Thursday, November 29, 2007

EMI wants to cut funding to trade groups like the RIAA

A Reuters article this morning reports that British-based music company EMI "wants to cut its funding to the industry's trade bodies... which could deal a blow to the fight against music piracy." Trade groups are the entities that "represent music companies and the fight against illegal piracy." Between the four major label groups: EMI, Warner Music Group Corp. (NYSE: WMG), Universal Music Group, and Sony BMG; the International Federation of the Phonographic Industry told Reuters that over $130 million each year goes to funding companies like it and the Recording Industry Association of America.Groups like the RIAA have an important mission of course, and this plan would severely limit the fight against piracy, but one music industry giant dropping out certainly would not add too much of a burden. We should not be surprised that EMI is the company to come out with this plan, even before Terra Firma took over in September the music giant had dropped the digital protection against piracy (Digital Rights Management technology) encoded into its media files.File sharing and piracy costs the recording industry loads of money every year (Reuters estimates that value in the billions) but it seems clear that the music industry cannot fight piracy while undergoing a major shift away from the "traditional" markets it has utilized for over 50 years. CD sales are plummeting while digital sales steadily grow. One label may not be able to change how piracy is tackled, but the current DRM-free approach coupled with new resources to market those products might make a difference. What difference, if any, is still to be seen. Just apply the Radiohead approach to everything and let consumers name the price of music. Many surely have some conscience...

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