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The RIAA will come to regret its court win

Can you spell p-y-r-r-h-i-c v-i-c-t-o-r-y?

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Column You can understand why an unpublished writer might resort to blooking; but when a successful author with a best-selling business title behind him gives away a chapter a week, it piques curiosity.

Gerd Leonhard is an ex-muso, with a message for the recording industry. Judging by the RIAA's triumphant win receiving $220,000 in damages for the downloading and sharing of 24 songs, it's a message they aren't ready to hear. But Gerd is sharing his ideas - free - in book form. There is (he says) a better way of getting money out of people's wallets than going to court.

The book is "The End Of Control" and chapter one is already out. It follows his highly successful business title The Future Of Music which has been translated into several languages, including Japanese, since its publication two years ago.

When I spoke to Leonhard he was in the airport in Singapore on his way to the next stop of a consulting trip to the Far East, and he was anxious to make sure the world knew about the Radiohead venture - to allow fans to download their tracks for "as little as 1p - plus a mandatory 45p credit card fee", and he was touting this as a sign of the times.

His message for the middlemen: "You are about to become squashed between hundreds of managers and artists that want to go direct, large retailers like amazon that re-write the rules of online music selling (think bundles... think flat-rate), telcos and operators that are getting fed up with the tedious and outmoded licensing practices, and search engines that are powering or becoming music communities and the next generation of radio."

And, he told his blog readers: "If [the industry tries to] keep up the strategy of 'you need us badly and therefore we make the rules' you will lose the artists, their managers... and the audience. Another 12 months for this Radiohead experiment to become the default approach. Get engaged or get outmoded. And do it soon."

His catchphrase seems to be "move the tollbooth further down".

What I wanted to know was whether he thought he'd make more money per copy, selling his new book chapter by chapter at zero price, than he did by giving it to a publisher. This turns out to be a tricky question to answer, because (as with many/most music deals) the publisher won't let people tell the world how much they get paid.

"But suppose," said Leonhard "you have a reasonably successful business book, which sells 50,000 copies, and your royalty is around 10 pence per copy, that's $10,000 more or less".

The money, however, isn't made on the book. Gerd works as a consultant; his fees go up and his assignments increase according to his web exposure. By giving the book away, clearly, he reckons people will read it who might otherwise not read it.

"That's also true in music," says Leonhard. "The real money is not in the CDs. It's in the gigs, the merchandising, the sponsorships. To make that money, you have to let people further down the highway before they arrive at the tollbooth."

The people formerly known as consumers, he says, are now the bosses.

The other half of the argument, which Radiohead was also pointing out in its own announcement, is the idea that giving away the content doesn't necessarily mean you don't sell the book or the CD. Radiohead is asking an astonishing forty pounds sterling for the boxed CD set of its "In Rainbows" songs and, as one of the group remarked: "How many football matches can you watch for that amount?"

Gerd Leonhard puts it slightly differently: "If people like the book, they'll buy a copy, rather than printing out the PDF."

A schedule for release - along the lines of DVD regions - simply loses sales, he thinks. "The new channel is 'who is quickest?' and 'who is best?' and not 'who has the best control?' any more."

He's predicting that the Wall Street Journal will go "open" onto the web shortly, and regards the New York Times' decision to start an RSS subscription feed as another marker of the changes. "Today, in our world of Googles, Facebooks, YouTubes, and iPhones, all content is just zeros and ones, and trying to prevent its 'leakage' is simply futile."

Bet that doesn't stop the RIAA suing its customers, all the same. ®

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