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By Peter Cochrane, 3 December 2003 17:05

COMMENT Digital content piracy needn't be about the internet. Peter Cochrane asks what's left for an industry that has lost control of distribution...

Entirely by chance I am sat in a coffee shop of a book and music store in Toronto reading an article that features the chairman of the Recording Industry Association of America (RIAA). This includes a picture of him holding a CD declaring that MP3 wars are over because their much-publicised prosecution of pirates and downloaders has resulted in a decline in the number of net downloads during the past month.

So it is with a sense of complete irony I sit observing a group of young people just two tables away with a laptop and an assortment of MP3 players. In turn a member of the group is despatched to the music section to return with a CD that is taken out of the box and slipped into the laptop. It is then obviously ripped and stripped in full public gaze and distributed among the portable devices on the table. This is the most blatant scene of digital shoplifting I have ever witnessed.

I sit for an hour drinking coffee and observing these youngsters go about the business of collecting music tracks for free. There are security cameras, sales staff and at least one security man walking the floor. The coffee bar waitress happily keeps serving cokes and coffee as the group continues to plunder. They seem totally unabashed and unaware that I am observing them. I am now faced with something of a moral dilemma – do I grass on these kids or do I just continue observing?

This turns out to be a difficult decision because I am not on my own. I’m travelling with a colleague from India who has just purchased an MP3 player for his son’s birthday. This particular player can be addressed through a USB port which he does not have on his laptop but I do. So while making my observations I am also in the process moving a large number of Indian classical and folk music tracks from his laptop to mine to then load on this new MP3 player.

Just where here did he get these tracks? I could ask but I decide not to and presume they are his paid-for property. In the circumstances, I decide to do nothing and just continue observing the digi-shoplifters at work.

The RIAA has always seemed blissfully unaware of the ingenuity and capability of the opposition. If this were a military campaign any sensible general would first ascertain the strength and capability of the enemy but in its war with the online community the RIAA has not done so. For starters there are around 400 million people engaged in MP3 file swapping – and a large proportion are far smarter then anyone employed by the music industry. At every opportunity the RIAA is thwarted and outmanoeuvred by a network of smart individuals. Here is the RIAA declaring a victory as dark networks have evolved to protect the identity of users providing large libraries of MP3 files.

It is also evident from this coffee bar that there are physical networks of people handing files on to avoid the internet and detection. This mechanism may be slower than the internet but it is no less effective. With the speed of physical travel, someone picking up a music file in Toronto today could have that file distributed all over the planet inside a week. With communities of students on walkabout every year it is obvious that the RIAA and its lawyers are in pretty bad shape in terms of inflecting any significant damage or kerbing the activities of file swappers.

Flying back to the UK I reflect on the changes in the music industry and its constant battle against any new technology that threatens the status quo. The move from wax cylinders to plastic discs, to tape to CD to MP3 have all been seen as a threat by the industry. But technology always wins and a lot of money is made.

I come from an era when radio was a luxury and only a few had a gramophone. Today we have everything but the notion that we will buy five copies of a CD so we can enjoy the same music in our home, our office, our automobile, on our laptop and so on is just plain stupid – once we have purchased digital files they are ours and we can place them anywhere.

The music industry's business model is set by founding premises of 150 years ago, when the vast majority of people would listen to live music communally and a very few would hear the perfection that could be achieved by an international orchestra or world renown performer. Everyone now access all of the music on our planet for free or very low cost, it has become another commodity. But there may be an opportunity for a greater value-add. Unless the RIAA relents and the music industry rises to this challenge, suffering will only continue and get worse.

So what is missing? As I look back the only redeeming feature I can think of from the past was the provision of detailed notes about the composer, the orchestra, band and performers. This gave context. It seems to me the real music industry problem is the lack of a good business model and value-add.

While we have progressed from awful analogue recordings on plastic discs demanding vast amounts of storage space, to a digital world with high-quality recordings preserved forever on hard drives, we have stripped away all the background information. Perhaps MP3 needs artwork, a background write-up, video, T-shirt, posters, memorabilia, text, speech and multimedia accessible files to help in our personal appreciation.

It is not by accident that the Apple iMusic service is an unparalleled success some five years into the MP3 war. It aligns with customer thinking and lifestyles and doesn’t require the physical shipping of atoms and the use of tons of raw material. It is a business model that actually works.

All the public and industry angst has been created by a small group of powerful business executives who either lack imagination or refuse to get with the programme and change their business in line with the wants and needs of customers. That's always a fatal mistake.

Most human and technological revolutions involve a degree of upheaval and pain and perhaps by not grassing on the digital shoplifters - which I still feel guilty about, by the way - I may have just made a positive contribution to the shortening of the industry's migration timescale.

Compiled on BA098 flying Toronto to London, dictated to a digital file and emailed to my PA a few days later. Drafted in The Courtyard Restaurant at Ipswich Hospital Trust Facility and emailed to silicon.com via my home LAN.