I just read a headline about how the iTunes Music Store is now more popular than most P2P networks. On the surface this seems like a great thing -- legal online music downloads have reached a level of legitimacy that indicates a viable business model for the record industry. The RIAA has fought so hard for so long to be the sole source of your music purchasing dollars that it is nice to see that consumer pressure has forced them to reach a compromise on the means of distribution. For years the record industry retained that control and maintained their price points through calculated manipulation of the infrastructure that delivered music to your ears. By using leverage over every aspect of process, from the artists themselves, to the use of studio time, to the radio and television media channels, to the advertising networks, to the distributers, to the retailers, the music instrustry (defined as the 5 or 6 major studios, the RIAA, and companies like ClearChannel), has colluded and used monolopy influence wherever they can to artificially lock-in a set product and price to maximize their returns. Given that the global economic structure does little to dissuade this behavior, it was only natural that we would see a peak by the late '90s in just how artificial that product had become.
In what has been the most interesting upheaval to hit the music industry since the invention of the phonograph, pressure exerted by the Internet (and largely, peer to peer networks) has gradually forced changes in age-old ways of thinking. The record industry has always been about the ability to control the means of distribution, of finding a way to broker the commodity of new sounds eminating from an artist through to the listener's ear. P2p applications suddenly and dramatically offered a way to circumvent the industry's sacred leverage points. The Internet had the potential to do away with the physical warehouses, manufacturing plants, trucking fleets, and importantly, retail shelf space allocation models, and instead replace them with a zero-cost distribution network that the industry could not control.
The record industry probably doesn't give a damn whether or not whether a certain number of people violate copyright regulations and swap music files. They read the same studies we all do -- they know that P2P builds buzz and increases exposure for artists, that P2P has led to a renewed interest in a product that had grown overwhelmingly mediocre. They know that 99% of the people that trade music for free were not going to buy it anyway, but that viral distribution does ultimately lead to more legitimate transactions. No, the record industry isn't dumb -- they don't care about the individual file swapping -- they care about the loss of control over the means of distribution. Their monopolistic (or rather, collusive) manipulation over what people hear, and what people pay to hear it, is entirely contingent on their ability to determine when, where, and how artists communicate with consumers.
So as P2P applications were exerting their downward pressure on the traditional models of the industry -- one extreme of which I wrote at length about in the disc -- the industry has fought back on two fronts. First, they have been trying, only partly successfully, to rewrite and reinterpret legislation of copyright statutes to redefine what have historically been fractional violations into what are now considered major crimes. They aren't doing this because anyone actually believes that they really are major crimes, but rather because by criminalizing otherwise legal behavior they can attempt retain their influence over how their products are distributed and marketed. The disturbing complicity of Congress aside, this approach has had only limited success -- P2P file swapping of copyrighted work still runs rampant and the industry is fighting an uphill and ultimately losing battle.
The second and more successful approach has been to begin working with the new medium and the new stakeholders to develop an alternative model for distribution, one that they can still influence and control. Online music stores such as Apple's iTune's Music Store, Napster, Wal-Mart, Yahoo, etc., have reached agreements with the industry (via their representative major studios) to begin offering RIAA-sanctioned products at RIAA-sanctioned price points. With a typical pricing structure of $1 per track, regardless of the length, popularity, or quality of the tune, the industry and the consumers have begun to reach an equilibrium. Regardless of the desires of the artists or the fringe of the consumer market, the masses have struck a deal with the powers that be on how we will purchase, price, and consume music for the next few years.
The problem is that it isn't a very good deal. The product that one can legally purchase online simply isn't a very good product. Compared with a physical CD a downloadable music track is of noticably lower sound quality. Even untrained ears can hear the difference between a CD and the low-bitrate encodings that online music stores use when heard side by side. (And the trouble is, most people never hear them side-by-side so they are missing many of the nuances that the artist orginally intented.) And compared with a physical CD, there are few options for archival -- most online stores are using some form of Digital Rights Management device to keep you from even perfectly legal backups at your own discretion. (And those few stores that are still using MP3 are only doing so for the short term, DRM-encumbered formats such as WMA or AAC will replace them.) Worse, the stores are all limiting where the legitimate paying customer can play their downloaded music tracks. Apple's protected AAC files can't be played on any portable device but their own, and certainly not alternative desktops like Linux. Microsoft's WMA can only be used on devices that license the technology from Microsoft. No wonder that Apple and Microsoft were all-too-happy to get in bed with the record industry on this one -- there is profit to be had if one can just join forces with the Devil.
So P2P was exerting a downward force, the record industry was resisting it, the online music store offered a middle ground, and the consumer accepted it. The only problem was that the middle ground was worse than what the consumer had before. The consumer sacrificed quality and their own rights for marginal convenience simply because the record industry offered no alternative. Something that potentially could have been revolutionary -- the elimination of the middle-man -- turning an industry back into an art, is quickly striking a balance that benefits neither the artist nor the listener. Today's online music stores are a horrible compromise, but that's exactly where we are finding ourselves. Right back where we started.
As always, I should note that I neither endorse nor advocate violating the copyrights or the will of the copyright holders. While P2P fileswapping of copyrighted materials may have been a wake-up call (and the salvation) for an industry, that doesn't mean that you or I or anyone else but the artist has a right to decide how their music is distributed. I think it is horrible that artists are compelled to work with the RIAA, but that is their own choice, not mine. Someday artists may discover a better way to reach their audience, but until then if you don't like the online music stores or are too lazy or cheap to rip your own CD, then you should consider learning to play an instrument and entertain yourself.
[By the way, feel free to quote this article-- you are entitled to under the Creative Commons license that I use for everything I write. But please respect that license and link back here and/or give credit where it is due. This is no different than the fight going on today in the record industry -- it is about putting power in the hands of the artists and the readers/listeners where it belongs.]