The Recording Industry is $222,000 Richer - What's Next?

The Recording Industry of America successfully sued Jannie Thomas, a file sharer who is now facing a $222,000 fine for her downloading and sharing activity. But is this the way to grow the music business? In the music industry's eyes they have made her a symbol of what will happen to other file sharers who download and pass-on music that they haven't paid for. But the tactic seems incredibly short-sighted.

The reality is that music has been completely digitized and is now traded, swapped, and downloaded freely across the Internet. The genie is out of the bottle and there doesn't seem to be any way to stop it or put it back. Lawsuits just show others how to steal files without getting caught. Apparantly Ms. Thomas used the same name for her file sharing account and her email accounts,etc. making it easy to validate her identity. Anonymizer software already exists to protect someone's identity and no doubt new products will surface to prevent file sharers from getting caught.

But suing doesn't address the fundamental problem. Technology which once helped make artists and recording companies fabulously wealthy have now turned against them. For the last 50 years technology allowed music to be cheapy copies and distributed. Now, technology allows their work to be distributed at an even cheaper costs. The benefit: wider exposure. The downside: the loss of a revenue source. Smart artists and musicians will realize that this dynamic is irreversible and will adapt. Suing is not the right approach and will not work in the long-run.

Here's what I would do if I were the music industry:

• Stop denying the invevitable. Recognize that fat profits from the purchase of music is going, going...soon to be gone.
• Begin to develop alternative revenue streams - cellphone ringtones, online commercials, music for user generated videos, etc.
• Recognize that music is changing. Big name acts can make lots of money on touring and merchandise. Help smaller acts adjust to this new reality and provide training and guidance.
• Recognize that artists are not in jeapordy but recording companies are.