The major record labels that had dominated the music scene for as long as anyone can remember came out vehemently against file sharing when it was introduced, claiming it was nothing more than epidemic bootlegging. Suddenly, the same group of young people, whose steady diet of $20 CDs made them rich throughout the decade,were dragged into court as an example of what happens to the thieves who were eroding record industry profits. The fierce opposition even led to a 9-0 victory by MGM in the U.S. Supreme Court, forcing one of the early file sharing websites, Grokster, to pay $50 million for copyright infringement. When the initial free sites were disintegrated or forced to become fee-based, it seemed that these companies, with the help of Uncle Sam, had taken back their rightful control of the music industry, but it was not yet a time for celebration. In fact, for most, it may never be time.
The labels were mistaken in the beginning, not because their instinctive greed had placed them on the wrong side of the file sharing debate, which it did, but because they squandered precious time on a crusade that they simply can not win, against the very people they look to for support. Unfortunately, over a half-century of dominance had blurred their vision, and the mission was a knee-jerk reaction to protect their profits (and nothing brings customers back like public prosecutions). Still hungover from the '90's record setting CD sales, they couldn't see, or refused to believe, that the party was over and it was time to go back to work and show why they got the job in the first place. This select batch of CEOs have a chance to either seize the moment and re-write the history books or watch their mighty ship disappear into the sea.
The Internet isn't going away, nor will it be commandeered by any one entity. Trying to police it is impossible and other than feeble scare tactics, which may work in third world countries but not so much around here, there is no way to bring back the record sales of yesteryear. Still, these dimwits continue to fight an uphill battle, as their “gang,” the Recording Industry Association of America, led by Cary Sherman, maintains that the measures taken to punish these music bandits will intensify, regardless of their former leader's admission, after the fact, that “it IS pretty cool to download music….” This ridiculous effort has turned into a full campaign throughout universities, involving several other “groups,” which are basically a collection of stuffed shirts, operating under some official-sounding acronym, like the R.I.A.A., who desperately need that bonus check to maintain their lavish lifestyles.
It's almost sad to watch these big kahunas flounder. Sure, there are some, like American Idol's Clive Davis, who have created successful revenue streams other than the sale of an obsolete physical product, but the rest, who thought it would be “fun” to get into the music business and be important among the high-rollers, have gotten more than they bargained for. While the natural instinct of any business manager is to fight “shoplifting” by beefing up security during business hours, what they are doing is pissing off customers who know the door is unlocked all night. Meanwhile, that “shoplifting” only represented an opportunity to stake their claim in the music business, but don't tell them, though. By now, it's clear that these guys are going to hold their ground all the way to the end.
It is true that the file sharing debate is one that continues forever and both sides have been clearly illustrated everywhere, ad nauseum. They do, indeed, each have their points, and because of this, major record labels will continue to argue their case, but what they fail to realize is that nobody cares. Especially when they consider that the only people truly being effected are the middlemen, nobody is going to stop downloading music; so, it's time for them to start rolling with the punches. As head of a major label, they are in prime position to spearhead a campaign that would change music forever, but it must involve doing a complete 180 and embracing the enemy.
Today, major labels have all taken a small step in the right direction by creating departments to oversee digital distribution, and many former personnel have crossed over to sites like Yahoo music. However, their involvement, for the most part, is begrudging, and these digital wings are meant to continue the impossible task of controlling downloads, rather than thinking of ways to utilize the new media accessibility to generate new profits. Their inception and development were reactive to the situation, not innovative, and ironically, they will be swallowed up by the nature of the business, the very same fierceness they once created.
Meanwhile, the race is on between a new breed of executives, who are hungry for a piece of the action. People like MySpace founder, Chris DeWolfe, or Martin Stiksel, who launched Last FM, a major online music site. Apple's iTunes is also a major player in the new world order of music. This is the group which will emerge as the new music industry legends. Whether it will benefit music long term or the industry will become another Animal Farm, it's most likely that this century's Barry Gordy or Sir George Martin will be a card carrying member of Silicon Valley, and that most likely means curtains for all of the smooth talking pimps, who slashed their way to the top in the old world. The choice is simple. They can continue suing downloaders, in essence, killing one roach at a time, or they can end their futile campaign and earn their place in the music business of the new millennium.