A panel discussion at a conference held by the New York chapter of the Recording Academy explored whether copyright laws and regulations must be revised or scrapped to meet the needs of the burgeoning Internet music industry as the use of MP3 technology becomes increasingly popular.
MP3 is an audio compression format that allows music to be easily downloaded onto a PC or portable MP3 device. Many artists and Web operators insist that MP3's compression technology helps the artists reach their fans without the need for record labels acting as middlemen. Recording artists Tom Petty, David Bowie, and the Beastie Boys already have released tracks on the Net in the MP3 format. Rap group Public Enemy plans to release its next CD on the Internet.
MP3 is considered by some to be the de facto standard for music downloading online, but the recording industry has expressed concern about MP3 because it allows for the free, unauthorized distribution of copyright-protected material. Big players in technology such as IBM and Sony are pitching download technologies of their own that offer copyright protection, joining AT&T Labs' a2b Music arm and Liquid Audio. All are looking to become the standard for music downloads online.
"There is enormous complexity in music licensing today," said Michael Robertson, chief executive of MP3.com, a download and community hub site. He noted that the current licensing structure has worked over the past 50 years, with different organizations building up around managing the rights of the artists.
"The copyright and licensing system is sometimes territorial-based and depends on how and where the music will be played," said Robertson, adding that the rules need to be reviewed because they do not apply to the Internet.
"The challenge everyone faces is how to make a new system that is not onerous to people who want to use music in new ways while at the same time making sure that artists get compensated," said Robertson.
Robertson drew the line in the sand, and other panelists jumped at the opportunity to attack.
"With all due respect, you have been in the business for 18 months and you have learned to make a lot of money in those 18 months," said Charles Sanders, counsel to the Harry Fox Agency, the National Music Publishers' Association licensing subsidiary. "I hope we are not using [a revamping of the system] as a code word for 'diminishing royalty.'"
Sanders said that most people have a false impression that Internet music sites are run by enthusiasts and college students as hobbies. "The concern cannot be that some college student be given the right to rip off songwriters and recording artists because that is a God-given right of college students."
Marc Morgenstern, who is a senior vice president of strategic planning and new media for ASCAP, a membership organization that collects royalties and fees on the behalf of publishers, artists, and songwriters, also said that Robertson's argument was deceptive.
"[The system] is not an onerous thing," said Morgenstern, noting that the ASCAP Web site has interactive calculators and forms to quickly get licenses.
Still, even some artists believe that the system can be improved so that they can continue receiving royalties and have the option to explore new distribution channels.
"Just because a system is not onerous and just because of the good intentions of ASCAP to protect [artists and songwriters] doesn't mean your system is a good system," said Thomas Dolby, a recording artist on the panel, a member of ASCAP, and cofounder of music technology firm Beatnik. "To try to put a square peg into a round hole and to say that the same system will apply to the Net is just unreasonable."
Dolby also noted that piracy always has existed, ever since the reel-to-reel recorder became available.
"To me the issue is not piracy [but] one of control," he said.
In December, the Recording Industry Association of America announced the formation of the Secure Digital Music Initiative (SDMI), a consortium of record company and technology executives that is looking to develop specifications for secure music downloading that ostensibly could be part of any download technology.
"[SDMI] is a bold and courageous stroke by the music industry," said Dolby. "But it can also be viewed as the only thing that is going to save their [interests] from people like [MP3.com's Robertson]."
SDMI is supported by many of the major players in the recording industry, including Bertelsmann's BMG Entertainment, EMI Recorded Music, Sony Music Entertainment, Seagram's Universal Music Group, and Time Warner's Warner Bros. and Warner Music Group.
Several major and independent record labels, as well as consumer electronics and technology firms, support the initiative, including America Online, AT&T, IBM, Intel, Lucent, Sony, and Toshiba.
The RIAA consortium has said that it is trying to balance technological advances while addressing the issue of artistic control and copyright law.
"SDMI is designed to provide the framework so that whatever the rules of transaction between the buyer and seller are, they can be respected by" devices and any other channels of delivering music, said Steven Marks, vice president and deputy general counsel for the RIAA, who also was a panelist.
Critics, however, note that representatives of the MP3 community and artists are not included in the consortium.
"I don't think anyone from the MP3 community is saying?that people should not be compensated for their work,'" said Robertson. "The question is how we do this in the digital age."