The Music Industry and File Sharing

I was invited to submit a guest column on this subject.  While I do not agree that music file sharing is "ok," I do think it is just plain stupid for the music industry to launch a legal campaign against people who are, ironically enough, their biggest fans, AND the largest purchasers of music.

Originally published in NewsScan on June 27, 203, time has allowed us to see the realities – the death and resurrection of Napster, the birth of iTunes, and bands like RadioHead giving away their music (which they make almost nothing on, the record labels keeping most of the money), in order to drive concert ticket sales, which is hugely lucrative for the band.

Anyway – here is the article and the responses from NewsScan Daily:

NewsScan Daily – A Summary of Technology-Related News
Sponsored by RLG And Written by John Gehl & Suzanne Douglas

June 27, 2003


[This is a guest column by NewsScan subscriber Bob Weiss of]
    The first point to be made is that the music industry leaders are failing to adjust to major fundamental changes in the music distribution model. Years ago, Wal-Mart, Target, Office Max, Home Depot and the like changed the retail distribution model forever by providing more variety and convenience at lower prices. This drove countless small retailers out of business. File sharing has also provided more variety and choice at lower (albeit free) prices. But it doesn’t have to be free, and Apple Computer and the supporting record companies "get it" with iTunes. I predict this service will achieve remarkable successes, if they don’t screw it up by trying to improve it. If only it was available to Wintel owners. (sigh)
    The second point is that what the music consumer is telling the record companies is basically a big GET REAL! Music fans are tired of paying $20 for the 2 songs they want on a 12 song disc, average price $10 each. Again, iTunes, with their $1 per song pricing is getting closer to what the marketplace wants. I think this model will eventually support prices in the twenty five to fifty cent range. The major record labels are used to soaking the public with high priced CDs from derivative bands loaded with songs of no consequence, and the consumer is refusing to continue with this business model now that something better is available.
    The third issue is that the people they are pursuing for file sharing for the most part are the biggest purchasers of legal music CDs. It is always bad policy to punish your best customers with law suits.
    The fourth issue is getting short shrift in all this, and that is the precedent of Fair Use. If I buy the CD, I should be able to burn a copy to save as a back up, and rip it to MP3 so I can play it on my portable player, computer, cell phone or PDA. The music industry appears to be trying to abolish this principle as well.
    But I believe what really is keeping these music-industry guys awake at night is this: the consumer of their product has already abandoned their traditional business model in favor of something less expensive and more convenient. What happens to the record labels if the CREATORS of their product abandon them as well. It is a small thing to set up an e-commerce web site and sell your product directly, and thousands of small computer software producers are doing this already, and evidently with some reasonable success. The bands are beginning to get into direct distribution already on their own web sites, and it is only a matter of time before this will be the way of things. Then the record labels will really be in trouble, much more so than today. Basically they are the "middleman" of this industry, and we have all seen what happens to middleman businesses who stop adding value to BOTH the producers and the consumers they serve.
    If I were in a major band, I would be asking my business manager exactly how much I am getting per song for every song sold through the major label. I bet it is way under a buck, in fact I bet it is under a quarter. If you consider that my album had only two songs anyone really wanted on it, and you adjust your calculations, maybe it gets close to a buck for the good songs, and the other songs were "free." These guys are smart enough to figure out that they can make more money selling their songs directly to fans for a dollar or less. What the music industry needs to become, if it wants to survive, is the hosting platform and marketing arm for this type of distribution. The attempts of music-industry leaders to force people back to the old model will fail, even with the vast sums of cash they have to throw at it. it failed 30 years ago when people started making cassette tapes from the vinyl albums they already owned. (Does anyone remember?) They can no more stop the changing marketplace by force, fear, intimidation, and the courts anymore than the small retailers could stand against Wal-Mart and Target.
    They need to quit wasting their time and resources on lawyers, and start developing a vision of their business that can still include them. If they don’t, others will, and they will be gone.

And Several Responses


    Major league kudos to Bob Weiss for explaining the impending RIAA suicide bombing. He offered the clearest, most prescient argument of reality that I’ve read on the subject to date. RIAA is about to take themselves out of the picture and will only take a handful of their best customers with them!!?? Beautiful, just beautiful. (H.S. "Chip" Vanture, Jr.)


    What an excellent piece! I may be biased because I happen to agree with all the points made, but it was still a well-argued analysis. The only thing I’d add is that while established artists can follow the direct selling model and expect a certain degree of success, up-and-coming artists are unlikely to sell in the same quantities without a serious marketing push. So the dilemma is how can new artists make a name for themselves in more than just a local or regional way, so that the direct selling model provides sufficient income for them to be more than just part-time performers.
    And how can the record industry protect their investment in promoting new artists when they sell music online? Until a solution is found that meets the needs of the record industry, the artists, and the consumers, I don’t think piracy will be drastically reduced, nor will direct selling work for anyone but the established artists. A variation to the pricing for the direct selling model that I’d like to see would work along the lines of all new music releases less than 12 months old would have a price premium, and anything older than 12 months would be charged at half the original price. Also I wouldn’t mind protection to stop me distributing to others, but I would want to be able to put the track on any device I own, and burn to CD as many times as I like. If I bought the track, I should have the right to do whatever I like with it as long as it’s for my own use. (Neil Bradbury)


    One thing that was not mentioned in Mr. Weiss’s article, but is worth mentioning, is the promises made by the record companies when they were trying to convince consumers to switch from vinyl (and cassette) to CD. I remember watching a lunch hour news show many years ago, when they were interviewing an official from a large record company. At the time there was a lot of controversy over the movement to CDs from cassettes and record players. This official told the interviewer that the cost to make cassettes (for example) was far more than to make a CD. He mentioned it cost about $1-$2 (Cdn) to manufacture a cassette, and $0.10 to manufacture a CD. Of course he touted the perennial corporate lie "we will pass these savings on to the consumer" (yeah right!). Before CDs came onto the scene a cassette tape typically cost from $7.99 to $12.99. CD’s can now cost anywhere from $13 or $14 to the $30 range.
    I am completely in agreement with Mr. Weiss on the idea of ‘fair use’ and my annoyance with the fact that companies want to fundamentally "change the rules" or deviate from the precedent that I can make a copy for my own personal use (if I own an original recording). We as consumers should be screaming our heads off at these fat-cats in the record industry. To quote a famous musician "The times… they are a changin’…" Hopefully record executives will eventually "clue in". (Phil Lindsay)


About the Author:

I am a cybersecurity and IT instructor, cybersecurity analyst, pen-tester, trainer, and speaker. I am an owner of the WyzCo Group Inc. In addition to consulting on security products and services, I also conduct security audits, compliance audits, vulnerability assessments and penetration tests. I also teach Cybersecurity Awareness Training classes. I work as an information technology and cybersecurity instructor for several training and certification organizations. I have worked in corporate, military, government, and workforce development training environments I am a frequent speaker at professional conferences such as the Minnesota Bloggers Conference, Secure360 Security Conference in 2016, 2017, 2018, 2019, the (ISC)2 World Congress 2016, and the ISSA International Conference 2017, and many local community organizations, including Chambers of Commerce, SCORE, and several school districts. I have been blogging on cybersecurity since 2006 at

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