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The digital distribution of music (and movies, etc) should be about value and volume. The Enemy or the Perfect Model?

Since the early days of the digital music file sharing and copyright wars, I have said that artists and copyright owners should get paid for their efforts, that uploading or downloading music outside the bounds of fair use and without permission is bad karma, but that the music industry is greedy and shortsighted in its pricing and viciously punitive in its enforcement methods.

Since digital music is typically not of CD sound quality, is less convenient to use than CDs in copy-protected formats, does not come with artwork, packaging, liner notes, or credits, it clearly should cost less than music in CD form – way less.

And yet the most popular legitimate digital music service, iTunes, sells most music at the rate of 99 cents per song, which is about exactly the going CD rate with only the one advantage of song-by-song flexibility. And Apple just got through battling the major labels to keep the price that LOW: the labels wanted to raise the iTunes price and shoot themselves in the foot yet again.

The consumer alternative? The questionable legality, morality, and safety of the free file sharing services. I’ve always thought the beauty and potential of the digital system is in easy user access to the entire range of recorded music at a rate that makes experimentation and “why-not? buying” affordable, encouraging consumers to open their minds and ears to the extraordinary range of wonderful, varied, and surprising music being made: either some kind of license-based all you can eat model, or a per song rate in the neighborhood of a dime.

At that rate — $1.50 or so per album — consumers can afford to sample, experiment, accumulate, and splurge. Consumers would be encouraged to buy much more volume than they can through the legitimate services now, AND the artists, labels, and copyright owners are paid rather than being cut completely out of the loop as they are with the free file sharing services.

Is it a coincidence, then, that at around 10 cents per song the Russia-based service is vastly popular around the world, ranked second behind only iTunes in the UK, for example? Rather than being the threat to world trade peace the U.S. Trade Representatives Office says it is, I would say it is THE model of what a legit music service should be with its reasonable pricing, clean design, vast catalog, and user-friendly software.

Heck yeah I’ll check out the new Dixie Chicks album for $1.87, American Idol Season 5 Encores for $1.12, or Red Hot Chili Peppers’ (double-CD) latest for $3.45. Would I at full U.S. price? No way – I have more important things to do with $50: I have a wife, house, and four kids.

And yet — and this is absolutely key — I can easily see myself spending $50 on music if I perceive it to be an excellent entertainment value, which I DO perceive to be the case at 30 or 40 albums for $50. So, do you want my $50 for or not? The iTunes method of 50 songs for $50 is working because most people are really looking for their favorite songs as opposed to complete albums when they buy music anyway, so $50 for 50 of your favorite songs doesn’t seem like such a bad deal. But $50 for 500 songs would be an excellent incentive to not only pick up my favorites songs, but to try out full albums, artists, and genres I wouldn’t go near at the higher rate.

“The United States is seriously concerned about the growth of Internet piracy on Russian web sites such as … the world’s largest server-based pirate web site,” Neena Moorjani, chief spokeswoman for the Office of the United States Trade Representative, told the AP late last week.

“Russia’s legal framework for intellectual property rights protection must meet WTO requirements … In that context, we continue to call on Russia to shut down web sites that offer pirate music, software and films for downloading,” she said.

The site claims to be fully licensed in Russia. “MediaServices pays license fees for all materials downloaded from the site subject to the Law of the Russian Federation,” the site says, citing an agreement with the Russian Multimedia and Internet Society, which says it collects and distributes royalties for online use of copyrighted music.

The relatively lax Russia is already the second-biggest source of pirate music, film and software in the world after China according to anti-piracy groups, which claim Russian pirating cost U.S. companies nearly $1.8 billion last year.

But there is “pirating” and pirating. What appears to do — publish prices, keep track of sales, report them to a royalty distribution agency, pay royalties — appears to be within current Russian copyright law and is qualitatively different from making unauthorized copies of a movie, album, or software and selling them in stores and on the street in direct violation of the even relatively lax copyright laws of Russia or China, etc.

The best use of the structure and reach of the Internet is to sell huge volume inexpensively to the benefit of producers and consumers alike – until consumers can do that legitimately, they will continue to find their own methods and entrepreneurs will continue to assist them.

About Eric Olsen

Career media professional and serial entrepreneur Eric Olsen flung himself into the paranormal world in 2012, creating the America's Most Haunted brand and co-authoring the award-winning America's Most Haunted book, published by Berkley/Penguin in Sept, 2014. Olsen is co-host of the nationally syndicated broadcast and Internet radio talk show After Hours AM; his entertaining and informative America's Most Haunted website and social media outlets are must-reads: Twitter@amhaunted,, Pinterest America's Most Haunted. Olsen is also guitarist/singer for popular and wildly eclectic Cleveland cover band The Props.

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