Music industry takes sides in file sharing war

The war over music downloads is hotter -- and more confusing-- now than ever.

As of February, more than 17,850 people have been sued by the Recording Industry Association of America on charges of downloading music without paying for it, or sharing music files in violation of copyright rules. The RIAA says breaking the law must have consequences.

But now, one of the RIAA's own member companies -- Nettwerk Music Group -- has come out against that approach. Suing music fans is not the answer, says Nettwerk CEO Terry McBride, whose company is footing the legal bills of a Texas family that was sued by the RIAA.

"The path that the industry is going down is actually destroying its own future," McBride says. "All they're really doing is creating a future that can't be monetized" -- by driving fans further underground.

Instead of working with sites like Napster and Kazaa, the RIAA's criminalization of file-sharing is driving fans to newer technology like Bit Torrent, which can't be tracked, he says. Fans are even IM'ing entire albums to each other, which also can't be tracked.

The RIAA, with its lawsuits, is "killing my future," McBride says, "and I refuse to let them do that."

Filing-Sharing: The Effects

Artists have long been on both sides of the file-sharing controversy. What's new is that the battle is being cast in business terms, with the very music companies the RIAA is trying to protect starting to break ranks.

Evidence is mounting that file-sharing is not the cause of recent downturns in music sales, led by a 2004 study by the Harvard Business School. Rather, file-sharing gets far-flung fans talking about new music, turning them into an unofficial marketing arm, McBride says.

"The brilliant thing is, these file-sharers are now beginning to break bands, bands that aren't getting mainstream radio or mainstream TV," he says. "Bands like Clap Your Hands, bands like Sufjan Stevens, bands like Arcade Fire are now beginning to break because these kids are sharing music, and they're beginning to sell records -- hundreds of thousands of records."

"Guess what, music just got exciting again," he says. "We're back in the days of grunge where new music is beginning to sell versus the homogenized stuff that's been on the radio quite a long time."