U2- One

U2 manager proposes novel piracy crackdown


CANNES: Saying that Internet and technology companies have for too long had a "free ride on music," the veteran manager of the band U2 on Monday urged them to start "sharing their enormous revenue" with singers and songwriters.

At the annual music industry trade show in the south of France, Paul McGuinness blamed broadband Internet service providers in particular for allowing mass piracy of digital music over their networks while sales of recorded music and royalty payments to musicians have plunged.

Technology companies like Oracle, Dell, Microsoft and Apple have also reaped millions in sales by whetting the public appetite for digital music without any benefit for the creators of the music, he said.

"They're keeping it all," McGuinness said of the money that tech and telecommunications companies make indirectly from the music business.

His impassioned plea was the latest in a steady stream of cries for help from the creative side of the music business over the past decade, ever since the original Napster made it easy to trade digital tunes over the Internet for free.
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In the meantime, global industry sales have fallen from $38 billion in 1998 to $17.6 billion last year, according to industry estimates.

Various solutions and proposals - from a fund to compensate musicians, to lawsuits against individuals who trade songs, to legitimate digital music services like Apple's iTunes - have failed to stop the tide.

Mark Mulligan, an industry analyst at JupiterResearch, expressed some doubt that McGuinness could make a much of a difference.

"You can point the blame in numerous directions," including Internet service providers, Mulligan said.

"The bottom line is it requires everybody in the value chain to act in concert, or it won't work."

McGuinness endorsed a proposal first raised in France late last year for Internet service providers to voluntarily band together and crack down on subscribers who dominate illegal file-sharing networks. The French plan, drawn up under the guidance of Denis Olivennes, chief executive of the electronics, movie and music retailer FNAC, is the latest in a series of French efforts to deal with media piracy.

Serious violators already face the threat of fines and up to three years in prison. But few have been prosecuted and few convicted under these laws, according to the International Federation for the Phonographic Industry.

"For ISPs in general, the days of prevaricating over their responsibilities for helping protect music must end," McGuinness said.

If they do not, governments should legislate such action, and the music industry should consider legal action against them, he said.

John Kennedy, head of the IFPI, which has sued both consumers and Web site owners on piracy issues, seemed willing to consider lawsuits against ISPs.

"We've tried every other avenue possible," Kennedy said.

McGuinness challenged Steve Jobs, chief executive of Apple, to "apply his ingenuity" to solving the music industry crisis. It was about this time last year that Jobs issued a public letter blaming the record industry, particularly in Europe, for making it difficult to see digital music legitimately.

Apple on Monday had no immediate comment on McGuinness's remarks.

"These are very clever people and a lot of fun to work with," McGuinness said about the technology and Internet community in Silicon Valley. "But they've been extremely socially irresponsible."

"For me," he added, "the business model of the future is one where music is bundled into an ISP or other subscription service, and the revenues are shared between the distributor and the content owners. Some people go further and favor a state-imposed blanket license on music. I don't believe in that."

McGuinness and U2 have in the past had a close working relationship with Jobs and Apple, which has sold a U2-branded iPod, its first commercial partnership for the music device.

"A government cannot set the price of music any more than a rock band can run a government," he said.

The manager said he could not speak for the members of the band on the issue, except to say that U2 has a "excellent relationship" with its record label, Universal Music Group, a division of Vivendi, based in Paris.

At the music industry conference, there were expressions of hope for advertising-funded music services, whose free digital music might be able to compete with the free music on pirate networks, like Limewire and Gnutella.
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