[The USA Today editorial calling for changes in the music industry]

USA TODAY

May 6, 2003, Tuesday, FINAL EDITION

SECTION: NEWS; Pg. 14A

LENGTH: 666 words

HEADLINE: Music industry's aggressive tactics tune out fans on Net

BODY: Today's debate: File swapping

Our view: A better plan is to improve commercial sites for online music.

Users of popular Internet systems for music copying are getting a new and unwelcome surprise: ominous instant messages from the recording industry warning that "distributing or downloading copyrighted music on the Internet without permission from the copyright owner is ILLEGAL."

The messages are the latest tactic in record companies' reinvigorated war against Internet music copying. Always quick to verbally attack those who use file-sharing systems, the industry now is adopting more tangible tactics. Call it virtual warfare.

Except the industry's messages contain a real threat of legal action. They also warn those tempted to share Internet music that doing so opens their computers' hard drives to unsavory characters who may be looking for more than free music.

This is classic recording-industry recalcitrance: heavy on threats against breaking the law, light on incentives to obey it. And it's only the first volley. The industry is developing computer viruses that would attack the computers of people offering pirated music. On the legislative front, it is pushing for a national law that would make such hacking by copyright holders legal.

Talk about adopting enemy tactics. By proceeding with its plans, the recording industry would join the ranks of Internet spammers and hackers. It also would waste creative efforts alienating the very people it needs to lure back to legitimate music sites.

The strategy raises questions about the business rational behind destroying an audience to save it -- especially an audience that has proved itself hungry for a reliable, convenient way to record music online.

The growth of Internet-file swapping has exploded in the past two years. Ratings services estimate that users of Kazaa, one of the services targeted in the recording industry's campaign, number almost a quarter billion worldwide. That's triple the number of people who used Napster before an industry lawsuit shut down the file-swapping service in 2001.

The industry says it needs to step up its efforts because piracy has become readily accepted. But its aggressive stance isn't working. Napster, the once-dominant fileswapping service, no longer exists. Verizon Communications lost a pivotal legal case and now must provide the names of suspected music pirates who use its Internet service. Colleges, fearing litigation, have stepped up efforts to police music theft on campuses.

Yet the efforts have failed to get people to pay for music recorded off the Internet. One reason is that legitimate music sites remain unappealing. Most are cumbersome and offer fewer services to paying customers than illegal sites provide for free.

That could be changing. After months of courting by Apple Computer CEO Steve Jobs, five major recording labels agreed to a less-restrictive approach to selling online music. Unveiled last week, Apple's iTunes Music Store allows customers to buy music a la carte rather than pay monthly subscription fees. It also lets them copy music on up to three computers and burn up to 10 CDs.

At 99 cents per song, the service still faces a major marketing challenge in luring people away from illegal sites. But it is a tentative move in the right direction. Now, if record companies could be more aggressive in pricing and less so in threatening customers, they might make real progress.

Music's growing medium

Online file swapping has become hugely popular. Some facts:

* Number of downloads of the file-sharing software Kazaa each week: 2.8 million

* Files shared over the Internet each month: about 2.6 billion

* Drop in CD sales last year: 10%

* Rise in blank CD sales last year: 40%

* Share of adults with Internet access who downloaded music for free: 17%

Sources: Recording Industry Association of America; USA TODAY/CNN/Gallup Poll