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Label supported P2P?

It’s taken about nine years since Napster burst on the scene, but the recording industry may have finally gotten it.

It’s taken about nine years since Napster burst on the scene, but the recording industry may have finally gotten it.

Over the years the industry has sued countless peer to peer networks, internet service providers, and individuals, but that strategy has been about as effective as trying to stop a freight train by throwing snowballs at it. They never got a defining legal opinion or law in their favour, but had to prove each case separately and with mixed results — looking like total jerks in the process by suing 13 year olds for tens of thousands of dollars, for downloading a few hundred dollars worth of music.

Sony tried embedding digital rights management software in CD’s, but in the process created a nasty Trojan virus that compromised the security of thousands of computers and even disabled a few systems when the owners tried to remove the harmful program. Sony vowed to try again, but after researching the alternatives they quietly gave up and shifted their focus back to the usual lobbying of governments, lawsuits, and other strategies favoured by the Recording Industry Association of America and its affiliated recording companies.  

Recently, the music industry took the extraordinary position that anybody who has ever transferred a song from a CD to their computer and put it on their computer or MP3 player has stolen that music. In their opinion, all copying of copyrighted material is wrong and everybody is a thief.

What isn’t clear at this point is whether the music industry sees Microsoft, Apple, Sony and all the other companies that make software that allow you to rip music from CDs onto your computer as being guilty of facilitating that theft. After all, they make our theft possible.

As if that wasn’t enough, at their recent summit in Cannes the music industry executives also restated their goal of making internet service providers (ISPs) responsible for their customers trading or sharing music through P2P networks, email, podcasts, and other digital music sharing platforms. They would force ISPs to spy on their customers, report customers stealing music, and take action to stop or penalize said customers, or be liable for what happens. So far they’ve failed, but they could be one court ruling away for setting the precedent.

Still, for all these activities the image of the little Dutch boy with his finger in the dam comes to mind.

But just when you think the music industry couldn’t get any more absurd, nasty, desperate, or wholly detached from reality, some of its biggest players at last seemed to grasp the concept that managing music in the internet age isn’t about maintaining control but about finding creative ways to profit by going with the flow.

Hence the relatively ground-breaking announcement by all the major record labels that they would embrace the new peer to peer (P2P) model put forward by Qtrax (www.qtrax.com). As a result of their agreement Qtrax can offer subscribers a catalog of 25 million songs that they can download to computers and MP3 players. Qtrax will then pay the labels for the songs you download, recouping their money through advertising and promotion. Qtrax only keeps a small share of the profits, with the rest going back to the industry.

The songs are encased in Microsoft’s digital rights management coding, which allows Qtrax to accurately track music from the label to the customer and make accurate payments. No other system accurately keeps track of what songs people are downloading and in what quantity, which is why recording companies have had the confidence to sign with Qtrax.

Qtrax itself is still in Beta testing phase, but should be in full release shortly. It currently doesn’t work with Apple computers or the iPod, but the company’s owners say it’s only a matter of time — the beta for Windows XP and Vista was available as of Monday, Jan. 28 and the OSX Beta will be available on Mar. 18.

Although I doubt Apple’s quite ready to part with all the revenue they’re getting from the iTunes Music Store, I believe they’ll do whatever it takes to keep their dominant position in the portable music player market. Also, iTunes is branching out to television and movies, which Qtrax does not offer, and can offer higher quality downloads for true audiophiles.

Although I’m concerned how the ads will be placed — will there be banner ads, or small audio promos before or after every song — I’m encouraged that the music industry is at last opening up to a new business model. The industry tried subscription services and digital music stores with some success, but revenue has continued to slip by double digit figures on an annual basis because you can’t beat free. And if you can’t beat them, join them.

And don’t forget the whole successful Radiohead experiment, since copied by Trent Reznor and others, where artists are offering their music through the web on a pay-what-you-can basis and leaving the music industry completely out of the picture (and out of the profits). The Qtrax model, even its means recouping pennies a song, is no doubt preferable than a full-scale revolt by artists.