Eliot Sherman: An industry that lags far behind

And so it starts, that inexorable march toward calamity, a heinous and deplorable exercise in futility.

I am speaking, of course, about Universal Studios' recent allegations that big bad Penn students are sharing all their movies and single-handedly crippling the studio's business.

The MP3 debate was not necessarily reopened with Universal Studios poking its noses into many of your hard drives, as the studio's main complaint was about the distribution of movies, but it is worth commenting on because of the studio's core belief: that the industry still maintains some degree of control.

Wake up and smell the megahertz. Those days are gone. File sharing is the way of the present and the future, and the fact that the entertainment industry has yet to recognize this and harness it to its own advantage, as it has with every other development that it swore would be crippling, reflects a lack of foresight and creativity. It strikes me that we're sending a lot of people to Wharton for nothing.

There are several stock arguments against the practice of file sharing. The most prevalent one, of course, is that in practicing this, users are depriving artists of their livelihood and making it more difficult for new artists to get recognized. This is flawed for two reasons: first, it is based on the premise that people who download music do not buy CDs, which has been proven false (U.S.-based Forrester Research concluded that consumers who download music account for 36 percent of U.S. CD purchases). Second, the theory is based on the premise that artists make close to the majority of their money from CD sales.

Artists make money from touring, plain and simple. In 2001, the Dave Matthews Band hauled in more than $60 million in touring alone, and you can bet that their CD sales revenue didn't come close to that.

This may seem like an easy example of a very successful band, but all bands make the majority of their revenue from touring, with the possible exception of Depeche Mode, who had trouble working up the nerve to leave its sunlight-deprived basement abode. Metallica toured for two and a half years straight. They were road warriors. Bands that don't tour, for whatever reason, have only themselves to blame.

As for people who seem to think that this will make it harder for young artists to break into the biz, I couldn't disagree more. If I have a CD that gets no radio airplay, but 10,000 Kazaa users have it, I have an entire fan base without having to do any marketing. That seems like a pretty good deal to me.

It is, in fact, a pretty good deal from music maker to music consumer, meaning that the only people who stand to lose are the music industry executives. And why shouldn't they lose? They have been steadily increasing CD prices into a criminally high range. Continually raising prices without changing your product is a good way to make your consumers think twice.

While MP3s present the Recording Industry Association of America with an easy scapegoat for slipping sales, the issue isn't quite as simple as it wants you to believe. There are numerous other variables to take into account, including the economy as a whole, the development of new products that lure away consumers and the decline in the number of new CD releases: by the RIAA's own figures, new releases fell by 31 percent in 1999 and haven't risen since, after increasing throughout the '90s.

In Britain, as the number of new releases rose, so did sales. Steven Peach, CEO of the Australian Record Industry Association, sent a clear message to the industry in late January when he admitted this: "I think it is important to recognize that there are other legitimate commercial pressures" on music sales. Peach went on to conclude that there are some positives from file sharing that the industry can learn.

Many people still look at file sharing as a crime. The jury is still out on that one, as it is an immensely complicated question; why is it OK, for example, for my friend to lend me a movie that he bought and yet, not OK for him to let me download a song off his computer if he bought the CD and ripped it? I'm not going to get into that, but I will say that if it is a crime, well, so is jaywalking. I personally won't lose sleep over either one.

As technology changes, industry adapts. In 1984, the release of the first home VCR led Sony to sue Betamax under the pretext that no one would rent or go to movies anymore. I think it's safe to say that Blockbuster is still open for business, in spite of its policy to hire only the most retarded employees that the world has to offer.

The music industry will adapt, as it has in the past, once it stops dragging its feet. I just wish it would hurry up about it. The times they are a-changing. So try and keep up.

Eliot Sherman is a sophomore from Philadelphia, Pa.

Please note All comments are eligible for publication in The Daily Pennsylvanian.