I'm in agreeance with about 0% of her statement. It seems to me that she's begun to step up her rhetoric in an effort to gain support for Senator Fritz Hollings' Security Systems Standards and Certification Act (SSSCA).

STATEMENT OF HILARY ROSEN
PRESIDENT AND CEO
RECORDING INDUSTRY ASSOCIATION OF AMERICA
BEFORE THE COMMITTEE ON THE JUDICIARY UNITED STATES SENATE

?IS THE MARKETPLACE WORKING TO PROTECT
DIGITAL CREATIVE WORKS??

MARCH 14, 2002

Thank you for the opportunity to submit for the hearing record our views concerning the protection of digital creative works, and particularly digitally recorded music. We would also like to thank this Committee, under the leadership of Chairman Leahy and Senator Hatch, for its longstanding dedication to ensuring an appropriate level of protection for creative works.

As the Committee knows well, America?s copyright industries have led the U.S. economy in contributions to job growth, gross domestic product and exports. Yet the recording industry is suffering ? and other content industries may soon be imperiled ? by rampant infringing distribution of our works through peer-to-peer systems, other pirate sites and ubiquitous CD ripping and burning technology. The solution lays in common standards enabling the implementation of collaborative technical solutions to stem piracy. Unfortunately, we fear that the marketplace may not be working to provide the incentives necessary for the development of such standards and to restore an appropriate level of effective protection for creative works. Accordingly, we are very interested in exploring with this Committee whether there is something that should be done to adjust the incentives that enable legitimate commerce in copyrighted works.

It is extremely important at the outset of my statement to respond to some of what I have heard from critics of this process. We are not interested in polarizing relationships with the technology industry. Our member companies are working with the technology industry everyday to develop these new businesses. And we absolutely know and appreciate that several of the tech companies have already spent millions of dollars and vast internal resources trying to find solutions to the problems being discussed today. We have always wanted these efforts at content protection to be of mutual benefit. That is the best way to achieve success.

The Marketplace Has Worked to Provide Legitimate Online Access to Recorded Music, But Infringing Services and CD Burning Threaten Legitimate Distribution Channels

For some time, people have been telling our companies to get their music online. Now we?ve done it. In addition to webcasters and other kinds of services that have become common, there are now more than half a dozen licensed subscription services in operation, and more are in the works. It seems like hardly a week goes by without reading about another new licensing deal. The marketplace clearly has responded to the demand for digital music by spurring legitimate service offerings. These services have some limitations that the pirate services do not. The pirate services do not pay creators nor seek licenses. These new subscription services have few customers, because they cannot compete with the music available for free using peer-to-peer systems and other pirate sites. The legitimate online music market is unlikely to prosper until something is done about the wholesale piracy enabled by systems like KaZaA and others.

These infringing systems are fueled by music ripped from CDs, and music obtained through these infringing systems is burned onto CDs for physical distribution, with hardware and software products that have become standard equipment on personal computers. The twin threats of infringing services and ubiquitous ripping and burning technology have created a situation where, more and more, consumers obtain music through infringing downloads and CD burning rather than through legitimate channels.

These problems are real and growing. Peer-to-peer systems enable the illegal download of billions of music files every month. And, in a recent survey of active music consumers conducted for the RIAA by Peter Hart Research Associates, 23 percent of the music buyers we surveyed told us that they are buying less music because they?re getting what they want for free by downloading and burning. In such an environment, perhaps it is not surprising that last year, record sales were down 10 percent.

The digital revolution holds the promise of exciting new services for consumers as well as economic opportunities for all the affected industries. Unfortunately, the level of piracy that digital technologies has enabled threatens our ability to develop new artists and produce new music and ultimately may result in fewer choices for American consumers. It certainly has had a significant, negative effect on artists, record companies and the thousands of other people who earn their livelihoods from the music industry, whether as performers, composers, distributors, wholesalers or retailers. Thus, we need to explore every avenue possible to protect our marketplace from piracy.

Technological Protection Measures Are Necessary to Inhibit Piracy and Promote Legitimate Commerce, But They Require the Cooperation of the Technology Industries

There are technical solutions to the online piracy problem that will facilitate the growth of a vibrant legitimate marketplace for online distribution of recorded music. Indeed, the adoption of technological protection measures that balance a music fan?s interest in personal use with the piracy concerns of the music industry are our best hope to preserve the legitimate music marketplace that has served America so well.

There have been various suggestions of technological measures that, if implemented in the near term, might offer some useful degree of protection against uncontrolled copying of content. Of course, CDs can be copy protected to inhibit ripping, and some record companies are looking at and testing such technologies. However, the mere protection of CDs alone cannot solve the online piracy problem, because uncontrolled ripping, burning and infringing online distribution are facilitated by computer products and consumer electronics devices that provide easy and open opportunities for digital piracy.

Moreover, the interests of everyone concerned ? consumers, copyright owners and software and hardware manufacturers alike ? would be best served by common technical standards that could be implemented in interoperable systems. Such standards would prevent consumers from being confused or aggravated by incompatible systems. Such standards would foster a legitimate marketplace for the distribution of copyright owners? works. And such standards would ensure that software and device manufacturers need only build certain technology into their products to provide access to works obtained through legitimate channels while helping control infringing distribution.

Thus, what is needed are common standards for collaborative technical solutions, in which technology on a disc or a download and technology in other software or hardware products work together. Such collaborative solutions could make a meaningful dent in online piracy. For example work could progress on perfecting how hardware and software devices treat copy protected CD?s or downloads. We have always been willing to find the right technology balance between a music fan?s personal use and still prevent a song from being sent to millions on the Internet. CD-Rom drive makers could be part of a productive solution. The analog circumvention issue has not been adequately studied for a solution either.

With the right kind of commitment, [voluntary] standards along these lines could be developed and implemented. We should emphasize that we have no desire to stifle innovation by technology companies or inhibit the legitimate use of new technologies to enjoy music. We embrace new technologies that allow us to create and distribute our works and reach consumers in new ways. Thus, we are eager to work with technology companies to formulate standards that will help end the bite of online piracy while at the same time facilitating the growth of a vibrant legitimate marketplace for online distribution of recorded music.

Infringing Services Have Eliminated the Incentives for Technology Companies to Protect Our Content to Further Their Own Business Interests

Since many have used the music industry as an example, we thought we would offer some history of some of the specific actions we took several years ago to try and address the issues. Obviously those efforts mostly failed and we are where we are. Hopefully, our experience is instructive.

We recognized long ago that all the participants in the digital music value chain, including not only creators and distributors of music but also the full range of technology companies, could benefit from common standards enabling the implementation of collaborative technical solutions in interoperable systems. We tried to do something about this on a voluntary, multi-industry basis through the Secure Digital Music Initiative (?SDMI?).

SDMI was a forum for diverse companies that can come together to better understand the others? perspectives, needs and desires in the hope that we could emerge with consensus security standards that would make everyone a winner. We organized SDMI to enable new business models for the legitimate distribution of recorded music while achieving technological protection against piracy. Technology companies participated in SDMI on the premise that they would be able to sell new products and services to enable consumers to get access to music online. In other contexts, such as DVD, these complementary goals of copyright owners and technology companies have led to standard-setting successes.

Unfortunately sometimes agreeing on standards for security and interoperability means choosing some winning technology and making sure there is cross licensing. That was inevitable in this case because a hardware or chip maker cannot be expected to include too many ?readers? or decoders in their equipment to react to, and software manufacturers will only accept so many different DRM?s. Content developers cannot imbed an unlimited amount of watermarks in their music or movies other content to react to multiple systems. So we tried, with great difficulty, to agree on some proprietary technology that would be interoperable.

Ultimately, SDMI stalled when technology companies discovered that, because of piracy, all recorded music was readily available online even in the absence of security standards. Given all of the proprietary interests of the tech industry, the only format everyone agreed to make their machines interoperable for was the unsecured mp3 format. Since every player and machine could read and play it, it became the de facto standard. In a world in which consumers could get for free all the music they could possibly want, there is no longer any incentive for technology companies to protect our content in order to serve their own business interests, because their products and ISP services are selling, even though those products and services are being used to acquire intellectual property illegally. If we could have kept working together, I know we would have done better at finding solutions. In sum, we just couldn?t keep them at the table.

If the Government Can Help With Security Standads, We?re Very Interested

Because of the effects of piracy on the incentives that have led to successful standard setting in other contexts, the marketplace presently does not appear to be working to protect digital music. And while we may be the first industry to suffer the ravages of online piracy, we won?t be the last ? unless something is done to encourage the kind of technical solutions that can actually deal with the problem.

The private sector should be given every reasonable opportunity to adopt appropriate technological solutions. And the government has already provided some help, in the form of the anti-circumvention provisions of the Digital Millennium Copyright Act (?DMCA?) and the notice and takedown mechanisms for ISPs. We are pleased at the renewed offer by many in the tech industry to seek compromise and resolution outside of government action. Obviously we would expect any such effort to include music?s seat at the table. However, additional help may be needed, whether in the form of enhanced legal remedies, more active enforcement of the law, or legislation requiring implementation of technical standards to ensure that all technology companies provide the same level of needed protection. So, we are very interested in exploring with this Committee whether there is something that should be done in this regard. We appreciate your leadership in this area and stand ready, on behalf of the recording industry, to be a productive participant in this important process.

Thank you.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Relevant Links

The RIAA
The SSSCA
Original Article (.pdf)
Senator Fritz Hollings
Summary of the DMCA (.pdf)

She still doesn't understand the benefits that file sharing has. You can't get more publicity than that. You get to know bands you'd never heard of, and you could get to buy the CDs.

BTW: Hillary: it's "file sharing", not "piracy"

PS: first post baby!

2nd post baby...
how nice it would be if tonya harding were to fight hillary rosen in the next celeberty boxing match, either her or chyna.. OOh yeah that would kick ass

3rd post baby.. oO

lol yea mtbatol that was a good fight.
but I think I rather get Mike Tyson to take a chunk out of her. oO

This is where a barf emoticon would come in handy...

"23 percent of the music buyers we surveyed told us that they are buying less music because they’re getting what they want for free..."

Sooooo.... are you saying that the other 77% are buying more music as a result of downloading? WTF is the problem then?!!

haha nice point cryxan

77% probably aren't aware of digital music. Of those 77% 60% aren't buying many discs because they cost way too much.

pfft. statistics can be used to bolster any argument. 73.6% of all people know that.

hmmmmm.... hey fletch, i think that would be 73.723 (ya forgot to carry the one )

The RIAA does not get it. Most people REJECT copy protection systems. People want USABILITY with their files, and "space shifting" is fair use. If you would have did it right, you should have licensed your entire catalog of MP3s to Napster two years ago.

Doesn't she realise this is a cause and effect scene? I rip and burn cuz the industry won't give me what I want. Yes, people ARE downloading for free, but that's because they can't buy what they want.. it's a circle..
"With the right kind of commitment, [voluntary]..".. one of the best jokes in the whole thing.. so to volunteer is "right".. that makes consumer advocacy and protection the "wrong" kind?
This bitch just doesnt' get it. Give the people what they want, and the problem goes away. File sharing isn't all about music (tho that IS one of the more fun applications). She talks about this like you can just log on, tune in and turn on, and sometimes we all know it just ain't that ez.
If the Music Industry would get off their asses and quit coming up with this bubble gum pop crap (aka Britney Spears) and send some real NEW music that people dig down the pipe and put it on media that I can play ANYWHERE as is my right, I'd probably buy it. (then rip it and put it in a p2p site *smirk*)

just my opinion......

Jerry Garcia would roll over in his grave. Hillary - you just don't get it do you? Blind greed and blind justice go hand in hand

Sum up the RIAA in one (polite) word:

ASSHOLES!!!!!!!

As we can see, the RIAA, like the entertainment industry as a whole, does not see fair use as a right, but as a mere "privilege." And not just blind greed and blind justice -- you also have blind paranoia, blind negativism, blind distrust, blind McCarthy-style slandermongering. . . . It is no different that the witch-hunts of the early 1950's, when (in one most famous case) actress Lee Grant was blacklisted for over a decade simply because her then-husband was suspected of being a Communist.

In actuality, their idea of "copy protection" is about as necessary as a brain tumor, diabetic seizure, boil around the neck, etc.

And as for why the record companies keep putting out "bubble gum pop crap": Simple. It's a producer-controlled medium where the nominal "artist" has zero creative control or input. In other words, it's a "work for hire." And isn't that what the RIAA has been claiming that all sound recordings are since, oh, Britney and her ilk first invaded the airwaves?