Okay, I haven’t yet commented on anything in the media, but I wanted to share an opinion about peer-to-peer file sharing (P2P). In case you haven’t investigated it yet — it’s the downloading of free music, movies and other media (sometimes legally, but more often illegally) from millions of users around the world. I can remember in the late 80’s that I used to swap cassette tapes with friends so that we could copy each other’s music collections. This is kind of like having millions of friends to share with.

Ch-Ch-Ch-Changes, Learn To Face The Change

As you know, everyone — especially the music industry — is up in arms about how P2P is cheating the artists and record companies. They have made numerous attempts to shut down P2P services and arrest people who use them. However, P2P is still alive and well — and growing. I’ve also noticed that there is a lot of anger and resentment about this change of events. And I started to wonder — isn’t this similar to any other change in business? Isn’t it similar to when we moved to the industrial age? From the industrial age to the information age? With each progression in how business CAN be done, someone is on the short end of the stick. Did it ever stop the world from changing? No — it just kept going. When something is cool, people want to use it! I am not making a statement about right and wrong here — I am making a different statement….Accept what is. And once you’ve accepted it, you can shift the paradigm of how profits are made. Isn’t it futile to try to change the direction of an ocean wave? How about riding the wave?

Money For Nothin’

For example, Apple did this by creating iTunes — and creating the popular iPod — although some would argue that this didn’t help musicians at all (see www.downhillbattle.org for more). What if the music industry realized that people are still willing to buy music, but they wanted to do it differently? Get real — we are in the information age — everyone is looking for some amount of free information before they buy! People want modularization, which is why subscriber services seem to be doing so well these days. Instead of being like Madonna and paying interns to put her political statements about filesharing into her downloaded songs, how about being like David Bowie and swapping free songs for e-mail addresses? See, David Bowie knows that e-mail addresses of fans is pure marketing potential — imagine having hundreds of thousands of fan e-mail addresses for marketing more David Bowie events & products? Imagine skipping the middleman (musicians have been raging against record companies about taking all the profits for years!) and creating a new online money-making machine? This could benefit new artists as well as those who’ve made their millions — if they could only see that it takes a bit of new thinking to do it.

Money, It’s A Crime — Share It Fairly But Don’t Take A Slice Of My Pie

My one political statement is this: My mother had a huge collection of record albums — and a record player. Then she bought cassette tapes and a tape recorder, then she bought CDs and a CD player. All her favorite musicians have benefited from her buying three whole collections of their music in her lifetime. She does not use P2P. Veterans, Baby Boomers and Generation Xers have complained for years about how the music industry has “stuck it to them” time and time again. Isn’t it interesting what happens when the gravy train reaches it’s destination and can’t continue? This is how end users stake a claim in what they are willing to put up with. Is it fair for everyone, absolutely not! But it does call for a need to stay in touch with consumers. When the wave starts to emerge — it calls for good business people to pay attention.

There is still money to be made, it just has to be made in different ways. The companies & industries that get this will thrive, the others will die. In the world of business, Darwinism applies — survival of the fittest. For the rest of us, entrepreneurs and corporations alike, the moral of the story is to watch consumers and find out what attracts them (it’s cheaper than doing surveys and polls!) — fighting the wave is tiring and it often doesn’t work.

Downhill Battle

For anyone interested in reading more about P2P filesharing & the music industry, I recommend visiting www.dowhillbattle.org. Here is their mission:

Five major record labels have a monopoly that’s bad for musicians and music culture, but now we have an opportunity to change that. We can use tools like filesharing to strengthen independent labels and end the major label monopoly.

How do musicians get paid for downloads? Simple: collective licensing lets people download unlimited music for a flat monthly fee ($5-$10) and the money goes to musicians and labels according to popularity. This solution preserves the cultural benefits of p2p, gets musicians way more money, and levels the playing field.

Our plan is to explain how the majors really work, develop software to make filesharing stronger, rally public support for a legal p2p compensation system, and connect independent music scenes with the free culture movement.