RIAA President Hilary Rosen Speaks to P2P Community

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Lisa Rein

Lisa Rein
Nov. 07, 2001 02:11 PM
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RIAA President Hilary Rosen delivered a talk yesterday at The O'Reilly Peer-to-peer and Web Services Conference in Washington, D.C.

Rosen delivered the music industry's perspective and position on P2P technology and laid out the reasoning behind its three-pronged P2P-containment strategy: public enforcement, education and litigation.

Rosen explained that her industry's focus has traditionally relied on promoting music to the buyers for record store chains, not listeners. The Web, she said, has changed all that, and is causing a shift in its approach to one that is more consumer-oriented.

She described the difficulties in shifting focus and pleaded with the technology community for continued patience while the industry evolves its strategy.

"Building a legitimate business model from scratch -- one that involves literally hundreds of millions of copyrights and interlocking creative rights, navigating incompatible DRM's and players and building customer service and ease of use that music fans have always enjoyed -- isn't quite as easy as people might think," she said. "It is clear that record companies haven't been as quick as some have hoped to get online. Maybe that encouraged piracy -- not excused it, to be sure, - - but encouraged it by not filling the vacuum of consumer demand."

Rosen explained that the interests of recording artists are threatened by P2P technology. "This is an industry of advances, not royalties," she said. "A record company executive once said to me: 'If an artist of mine gets a royalty, I haven't done my job at negotiation time."

Reflecting on the music industry's hodgepodge of mostly stillborn attempts at making their assets available over the Internet, Rosen admitted that the industry had made some critical errors along the way.

"If we had it to do over, I think the recording industry would do it differently. Technology development and innovation might not have been left to the consumer electronics and IT industries as it was by the recording industry in the 80's, leaving our companies less than fully operational on that level when the wave of new opportunities hit again in the early 90's. But it is clear -- our member companies see an enormous opportunity here and now and are working diligently with technology partners to seize it."

Rosen said she feels there is "too much music available for the current distribution model" and looks forward to the potential for new "legitimate business models" in the future.

"Obviously, in a free market, our approach isn't the only one, nor, for that matter is peer-to-peer. What we seek -- and what I hope you'll embrace -- is an open market in which everyone competes with mutual respect on the value of his or her creations." But she also assured the audience that the RIAA has no intention of halting its current legislative efforts. "We have no choice but to continue them as long as copyrights are being infringed," she explained. "But we also know legal efforts won't get music online. Legitimate business models will. Consumer demand will. Technology will. I want to get the lawyers out and the innovators in."

Rosen finished her speech with traditional promises of new services and technologies on the horizon: "New subscription services are being launched in the coming days and months. Virtually all RIAA member companies are participating in launches of these multiple services. I think the initial offerings will be very good. But they will get better as technology develops and the desired consumer experience has better definition. A lot of progress is being made and more will be done."

O'Reilly and Associates President Tim O'Reilly asked Hilary to explain the math a bit behind the Recording Industry's cost model. Rosen commented that such figures were hard to nail down, due to the many possible variations of recording and marketing agreements. "There's no single model. There's no single way," she said. (Note: the RIAA's Cost of a CD document and Market Data newsletter offer a bit more specifics on the numbers involved.)

Zooko, a software engineer at Mojo Nation, asked Rosen if she truly understood the physical impossibility of effective Digital Copyright Protection, quoting a Bruce Schneier Cryptogram that clearly illustrates the situation:

"Every time I write about the impossibility of effectively protecting digital files on a general-purpose computer, I get responses from people decrying the death of copyright. "How will authors and artists get paid for their work?" they ask me. Truth be told, I don't know. I feel rather like the physicist who just explained relativity to a group of would-be interstellar travelers, only to be asked: "How do you expect us to get to the stars, then?"

Rosen nodded. "I get it," she said. "It's going to be very hard."

"Not hard: Impossible!" Zooko and the entire crowd exclaimed.

"I get it! I get it!" she insisted.

The complete transcript of Hilary Rosen's speech is available as a PDF or HTML file.

Rael Dornfest contributed to this report.

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Lisa Rein is a co-founder of Creative Commons, a video blogger at On Lisa Rein's Radar, and a singer-songwriter-musican at lisarein.com.