A Generation Lost: How the Music Industry Lost 30 Years or So of Income

A research study released today in Great Britain shows that, despite knowing that downloading music is illegal, young people 14-24 continue to download music by whatever technological means available (see original story below). These studies seem to pop up monthly, while the lobbyists and paid-for politicians on either side of the Atlantic try to legislatively put their fingers in the dike. The content industries need to realize that they have complacently fallen so far behind technologically that they simply cannot, and will not, recover their old business model for at least a generation.

For decades, consumers happily rushed to stores to buy the latest releases from their favorite bands. From Elvis to Bill Haley, Buddy Holly to the Rolling Stones to Nirvana to Blink-182, people wanted their tunes and they were willing to pay for them. The portable record player gave way to the car 8-track player. Enter the Walkman, and then the Discman. Then, in the late 1990's some inventive and intelligent folks outside the music industry realized a vast improvement in the solution to the music portability puzzle that had so clearly intrigued people over the previous generations. Along came MPEG Layer 3 technology - you know it as MP3 - and what was a stroll became a sprint en masse.

First players like the Rio took slow steps into market acceptance. Then the Yepp player did the same. More tech savvy citizens got into the mix and along came Napster. The sprint was now a rushing stream. Up went Internet bandwidth, along came Kazaa and the iPod...and then the stream became a torrent - Bit Torrent to be exact. Over the course of less than a decade, the content industries stood by, heads in the sand while technology created by individuals and corporations alike realized all of the ease-of-distribution dreams that the content industries had always dreamed of. Every person in the world could quickly receive a copy of what they had long been willing to pay for. They could take that copy with them anywhere they went - and they wanted to do so. And the content industries stood idly by, deer in headlights, heads in the clouds...the euphemisms go on and on.

Had the industry recognized the changing tide, they would have been able to harness the wave and ride it into an explosion of success and far greater distribution. But instead they turned their backs one year, fought with all their might the next, and shrugged their shoulders the next. What was left? An entire generation who was raised on free, easily distributed, easily duplicated music and movies. Music and movies that these consumers still want.

The content industries will not recover these consumers as paying customers. It simply won't happen. Well, unless they can come up with a technological methodology to put the genie back in the bottle. Suing customers has proven costly and ineffective. Occasional talk of "educational endeavors" to apprise young people of the copyright laws have gone nowhere. And legislation will only breed more cynicism, cost more money, and lead right back to suing or pushing for prosecution of customers.

The only answer is to use all of that money and might to develop new technologies that once again make the industries' products ones that the customer must buy if he or she wants to obtain it. Until then, customers - teens and twenty-somethings - who have grown up with free music and movies at their fingertips will have no reason to change their thinking. Try telling people that we're now going to drive on the left side of the road or that they will have to use coin-operated telephones at home. Simply put, it just doesn't compute. And for a whole generation who got loose from the gates while the industry snoozed, music will always be free and the old way simply won't make sense.

The content industries can regain their paying market. It just isn't going to happen in this generation unless they start being as smart as those who have slayed their previous model and develop another model that proves that paying for the music consumers love is a necessity, not an option.

Link: Original Times Online Story: Young people ignoring attempts to combat illegal music downloading

Network Traffic Shaping a Threat to DMCA Safe Harbor for Network Providers

My reading of the article from University of Georgia student newspaper RedAndBlack.com, cited in the entry below discussing "Ruckus", left me with the uneasy thought that universities and employers, in trying to subtly dissuade downloading on their networks are choosing methods that may strip them of the protections from secondary liability under the Digital Millennium Copyright Act (17 USC § 512) for copyright infringement by network users.

The above cited article quotes University of Georgia communications director Bert DeSimone as saying that his network is largely unaffected by peer-to-peer file sharing because "[t]he system rates activities like peer-to-peer file sharing and limits it in favor of other activities...More bandwidth is given to the research mission of the University."

The practice described by Mr. DeSimone is known as network traffic shaping. Traffic Shaping is a practice by which network administrators attempt to give priority to digital transmissions of one type of information over another. This method, while effective in assigning greater bandwidth to desired network traffic and less bandwidth to undesirable traffic, is arguably an abrogation of the DMCA online service provider safe harbor when read in light of the Supreme Court's holding in MGM v. Grokster 125 S.Ct. 2764, 2767 (2005).

In order to shape network traffic, the network is configured to read the identifiers of data packets traveling over that network and read basic information from those identifiers that specifies what type of data is being sent. Because this gives the network provider (in this case the University) knowledge of the transmission of potentially infringing material over the network, yet allows that traffic to proceed and funnels the traffic into what is essentially the "slow lane" of the network highway, the provider may be charged with participating in the selection of content and/or ceasing to act as a conduit delivering content through automatic processes.

Either of the conclusions above places the university-provider squarely into the shoes of Grokster and Streamcast, the liable defendants in the MGM case. The Supreme Court wrote that there was "no evidence that either company made an effort to filter copyrighted material from users’ downloads or otherwise impede the sharing of copyrighted files" on the Grokster and Streamcast systems and was persuaded by the fact that "[the defendants did not] attempt to develop filtering tools or other mechanisms to diminish the infringing activity using their [software]."

When combined with the Ninth Circuit's language in Napster that "[i]f a computer system operator learns of specific infringing material available on his system and fails to purge such material from the system, the operator knows of and contributes to direct infringement," the network provider who shapes traffic and knowingly allows downloading to continue may be secondarily liable for copyright infringement accomplished over the network.