NEW YORK -- It may have been about revolution, but it wasn't going to get bloody if Susan Nunziata had anything to say about it.
"I've asked everyone to check their weapons at the door," Nunziata, Billboard magazine's managing editor, said at the outset of Saturday's conference on downloadable music.
Sponsored by the National Academy of Recording Arts & Sciences, the event gathered individual artists, MP3 pioneers, and recording and technology industry insiders to debate the future of the music industry in the digital world.
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They didn't come to blows, but the opposing interests made predictably little progress toward resolving their differences.
One panelist, Thomas Dolby Robertson, a musician and president of the music technology company Beatnik, compared the debates to "a reenactment of a tribunal [during] the French Revolution, starring Michael [Robertson, founder of MP3.com] as Robespierre."
Appropriately wearing a black beret, Dolby Robertson said, "I was wondering whether tens of thousands of Web surfers were ... seeking to guillotine the heads of the labels. No doubt Hilary Rosen [the Recording Industry Association of America's chief executive] would be up there saying, 'They have no CDs? Let them eat DVD.'"
MP3 -- an audio format that lets users compress music files to send over the Net -- is at the center of the debate, since it is also a tool for widespread music piracy.
The Recording Industry Association of America says it isn't against the format, but it is looking to use another with added security through its Secure Digital Music Initiative. And technology companies are competing to be part of the new specification.
New MP3-based businesses have sprung up online as alternatives for musicians, offering them a greater percentage of royalties. They maintain that a system less open or flexible than MP3 won't work. Getting paid for downloaded music was a core issue in the debates.
Panelist Charles Saunders, counsel for the Harry Fox Agency and the National Music Publishers' Association, brandished a document he said was "a copy I carry with me of the United States Constitution.
"[There's] nothing in here that says, 'Music is supposed to be free.' But there is a copyright clause in here that gives rights to people who create and invent things. It is those people who will dictate how ... their work is used by other people, not the other way around," said Saunders, whose comments were greeted with enthusiastic applause.
"There's more to be gotten from the popularity of music on the Net than just the dollar," said Dolby Robertson, who also serves on an advisory board for the RIAA's SDMI. "This is something that record companies are very unaware of."
A heated exchange erupted between MP3.com's Robertson -- who gives away legal MP3 files to promote the CDs of unsigned bands -- and the RIAA's deputy general counsel Steven Marks.
Robertson called the current state of music licensing fees and terms too complex to be transferable to the Net and its new ways of listening to music. For example, webcasters who want permission to create customized radio stations for users, have "to get five [different] licenses. They have to talk to a record label every time they want to hit the skip-this-song button," Robertson said.
Marks told Robertson, "You're trying to dictate the terms on which people license [music].... The license has to be taken from individual copyright holder.... There is no right for every user of music to have instant access on the terms they want it."
The afternoon panel pitted representatives from Diamond Multimedia and RIAA, which sued Diamond in October over its portable Rio MP3 player. The RIAA said the Rio was ruining the marketplace for digital distribution. Diamond countersued in December. "This product was capitalizing on a pirate market, therefore only intended to encourage piracy," said Marks. "Not to say there's not legitimate MP3s, but [late last year] it was a pretty small amount."
Robertson called it "pure speculation by the RIAA. You have to include people [who] are encoding their hundreds of CDs for their own personal use. You can't look at one property [on the Net] and say, 'There's a bunch of people that steal stuff over there. We'll ignore all the people that use it legally.'"
Robertson's remarks also got applause.
"The bottom line is that the Diamond device violates the Audio Home Recording Act," said Marks.
"A judge will decide that," retorted Diamond's Rioport.com vice president David Watkins.
Robertson cited a Best Buy study on what shoppers purchased along with their Rio. "The answer is 4.2 CDs."
"People who make money off creative products who don't want to pay for it always tell their creators how much money they are making by the theft that's taking place," said Saunders.
Meow.
During the morning panel, Robertson, Watkins, and representatives of competing download platforms like Liquid Audio and AT&T's a2b music had to defend their new business models.
Robertson said MP3.com has 10,000 artists on the site posting MP3 files and 125 artists signing up every day. "Very few artists have died from overexposure. It's really about making ... a connection to the fans," learning their e-mail addresses and favorite music.
"Artists may have died from starvation," said Joyce Eastman, Lucent Technologies' vice president of business development. Is MP3.com "really about [selling] T-shirts? MP3 doesn't give you control."
Lucent is working with e.Digital to develop a new handheld device that will play secured music files using Lucent's proprietary audio-compression format. It's a member of SDMI.
"Consumers do care about copyright," said Richard Conlon, vice president of marketing at BMI, a group that helps artists collect royalties and just announced it is taking much of its royalties payment, watermarking, and music-tracking business online. But the technology must "be totally transparent. No one cares when they listen to the radio whether [copyright] clearance was granted."
Moderator Marc Schiller of Electric Artists asked how MP3.com and others would make money after the music industry starts selling music downloads.
When Sarah McLachlan promoted her new album by giving away two live Liquid Audio tracks on Amazon.com last week, it shot to No. 1 on Amazon's bestseller list and became its fastest-rising seller, said Liquid Audio's Dick Wingate, vice president of content. In a brief moment of unity, Robertson called the promotion "a wonderful model."
After the panel, Robertson was questioned by artists. "I've got the No. 1 R&B single on your site," said one. "What do I do with that publicity? In theory I should have access" to the e-mails collected from listeners.
Robertson said his site is working on creating a newsletter so bands can e-mail fans with updates about tours and albums. He cited privacy laws as putting limits on what the site can do with the addresses.
"It is total anarchy at this point," concluded audience member Alan S. Bergman, an attorney who represents clients like the Global Music Network in New York. "Very little [music online] is licensed."
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