Music Industry Wakes Up: No More Suits for Filesharing

The approach of the music industry to the advent of online sharing of digital music may go down in history as one of the most textbook examples of how to punish your customer for their devotion to your product. Rather than recognizing the fact that online file-sharing indicated an incredible amount of devotion to music content on the part of the consumer, the music industry instead chose to punish their most loyal fans with suits. Certainly, file-sharing is illegal, but the stubbornness of the music industry to listen to what the consumer was telling them: that downloading music by the song was what they wanted, caused them to delay entering the digital music market until Apple had all but owned the space, leaving them sharing a significant portion of their profits with Steve Jobs and the folks at Apple HQ.

Today, the music industry is making an announcement that they plan to significantly scale back their litigiousness, and instead work with ISPs to identify and target those that upload pirated music and content. The Wall Street Journal says:

The decision represents an abrupt shift of strategy for the industry, which has opened legal proceedings against about 35,000 people since 2003. Critics say the legal offensive ultimately did little to stem the tide of illegally downloaded music. And it created a public-relations disaster for the industry, whose lawsuits targeted, among others, several single mothers, a dead person and a 13-year-old girl.

How will this affect the pay-per-download industry? It all depends on how well the collaboration between the ISPs and the music industry goes, which remains to be seen. Revenue from music sales is down across the board, with around 500 million CDs and digital albums sold in 2007, and only 844 million paid songs, not enough to make up the difference lost in album sales. In the mean time, music sharing continues to grow online.