Friday, December 19, 2008

Music Industry Changes Tune -- Drops Lawsuit Strategy Against Digital Infringers

In a major strategic "180", the recording industry has dropped its long-standing PR-"unfriendly" and largely unsuccessful strategy of filing lawsuits against people accused of stealing music online.

Instead, the Recording Industry Association of Amercia (RIAA) has finally adopted a pragmatic strategy under which it will work WITH ISPs to identify suspected pirates and notify them that their digital theft has been identified. If the suspected theft does not stop after the person receives such notification, then the ISP will proactively take several steps to curb the illegal activity -- first, by providing slower service; second, by cutting off Internet access completely.

This is no small deal and is long overdue. Since 2003, the RIAA had initiated legal proceedings against 35,000 suspected pirates. But, this litigation strategy -- not surprisingly -- failed to stem the tide of illegal file sharing, which has only continued to escalate over time. The RIAA's strategy also made the music industry the "enemy" in the minds of many consumers, many of whom in this digital age have come to believe that music is free.

Meanwhile, the music industry continues to suffer ... and suffer badly as it looks to new business models. Sales of legitimate music online -- such as through Apple's iTunes store -- have not come close to making up the short-fall of declining CD sales. As a result of this sobering reality, the music industry is much more open to experimenting with diverse business models in this brave new world. And, it is doing so ...