Digital Music Watch

Is it just me, or does it seem like we are experiencing news déjà vu a lot lately? From Bush at war in the Gulf to Princess Di and Mother Theresa back in the headlines, I’m starting to suspect we’ve slipped through a time warp. The controversy over music in the digital world is also making headlines, though in truth it never left them. Recent weeks have produced several items worthy of note.

Hate the sin not the sinner…

After criticism and a fair share of heckling in the press for suing children and the elderly in an effort to curb illegal downloading, the RIAA is still aggressively pursuing music pirates in and out of court. Their processes of obtaining a subpoena that requires ISPs to identify someone believed to have used the ISP’s services while committing copyright infringement over the Internet has raised privacy protection concerns.

However, RIAA President Cary Sherman is optimistic, commenting that “the music community’s efforts have triggered a national conversation—especially between parents and kids—about what’s legal and illegal when it comes to music on the Internet. In the end it will be decided not in the courtrooms, but at kitchen tables across the country. We are heartened by the response we have seen so far.”

Agree or not, file sharing without the copyright owner’s consent is illegal, but somehow like jaywalking, to many it doesn’t seem really illegal. The Clean Slate Program offers amnesty to peer-to-peer network users who voluntarily identify themselves and pledge to stop illegally sharing music on the Internet. Users must file a form before they are investigated or involved in litigation.

Also, in response to criticism over their tactics, the RIAA now sends letters warning people they are about to be sued and gives them 10 days to make contact and discuss a settlement to avoid formal litigation. Under copyright law, the defendants could face damages that range from $750 to $150,000 for each illegal song. Most settlements, however, have been for less than $5,000.

Whatever headway the strategy is making for the economic good of the artists, it’s definitely alienating segments of the music buying public who are vocally protesting the RIAA’s actions on message boards and in the national press—this from a public already disenchanted with an industry they have long felt overcharges for a product of sometimes questionable quality. Makes you wonder where the high-priced marketing spin is on this one.

Apple to the rescue?

A new hope is perhaps to be found in the form of Apple Computer’s iTunes Music Store. Unlike the other subscription services that have tried (and if not failed then not exactly succeeded) to corner the online market over the last year, iTunes has a simple strategy that’s working dramatically in the marketplace—pay 99¢ per song and it’s yours to do with as you (legally) like. Apple reportedly sold 13 million songs in six months—70 percent of all online music sales—even though the service worked only on Macs. The recent launch of a Windows version is already pushing those numbers higher, though skeptics say it still won’t curb illegal file sharing.

Just the facts…

A new consumer report examining the status of online music has been released by Jupiter Research. According to analysts there, music aficionados, who represent 14 percent of the online music audience, spend on average over $30 a month on music and tend to be male, under age 35, and comfortable acquiring and consuming music on the PC. Jupiter suggests that “retailers of music downloads and subscription-based online music products should spend their marketing dollars” here.

CDs remain the dominant revenue generator online, though 23 percent of respondents said they have decreased their spending. On average, both CD purists (11% of the audience) and music aficionados purchase two to three CDs per month. Unsurprisingly, the affluent CD purists (one-quarter of them earn over $100,000 per year) “show little interest in MP3s or file sharing,” but are typically older and “devoted music enthusiasts.”