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The threat to "corporate" outlets for art, music, video, and other media is what is at stake here, not the rights of copyright holders.

For decades in the music world the recording industry has controlled the pipeline of what gets on TV, radio, and distributed into the stores. There are thousands of talented indie artists who are every bit as good as anything you'd hear on a major label, but for whatever reason, they remain unsigned. The internet brought a new, uncontrolled means of distribution to independent musicians. You see, for most solo acts and bands, selling a few thousand CDs a year is enough to make a tidy profit without giving up the control of your music, your name, and your life.

You see, without the millions of promotional dollars spent to create the buzz on the street about a new album or group, the playing field is pretty leveled out by talent. Michael Jackson only sold about 50,000 copies of one album because Sony didn't promote it. His name and his talent only placed his sales where a good indie band could reach. The record companies operate a sordid consignment business. Here's how it works.

1. Artist gets signed receives and advance (if they're lucky.) The deal gives the record company complete rights to all the songs, the album and the name of the artist or band in most cases. (Remember Prince, he became "The Artist" because the record company he was having a legal battle with owned his name.) Let's say the band gets $200.000. Sounds like a lot, but split 5 ways, each band member gets $50,000. A lot of professional people make that much in a year.

2. Record company releases the artist's album after nearly a year after it was recorded. The band wants to go on tour to promote the album. They receive a recoupable advance on royalties for the video, tour support, promotions, etc.

3. Albums get into the stores to coincide with tour schedule. Each step of the distribution chain receives stock free for 90 days consignment. This means that from the distributor to the rack jobber to the retailer, that's 9 months to pay the record company-who holds it for another 6 months or so before having to pay out.

4. Nearly two years elapse before the artist sees any royalties (so that $50,000 per guy advance had to come down to about $25,000 a year). Once the record company deducts tour support, the video, promotion, etc. from the million-seller album (if they're lucky), the band ends up OWING the record company about $2 million!

When it comes time for the second album, the record company tells you what to wear, what to say, how to say it, they control the songs, the tour, and everything because you are now an indentured servant of the record company. You might be able to sue them and win, but you were dumb and hopeful and trusting and their lawyers were smart and slick.

The problem is, the large record labels want to control the pipeline, not just preserve their copyrights. MP3.com is a perfect example of that. When I discovered MP3.com a few years back, I signed up, and instantly gained a means to feature my music to hundreds of listeners each day. I could control if they could download or only stream the audio. I could use MP3's features to create professional-quality CDs without having to make them by the thousands and sell them at the price of my choosing.

MP3.com actually paid the artists for the amount of airplay they generated. For certain genres of music, that's fantastic, because most traditional folk, jazz, New Age, and other niche genres of music are usually featured on public radio stations. ASCAP and BMI don't typically include airplay on public radio in their surveys, so artists don't make much in the way of performance royalties unless they're in mainstream genres of music.

When I first started out, I made a few hundred bucks a month featuring my music. MP3.com was not like Napster. They didn't do file sharing. They did allow folks to upload copyrighted music for their own use. That meant that I could take my favorite CDs, upload them, and through my own account, listen to them at work or anywhere I'd happen to have an internet connection. There were no copyrights violated in this, in my opinion. The best part was the huge opportunity it provided indie artists.

Unfortunately, the $$$ signs drew attention from the corporate music world and their lawyers caught the scent and they sued MP3.com. MP3.com lost a $55 million settlement, which included turning over a controlling interest to their company to several mainstream record companies. Since that time, MP3.com has eliminated paying indie artists for airplay, started charging artists for services that were previously free (because the CONTENT we provide brings THEM income). My airplay numbers are higher than ever, but the money disappears into their pockets, not mine.

The whole "copyright infringement" business is an attempt to take a now archaic law, written back in Thomas Edison's day, and use it to manipulate emergent technology and control the MEANS OF DISTRIBUTION. Instead of creating competitive products that customers would WANT to pay for, they took the socialist route and tried to legislate competition out of business. It's working.

The libertarian approach to the problem would be for producers to create a quality product at a reasonable price that people would not object to buying. Remember video movies when they first came out? It cost nearly a hundred bucks to buy one. Piracy was out of control. Then the prices dropped, and people didn't buy pirate copies, because they wanted the real thing.

The going $17.00 for a CD is piracy. It is a totally unreal markup. If people really knew what it costs to manufacture CDs, they'd have a cow over the price. The old myth was that you were paying for increased quality over LPs and cassettes. The real truth is that CDs cost considerably less to manufacture than LPs or cassettes. If the recording industry wants to stop piracy, they need to drop the prices and compete honestly in an open market.

Sorry this was long, but this is a real hot button for me. I'm a guitar teacher and indie musician, but I always kept my day job. I've always been able to make money with music, but the enemy is the industry itself. The corrupt RIAA lobby corrupt Congressmen and get copyright law written to their benefit. They are not about protecting artists--it's about protecting their profits at the expense of the artists.

Greg West
www.mp3.com/gregwest

The going $17.00 for a CD is piracy. It is a totally unreal markup. If people really knew what it costs to manufacture CDs, they'd have a cow over the price. The old myth was that you were paying for increased quality over LPs and cassettes. The real truth is that CDs cost considerably less to manufacture than LPs or cassettes. If the recording industry wants to stop piracy, they need to drop the prices and compete honestly in an open market.

Well I think Joe Six-pack is finally catching on. Especially when he can get a stack of 100 blank CDs at Wal-Mart for $20 (twenty cents a CD). And that's retail. I'm sure the factories that crank out CDs by the millions pay far less per CD - probably a couple of pennies per a piece. Throw in the jewel case, the little booklet that goes inside and those annoying stickers and shrinkwrap that you need an Exacto Knife to get off and the total cost of the whole package might approach 20 cents.

And we thought Bill Gates had the monopoly on price-gouging!

I have always stated that if the recording industry was to lower the price-point of their CDs to $4.99 or less - still room for a huge profit margin - they would sell 10x as many CDs. At that price-point, a CD will become an impulse item. People will buy them on their lunch hour and not think twice about it. Yes, people will still download MP3s but if they download something they like, they will likely go out and buy it. For them, MP3s will be a convenient way to sample music. Only broke kids will bother with making homemade CDs out of MP3s. Everybody else will want a clean copy with all the extras like liner notes, artwork, etc. It's why people buy DVDs instead of taping off HBO.

Speaking of DVDs, you might remember when VCR tapes of movies costed $90 or more. They didn't sell too many except to video rental stores. Millions of people had libraries of movies that they taped off the TV. But when the movie industry dropped the pricepoint of these pre-recorded VCR tapes (and later DVDs) to where people would buy them, home taping came to a virtual halt. People don't bother taping movies off the TV for the same reason most people don't make their own butter or brew their own beer. It's much easier and cheaper to just buy it off the shelf at the store. I'm sure that when the supermarkets start charging $17 for a stick of butter, a lot more people will start making their own.

BTW, very good post.