(TV) Burning Cds Endangered / Costello

["Casey, Leo J" <CaseyL@VOLPE.DOT.GOV>]

I thought list might find this article interesting.

I would have just sent a web link to list that contained the article instead 
of the entire article itself, but although I have free access to Boston Globe 
Archives there's a snafu which would prevent such a link from showing you the 
article.

	Leo 

Burned? 
Last year, recordable discs outsold CDs for the first time. With so many people copying music, is the record industry toast? 
By Steve Morse, Globe Staff, 4/21/2002 
The cries are getting louder from many artists and record companies. Sheryl Crow calls it ''shoplifting.'' Elvis Costello calls it ''stealing.'' But many young music fans are calling it their personal right in the digital age. 
The issue is CD burning - the act of duping a CD for free on your computer. It's become the central worry of a music industry that slumped last year and continues to dive alarmingly, as more and more consumers feel entitled to burn CDs and often distribute copies to friends. 
Even Harvard Law School students are getting into the act. When Hilary Rosen, the head of the Recording Industry Association of America, lectured at Harvard last week, she asked how many of the law students had illegally downloaded music. About one-third of them put their hands up. But when she asked how many had burned CDs for friends, the vast majority raised their hands. 
''And some of these people are thinking of going into the entertainment industry,'' Rosen said afterward, shaking her head in disbelief. ''This is what we're up against.'' 
For decades, people have made cassette recordings for friends. But record-label representatives say that home taping was never as prevalent as CD burning, mainly because blank tapes cost up to eight times what you now pay for blank CDs. Also, the sound depreciated every time you made another copy. 
Not so in the digital age, when immaculate-sounding copies can be made every time. 
Ownership of CD burners 
has nearly tripled since 1999. Last year, according to a study by Peter Hart Research Associates (commissioned by the RIAA), two in five music consumers owned a CD burner, as compared with 14 percent in 1999. And the same study found that 23 percent of consumers bought less music last year because they downloaded or copied most of it for free. 
Many new computers now come equipped with burners, and recent TV commercials tout them as being hip accessories. Sales of blank CDs - used for recording purposes - have skyrocketed to the point that, for the first time, more blank CDs (1.1 billion) were sold last year than prerecorded CDs (968 million). 
''Obviously, something is being done with those blank CDs,'' says Mike Dreese, owner of the Boston-based Newbury Comics record chain and prophetic coauthor two years ago of a widely distributed essay, ''Disc burning equals death.'' 
Dreese notes that CD sales were down 4 percent last year from the year before. They are down 9 percent so far in 2002 and he predicts a 13 percent overall decline this year, based on how many consumers will buy new CD burners. 
There's a ''sex appeal'' to burning CDs, says Crow, adding that it is a social event for young people, just as listening to 45s was once a social event for their parents. 
The industry is grappling with technologies that prevent copying to help stall this trend and especially to harness the ''cottage industry'' (as Dreese calls it) of people who make copies on a dorm floor and sell them to other students. This goes way beyond just making copies for friends. 
''None of the [copy-prevention technologies] totally work yet, but the best minds in the business are spending copious amounts of time to find a solution,'' says Ron Fair, president of A&M Records. 
In the meantime, the industry is mounting a massive public-education campaign before other, sterner tactics are tried, as happened when the RIAA effectively shut down the file-sharing service Napster by hitting it with a lawsuit that succeeded, ultimately protecting against copyright infringement and ensuring that record companies and artists would be compensated for past copyright violations. 
Seeing both sides 
It's a complex issue that is far from cut-and-dried in the eyes of many observers, including some artists. ''I see it from two different sides,'' says Boyd Tinsley of the Dave Matthews Band. ''It sucks because musicians will make a lot less money'' from CD burning, he says. ''But, on the other hand, it's a cool thing because kids gets exposed to so much music through the Internet - and that's a good thing.'' 
Many young people such as Eric Gregory, a 16-year-old student at Cambridge's Buckingham, Browne & Nichols School, also see both sides of the issue. But they burn CDs anyway, convinced that store-bought CDs are just too expensive (up to $19.98 apiece for domestic releases). 
''The amount you have to pay for CDs is horrendous,'' says Gregory. Instead, he's joined the parade of fans who buy blank CDs in bulk (costing between 25 and 50 cents each) and then add the CD cover artwork by checking Internet sites such as www.CD-cover-search.com. His CD burner cost less than $100 and he can copy a CD in about three minutes. 
''Burning a CD is a good thing,'' he says, ''because you get to see if you like the band, and then you can go to their shows, where you help them by buying tickets and merchandise. I'm not trying to rip off the band. And a lot of times, kids will buy the CDs after they've burned a CD, just to support the band.'' 
The RIAA's Rosen, however, sees some of this as bogus logic. ''It's in vogue to diss record companies. That gives fans the license to say, `Well, we're only hurting record companies. We're not hurting the artists,''' she says. ''People sometimes think `If an artist is well known enough and I've heard of them, they have a lot of money and I don't care. And if an artist is unknown, they ought to be grateful to me for spreading their name around.' So they create this sort of rationalization.'' 
Rosen does a lot of public speaking at schools and she prods the students to think about what they're doing by burning CDs, since the artists aren't getting any royalties from that. ''Analogies are what really work best,'' she says. ''I ask them, `What have you done last week? They may say they wrote a paper on this or that. So I tell them, `Oh, you wrote a paper, and you got an A? Would it bother you if somebody could just take that paper and get an A too? Would that bug you?' So this sense of personal investment does ring true with people.'' 
In today's volatile business climate, arguments over CD burning can sometimes get much more testy. Dreese of Newbury Comics recently spoke at Berklee College of Music and lost his temper with one student who said that he could hack through any encryption technology and still get the music for free. 
''I said, `Well, what if you could steal a penny from every senior citizen's bank account in the country? They're not going to miss it, but you'd quickly make yourself a million dollars. Now what would happen if everybody behaved that way?' 
''These type of people perceive the risk of getting caught as being nonexistent. It's like a hacker mentality. If there's a way you can hack it, then you should just be entitled to it. It goes with the hacker ethic.'' 
The downturn 
The reasons are debatable, but signs of a record industry swan dive are everywhere. There have been recent bankruptcies by the National Record Mart and Northeast One-Stop (the No.1 supplier of music for Newbury Comics), Valley Records in California, and a stunning move by EMI Records to lay off 1,400 employees globally and drop 400 acts. 
It's also notable where the people who still buy music are buying it. Chains like Tower and Virgin are down 8 to 9 percent, according to SoundScan, while mass merchants such as Wal-Mart and Target (that is, stores that sell many other products besides CDs) are up 6 percent. That has a negative impact on the selection of music in record stores, because obviously, those retailers focus on the faster-selling hit-making acts, rather than exposing a lot of new, lesser-known CDs that sell fewer copies and take up space. 
Stopping the practice of CD burning, however, could be thorny on legal grounds. ''Is CD burning legal? That's a little complicated. Probably the answer is yes,'' says William Fisher, co-director of Harvard's Berkman Center for the Internet and Society. 
''The cottage industry of kids burning CDs and selling them around dorms is plainly illegal. That's a commercial use,'' he adds, noting that it violates the Audio Home Recording Act Congress passed in 1992. ''But if a kid wants to distribute 10 copies around his dorm for free, that's looking a lot more like it's OK. That sounds like what was happening for [what led up to] the Audio Home Recording Act. You'd make a mix and distribute it to friends as gifts. And gifts are not commercial, so it's very hard to stop.'' 
The way to address the record industry's concerns about loss of revenue is by finding other means of compensation, Fisher says, such as a tax increase on blank CDs. The major record labels may eventually push for that tax, or a tax on CD burners. 
For now, though, the labels are exploring copy-prevention technologies. Sony just released the new Celine Dion CD in Europe as an encrypted CD, though the results are not yet in. Universal experimented with copy prevention on the domestic release of a second volume of ''The Fast and the Furious'' soundtrack). 
More ominous for digital free-use advocates is a bill introduced last month by Senator Ernest Hollings, a Democrat from South Carolina. Called the Consumer Broadband and Digital Television Promotion Act, it would give the entertainment and computer industries up to 18 months to agree to a technological standard to stop the spread of unauthorized copying of digital audio and video. A Web site known as DigitalConsumer.org was started to rally support against this Congressional bill. 
Record labels have also started their own subscription services that are trying to grab a piece of the pie. These services include Pressplay (jointly owned by Sony and Universal), MusicNet (funded by BMG, Warners, and EMI) and Listen.com's Rhapsody. They offer the downloading of music, but Pressplay boasts that it is the only one to also offer CD burning (on a very limited basis) so that you can make a portable copy for your car or your Walkman. 
Pressplay, which pays artist royalties, was launched in December and offers a 14-day free trial. After that, consumers can sign up for the ''silver'' plan for $14.95 a month (offering 500 streams, 50 downloads, and 10 burns - but only two songs from any one album), the ''gold'' plan for $19.95 a month (750 streams, 75 downloads, and 15 burns), or the ''platinum'' plan for $24.95 (1,000 streams, 100 downloads, 20 burns). There are no statistics yet as to its success, according to Pressplay vice president Seth Oster, but it has ''exceeded our internal estimates,'' he says. Pressplay is also partnering with Billboard to offer the latter's archives, so someone could go back 20 years, for example, and grab the Top 10 hits of that particular week to make a compilation CD. 
The cost of these services is similar to paying a monthly rate for cable TV, but the difference, according to Dreese, is that consumers never got cable TV for free, whereas they are now used to getting music for free because of CD burning. 
''I don't see why anyone is going to pay $10 to $15 a month for a severely limited bit of music,'' says Dreese, who predicts that Pressplay is going to meet consumer resistance. 
But music-industry executives argue that the landscape is going to have to change, one way or another. 
''We have got to do something to protect intellectual property. It's just not right to steal,'' says Albhy Galuten, vice president of new media for Universal Records. ''We're not living in the Renaissance when the Medicis funded artists. We live in a capitalist society. 
''This is a sociological problem and we have got to work it out,'' adds Galuten. ''I find it incredibly ironic that some people will spend an extra $1,000 on their hard drives just so they can store more music, but they won't pay for the music.'' 
The RIAA is taking a wait-and-see approach at the moment, but Rosen does not rule out seeking legal redress against individuals who ignore copyright protection. It's a last resort, but she says ''individuals are liable.'' 
And Elvis Costello doesn't mince words when he says, ''If you're a carpenter and you make a chair, and then somebody comes around your workshop and takes the chair away, you call the police. There isn't any gray area. It's just stealing. 
''Why should it be any different with music?'' he asks. ''If music is all free, then why not go and make up your own songs? Music isn't just in the air. Somebody has to determine the order in which these tones and rhythms are played and arranged and recorded.The woolly idea that music should be for free is ridiculous.'' 
Yet even Costello acknowledges that, at least in terms of the big record companies, ''They've loaded the game so the house has been winning for a long time. Now it's time maybe for the house not to win for a while. Maybe they have to take some losses.'' 
This story ran on page L1 of the Boston Globe on 4/21/2002. 
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