In the previous article, we saw how badly file sharing and piracy have affected the music industry, the relationship between record labels and artists, and the options artists now have of taking more profit from their works, which technology and the present crisis have made available.
The music industry is undergoing a deep change, but those who aren’t afraid of adapting and innovating will certainly be the ones who will survive these times.
In this article, we will focus on copyrights, file sharing, and what the future has in stake for record labels.
Law Vs. People
It’s been 7 years since notorious RIAA (Recording Industry Association of America) sued the first music consumers for file sharing. According to the EFF (Electronic Frontier Foundation), a non-profit that defends free speech, privacy, innovation, and consumer rights, the record companies have sued over 28,000 people for music file sharing since then. And there is no end in sight. 
Some of those who share files on the web, like video documentaries on Youtube, for example, try to protect themselves by mentioning the Section 107 of the US Copyright Act. However, that law isn’t a life saver.
According to the text on the US Copyright Office site, the Section 107 actually lists the instances in which reproduction of copyrighted content is considered fair use, which are for “criticism, comment, news reporting, teaching, scholarship, and research”.
Still, such reproduction must be considered according to four criteria:
- “The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes
- “The nature of the copyrighted work
- “The amount and substantiality of the portion used in relation to the copyrighted work as a whole
- “The effect of the use upon the potential market for, or value of, the copyrighted work”
The problem with using the Section 107 as a defense for reproduction of copyrighted content online is that it is vague when it comes to defining when exactly copyright infringement occurs.
The text on the site points out that “the distinction between fair use and infringement may be unclear and not easily defined. There is no specific number of words, lines, or notes that may safely be taken without permission.” And because of that, lawsuits of copyright infringement are often judged on a case by cases basis.
Also it isn’t enough to place an attribution along with the copyrighted content as it “does not substitute for obtaining permission.” The Copyright Office advises that getting permission first is the best warranty against a lawsuit. In the following links you can read the full text, and find more information on fair use.  
So, considering that law, all those who share copyrighted content online (which doesn’t belong to them), such as documentaries, video clips, songs, pictures, books, etc, are infringing the copyright law. And while some choose to fight their own consumers for that, others, smarter perhaps, try to adapt.
New Ideas, New Strategies
Maybe what this commotion is really about is that things changed too quickly and many people, especially those who own the content, are still catching up. People are being forced to deal with new technologies, a new idea of intellectual democracy, and many are either adapting very slowly or getting desperate.
While those who adapt try to implement new alternatives (paid streaming services, paid track downloads, ads on Youtube channels), those who get desperate, take desperate legal measures (heavy charges against consumers).
Internet is about content, and it has created a demand for access to content from all over the world, an interest in products from faraway places, and consequently new market possibilities. However, the changes are so recent, despite their sweeping effect, that we still don’t have a general efficient way of paying for and acquiring content and products online, for instance.
Richard Stallman, founder of the GNU project and the Free Software Foundation, raised this question in an interview for Mashable.com. He commented, “I would like every player to have a button you could push to send it down [money to artists], and you shouldn't have to look up where you send this, it should be anonymous, it should be nothing by tracking who sends money to anybody, and it should be easy [...] And then if you send it through Paypal, for instance, the musician will get half a dollar. The existing systems are inefficient for use." 
Stallman also has a very controversial opinion on file sharing: “I don't think that artistic works all must be free, but there's a freedom criterion that I think you must have for all copies of any works that are published, including art, and that is freedom to share. And that means to non-commercially redistribute exact copies. So, I don't say that music must be free, but I do say that it must be shareable.” 
That’s very good for music fans, but how do you make that possible without hurting artists and labels?
Meanwhile Record Labels Struggle
Do CD’s really need to be expensive?
Record companies used to be (and some still are) responsible for several costs, such as funding recording sessions, manufacturing, distributing and marketing products, supporting artists financially, and doing the accounting, but many aren’t dealing with that anymore.
All these costs were paid by consumers when they bought CD’s, but CD’s will have to become cheaper as digital recordings become more and more common, and as record labels stop caring for all those aspects of CD production.
Nowadays, recordings can be made in the same computer one uses at home, manufacturing is becoming unnecessary as digital recordings are more and more the format of choice for music fans, and distribution costs are almost none. 
In such a dynamic scenario, either labels will change, becoming small offices with few employees or they will disappear. And this is no wonder, as in the past, when a new technology became popular the previous one either adapted or became extinct.
Take the Industrial Revolution for example, which left thousands of manufacturers and craftsmen jobless, while the new industries and entrepreneurs flourished. Times were certainly chaotic then, but without it we wouldn’t have much of our present comfort and prosperity.
Quoting again from the article written by David Byrne for Wired.com, he did a remarkable interview with musician and producer Brian Eno, who stated that record labels “structurally, they're much too large. And they're entirely on the defensive now. The only idea they have is that they can give you [the musicians] a big advance — which is still attractive to a lot of young bands just starting out. But that's all they represent now: capital.” 
Besides, according to Eno, it seems that record label executives complicated the situation by firing middle level employees, who knew the job and loved music, keeping the lower level ones and hiring an inexperienced workforce, just because they are cheap.
In addition, most of the upper level executives were also replaced by lawyers and business people, who don’t know the market, and probably don’t care much about music.
Hard & Urgent Measures
In order to unravel this imbroglio, several hard and urgent measures must be taken. When it comes to the relationship between record labels/retailers and consumers, CD and digital track prices must be reasonable, with streaming services as an alternative, and import prices being improved as well.
As for the relationship between record labels and artists, the copyright issue has to be tackled. An artist shouldn’t be deprived of earning their keep with their own work, just because the label isn’t interested in marketing it. Regardless of the labels’ investment, artists should be the main owners of their creations.
And then there’s the problem of file sharing and piracy, which are actually distinct issues. Whatever the blame of file sharers, they definitely can’t be considered the same way someone who rips CD’s for selling.
Slowly the classical model of music industry is being changed, but its new form is still unknown.