FRED GOLDRING’S MUSIC-BUSINESS INTERVENTION

In the Oct. 25 edition of our esteemed sister publication, Billboard, noted music attorney Fred Goldring took the opportunity to give the industry some "tough love" in an opinion piece that maintains file sharing, as many already believe, is with us for good. With true "if you can’t beat ’em, join ’em" spirit, Goldring lays out an eight-step "recovery program" for the music business (leaving room for four more?), insisting that the RIAA’s current "shock and awe" tactics are only counterproductive. Pointing the way to further exploration of "wide-ranging solutions, from digital tip jars to compulsory licenses," Goldring’s central issue is a simple one: File sharing won’t be snuffed, so shouldn’t we try to harness it instead of snuff it?

Below are Goldring’s eight steps. Below the steps are the reactions of various industry players, both pro and con, which we will update as the dialog progresses.

FRED GOLDRING’S EIGHT STEPS TO MUSIC-BUSINESS RECOVERY

1. Admit you’re powerless; accept the reality of your situation. File sharing is not going away. Downloading is already more popular than the CD.
2. Give up on anti-piracy technologies. They don’t work. They won’t stop copying and distribution. They’ll only make your products less appealing to your prospective paying customers.
3. Stop attacking your own customers. Besides being bad P.R., it’s bad business. Remember, you’re hoping to sell music to the same "thieves" that you’re now suing. Look at this "problem" as an opportunity to turn the majority of music fans who never bought records into paying customers.
4. Get out of the way, and make yourselves invisible. The music business works best when the focus is on the music and not on the business.
5. Re-order your priorities. You certainly have a right to complain about double-digit declines in sales. But you’re spending way too much time pointing the finger, and you’re not focused on immediate, practical, fair solutions.
6. Give the people what they want, even if it requires the laws to be changed. You aren’t working to give them what they want, and that’s why they’re turning to services like Kazaa—not just because they’re free.
7. Support initiatives that will allow unlimited access to every piece of music in the MP3 format whenever and wherever someone wants it, with no conditions or restrictions in an easy-to-use interface. People will pay for this.
8. Stop your futile efforts to change the behavior of millions of music fans. Spend all your efforts on designing a system that gets everyonje paid around the overwhelming behavior that exists—and creating better records.

INDUSTRY REACTION
Attorney Gary Stiffelman: "I feel that too much effort is being spent on litigation and not enough on technological solutions. There are ways to use Kazaa and other file-sharing networks to make money, but until the consumer cannot get music for free, the problem must be [solved] through technology. Solutions that encrypt CDs are a dead-end, but antipiracy measures that attack file-sharing from another perspective should—and must—be pursued.

"The only way to educate consumers is by suing a few of the bad eggs on a random basis. This is exactly like the IRS audit process. You can lead people in the right direction by a combination of the carrot and the stick; neither alone will work. The problem thus far is that the carrot is insufficiently appealing to migrate the file-sharers to the alternative forms of downloadable music—the price is too high and the usage restrictions too arcane and draconian.

"Fred has done a good job of pointing out the problems, which we all are fairly conversant with. What he has failed to do is address the central dilemma, which is to make money from commerce in a commodity which is available free of charge to millions of potential customers. Maybe the solution is to change to a nickle per download, or a $5 per month all-you-can-eat formula, or something else that Fred might be thinking about. In order to complete his analysis, he needs a ninth step. It would be nice to see some analysis of how to get past the current dilemma."

Attorney Doug Marks, Barnes, Morris, Klein, Mark, Yorn, Barnes & Levine: "Without splitting hairs, I would suggest that only #8 sets forth a constructive point. The big issue starts with that—i.e. a discussion of the monetizing of peer-to-peer networks. Eg. Do we do an ASCAP/BMI-type sampling system? Whereby file sharing sites pay annual fees? I strongly disagree about his views on the freeloaders—piracy will be marginalized in the new world (unless people such as Fred continue to argue its moral/legal acceptability)."