http://www.cpwire.com/artman/publish/article_1212.asp
CP NewsLink Transcript: Cary Sherman of the
RIAA
Following is a transcript of the Nov. 18,
2005 CP NewsLink conference between college
journalists and Cary Sherman, president of
the Recording Industry Association of
America (RIAA).
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Friday, November 18, 2005 2:00 p.m. EDT
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moderator: OK, let's begin. Thank you,
everyone, for coming to the Recording
Industry Association of America (RIAA)'s
CPNewsLink newsmaker conference today.
moderator We are pleased to welcome as our
CPNewsLink guest this afternoon Mr. Cary
Sherman, president of the Recording Industry
Association of America (RIAA). The RIAA's
member companies are responsible for
creating, manufacturing, or distributing 90
percent of all legitimate sound recordings
sold in the United States.
moderator: As many of you know, the RIAA is
an organization frequently in the news when
it comes to issues of online file sharing
and music piracy, and recent weeks have been
no exception. The recent shutdowns of file
sharing services Grokster and i2hub have
generated headlines across the country.
moderator: Today, we will have the chance to
hear from Mr. Sherman on these developments
and others affecting colleges and
universities in the wake of the Supreme
Court's Grokster decision this summer.
moderator: Mr. Sherman, welcome.
cary_sherman_riaa: Good afternoon. It's
great to join you all once again in this
forum. I very much appreciate the
invitation. Before taking your questions, I
have just a few opening remarks.
cary_sherman_riaa: When it comes to illegal
downloading, a great deal has changed since
I last participated in an online chat with
college reporters in April of this year: The
U.S. Supreme Court has ruled unanimously in
MGM v. Grokster that not only individuals
but businesses that encourage illegal file
sharing can be held accountable for their
actions.
cary_sherman_riaa: That decision was
followed by a series of similar
international rulings in Korea, Taiwan and
Australia, where the Federal Court found
Kazaa to be illegal.
cary_sherman_riaa: Earlier this month,
Grokster agreed to settle with the major
record companies, movie studios and
publishers, marking an important milestone
in the continuing transformation of the
online marketplace. And just this week, we
saw reports that i2hub had gone dark.
cary_sherman_riaa: What does all of this
mean? Contrary to what you might think, it
means even more options for enjoying music
and movies online. These developments have
given the legitimate online marketplace a
tremendous boost - enhancing our ability to
invest in new bands and new music.
cary_sherman_riaa: This is, after all, about
more than just the artists at the top of the
Billboard charts. This is about the next
generation of music. It's less about the
musicians of today and more about the
unsigned musicians of tomorrow. When you
download a song illegally or burn a copy for
everyone on your dorm, you are undermining
the ability of the music companies to invest
in the next great up-and-coming band you
have yet to hear about.
cary_sherman_riaa: The impact of these
efforts is already being felt on college
campuses across the country, with almost 80
schools now offering students a legitimate
music service. This is tremendous progress
from just two years ago, when this map was
qute literally empty. Yet we recognize that
there is considerable work still to be done,
particularly in regard to addressing the
emerging challenges of campus Local Area
Networks or LANs as well as unauthorized
hacks of iTunes such as myTunes and ourTunes.
cary_sherman_riaa: We look forward to
continuing our work with the university
community on these important issues as well
as our work with music services that respect
the laws protecting creators.
cary_sherman_riaa: With that, I am happy to
take your questions.
moderator: Let's begin with a question
that's on everyone's mind...
On a timely note, what do you make of the
shutdown of the i2hub file-sharing network
earlier this week? What does it mean for
students and file-sharing on campus?
cary_sherman_riaa: We've seen the same
reports that i2hub has shut down. To the
extent that this reflects their reading of
the Grokster decision, we're not surprised.
In fact, other p2p's appear to have read the
decision the same way, as WinMX has also
reportedly shut down, and other p2p's are in
active discussions for how to turn their
businesses into legitimate services. What
this ultimately means is that venture
capital money and advertising money will
flow to licensed music services, which will
give them the incentive to innovate and
provide even better music experiences to
their consumers. The winner will be music
fans who want better and better online music
experiences.
moderator: OK, now we will turn it over to
our participants for some questions.
Participants, if you can, when asking a
question, please state your school and
newspaper name at the front of your question.
moderator: And now we will move to take our
first question... Please stand by.
UMass - Amherst, The Massachusetts Daily
Collegian: Mr. Sherman, I am wondering what
your thoughts are on the price of music to
the public. In that what is the production
cost of a CD and how much of the money goes
to the musicians and the record company as
profit. I feel that a lot of people cannot
justify spending $15 on a CD to give more
money to people that are already very
wealthy.
cary_sherman_riaa: It's a common
misconception that when people spend $15 on
a CD, they're simply paying ultra-rich
megastars and big record labels. First, a
lot of that $15 goes to the record retailer
who is trying to make a living by selling
music. But more importantly, behind the
artist you've heard of, there are countless
others who have contributed to that
recording or to trying to make that
recording a commercial success. Studio
musicians and background vocalists, the
members of the band, the studio engineers,
the producers, the songwriters and
publishers, the marketing and promotion
people -- you wouldn't believe how many
people get involved in the making of a CD
from conception to distribution. They make
their living by the revenues that are earned
from the sale of the product. When people
download it without paying for it, or get a
burned copy from someone else, there's that
much less money for the people who worked to
make that recording. And there's also a lot
less for record labels to invest in another
artist tomorrow.
USC, Daily Trojan: Can you please briefly
explain what I2Hub is?
cary_sherman_riaa: i2hub is (or was) a
file-sharing network that was specifically
configured to operate on Internet2, an
ultra-high-speed network largely used for
academic research purposes. Unfortunately,
the major use of i2hub was copyright
infringement, especially of movies and music
albums, because they could be transferred in
minutes instead of hours.
Columbia University, Columbia Spectator:
With fears of illegal file sharing
throughout the music industry, many
companies have taken measures into their own
hands. Within the last two weeks, there has
been a great deal of discussion about Sony
BMG's rootkit program. Does the RIAA condone
such actions on the part of individual
companies to protect their profits?
cary_sherman_riaa: There is nothing unusual
about technology being used to protect
intellectual property. You can't simply make
an extra copy of a Microsoft operating
system, or virtually any other
commercially-released software program for
that matter. Same with videogames. Movies,
too, are protected. Why should CDs be any
different?
cary_sherman_riaa: The problem with the
SonyBMG situation is that the technology
they used contained a security vulnerability
of which they were unaware. They have
apologized for their mistake, ceased
manufacture of CDs with that technology,and
pulled CDs with that technology from store
shelves. Seems very responsible to me. How
many times that software applications
created the same problem? Lots. I wonder
whether they've taken as aggressive steps as
SonyBMG has when those vulnerabilities were
discovered, or did they just post a patch on
the Internet?
cary_sherman_riaa: One other thing to point
out: The music industry has been more
permissive about copying of its copyrighted
product than virtually any other industry.
How many burns are you allowed of a movie?
None. How many of a videogame? None. You get
the idea. Even the CDs with content
protection allow consumers to burn 3 copies
or so for personal use. The idea is not to
inhibit personal use, but to allow personal
use but discourage (not prevent, you can
never prevent) copying well beyond personal
use.
University of Southern Mississippi, The
Student Printz: History seems to show that
anything done to stop files sharing will
only create new methods and technologies to
get around their controls. In light of that,
should the middlemen (RIAA, et al) be
thinking about ways to bring consumers what
they want -- which they'll mostly end up
getting in any case -- instead of futilely
struggling to keep their finger in the dike,
which ultimately only causes further public
unhappiness with them?
cary_sherman_riaa: History also shows that
no matter what is done to stop bank
robberies or shoplifting, some people will
always find a way around those techniques.
Does that mean we should simply give up and
allow people to take what they should be
paying for? Record companies ARE trying to
give consumers what they want. Think of how
music was available just a couple of years
ago and how it's available now. You can buy
an individual track, at any time of the day
or night, and get it instantly on line. You
can subscribe to services with a
million-and-a-half tunes to choose from that
you can listen to whenever you want, for an
all-you-can-eat monthly fee.
cary_sherman_riaa: And these models are just
the beginning. Online offerings (as well as
new forms of physical offerings) will
continue to get better and better. That's
the marketplace at work.
University of Southern Mississippi, The
Student Printz: If gun makers are not liable
for the public's illegal use of their
products, why are p2p sites?
cary_sherman_riaa: If a gun manufacturer
encouraged a gun owner to use the gun in the
commission of a crime, you can be sure that
they'd be liable. The Supreme Court said
that Grokster could be liable for actively
encouraging or inducing its users to commit
copyright infringement.
CPLisa: A question submitted via e-mail...
It has been said that since the lawsuits
began a couple of years ago, the number of
P2P users has doubled. It seems that the
lawsuits are not really that effective at
stopping the file-sharing problem. What can
the RIAA do at this point to make a bigger
difference in the ongoing battle against
piracy?
cary_sherman_riaa: There's a lot of
conflicting data about the level of p2p file
sharing. It's not easy to monitor what is
actually happening on the Internet, so I
guess it's not surprising that the data
would be inconsistent. We've seen data that
shows that file-sharing has remained
relatively flat, and some that shows growth,
but at far lower than the rate it was
growing before the lawsuits. And relative to
broadband penetration, which has gone way
up, file-sharing has been either level or
gone up only slightly.
cary_sherman_riaa: Whatever we do, we know
that file-sharing will continue, just as
physical piracy will always continue no
matter what we do. We all recognize that the
most important thing we can do to deal with
illegal activity online is give consumers a
better alternative -- a legal service that
they love. That's what lots of companies are
now doing, and we hope that ultimately the
legitimate marketplace will outpace the
illegal downloads.
U. of Houston: What future measures does the
RIAA plan against music piracy? Is it going
to be protected so no one can make a copy of
cds?
cary_sherman_riaa: You've got to distinguish
between what RIAA does and what individual
record companies do. RIAA will continue to
protect intellectual property rights in
court, etc. But only an individual record
company can decide to use copy protection on
a CD. Record companies have different
policies on whether to use such technology,
but I know of no record companies in the US
that have sought to prevent the making of
any copies at all. Everyone understands that
consumers want to be able to listen to their
music in their car, in the family room, at
the beach, and that allowing them to do that
is part of giving them a great music
experience. So even when a CD is protected,
it will almost certainly allow personal use
copying.
moderator: And that leaves us time for one
more question.
UMass - Amherst, The Massachusetts Daily
Collegian: Thank you for your answer, Mr.
Sherman. Is it not rather harsh of the RIAA
to be suing college students that most
likely will not have the ability to pay the
fines imposed on them? And along those same
lines will the RIAA still follow though with
the lawsuits even after all the p2p networks
are shutdown and college students get the
point and stop downloading music illegally?
cary_sherman_riaa: Obviously, anyone who has
stopped downloading (or uploading) illegally
will not get sued. Lots of college students
try to justify taking music for free because
they can't afford it. That, of course, is no
excuse, any more than it would justify
stealing a CD from a record store. And for
generations, students have spent their
hard-earned dollars on the music they love
in the local college record store. How many
of those stores are left now? Makes you
realize just what the impact of illegal
downloading can be, and why we've taken the
actions we have.
moderator: Mr. Sherman, any closing remarks?
cary_sherman_riaa: I want to thank all of
you for participating in this afternoon's
chat. Illegal file sharing on college
campuses is an issue that looms large for
us, making it all the more important that we
take opportunities such as this to help the
higher education community better understand
our positions and actions. Thank you for
your thoughtful questions and for your time
today.
moderator: This concludes today's newsmaker
conference with Cary Sherman, president of
the Recording Industry Association of
America (RIAA). The conference is brought to
you on CPNewsLink, a joint service of
College Publisher and Collegiate Presswire.
moderator: On behalf of the RIAA, thank you
for attending, and thank you for your
interest. And, on behalf of the college
journalists attending this event, and those
reading about it, our thanks go out to Mr.
Sherman for taking time out of his busy
schedule to chat with us today.
moderator: If you have additional questions
about this story, please direct them to
Jenni Engebretsen, Jonathan Lamy, or Amanda
Hunter of the RIAA at (202) 775-0101.
moderator: Additionally, for your use in
writing a story, we will be sending a full
transcript of this event over Collegiate
Presswire to all of our subscribing
newspapers shortly, and we'll be posting a
copy on the front page of the CPNewsLink
website after that. (
http://www.cpnewslink.com)
moderator: As a reminder, we will be hosting
additional CP NewsLink newsmaker events
throughout the upcoming year, so please keep
an eye on this website for details.
moderator: We hope you enjoyed this chat,
and trust that it provided you with some
insight and perspectives into this issue for
your use in writing stories on this topic.
moderator: Thank you, once again, for
attending today's CP NewsLink conference.
moderator: Good bye, everyone!