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What AllofMP3.com could teach the music industry

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[Editor's note: Sometimes one re-reads a piece and realizes that an essential piece of background information has been left out because it was considered absolutely obvious. In this case, I'd like to make it perfectly clear that I don't condone AllofMP3.com. They steal music and distribute it without compensating the artists who sweat and suffer to create it. I also don't seriously believe that any record company would ever purchase AllofMP3.com, although I could foresee a situation in which the domain is turned over to a recording association as part of a legal settlement. The original title -- "Why Allofmp3.com could become the saviour of the music industry" --  was an attempt to draw in readers. Unfortunately, it merely served to pull people's attention away from the important elements of this piece.

I firmly believe that the major labels should set up an international site similar to AllofMP3.com that pays artists properly while offering affordable music downloads which do not restrict my fair-use rights. In other words, I should be able to use the music I download in exactly the same way I use a CD: I deserve the freedom to play it on my stereo, in the car, or on my iPod. I deserve the right to take it to a friend's place and play it there. I also deserve the right to resell it or give it away.]

AllofMP3.com is a Russian music download service that charges "by the megabyte," just like a dodgy buffet restaurant. You choose the bit-rate and they serve up unencrypted mp3 files that you can play anywhere. Their prices are unbeatable (most songs cost less than 20 cents) because they [illegally] sell millions of dollars worth of music without paying license fees to the people and companies who own the source CDs. The International Federation of the Phonographic Industry (IFPI) and the Recording Industry Association of America (RIAA) are [quite rightfully] working extremely hard to get the site shut down, but I have a better idea...

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The IFPI should buy Allofmp3.com and turn it into a distribution system for their members. If they keep critical elements of the current site, I guarantee them massive success. [OK, just in case you're about to pull out your gun, I don't seriously think that any recording association would buy such a site. I think there are several elements of AllofMP3.com that record companies should duplicate, though.]

Allofmp3.com became popular because they give music lovers what they really want: a convenient and affordable source for music that isn't copy protected. To regain their footing, the major labels need to get their collective heads around the idea that convenient, versatile and inexpensive downloads are the key to prosperity.

The IFPI truly needs something like Allofmp3.com as a sales portal for their members. The word on the street is that 30% of each iTunes transaction goes directly into Apple's pocket. In other words, by selling direct record companies could cut the price of a popular song to 69 cents without significantly impacting their bottom line. In fact, I'll go a bit futher to suggest that entire albums should be available for no more than $5. The important point here is that the site needs to offer material from a full range of labels, just like a record store.

Apart from price, a second key advantage of Allofmp3.com is that they offer unencrypted mp3 files that can be used as the customer sees fit. I understand why recording industry associations are attracted to copy protection: it prevents people from giving or lending songs to their friends and keeps control in their hands. But Allofmp3.com has already proven that people will pay for unprotected downloads, as long as they're easy to obtain and affordable (seeing a pattern yet?). The vast majority of tunes on my computer's hard drive are from my CD collection, and having them available in unprotected form hasn't turned me (or any of my friends) into rabid filesharing pirates.

The third critical advantage of Allofmp3.com is that they are truly international. There are no arbitrary boundaries - all songs are available worldwide at the same time, for the same price. Not that I mean to pick on iTunes, but Apple's prices vary inexplicably between countries: a song that costs 99 cents in the USA retails for the equivalent of $1.25 in Europe, $1.47 in the UK, 87 cents in Canada, and a whopping $1.58 in Ireland. Why?

Bohus made the astute observation this afternoon that "any media without DRM is retro." In a way, he's completely right; mix tapes and VHS recordings of TV shows may soon be outlawed by draconian "Digital Rights Terrorism" laws. He continued with a zinger: "I don't want to live in a world with no record button." Sadly, that's exactly the world media executives fantastize about - a place where you have to pay each time you hear a tune or see an image.

I don't think the record companies' pay-when-you-hear nirvana will come to pass, simply because their vision isn't one that any of us sincerely want. And that leaves only one option...

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