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Author: albaby1 Big gold star, 5000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 919  
Subject: File sharing once more.... Date: 12/2/2002 1:46 PM
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Well, time to jump back into the moribund Napster board to revisit a hoary question of old: is file-sharing hurting the music business? In today's Fool on the Hill, Joshua Brown suggests it isn't:

So why would Sony -- or any record company, for that matter -- make a move like this? The record companies view file sharing as the major culprit in the drop in record sales over the last few years, and they believe stopping it is central to helping revenues rebound. Never mind that CDs are obnoxiously expensive (several major labels were convicted of CD price-fixing and fined over $150 million last year). And never mind that a consumer considers herself lucky if more than two tracks on a new CD are good. No, it must be because of the music pirates.

http://www.fool.com/News/Foth/2002/foth021202.htm

Of course, these arguments are a bit specious - they might be correct, but they don't explain why record sales would have dropped compared to previous years. Are CD's too expensive? Maybe - but they're no more expensive than they were in 1999 or 2000, and in fact have dropped somewhat in price since the price-fixing scandal of last year was settled. Are only 2 tracks on a CD any good? Perhaps - but why is that different from years past?

The reason that Sony - or any other record company - is willing to make this move is because they correctly view file-sharing as the greatest threat to their industry...well, perhaps ever.

This ain't the audio cassette revisited. With even a DSL connection, you can download several tracks simultaneously in under four minutes. You can have an entire 12-song album downloaded and burned in about 20 minutes - without ever having to know anyone who bought the original, much less physically be able to borrow it.

And that's just today - just wait until the pipes get wider. The biggest practical inhibitor to massive piracy is the reduction in sound quality resulting from compression. That compression is necessary because a standard CD track is about 40-50 megs, about 10x bigger than the MP3 equivalent. That's too big for easy transfer/storage today, but how long do you think it will be before the average pipe size is 4-6x what it is today? Five years? Ten years?

Advocates of reasonable, legitimate on-line music should hail the Sony initiative for what it is - an effort to find a way to have music files stay with the user who bought them, rather than bouncing around the net. Until that problem is solved, the music industry will not offer their own legal alternative to a less-than-perfect pirate network.

Albaby
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