Thu, Nov 13, 2003 - Page 9 News List

Legitimate music downloads rock the music establishment

By Bobbie Johnson  /  THE GUARDIAN , LONDON

"PlayLouder MSP finally offers record companies a way to monetize file-sharing and represents a potential solution for the record industry," he says.

If it is to succeed, though, Playlouder will have to fight hard. It will need to bring major labels on board to give subscribers a wide enough range of tracks to trade, and compete with a burgeoning range of music services. It could be joining the market at exactly the kind of watershed moment which could prove make or break.

"This is the pregnant moment in digital music," says Josh Bernoff, a principal analyst at Forrester Reearch. "Lawsuits are creating doubt among users of free services, while the variety and usability of legitimate digital music services make them a real, usable alternative."

The industry standard for online music is rapidly becoming Apple's iTunes download shop -- currently vaunting the fact that it has sold more than 10 million tracks in the four months since it launched its service in America. It's an impressive figure -- and one that is increasing quickly with the recent launch of iTunes for PC, a move which expands the technology beyond the niche market of Macintosh users and potentially into every Internet-enabled household in the US.

But nobody wants to let Apple steal a march in the market, and rivals are clamoring to throw their hats into the ring. Dotmusic, which was bought last month by Yahoo from BT could be the latest contender to don its spandex pants and jump on stage, with industry watchers speculating about a wide-ranging link-up with AOL and Real Networks. Thanks to the fact it currently holds licensing deals with five major labels, Dotmusic has not yet lost all of its rock star luster, even though it is something of an Internet hot potato, changing hands three times in the past three years.

And recently the trumpets have sounded for the much-vaunted relaunch of Napster, which resurrects the infamous file-sharing application in the form of an Apple-like download store. But still it must compete with the illegal traders on difficult ground.

Those skeptical of the record industry's position believe file-sharing is the scapegoat for waning sales and overpricing. This is the same set of issues raised decades ago by audio tape recording, they argue, simply magnified by the power of the Internet.

"Labels are in trouble, and it's not from file-sharing," Bernoff says. "To tap into US$2 billion in new revenues, they must let people find, copy and pay for music on their own terms."

Some figures inside the download industry go even further.

"Protecting copyright is really just a smokescreen to hide the real challenge confronting the entertainment industry," says Alan Morris, the executive vice president of Kazaa-owner Sharman Networks -- and the man whose picture is most likely to be used as a dartboard by frustrated record company bosses around the globe. His own product, he claims, is under fire because it is about "moving beyond an outdated economic model that is being rejected by the marketplace for which we have a well-conceived upgrade path."

The truth, as always, is likely to be somewhere in the middle of these two contrary positions. One thing, though, is certain -- file sharing is unlikely to disappear.

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