. Home users wouldn't be able to afford them, and it wasn't plausible to transfer the files on a CD to a user's computer. The few who could would live on the fringe.

Then in 1995, the Internet received a facelift. Quickly, users demanded a richer experience, and streaming music of the poorest quality trickled through phone lines everywhere. Worse than bad elevator music, it trembled and paused like a broken thought. What kind of threat could this be? Concerts could be sent out and shared; what else would people ever want?

Faster downloads, better file compression, the weight of pent-up demand and lines of software code brought the thought forward and, suddenly, the music was free. Unleashed and uninhibited, it outpaces its master as it ducks the law and detection with ever-present ease.

The news this week means nothing. Individual labels and other online services have been selling digital versions of copyright materials for a few years. None has matched the success of Napster. Millions of daily users combined with the fastest growing application in history created the largest music forum ever seen.

It won't be duplicated. That's why my mind struggles with why the labels have worked so hard to tear it apart. We've all agreed we would pay, but each player needs his or her own sense of control. The labels hope to break the market into fragments, users paying here and there for their demand. One global, readily accessible market just won't do.

Technology enables us to work efficiently. The music industry pushes us towards inefficiency. More devices, new formats and a secure lock on property the industry accommodated - not created - means we'll all pay more. Until individual artists reconsider their own value in the equation, the industry will continue reaping enormous profits while artists and fans give more and more.

Hit 'record' as fast as you can. Train your hands to maintain the pace. It's much easier today, and there are no annoying commercials or DJs to edit out yet. A few years out when you pay to download the weekly top forty for your kids to listen to, you'll remember the good old days.