RIAA Losing EMI?

By Richard Menta 11/29/07

Lobby groups are of particular importance to industry, because they represent their interests up on Capitol Hill. Sometimes, these interests conflict with those of other industries and both battle for the influence of senators and congressmen to pass legislation that favors their side. Conflicts between the record industry's lobby the RIAA and the Radio Broadcaster's lobby is a good example.

Sometimes, the other side has no counter-lobby to offer balance to one-sided efforts as is the case between the RIAA and the average consumer. In this situation we have seen the recording industry, through legislation like the Sony Bono act and the DMCA, steer copyright law overwhelmingly to their favor. For that the RIAA earned it's big checks from the major labels who financially support it.

But those pieces of legislation were passed in the last century and when your label is paying a bill of $132.3 million per year - as EMI is to fund both the RIAA and its global brethren the IFPI - a "what have you done for me lately" attitude is understandable. The word is EMI may pull out of the RIAA and IFPI.

Even though these lobbies took their marching orders from what Digital Music News pundit Paul Resnikoff called the record industry's "executive class", they had responsibility to make work the misguided strategies against those disruptive technologies that bring change to this space. The efforts have not exactly been a success from a major label perspective.

A sample recap. Years of lawsuits against individuls who trade have done nothing to abate file sharing. A campaign targeting Wall Street successfully shut off the flow of money to start-ups not label-blessed, but it strangled legit US companies, while leaving the space uncontested for the living room applications and overseas music ventures. Meanwhile, RIAA efforts proved a public relations travesty that I argue is devastating to the labels.

As label revenues decline sharply a $132 million a year lobby bill starts to shade from necessity to luxury. Of course, the RIAA didn't tell Sony-BMG to put a rootkit on CDs. And if there were execs at the lobby who told the labels that suing their customers is not good business they were overruled.

But, then it doesn't matter whose fault it is. Unless both the major labels and the RIAA makes a drastic change in direction the price tag is no longer affordable.

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