HITS Daily Double
"We are totally opposed to the notion that file-sharing is the primary cause of the woes facing the music industry."
——Steve Wiley, Hoodlums New and Used Music


Radical Advice From an Unorthodox Indie Retailer, a Digital Commerce Player and More
Hey man, it’s Rocktober—as good a time as any to pause from our litigating, doomsaying, shuddering-in-a-fetal-position ways and look at some fresh perspectives.

With the RIAA claiming progress in its lawsuits against file-sharing but little sign of a general upturn in the business, the Senate’s Permanent Subcommittee on Investigation—during its 9/30 hearings on said suits—heard a lot of testimony about the perils of downloading.

With industry figures railing against the ravages of peer-to-peer file-swapping, the oft-provocative Coalition of Independent Retailers decided to offer a counterweight to the majority viewpoint.

Since the committee had invited Pennsylvania indie retailer Mike Negra (of Mike’s in State College, PA), who voiced his support for industry lawsuits against some P2P users, CIMS asked Steve Wiley of Hoodlums New and Used Music in Tempe, Arizona to represent.

Though CIMS’ Don VanCleave circulated Wiley’s comments to his email list and averred that more than a few retailers would likely agree with the remarks, he was at pains to establish that the Arizona retailer’s views do not necessarily reflect those of the Coalition.

Introducing himself as co-owner (with partner Kristian Luce) of the CD/DVD outlet—located in the Student Union of Arizona State University—Wiley said the institution’s 57,000 students and their locale arguably exist at "the epicenter of the digital music debate."

"We sell music to file-sharers every day," he testified, "and we are here to present a different view to the committee."

Hoodlums opened its doors in 1998, at the onset of the Napster phenomenon, Wiley pointed out, yet it is currently enjoying its biggest success—with September 2003 representing peak sales in the store’s history.

"We have extensive conversations with our customers (nearly all of whom engage in the practices being litigated by the RIAA) regarding the topic of file-sharing on a daily basis," Wiley asserted, adding that feedback from these customers is used to improve the store.

While generally opposing "people not paying for music," Wiley went on, "we are totally opposed to the notion that file-sharing is the primary cause of the woes facing the music industry." The indie retailer suggested instead that P2P serves as "a convenient scapegoat for out-of-touch label executives and record store owners, many of whom thrived in the ‘replace-your-LP-with-a-CD’ era but are having trouble today because they are continually trying to fit a new breed of customers and technology into the old model of doing business—instead of adapting to the customer’s needs."

Wiley instead blamed high prices, what he called the non-viability of digital commerce and the industry’s inability to understand that P2P can help as well as hurt sales by making it easy for consumers to sample music they later buy. He called RIAA litigation a "public relations nightmare" and said most of his customers scoff at the industry’s claim of the moral high ground. "Stop prosecuting kids," he said, imploring "major record labels and politicians [to] quit trying to prosecute our customers and start finding a way to give them what they want."

Wiley speculated that a subscription service would be more effective than a la carte downloads for digital distribution, comparing such an offering to cable TV and claiming it would generate far more revenue than CDs and a la carte digital sales combined.

While BuyMusic.com’s Liz Brooks naturally takes issue with the latter assessment, she finds quite a bit of common ground with retailers like Wiley. For her part, Brooks believes the biz should work to appeal to P2P users who want to buy music and ignore those who don’t.

"The world is full of people with more time than money, and these people will find work-arounds to get music for free," she says. "But people without money aren’t our market."

Indeed, Brooks argues, a la carte download services have an opportunity to build on the familiarity with digital files fostered by P2P use. The paid services can ultimately trump the free, lawless file-swapping zone, she adds, by making the transaction quick and easy.

What’s more, notes Brooks, BuyMusic’s recent online premiere of Columbia artist John Mayer’s new album worked "amazingly well," demonstrating that the right mix of quality and price can already form a significant piece of the sales picture for many artists.

Meanwhile, the shadowy U.K.-based industry org known as the IFPI continues to blame file-sharing and other forms of piracy for the retail doldrums reflected in its new report, which has global recorded music sales down 10.9% for the first two quarters of 2003. The consortium said audio and music video earned only $12.7 billion for the period, compared to $14.3 billion for the first half of 2002.

Interestingly, the IFPI points to growth in certain foreign markets—especially ones in which consumers are still transitioning to the CD from cassettes. Sure hope those people know that home taping is killing music.