Market music

November 30, 2003

MARKETS OFTEN can solve problems better than courts. Witness the music industry's crackdown on the vast and free availability of recordings via Internet file sharing.

The proliferating violations of intellectual property rights -- to say nothing of the music industry's deteriorating profits -- prompted it to file hundreds of lawsuits this year against alleged habitual downloaders, many of them minors. And that tactic quickly led to the colossal public-relations blunder of more than a few suits that created free-music poster children, such as the 12-year-old New York City girl who allegedly downloaded more than 1,000 songs.

But now comes Pennsylvania State University and Napster, innovating a nonlitigious future for a hidebound industry badly in need of some imagination.

Napster, you will recall, was the original file-sharing service that was successfully shuttered by the recording industry and courts. Now it's been reborn under a Silicon Valley company called Roxio as a pay-per-download music vendor, like that pioneered this year by Apple Computers.

And in a landmark deal announced this month between Napster and the university, Penn State will eventually provide all its students with largely free access to the music service's library of more than 500,000 songs. The university is paying Napster from students' technology fees.

Some Penn State students are grousing that the terms of Napster's service are more limited than they'd like, that they'll go with pirated music anyway.

But there are plenty of signs that the Penn State deal is emerging as a legitimate alternative to the absurdity of a moneyed industry suing some of its most rabid fans. Not only are more universities interested in jumping on this bandstand but also such major Internet-access providers as Comcast are beginning to offer roughly similar services as an add-on, much like a premium cable TV channel.

Sure, Internet piracy isn't ending. But top retailers, including Wal-Mart, are reportedly about to get into this business, so look for prices (typically now 99 cents a song) to fall. Meanwhile, usage of Kazaa, one of the leading sources of pirated music, is down by half since June. And not incidentally, the music industry's biggest conglomerate has helped itself by cutting the forbidding $17-$19 price range of a CD by about 30 percent.

The elegance of this solution is worth appreciating. University students get music access for limited cost; the schools end up on the right side of this thorny and rampant piracy problem; and the recording industry and its artists get properly rewarded for their creations. All in all, it's a whole lot better than going to court.

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