LOS ANGELES -- Three weeks ago, the geeks and hackers of the online music world met with a select group of industry representatives to discuss the future of music on the Internet.
Thursday night in Hollywood, the tables were turned as the suits outnumbered the geeks at a panel called "Downloadable Music: Revolution or Revitalization?" held by the Los Angeles chapter of the Recording Academy.
From the outset it was clear that this was not your typical Internet panel: Perfume wafted heavily through the room and there wasn't a software T-shirt in sight. A huge golden gramophone sat at the side of the stage, lest anyone forget that this group selects the Grammy nominees.
The night confirmed the mainstream recording industry's fears about the Internet's ability to undermine its business. Speakers continually raised concerns about the intellectual property issue, usually in a surprised tone of voice, as if stunned by music fans' desire to copy and share music over the Net.
"The stakes are incredibly high," said Michael Greene, president and CEO of the Academy. "When it comes to the Internet, our traditional concerns are multiplied by the thousands."
Not all were doomsayers, of course. Included on the panel were representatives of Liquid Audio, the Internet Underground Musical Archives (IUMA), and other new-media companies, who make it their business to distribute music on the Web.
Aside from a few promotional schemes offered by Liquid Audio and competitor Global Music Outlet, the consensus was that anyone waiting for big-ticket acts to distribute their music on the Net -- particularly new music -- will continue to wait. Most panelists agreed that at the moment, it's just too difficult to negotiate an adequate contract that covers single downloadable songs, available worldwide.
Albhy Galuten, vice president of interactive programming at Universal Music Group and a musician and producer in his own right, said that updating the way royalties are handled is a priority for his company, but that it's an extremely tedious process.
Galuten went on to say that he was astonished by the lack of respect for intellectual property displayed by today's youth. He said his own children returned from college with tales of a shared network of music distributed between friends on the school's computers.
According to Galuten, even the CD format is too much of a risk for piracy because of the ease of burning CDs, but that work was underway to release a new format that would eventually replace the existing one.
Ultimately, Galuten said, the important issue is educating consumers to stop expecting a free ride. "There's this idea that art wants to be free," Galuten said. "If consumers are committed to stealing and not making money off of it, [piracy] is not very stoppable."
Other panelists concurred.
"I think one of the reasons that kids steal stuff is because there's too much that's free [on the Web]," said Mike Farrace, vice president of Tower Records. "It's time that we show people that if you want the free goodies, you're going to have to pay." He then suggested ways of selling additional promotional singles on the Net to consumers who had already purchased CDs.
Even Scott Burnett, vice president of Liquid Audio, was singing a verse of the same song. "We want the grab bag of free songs to go away," he said. (He would replace it with a grab bag of industry-approved and legitimately bought songs.)
Lacking a clear direction for big-name stars, many of the panelists offered advice for unsigned artists, ready to take advantage of the Net. The guidance was fairly standard, with most panelists recommending IUMA as a good starting point for new bands. As Ted Cohen, former Warner Brothers executive-turned-multimedia consultant, told the audience, "The people willing to take chances now are the people with the most to gain."
Addressing piracy, Cohen contended that if it's made easy for consumers to purchase something legally and conveniently, they usually will.
When the floor was opened to questions, Michael Robertson, publisher of MP3.com, stepped up and offered an olive branch. Robertson compared the music industry's worries to those of the software industry 15 years ago, before it learned to route around piracy. Robertson encouraged the business to change its tune: Rather than being gloomy and protective, it should embrace new technology.
