Hilary Rosen, Former Head of the RIAA, Now Consultant to XMSR, Interviewed in Wired Magazine

Hilary Rosen: Singing a New Song?
By Eliot Van Buskirk Also by this reporter
02:00 AM Jul, 10, 2006

For many, the name Hilary Rosen recalls a Recording Industry Association of America bogeywoman who brought the law down on Napster, the Diamond Rio, small-time internet radio and other fan favorites. Music and tech enthusiasts seemed to hold her personally accountable for the record labels' attempts to preserve an outmoded business in the new, digital age because she acted as the public face of Big Music.
Rosen left the RIAA two and a half years ago. Since then, she has become the interim director of the Human Rights Campaign, launched a political blog for The Huffington Post, and formed a consultancy with , another RIAA alum.

Among her current clients is XM Radio, which is embroiled in a lawsuit with the major record labels and the organization she formerly led over a feature that allows satellite radio customers to temporarily store copies of songs on devices for on-demand listening.

In her new role, the erstwhile copyright enforcer has found herself criticizing the lack of interoperability in digital music; questioning the efficacy of the RIAA's lawsuits against individual file-swappers (a tactic that began only after she'd left the organization); defending new portable audio devices from RIAA censure; and even voicing support for subversive "copyleft" ideas such as the Creative Commons.

It might please some of Rosen's critics to parse this as evidence of a change of heart or even recognition of the error of her ways. Not so fast. Some of her latest arguments obviously dovetail neatly with the interests of XM. But her views, honed over nearly two decades in the music industry, have always been more nuanced than her critics have generally assumed.
Wired News caught up recently with Rosen to talk about life after the RIAA -- lessons learned, XM and the future of music. (The interview that follows has been edited for clarity and length.)

Wired News: I read that you now think that the RIAA has made a mistake in suing individual file sharers as opposed to when you were at its helm, when the approach was more going after companies that are making money on infringement.
Rosen: I never said it was a mistake. … The main goal of enforcement is to promote legitimate distribution. So what I did say, and what I believe, is I think it's a fair thing to question the ongoing value of the individual lawsuits now when there's so much opportunity in the legitimate marketplace. I think it's a fair thing to question: Have the lawsuits outlived their usefulness?

WN: You seem to have said lately that DRM (digital rights management technology that prevents unauthorized copying) doesn't make sense to you anymore. What made you come to that realization?
Rosen: I have long been an advocate of interoperability. I mean, that was one of my original goals when we started the SDMI initiative in the '90s. I always thought that both security and interoperability were worthy goals, and I think people have really focused almost too much on the security part of it.
When I look at something like iTunes and the success of the iPod, I just think how much bigger the online music market could be if there were interoperability among the various services and the various devices.… You can eliminate the DRM and essentially have sort of unprotected content sold everywhere. I'm not a particular fan of MP3 -- I don't think it's as good audio quality -- but, let's say you did AAC or something else.
Obviously, Apple has a business strategy that says "proprietary" works for them. The record companies, I think, have tried to convince Apple to open up their system. I don't think that's been successful. The choice now is to either go unprotected so everybody has the same shot and the market expands, or to continue down what I think is an unfriendly path for consumers and the industry, because I don't think it's growing as fast as it can.
I understand there's a rabid philosophy on both sides of this to protect or not to protect … and I actually am not that black and white about it. I think if people want to protect their content, and want to have a DRM or a business model that limits its distribution, that's okay. If others don't want to, that's okay too. That's why I like Creative Commons. It's all about choice. What I have focused on is what will most dramatically expand the music market at a time when device choices feel so limited and the service side is so underutilized.

WN: In the XM situation, with the RIAA going after Sirius and XM for those songs cached on portable devices -- what do you make of all that?
Rosen: I've been working with XM for about six months. There's a current dispute about whether XM essentially has the right to have a home taping function on their newest devices, and I just think that that's an easy question.
Clearly consumers have the ability to record that way. If there were a search function that said I want Coldplay every time it plays on any XM channel, and I want my device to pull it down and establish a Coldplay library, then I think that would be crossing the line, but these devices don't do that. They allow you to save existing programming and make play lists out of the programming you have affirmatively saved, so I think this dispute will be resolved.
It's in the business sphere, although the RIAA has taken it into the political sphere to try and get legislation to regulate these recorders, and I just am optimistic that there will be a settlement. I think this doesn't rise to the level of court precedent and legal precedent and frankly, I think if the court case continued, the record companies would lose.
There's been a lot of bad information reported about this, both on what the device does and the business choices XM has made. People have said, well Sirius chose to pay additional monies for their devices but XM didn't. That's not true. XM did offer to pay additional monies, in fact, at greater levels than what Sirius is paying, but the record companies, I think, were just looking for a lawsuit on this one because they're hesitant about these devices going forward.

WN: Do you think that we'll ever see TiVo-style, preemptive search where you're looking for what you want to essentially download over satellite?
Rosen: Well, it is ironic, because you can do that with TiVo or a DVR quite easily and it's proven to simply expand the video market. I'll grant that audio might be different in terms of librarying, but I do think you'll see multiple business models with search and library functions going forward. But (regarding) the case before the court now, that's involved with (XM Radio's) Inno and Helix, (they) don't go that far. Therefore, I don't think they rise to the level of panic they seem to be instilling.

WN: Do you put any stock in the idea of taxing ISPs, sort of like what Canada has done? I believe they have a tax there on equipment that enables people to download from P2P with impunity because they've paid this tax, though they still can't upload. Do you see that as a viable approach or is that not enough choice?
Rosen: I'm not a big fan of the government taking over the licensing structure but I do think that the fact that we have very strong copyright owner rights in this country behooves all copyright owners to be as thoughtful about their distribution strategies as possible.
But people ascribe more evil motives to the record companies or copyright owners than they deserve. These people are not in business to lock up their content and make sure you never get it. Their business is only successful if you actually want their content and want to buy it and distribute it, so I think that there is probably extra rhetoric on both sides of that.
WN: The role of the labels seems to be changing in the digital era. What do you see as the next phase in this development, the record label of 2008?
Rosen: It's a hard question in that there are so many models. I do believe that the traditional role of a record company is important now and will continue to be important -- nurturing talent, investing in the marketing and promotion of that talent, and helping that artist with all the multiple distribution options.
In some respects, the people have thought, well, once an artist is established or they have a big name, they don't need the record company because after all, they can go directly to their fans. In fact, that hasn't proven to be true. What we've seen is that the bigger the artist, the more money they want invested in marketing and the bigger the investment in the promotion, etc., and they want the record company's help in doing that.
You see a lot more growth in those artists that can't get through the funnel of the old traditional record company system and they have a lot more opportunity and a lot more outlets…. In many ways, in the online world, what's happening now is what happened in the record industry in the '50s, '60s and '70s -- independent companies and independent artists would develop a following, create a new sound or a new niche, and they would essentially be bought up and expanded by a major label. Now, I think you see some of that in the online space. I think it's all good whichever way it ends up.
You can argue whether you like that taste or not, but there are 100,000 new releases every year, and having somebody filter and pick out those needles in the haystack is still a valuable role.

WN: What advice you would give to (current RIAA head) Jonathan Lamy?
Rosen: Well, I've learned … what I've always suspected -- that it's easier to talk about it than it is to do it.
Look, I think the business has evolved, sometimes not as quickly and not as aggressively as some of us would have liked, but I certainly think the folks at RIAA are doing a good job and doing the best they can do. People also ought to know, the RIAA doesn't call the policy shots. The record companies do.
One thing that was always clear to me was that people sort of blamed the RIAA for essentially being good at their job and that's certainly not a bandwagon I ever want to jump on.

Link to Article: HERE

7/11/2006 09:56:00 AM

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