Money for No One, and your Discs for Free
MP3 is Quietly Wreaking Havoc on Music Row
BY REBEKAH GLEAVES AND SNACKBAR JENKINS
Forget Y2K. What Music City needs to lose sleep over is MP3, a digital
audio compression technology that allows music to be posted on the
Internet and downloaded at near-CD quality – for free. Is the gravity of
this sinking in? All the music you want for free. Years of fat royalty
checks might have left some Nashville songwriters too content to pen sad
songs, but that hasn’t stopped MP3 from lightening the loads in their
wallets. If only the songwriters knew.
While Al Gore was busy "inventing" the Internet, actual techies were
forcing the medium into uncharted territory. Most likely the veep did not
consider the effects of on-line pirating when he made his claims, but,
recognized or not, the Internet is full of hackers, each waiting to cash
in at Nashville's expense.
Huh?
What this means is that any 15-year-old with a Dave Matthews Band CD, a
PC and a CD burner can perpetrate Internet piracy. In fact, the worst
offenders aren't even old enough to vote.
After "sex," "MP3" is the most requested term on the Internet, and pop-up
ads on the most popular MP3 site offer links for those looking for
information on "depression," "acne," and, of course, "barely 18 babes"
and "teenage orgies." Gore presumably did not consider that the
information superhighway would wind through a pre-pubescent red-light
district. But that’s another story.
For those of you keeping score at home, MP3 (short for MPEG Layer3) is an
audio compression algorithm that allows computer users to download free
CD-quality songs. It was developed by the Moving Picture Coding Experts
Group (MPEG) between 1988 and 1992, so it’s been around for a while. You
do not have to buy it or attach complicated devices to your computer. It
is something anyone can download at no charge.
One year ago, 40 minutes of music required 400 megs of storage. Now, with
MP3, 40 minutes of music can be compressed into 40 megs, depending on the
translation. At that point, you burn a CD, clear the memory and start
again. Some users with CD burners can fit up to 20 albums’ worth of
material on one recordable disc.
Taking Candy From a Baby
Picture royalties as the world's largest candy machine. There's a
never-ending line waiting to drop a quarter in the machine. But the
people in charge took the day off, just in time for a couple of kids to
knock the machine over, filling the streets with candy. Anyone with a
sweet tooth can fill her arms with free goodies. Do you think she’ll
leave a quarter when she's done?
Many of Music Row's inhabitants hope so, but most remain wary. Even Tom
Petty gambled on MP3 recently when he posted his new single in the
format. Two days and 150,000 downloads later, Petty's single was yanked
off the ’Net.
"There's a lot of opportunity with [MP3]," says Mindy White, a marketing
consultant with Thunder Call. "It opens up doors for non-traditional
promoting and music marketing. But, no matter how badly we want to
believe the opposite, the Internet is largely unregulated."
This is something many industry types want to change. After significant
candy gathering, the RIAA (Recording Industry Association of America) and
some of the major labels gathered to announce the Secure Digital Music
Initiative (SDMI). Their goal was to protect copyrighted material in all
existing and emerging audio formats and through all delivery channels.
One such effort of SDMI is the incorporation of digital watermarking to
prevent second-generation copying of material.
"We are looking for ways to watermark music so we can keep track of it to
insure that royalties are paid," says Page Kelly, senior director of
business and legal affairs for Arista Nashville. "We have not authorized
the release of tracks by any of our artists in the MP3 format to any
site. The majority of the stuff out there is bootleg, and the artists and
the recording companies are not making any money off of it. I don't know
if people downloading it will take the place of buying the album. It's
still too soon to tell."
But is it? An annual survey commissioned by the RIAA reports that music
sales in the ages 15-24 demographic, a mainstay in the market, are down
about 4 percent since 1996. The report, issued just two weeks ago,
speculates that MP3 piracy could be behind the decline.
Blame It On Rio
Until last year, no one in the industry really worried about MP3. Not
until Diamond Multimedia Systems developed a device about the size of a
deck of cards (2.4 ounces) called the "Diamond Rio PMP 300." The Rio is a
shockproof, walkman-like musical godsend that everyone who reads this
will probably rush out to buy. It holds about one hour of music and
retails for under $200. The unit plugs into a port on the computer, which
then transfers MP3 files into the unit's memory, thus making it portable.
There are no moving parts to break and no CDs to skip. The Rio is
virtually shockproof and will probably begin making appearances at your
neighborhood YMCA. Now, even those who are technologically impaired can
steal music with ease, a fact that has alert Music Rowsians getting
nervous.
The RIAA filed a lawsuit against Diamond in early October, alleging that
the Rio was a device for pirating music. The association then used the
1992 Audio Home Recording Act to obtain a restraining order against Rio's
release. The order was overturned just 10 days later.
In December, Diamond countersued the RIAA for antitrust violations and
unfair business practices and claimed that the Rio was protected by the
First and Fifth Amendments.
"Diamond's counterclaims allege that the lawsuit against Diamond is a
product of a conspiracy between RIAA and others to restrain trade and
restrict competition among manufacturers in portable MP3 devices and has,
in fact, damaged Diamond's profitability and credibility in a new market
area," says a statement released by Andrew Bridges, counsel for Diamond.
Some groups, like the Nashville Songwriters Association International
(NSAI), have decided to embrace change. NSAI decided not to be a party in
the lawsuit filed last year by RIAA, choosing to work with Diamond
instead. Barton Herbison, executive director of NSAI, said that some
songwriters even use MP3 to co-write tunes with West Coast musicians.
"Diamond has agreed in principle to put an elaborate key into files that
will lock the file to non-authorized users," says Herbison. "If anyone
does crack that key, their name and e-mail will be recorded and legally
we can prosecute. We have to look for legislative means, but we also have
to look to the marketplace. We want to be a part of change, but we want
to build some protections in, too."
What the Law Will Allow
While Music Row executives seem to be spinning their wheels and pulling
out their hair, MP3 technology continues to roar on. At least three
companies competing with Diamond are considering using IBM's new
microdrive, a matchbook-sized drive that can store up to six hours of
music, as a component in portable MP3 devices.
Realizing that the technology is moving too fast for Nashville's largely
antiquated music community to keep up, all heads seem to be turning to
Congress. Unfortunately, Congress is looking the other way. The governing
body elected not to discuss the issue this term, but says it may in the
next term. That's just enough time for most all of Nashville's musical
community to get ripped off.
Alarmingly, even after In Review explained what MP3 was to the press
secretaries for Senators Bill Frist and Fred Thompson, neither would
comment on the issue. Gov. Don Sundquist's office fared only slightly
better. After introducing the governor's press secretary to MP3, she
issued this blandly obvious statement:
"The governor would oppose anything which negatively affects the
ownership of artist's copyrighted material."
Duh.
Without any real legislative action, it seems that those working in the
music industry must watch their own backs.
"It's a double-edged sword," says Craig Weissman, a songwriter with Almo
Irving Music Publishing. "It lets the music get out there, but it lets it
get really out there. I'm not ready to give it up, but I hope we can
figure out a way to benefit from the technology."
The Bright Side
Others are cautiously embracing the technology. Big words like
"disintermediation," a term which means "cutting out the middleman,"
appear often. Unsigned artists realize the potential MP3 holds for them.
In theory, successfully utilizing MP3 technology could eliminate any need
for a record company.
"For us, it's an awesome way to make a lot of money in record sales
without having to have a record contract," says Steve Winters, a band
member in Hangman's Daughter. "It's the perfect way for smaller artists
to get their music out there. I'm sure I'll convert all of the songs on
our demo to an MP3 format. But I won't convert entire songs. If people
want the whole song, they can pull out their cyber-wallets and buy it."
So maybe all of Music City should not be scared. For the underdogs, the
unrecognized and unappreciated makers of non-Nashville music, it might
just be the perfect way of thumbing their noses at 16th Avenue. But the
Goliaths – the industry guys – should be afraid. Very afraid.
