Good morning Mr. Sherman,

My question: The RIAA, as justification for demanding sound recording royalties from web radio while pouring millions into broadcast radio as "promotional fees," insists that there's no evidence of the promotional power of Internet radio. Yet the major label-owned Pressplay has streaming stations, and RIAA member labels regularly promote roster acts' new product with streams (Radiohead, Wilco, Coldplay, etc.). How do you reconcile this?

Given that many of the dubious accounting practices and procedures which skirt the border of legality, and which have come home to roost for many American corporations, were pioneered by the recording industry, what are your members going to do to remedy this?

I think that hillary looks like a ape!

What is your reaction to Janis Ian's article, "The Internet Debacle"? Apparently, it caused quite a stir in the RIAA.

For those not familiar with the article, it can be found at http://janisian.com/article-internet_debacle.html .

Cary, you're being disingenusous at best here, so let me ask you more directly.
Does the RIAA support or oppose the CBDTPA - Hollings bill to outlaw all computers that do not incorporate mandated copy restriction code?
Does the RIAA support the Biden bill that would shelter copyright holders from civil and criminal penalties if they hack into other people's computers?
If you can truthfuly say that you do not support these bills, and did not lobby for them, that would be very welcome.

As long as we can hear the music, it can be copied. These technologies do not protect you from determined copiers, all they do is reduce the value of your CDs. If I can't get the music onto my iPod, I won't buy the CDs. The reason I buy a CD is to get master-quality music I can transform into mp3 or mp4 or Ogg Vorbis myself.

Analysts: Downloading to Help Sales
CD lull due to economy and CD prices, not piracy
Written by Karl Bode
A new Forrester study shows that decline in CD sales are not due to piracy, but instead can be blamed on the current economic recession and high CD prices. The report goes on to note that three quarters of all consumers who purchase CD's do not engage in digital copying. The study for the most part is optimistic, noting that downloading music from the Internet will reach $2 billion in sales, or 17 percent of the music business in 2007, and could be the industry's savior.

Worldwide CD sales last year dropped 5.1 percent, a loss that analysts believe will continue for the next several years. If you ask the RIAA, these losses can be directly attributed to piracy. The RIAA continues to pound the sympathy drum, despite the fact that lost revenues have more to do with their own decisions than the decisions of music pirates. Economic recession, limited and corporatized radio playlists, and high CD prices are the reason sales are down, according to Forrester. Incorporate the war being waged on music pirates, and you've got an entire generation starting to download music out of spite, which certainly will eventually impact sales.

Of course the RIAA is usually ready with their own stats that show otherwise, the most recent batch indicating that those who download more, purchase less....statistics standing in opposition to reports released over the past several years by multiple statistic farms. The RIAA notes that among consumers who have downloaded more than they did six months ago, 41 percent purchased less music in that time frame, with only 19 percent purchasing more music. But linking that lack of interest in CD's directly to piracy is a logic chasm the RIAA continually leaps across, despite no directly linking evidence.

The newest Forrester report opines something most everyone following the peer to peer debate already knows: the RIAA must begin offering their entire catalogs on-line for download in easy, non-restrictive purchasing programs if they wish to survive into the digital age. By 2007, music downloading will reach $2 billion in sales, or 17 percent of the music business, according to Forrester.

Accoring to a recent FCC report, (.pdf) 60 percent of the population will have a broadband connection by 2006, with 40 million people ready to download digital music. Forrester predicts, if the RIAA can do some damage control and begin to embrace file trading technology, they could have a slice of the digital pie, making $2 billion in new revenues if they're willing to present a solution that consumers can accept. Provided such a solution exists, the industry could see a turn around in profits as soon as 2004. Continuing down the road of strong arm legislation, customer alienation, and heavy handed tactics, will bring about the exact opposite result.

Remember kids, Home Taping Is Killing The Music Industry! (and it's fun!)

Any chance you guys can clean up Sherman's copy so it's not riddled with question marks where (I'm presuming) commas should be? They make for stilted reading, and send subtle, unintended signals to the reader's brain.

(I'm viewing on IE6.)

Thanks for the q's and comments. Cary Sherman only had two hours and we already had the q's selected for this timearound. It looks like we'll be doing it again, so please feel free to leave more questions and this is an excellent forum for comments/discussion. Thanks!

Thanks for the heads-up on the ?'s G Will, they did give an odd taste to things. Fixed.

Waht are your reactions to the interview?

"I can walk into any bookstore and peruse a book for hours before buying. I can also return that book for store credit without the bookstore accusing me of photocopying the book at home.

I generally cannot peruse the contents of a CD, and I can not return it once it has been opened."
--Jon

"I guess you haven't been to a record store lately."
--Cary Sherman

I think, in any objective way of 'keeping score,' Mr. Sherman won that round, at any rate.

To those posting studies as to the profitability of "file sharing" for record companies:
1) Is there anything in these studies that lend you to accept their credibility? Or are you just chosing to cite the source that's most favorable to your views?
2) Don't you think that record companies, the people who have the most at stake in the question over record profits, have enough of a vested interest in the question to have looked into the matter?

I'd say more, but then I'd be canibalizing from what could be a perfectly fine post.

I think other people have brought up good points, but I would like to see more sales information than 2000 to 2001. Two years does not establish a trend nor represent the possibility of effects from other variables (i.e. recession). You cannot conclude from those two years that the only possible reason for reduced sales is piracy. There are lots of things going on in the world...

I would like to see how sales were effected in other years as we passed through other economic periods. It would also be interesting to see how sales were affected as technology shifted (e.g. vinyl to tape to CD to MP3 download). Maybe this already exists somewhere on the internet, but I've been unable to locate a good source.

Also, Mr. Sherman mentions that the top ten selling albums went from 60 million to 40 million. That's a 30% drop. Yet total sales only dropped 10%? I'm not sure the 30% drop should be sited as further evidence of piracy. It is more likely that people's tastes have changed and the record companies aren't quite keeping up...

Mr. Sherman writes:
>Furthermore, we've been studying this for awhile
>(no surprise there). In a study we'll be releasing
>soon conducted by Peter Hart Research Associates
>for us, we learned that -- by more than two to
>one- those who say they are downloading more say
>they are purchasing less. To be fair, some said
>they were purchasing more. But only 19% said they
>purchased more, while 41% said they purchased
>less.

Of course, there's some fuzzy math going on here. 19% plus 41% is only 60%, and having covered "purchasing more" and "purchasing less," the only options left for the missing 40% are "purchasing about the same number of CD's" or "don't know/ no answer."

40% would be an awful lot of "no answer" responses, so at least some of those are probably "about the same." If it's half "about the same" and half "no answer," well, then, we have what statisticians would call "a wash" -- 41% purchasing less, 39% purchasing about the same amount of music, if not more.

Without knowing what they actually asked, and the relative sizes of the increses and decreases, it's impossible to say whether file-sharing is really decreasing sales, but his initial citation of this study is the sort of dodgy use of statistics that should raise a red flag for readers.

I'd like to see a chart of music sales vs. the sales of some other entertainment device which currently isn't being passed around casually, for the past 10 years or so. Videos/DVDs leap to mind first, but the trouble there is that lots of people for the last few years have been switching from VHS to DVD, and re-buying all of the best movies, throwing off the curve some. Perhaps sales of music vs. sales of computer games?

That ought to give us a fair estimation of how small entertainment spending has been changing worldwide in the past two years, shedding some light on the economy question.

The idea is to come up with consumer-friendly technology that allows users to make appropriate personal use of their music, but that prevents piracy.

That technology doesn't exist, and even the best theoretical attempt at creating a system like that would create a structure of "haves" and "have nots" regarding who is allowed to write or manufacture software and hardware that can access digital music.

Here is why:

1) Barring some fundamental breakthrough in watermark technology, the analog hole will always exist. Any "pirate" can, now and in the future, make copies if they are willing to accept a slight degradation in quality. Thus, they are fighting windmills.

2) The basic premise of a DRM system that prevents copies is that the cleartext must be kept in a black box. If the user/customer is able to gain access to the cleartext in any way, he can copy it without restrictions. Thus, any time shifting, space shifting, format shifting of the music must be within the black box created by this DRM system. If your portable music player doesn't support the DRM system, the system can't allow you to make a copy. In order to be able to listen to the music on the devices you own (PDA, portable player, car player, PC, home stereo rack, etc), these devices must have support for the DRM system.

Now, who will have the power to determine who is allowed to make devices or software that support the DRM system? Do we really want the music industry to do the same to digital audio that Hollywood did to the DVD format? (For those that don't know - Tinsel Town set up a lisencing regime that force all DVD player manufacturers to sign a license agreement that, among other things, require the players to obey the region restriction).

Record companies have been major beneficiaries of new technology (from wax cylinders to vinyl to LPs to CDs), and the current technological developments are no exception. But let's face it, even great technology can be abused.

Record companies have also tried to stop or control each and every one of those technologies (excluding the wax cylinder, since it was the wax cylinder companies that became the first record companies), and there was much shouting before the record companies grudgingly accepted that the new technology created new markets instead of being the boston strangler.

They tried to stop the radio - after all, you can't have someone give away music for free if you have built a business model on selling wax rolls, records and players.

Does anyone remember "Home Taping Kills Music" and the panic mode the RIAA entered when the cassette entered mainstream?

They went after the first portable MP3 player.

My question is - given that the recording industry has consistently been wrong about the threats created by technology, why should we believe them this time? And why should we believe that the legislative and technological changes that the music industry is asking for is really necessary to protect artists, instead of a reflex reaction to protect old business models?

Also contrary to your impression, record companies want Internet radio to succeed. We need lots of outlets for music, and webcasting is one of the most exciting new ways for new artists and new music to gain exposure. Record companies (and artists - who get 50% of the royalties) also want to be paid fair value for their music when it's used for commercial purposes by webcasters. Just because we have a disagreement over what fair value is for the music doesn't mean we want to "squash" Internet radio. Right now, we're in negotiations with small webcasters to figure out what kind of rate works for all sides.

For the other side of the argument, see http://www.saveinternetradio.org/

I say, let internet radio and file-sharing kill off the RIAA and most of the moneygrubbing artists out there. I think the music industry is in need of a good re-birth, there are plenty of incredibly talented musicians who would be happy making $50K a year (just like any other normal working-class 9-to-5 job) just practicing their craft, playing shows, recording an album or two a year. And, sufficed to say, they could make that amount and probably a whole bunch of extra pocket cash on top of it from their LIVE PERFORMANCES alone.

Let's give the music industry back to the people with the passion, not the people with the ca$h and high-priced lawyers. This country's too disgustingly obsessed with money anyways.

Just FYI, Sherman's reply to the 3d question is even more deceitful than the rest of his b.s.

Every one of the RIAA companies is PART of the AFTRA suit, and in fact they face RICO statute charges (which means treble damages, potential forfeiture of the assets--masters--involved and more). Sherman is certainly aware of this, as he is aware of the revelations during last year's Calif. Senate hearings that established conclusively that the record indsutry's shady accounting practices and outright theft from artists is an ongoing matter and reaches up to the highest-paid, best-represented artists.

It is, however, foolish to presume that people who have made a lot of money and can afford high-priced lawyers (who tend to do a better job than low-priced lawyers, in my experience) lack passion. Does anyone actually think that John Lennon lacked passion, for instance?

let's cut to the quick of things here:
cary sherman is simply a greedy, bloodsucking bitch trying to eliminate any competition that might actually tender even a thin dime out of her pocket or the pockets of her billionaire cronies. the only thing she's protecting is her money & damn anybody's rights. the riaa should be dissolved...period!

Wilfie - I think Mr. Sherman would be bothered by your comments, if he was still around more than eight months later to read them. On his behalf, though, I suggest that you detail what your alternative plan for providing music for the masses is.

If you need more room, email Eric and ask to become a critic and you can post a story of your own. Enjoy!

I don't think the RIAA should bust anybody who downloads music, videos and stuff like that off of Kazaa and Imesh. People pay $10-$80 a month for their own ISP. I believe people who pay for their own internet should be able to do what they want on a certain extent. I believe the line goes further than just P2P file sharing. $750-$150,000 is just too much of a lawsuit to file against some home-user who makes only $30,000 a year while musicians make millions of dollars. They should pass an individual law for each state on whether or not internet users should be allowed to have P2P file sharing programs. And I'm pretty sure that atleast the entire state(s) of 40 out of 50 would say YES to allowing file sharing (music, videos, images, etc.)

I am not rich like most of the people in the music business and sorry if I don't cry a tear or two just because you want me stop downloading materials in my own privacy of my own home. No I cannot relate to artist that are making millions and I am one of the reasons they are where they are at and now they tell me I cannot download in fear I may get into trouble.. Please Mr. Sherman you need to get a life and focus on things a little more important. Guess you just don't have enought bucks in your pocket. Sorry if I cannot relate to you.... Tell your record industry to cut its prices on less than great material and I might think about buying instead of downloading!!!

I'm so tired of hearing this record company executives and other artist crying about folks downloading there songs on the net. Obviously there not hurting from lost of sales. I watch "MTV Cribs", and BET's "How i'm living" and these artist put the millionaires from the Lifestyles on The Rich and Famous to shame. I support online file sharing 100%, for years i've purchased hundreds of CD's, tapes, albums, went to concerts, whatever and lets just say, wheres my justice. I cant recalled the plenty of times i've bought someones album, and only listen to like 2 or 3 songs out of 16-21 tracks, wheres my refund?. I hear music on the radio, especially since the "bling bling" era and you want me to feel sorry for a group of artist who all they talk about is the millions of dollars, the Escalades, Hummers, and $80,000 diamond, watches, necklaces, and rings the sport. Please get a life, online file sharing is here to stay, and these record executives, can sue, cry, spit all they want......WE WONT GO AWAY, AND YOU'LL NEVER SHUT IT DOWN......get over it.

Under the current circumstances, looks ike we should move this interview back into the spotlight.

Why can't the recording industry put a bug in their recordings to stop coping or require a code to open the CD for coping. I think piracy of music or anything is wrong.

I would like Sherman's telephone # so I could call and tell hime what I think about RIAA suing a poor 12 year old kid.

Enough calls may make him realize how unpopular he is to the American public.

For me, I don't download music, I don't buy current music, I don't listen to current songs and I don't really care for the current vocalists or nmusicians. I am a disinterested person.

Email this idiot to let him know that the CD's are ridiculously over priced...


cary.sherman@riia.com

This guy is a greedy little *sshole. Even words don't do justice.

Fuck you i hate the RIAA!!!!!!!!!!!!!

WHY DOSEN'T RIAA PUT OUT LEAGAL COPIES FOR DOWNLOAD THAT USE ADVERTISMENTS TO PAY FOR THE DOWNLOADS???

SONGS OR VIDEOS EVEN TV SHOWS COULD CONTAIN ADS THAT IF LEFT IN MAKE THE ITEM LEGAL IF REMOVE IT IS AN ILLEGAL COPY...

RIAA COULD SELL AD SPOTS FOR A CERTAIN DOWNLOAD MAKING MONEY FOR THE INDUSTRY AND WE COULD CONTINUE DOWNLOADING MUSIC MOVIES AND MORE...

THIS SEEMS LIKE A SIMPLE SOLUTION TO ME THAT WOULD MAKE BOTH PARTIES HAPPY AS LONG AS IT WAS TASTFULLY DONE...

very interesting concept Merril, that's what we do here

"Albee" said he had a problem with the RIAA suing a "little 12 year old"

Tough. Freaking. Beans.

That "little 12 year old" was stealing copywritten material. Would you have a problem with giving a 12 year old criminal penalties if he/she stole books? What's different about music?

copyright infringement isn't stealing, it's a civil violation of contract

I'll never buy a CD again!!! Fuck YOU RIAA

i believe people like cary sherman need to get a life. trying to scare people with there lawsuits and big lawyers. sueing innocent people who are just look for a way to get cheaper music. i have spent almost 200$ this last month buying cd's and only to find that there are only 2 or 3 good songs and the rest is garbage. i should sue the RIAA for my money back for the garbage i had to listen to. i will never ever buy another cd or pay for music again to support a money hungry industry i wouldnt pay for it if it was only 1 cent the RIAA and cary sherman can suck a fat one. as someone greater once said let my people go so leave every body alone get a life quit sueing low income innocent people and get that stick out of your but i bet you havent been laid in years.

The RIAA realizes it is on it's final legs, it is losing control , it is now a caged and cornered animal ..striking back but ultimily defeated.

It cannot control what it does not control ..


The way to insure the end of the RIAA is not to fear it..keep it in it's cage , keep it in it's corner ..let it know you are master and it has no choice but to submit to your will.. the will to trade music ..freely ..

Download at will until they cannot afford to sue anyone ..bankrupt them..it is that simple..

In response to Ashley Maes, "That "little 12 year old" was stealing copywritten material. Would you have a problem with giving a 12 year old criminal penalties if he/she stole books? What's different about music?"

Get a radio.
Or pay attention. The frelling RIAA doesn't give a sliver of a penny to the artists if you buy an $18 CD, of which contains 1 good song, and about 13 other crappy songs.

You can buy a DVD for the same price, or even less (I've seen them for 5 bucks at Sam's) And get more enjoyable content.

Plus, filesharing has been advertised as a good thing, that it wasn't "illegal"
Would you steal a candy bar in a *store* that had a sign in front of it saying "FREE"?
I would, heck, if it was free. It wouldn't be illegal or stealing. It's Free! Tell me how one can steal something for free.

Also in response to Al Smith, "Why can't the recording industry put a bug in their recordings to stop coping or require a code to open the CD for coping. I think piracy of music or anything is wrong."
And a quote from almost everywhere "America, the Land of the Free"
WHERE THE HELL IS MY FREEDOM?

EUROPE is more free than America.
Canada, Mexico, Hell...
It won't be long before Russia is MORE free than America.
I've already decided to move out of this screwed up country.
Maybe to Germany, Ich finde Deutschland interessant. Das Land ist besser als Amerika.
Or Canada.

RIAA


Cary Sherman, President

one thing he better stop what he is doing befour some more people get heart dont stop music or anything from file shareing it is grate to get things free in life the thing u shuld stop the most on p2p is child porn movies and pic

I..dislike...Cary Sherman.....I agree on the child porn thing though.....But...for real, stop prosecuting people. You are just making people do it more. And also making people buy less CDs.

I think that this song is the best way of describing my feelings on this matter. http://media.zug.com/RIAA_Phone_Call.mp3

PLEASE CONTACT FOR CARY SHERMABN ?????
E MAIL

THANK YOU
FOR PLAGIAT MY PREROGATIVE

[Personal contact info deleted]