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RIAA praises 'magnificent' P2P

Then asks Senate to kill it

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An open letter to the Senate from Recording Industry Association of America chief Mitch Bainwol praises peer-to-peer technology as "magnificent". But this isn't a change of heart: the RIAA is rallying support behind Orrin Hatch's INDUCE Act.

Bainwol paints critics of the bill - which makes manufacturers of devices such as the iPod liable for infringing uses - as the real Luddites.

"Ironically, these P2P operators who hide behind the protective cover of 'technology' resist deploying existing technological answers to solve this problem. They resist modernization because it undercuts their business model," he claims.

"There is nothing inherently evil about P2P," writes Bainwol. "On the contrary, it's a magnificent technology. But it has been hijacked by some unscrupulous operators who have constructed a business model predicated on the taking of property financed by my member companies."

Catch a falling star and put it in your pocket

Bainwol uses some selective statistics to show how badly the industry is hurting. With overall sales dipping only slightly in line with the economic downturn, and with CD sales now on the rebound, this is a challenge. So Bainwol uses a declining sector of the market to illustrate his point.

"In 2000, the top ten hits sold 60 million units in the U.S. Seven of the ten sold more than 5 million units each; every one of them sold at least 3 million units. Then the slide kicked in. Last year, in 2003, the top ten hits were cut almost in half, to 33 million units. Just two of the ten sold more than 5 million units; five of those top ten hits sold less than 3 million units," he reckons.

The industry's logic is based on it being a hit machine, then subsidizing other acts on this using these proceeds. But a critic might point out that if the fortune generated by hits is down so significantly - and sales are holding up - then what Bainwol claims to be his industry's basic business model is flawed. Either that, or else he doesn't know how the business he represents really works, which is unlikely. Or that he knows and isn't telling the truth.

Bainwol thinks the notion that P2P drives sales to "flying pigs". But the jury is out on this one, as the evidence is far from conclusive.

"If we don't value intellectual property," he concludes, "we are compromising our country's economic future and the foundation of property rights that underlies our great capitalist system," he writes.

Stirring stuff: and US-based readers may want to write a nice letter to their Senators pointing out the contradictions in his argument.®

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Hatch's Induce Act comes under fire
Consumer groups rally against Hatch's Induce Act
Dirty rotten inducers - the law the IT world deserves?

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