Thursday, February 15, 2007

RIAA: Guilty of not following the market

I've read a series of interesting articles finding historical occurances of where businesses have acted like the RIAA (Recording Industry Association of America).

History Repeats Itself: How The RIAA Is Like 17th Century French Button-Makers
In France, button-makers, faced with competition in the form of (gasp) cloth buttons, got the government to impose a fine, and, not yet satisfied, "demanded the right to search people's homes and wardrobes and fine and even arrest them on the streets if they are seen wearing these subversive goods."

The premise being, of course, that the RIAA, like the button makers before them, have forgotten what business they are in, and see new ways of doing things as a threat to their (now outmoded) business model.

The author goes further:
Step One To Embracing A Lack Of Scarcity: Recognize What Market You're Really In
Positing that if horse-drawn carriage makers had realized they were in the transporation business, not the horse-drawn carriage business, they might have leapt on automobiles rather that go out of business holding onto their old model.

People didn't want a horse-drawn carriage, they wanted something that got them from point A to point B. Similarly, the MPAA and the RIAA act as though they are in the business of controlling how movies or music is sold, when actually they are in the entertainment business, and these models have changed.

If you're looking to catch up on the posts in the series, I've listed them out below:

Economics Of Abundance Getting Some Well Deserved Attention
The Importance Of Zero In Destroying The Scarcity Myth Of Economics
The Economics Of Abundance Is Not A Moral Issue
A Lack Of Scarcity Has (Almost) Nothing To Do With Piracy
A Lack Of Scarcity Feeds The Long Tail By Increasing The Pie
Why The Lack Of Scarcity In Economics Is Getting More Important Now
History Repeats Itself: How The RIAA Is Like 17th Century French Button-Makers
Infinity Is Your Friend In Economics

RIAA vs. The Market
I don't knock the RIAA's responsibility to its investors nor the position it has come to hold over time. I think they are unwisely playing a delaying game with the market and it's going to bring them to their knees within 10 or 20 years.

I don't condone freeloading and think that Apple got something right with the idea of micropayments and it's iTunes store - a song for a buck. (Personally I dislike micropayments because the average consumer has trouble thinking of a dollar as something of value enough to give them pause in a knee-jerk transaction, but hey, that's business.) It's a new market that has arrived and existing business models are having trouble adjusting. The RIAA doesn't want performers to move en mass to this new model because it devalues the one they have put so much time in, instead of doing the smart thing and, say, buying iTunes, or becoming the lead contributor (and secondary beneficiary). That would be protecting their investors interests.

Patents will protect the RIAA for only so long before the pressure of a changed market obliterates their current business model.

RIAA Legal Tactics
Having read in depth the RIAA's civil suit strategy, from filing the suit in the wrong jurisdiction and pushing forward with so little regard they've netted dead people, grandparents, and folks who moved in after the fact, or calling people and threatening them over the phone with legal actions they can't take -- I call that a desperate last gasp, and like the button makers, parallels what's happening.

The RIAA wants the freedom to bypass laws the police obey in regards to invasive searching. As an American, that kind of incenses me.

See RIAA versus the People , a law firm specializing in handling their tactics, or how a typical case unfolds.

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