Thu, Nov 13, 2003 - Page 9 News List

Legitimate music downloads rock the music establishment

By Bobbie Johnson  /  THE GUARDIAN , LONDON

Now is the time of year that record company executives around the globe are likely to be mopping the sweat from their collective brows.

With fingers crossed, they hope record releases from their biggest guns will help to boost flagging revenues over Christmas and revive an industry in seemingly terminal decline.

Music label bosses waste no time laying the blame for a downturn in music sales -- the culprit, as always, is the Internet. Illegal downloading is the Achilles' heel of the recording industry, and the term "file sharing" is anathema to the music-label fat cats staring plummeting profits squarely in the face.

But a new service which has just begun testing ahead of a proposed launch in the new year aims to provide a stepping stone between file sharers and the music industry. Instead of being a pay-per-download service or music portal, Playlouder MSP is being touted as a "music service provider" -- a one-stop shop that not only provides users with their broadband connection, but also allows them to download as much music as they want legally. And all for a price to compete with big rivals such as British Telecom (BT) and AOL.

The concept is simple: subscribers receive a high-speed Internet connection and everything else associated with a normal ISP. And like normal Internet users, they will be allowed to use file-sharing programs such as Kazaa or Gnutella. But instead of sharing with users anywhere on the Internet, subscribers will remain within a gated community, only able to share with approved users -- and therefore only sharing licensed tracks from the labels signed up to the scheme. And in return for licensing their entire catalogues for downloading among the Playlouder peer group, record labels will receive a slice of the subscription fee.

"A lot of people were wondering why no one had found a way to collaborate between record companies and Internet service providers," says Playlouder MSP director Paul Hitchman. "The answer's simple: ISPs don't want to share their revenue. We're putting our necks on the line by effectively cutting those revenues.

"We share our margin with the music companies directly. We're trying to cut through the antagonistic relationship between music companies and Internet firms."

With recognizable, but credible, names such as Dizzee Rascal, White Stripes and Stereophonics already signed up, and with respected underground labels such as Ninja Tune on board, Playlouder MSP is hoping to appeal to dedicated music fans as well as cautious individuals looking to avoid legal action down the line.

Of course, part of the gamble relies on the slow but steady demolition of the myth of "free" file sharing. Those users who are downloading and swapping tracks are still paying for their Internet connection -- and, in most cases, paying handsomely, even if the victims of file sharing never see those profits. That's where Playlouder MSP hopes to change the landscape. A deal to gain direct access to the fabled "local loop" cuts out rental costs from BT, allowing them to keep broadband speeds high, prices low and, crucially, allowing record companies to gain profit from an otherwise illegitimate revenue source.

Labels backing the new initiative are hoping this method of top-slicing revenues could be the way forward.

"We are committed to working with the most innovative new media companies," says Martin Mills, the chairman of Beggars Group.

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