nagging headache that is costing his organization a lot of money. As president of the Canadian Recording Industry Association, Robertson tries to curb the illegal distribution of music by Internet pirates.
The task is maddeningly difficult because digitally encoded music on compact discs is easily transformed into so-called MP3 audio files. The pirates then post the copied music on Web pages for visitors to retrieve free of charge. Every week, Robertson’s legal team sends between 15 and 20 cease-and-desist letters to Internet service providers who host such pages.
While that usually leads to the page being closed down, pirates often simply create another under a different name. “Our anti-piracy budget is in excess of a million dollars a year,” says Robertson.
“A good part of it is going towards trying to control MP3.”
That may not be easy, or even possible, given MP3’s massive worldwide appeal. According to the Web page searchterms.com, MP3 is the No. 1 term used in Internet searches—surpassing all other terms, including sex. But under international copyright law, it is illegal to distribute duplicated music without the copyright holder’s authorization. Each year, says Robertson, the
music industry loses about $1.5 billion in revenue worldwide to MP3based ripoffs. “It’s like a record store sitting with its doors open, no staff, and everybody helping themselves.” Not all uses of MP3 technology are illegal. It is entirely legal for musicians, often unknown or sometimes even famous, to bypass record labels and promote themselves by posting MP3 copies of their songs on the Web. The most popular site for this is MP3.com, a Web page
Record companies are struggling with Internet pirates who copy songs and then give them away
where bands make one of their songs available for free downloading. Listeners can then buy the artist’s other songs if they like what they hear. Proceeds are split with MP3.com.
Mainstream performers have begun to embrace the MP3 medium. In a deal announced in April, pop diva Alanis Morissette and her Maverick label gave the format new legitimacy by agreeing to advertise Morissette’s summer concert tour on MP3.com. In a promotional technique called viral marketing, Web site visitors are invited to listen to a Morissette song and then e-mail friends to tell them what they think. Pirates are foiled because the song can be heard but not downloaded.
Copying music in the MP3 format for personal use is fine. But distributing copies is not. The temptation to break the law, however, is obvious: in addition to pirated music being free, MP3 files are easy to use and sound quality is almost as good as a CD. The downloaded songs are played over speakers on a personal computer or fed to a stereo receiver. The technology’s popularity took a leap forward last fall, when Diamond Multimedia Systems Inc. of San Jose, Calif., began selling the Rio, the first mass-marketed portable MP3 player. In the first quarter of this year, Diamond sold more than 200,000 units.
While MP3 s popularity grows, record companies fret. Last December, at the behest of five record powerhouses (Sony, Warner, EMI, BMG and Universal), more than 100 companies from the music, consumer electronics and computer industries established the Secure Digital Music Initiative. At week’s end in Los Angeles, the consortium debated whether to ratify a new standard for the next generation of portable devices for digital music. As proposed, the new portable players, expected for the Christmas retail
season, will still play pirated MP3 music. But the players will have to be designed in such a way that they can be upgraded once the consortium develops a secure technology for distributing digital music. That is unlikely to happen for at least another 18 months. Industry executives believe people who buy the first generation of players will then upgrade to gain access to legitimate music.
But upgraded devices will still be able to play pirated music. That means, in short, that piracy is here to stay, says Lucas Graves, an analyst with Jupiter Communications in New York City. “It’s fairly widely understood that record companies will never be able to stem piracy through technological means,” says Graves☺. “The digital music industry is going to have to live with a relatively high degree of piracy.” Not exacdy music to the industry’s ears.
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