Speaking at the National Association of Recording Merchandisers' (NARM) annual convention, Hatch, R-Utah, invited music retailers to participate in political discussions and implored them to contact him with their hopes and concerns.
In many respects, Hatch said, "politics is going to determine whether this business succeeds or fails."
Music distribution has become a heated topic in Washington, leading to unlikely alliances among conservative senators such as Hatch, who's also a songwriter, and grunge artists such as Courtney Love--both of whom criticized crackdowns on Napster.
The Senate Judiciary Committee has heldon the state of the music industry, and legislators have pushed a spate of legislation. Proposals include bills that would make it for online music stores to operate or would give the entertainment industry more over technology development in its attempts to thwart piracy.
During his speech, Hatch, the ranking Republican on the Senate Judiciary Committee, criticized the current music climate, even going so far as to say that the Digital Millennium Copyright Act, which he helped draft, "still has some problems." Entertainment industry representatives have been wielding the law to crack down on those they perceive as a threat to their control over music.
The senator said he would prefer the market to take care of his concerns but that he thinks legislation could be necessary. Though Hatch said he doesn't currently favor compulsory licensing, he might consider it in the future if the big record labels remain unwilling to license their music to smaller companies--a statement that drew applause from the audience of music-store representatives.
Hatch acknowledged that the Web has the potential to cut out the middlemen, including many of those in the audience. "Many see this as a threat to business. It need not be," he said.
He added that market winners will be those who enhance the relationship between music makers and their consumers, not those who try to control music at any cost.
"The Internet can serve the useful function of making that relationship more flexible and more interactive," he said.
Hatch cited several examples of how the Web is changing music distribution, including Journey's decision to prerelease an album to fans and then add more songs based upon their reaction. He also cited sampling and introducing fans to new bands according to their listening habits as practices that will set successful music retailers apart.
Hatch, who likes to tout his songwriting skills, tried to invoke kinship with the audience, telling them tales of his songwriting travails from Utah to Nashville, Tenn., and bragging about how one of his inspirational songs played behind an Oprah segment on the Sept. 11 terrorist attacks. He said musicians ranging from Don Henley to the director of the Boston Pops are visiting his office to plead their case.
Hatch--looking every inch the Beltway insider with his gray suit, starched white shirt and red tie--also prompted some chuckles in the audience when he talked about working closely on policy issues with U2's lead singer, or as he put it, "my friend Bono."