Can the Music Biz Adapt to File Sharing?

May 9 , 2003 -- If you try to download Madonna's newest single off the Internet this week, you might get this message from her instead: "What the f*** do you think you're doing?"

Madonna is upset about the newest way to get music — downloading it from the Internet. It's illegal, but almost every young person does it. Search for the song you want, click on it, and in minutes it's on your computer. Free.

At this moment, several million people are probably at their computers sucking music off the Internet.

Four years ago the music industry tried to stop this downloading by suing Napster — the first major music-sharing business.

The music industry won. A federal judge ordered Napster to get rid of any copyrighted songs it made available to users.

But while that killed Napster, it didn't kill the practice, because immediately, other sites popped up and downloading music became even more popular. Now, even my own kids do it.

So last month the music industry filed more lawsuits — this time against four college students who set up Web sites that helped people get music — suing them for $150,000 for every copyright violation, which totaled more than $90 million.

"These kids were engaged in pretty outrageous behavior," said Cary Sherman, president of the Recording Industry Association of America.

Sherman complained the students were breaking copyright laws, and said the industry had to take this action to send a message that "nobody is above the law."

Dan Peng, one of the four students who was sued for millions, said, "This could not possibly be happening to me, right? Everybody at every college across America, and most high schools are sharing files, right?"

Peng said he set up his Web site at the request of fellow students — and never made a penny off of it.

Peng thinks the industry is just trying to intimidate people, and said he's definitely intimidated by the money the industry demanded in its lawsuit.

But Sherman said, "Nobody is expecting kids to pay that kind of money — and they won't." He added, "That's just the legal stuff, that you put in papers."

It is a big deal to Jesse Jordan, another of the students sued. Jordan paid $12,000 to settle the suit.

"The $12,000 for Jesse was his life savings," said his father, Andy Jordan. "It was a lot of money, all of it, for him. They're still in business, but his bank account — empty."

The other students quickly settled with the music industry. too.

And what did the lawsuits accomplish? File sharing is still widely available on any computer. Students told us free Internet music is here to stay.

New Technology Often Viewed as a Threat

It's not the first time that businesses felt threatened by changing technology. When radio first came out, the music business vehemently objected to the stations playing their music for free, saying it threatened their livelihood.Today record labels do all they can to get their music ON the radio.

When VCRs first came out, movie studios sued, saying taping off your TV set was a copyright violation. Stores posted signs saying "Off-air taping is illegal." It's lucky for the movie companies that they lost, because today they make more money from home video than they do from the box office.

Sherman said this is different. "What the movie business economic model is — and the music industry economic model is — are really two different things," he said.

Many musicians, like Lars Ullrich of Metallica, say file sharing is like shoplifting. "This is really no different than theft. Grab a Metallica CD off the shelf and walk out of the store with it, it's really no different," Ullrich said.

The students we talked with don't see it that way. "If I were going to lend a book to my mom to read that I own, would she be brought to jail? I don't think so," one said.

Another said, "Before I'm gonna invest $18 on something in buying an album, let me check a few of the other songs and make sure it's not a dud."

"To me file sharing is, that's not breaking the law, that's sharing music with the world," said another student.

It is breaking the law, and lawbreakers better watch out, says Sherman.

"When you offer copyrighted music on the Internet for other people to take, you can be identified. And people need to understand that … [there] can be consequences."

A Matter of Adapting?

Why can't the industry just adapt? Accept the Internet. The file-sharing sites are a wonderful innovation. They let people download exactly what they want. They let artists send samples of their work to the whole world.

Sherman said that'd be great, as long as it's the choice of the creator.

I told him I would like to control what I do — on television. But once it's out there — it's out there. Don't we just have to adapt?

Sherman said the industry is already adapting.

Apple itunes launched with great publicity last week. They got big artists like Sheryl Crow, U2 and Missy Elliot to license their music on the site — which let users download each song for 99 cents. This, and other legal sites offer better quality copies, and reduce the risk of downloading a virus, but the sites don't offer the complete selection of songs available at illegal sites. Walt Mossberg, technology writer for The Wall Street Journal, says some legal sites "treat everyone like a potential criminal, and they take all the joy out of buying and playing music."

Some musicians, like Chuck D, Courtney Love, and Billy Corgan, think file sharing is just fine.

Some say the industry should just adjust to the Internet — either invent software that stops file sharing or give up and change the way they make money — make it from concerts or merchandise sales.

The industry says it's going to keep suing people.

Will they sue me, because my son downloads music?

Sherman said the "industry's first interest is in getting people to stop uploading — stop offering the music."

So you won't come after my son? I asked.

Sherman said, "I can't promise that."

Give me a break.