Disharmonious Times

Napster is the genie the recording industry can't put back in the lamp, and each day it becomes clearer that the rise of this popular music swapping technology marked the dawn of a chaotic period for the music business and consumers alike.

Napster is the genie the recording industry cant put back in the lamp, and each day it becomes clearer that the rise of this popular music swapping technology marked the dawn of a chaotic period for the music business and consumers alike.

For the major record labels, the choices range from grim to lose-lose. Their unified effort to attack the challenge, under the auspices of the Recording Industry Association of America, is beginning to disturb politicians on both sides of the aisle. Some see abuse of the Digital Millennium Copyright Act. Others see monopolistic strong-arming and restraint of trade.

Even worse, the industry now finds itself at war with all its constituents. Its attempts to have the courts shut Napster down have already alienated its youngest and most motivated consumers, who have shown no concern at all for the industrys assertions of copyright violations. And the draconian measures being embraced by the RIAAs Secure Digital Music Initiative (SDMI), an attempt to enforce copyrights electronically, clearly will alienate the majority of music consumers who continue to purchase their music legally and want to be able to play it and make legal copies without a hassle.

SDMI is even alienating the one group the major labels can never afford to anger: the manufacturers of consumer electronics devices.

Whats more, the RIAA is finding it has few allies. Many of its own artists are more inclined to use the ensuing chaos to exact revenge for what they see as years of abuse at the hands of fat, greedy record labels. And the small, independent labels are sitting on the fence, wondering if they might have more to gain from allying themselves with the MP3 renegades than from continuing to subsist on scraps from the major labels banquet table.

There is no question that the labels own the property and have the right to take measures to protect that property from large-scale theft. And there is some reason for hope, because emerging business models suggest that a middle ground may emerge that allows limited third-party distribution online in ways that deter theft.

Thats the simplified version. Each of those issues is mired in complexities that demand a closer look, which is what Interactive Week offers in this special issue on the interactive music industry. From Senior Writer Sara Robinsons cover story — a status report from the front lines — to first-person essays by Hilary Rosen, chief executive of the RIAA, and Glenn Rubenstein, leader of the musical group Headboard, we show the broad spectrum of viewpoints that define and separate the combatants.

When the complexities are studied and absorbed, the one truth that emerges is that the music industry will never be the same. Old rules will be bent or discarded along with old business models. This will happen either through enlightened creativity on the part of the RIAA and the industry giants it represents, or as a result of an industry chastened by lawmakers, courts, artists and consumers. Maybe it will take a little of both. It will happen, because the unleashed force of the Net will not be stemmed.

It wont happen in a single court decision or through enactment of a new copyright law. The struggle were witnessing is one step in the evolution of the entertainment industry as it adapts to an era of cheap, instant distribution. Things are about to become more complicated, thanks to ever-expanding bandwidth for distributing digital entertainment products and convergence technologies such as interactive television, which will not only alter the value of content, but change its very definition.

Interactive Week is committing expanded resources to the coverage of this evolution, not just because its a compelling story, but because the many skirmishes that define the battle will present untold opportunities for creative entrepreneurs for years to come. Look for other special issues throughout the year about entertainment technologies, including interactive TV, streaming media, Hollywood on the Net and the future of electronic entertainment. We think youll find it a fascinating trek through uncharted territory.