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Tech Industry

Digital music: End the holy war

EMusic CEO Gene Hoffman says both sides in the Napster dispute need to smell the coffee and seek out the middle ground. Will they listen?

    Mr. Hoffman is president and chief executive of EMusic.
    I've often heard Napster users talk about the importance of a concept we all should have learned in kindergarten: sharing.

    I've also heard the major record labels counter with a Mom phrase of their own: respect (as in copyright laws).

    Here's a new word for both of them, straight from "Sesame Street": compromise.

    Last May I wrote an opinion piece suggesting that music fans and the record industry should try to find some middle ground in their debate over digital music. Almost a year later, things are more polarized than ever.

    I'm starting to worry that this debate has become a holy war, with neither side wanting to give up an inch of their extreme position--to the ultimate benefit of no one.

    If you have followed the issue in magazines and chat boards, you know the arguments by heart. Pro-Napster fans say that digital music should be freely shared, while the big music companies say it should be encrypted, so that it is impossible to share.

    So who is right? I think they're both wrong.

    Of course, I can appreciate both sides' opinions--to a point.

    Music fans want cheap and easy access to their music. They're tired of spending $17 for an entire CD when they only want one or two songs. They like the flexibility of the MP3 format because it allows them to download and listen to songs immediately. They want the option to burn music to CDs or portable MP3 hardware devices. They believe that digital music should be cheaper than buying full CDs because there is no longer any physical packaging.

    I think that's fair.

    On the other hand, the music industry wants to be compensated for the investment and work that goes into developing bands and producing albums. For the most part, consumers don't see the huge underlying cost of A&R, marketing, promotion, retail and royalty payments.

    They don't understand that for every blockbuster hit act on a label's roster, there are dozens that don't turn a profit. Because the fans watch "VH1: Behind the Music," they believe that the entire record industry is corrupt and greedy. Some artists are rightly concerned that when tools like Napster do eventually eat into their CD sales, they may not be able to support their families and be full-time musicians.

    Both of these arguments sound reasonable and not mutually exclusive. So what's the problem?

    Finding middle ground
    The problem is that neither side trusts the other. "Trust." Another kindergarten word.

    The bottom line is that two relatively simple things need to happen to end this war. A concession needs to be made from each side:

    • The five major record labels need to start selling their music inexpensively as MP3s. Frankly, if they had done so a year ago, you would have probably never heard of Napster--much less used it. The sooner they give up on these so-called secure solutions, the sooner they will be able to recognize the many efficiencies of digital distribution.

    • Techies should stop trying to find ways to avoid having to pay for the music they enjoy. Just because it's technically feasible, it doesn't make it right. If you are a true fan, you should want to support your favorite musicians.

    I'm sure that some of you will call these proposals naive and unrealistic. I would suggest that they are infinitely more practical and compelling than hoping that fans will pay for locked-up music files or expecting musicians to produce music for free.