It's All Free!

(5 of 5)

Pressplay and the other "legitimate" music services are more reliable than Kazaa and its ilk. For one thing, there's no porn and no spoofing, and Apple's new offering is expected to give the whole process a more streamlined, user-friendly feel. These services also give customers the peace of mind that comes with not breaking the law. It will be interesting to see how much that's worth. But for now listeners are staying away in droves; industry analysts estimate that the legitimate downloading services have fewer than 300,000 users in all. Still, if the retail-music business is going to survive, this may be what it has to look like, and for the business side, that's the real significance of the digital revolution. "It's not piracy per se but a transition to a digital world that will transform what a record company is and how it works," says EMI's Rose. "While downloading is an important issue, it's just symbolic of a much more fundamental shift in how music will be moved and acquired by consumers and be used."

Can the for-pay services compete? Maybe. Can antipiracy laws be enforced? Perhaps. Can copy protection stand up to a hacker army of teenage Jon Johansens? It's possible. But all this raises an interesting question: What if the pirates win? If you play the thought experiment out to its logical extreme, the body count is high. After all, you can't have an information economy in which all information is free. The major music labels would disappear; ditto the record stores that sell their CDs. The age of millionaire rock stars would be over; they would become as much a historical curiosity as the landed aristocracy is today. Instead, musicians would scratch out a living on the touring circuit, since in an age of free music the only commodity they would control is live performance, along with any merchandise they could hawk in the parking lot after the show. Hollywood would also take a hit. People might still pay to watch movies in the theater — viewing on the big screen beats watching movies on your computer — but Hollywood would have to do without revenue from video stores. Who's going to rent what they can download for free? TV studios would likewise have to do without their cushy syndication deals, since the Net would become the land of infinite reruns. Hope you like product placement — you'll be seeing a lot of it. Already this July the WB network and Pepsi plan to launch an American Bandstand — style TV show called Pepsi Smash, featuring performances by big-ticket music acts. Alternative revenue streams never tasted so good.

In a sense, the future is already here. You can see it in action in Asia. Piracy is a growing phenomenon in the U.S., but in some developing countries, it is a fact of life. There's a marketplace in Karachi, Pakistan, where you can buy a DVD of How to Lose a Guy in 10 Days for 100 rupees (about $1.75) even while it's playing in first-run theaters in the U.S. Karachi boasts five optical-disc factories, just one of which churns out 40 million pirated discs a year. If you think American teenagers are guiltless, file-swapping punks, try talking to a Karachi shopkeeper. "We make copy of everything!" says Mohammed Haris. "Even George Bush cannot dare to come over here. We will keep the original and send his copy back home."

This kind of commercial piracy has devastated the Asian entertainment industry. In China, where piracy rates for movies, music and software are all more than 90%, record companies trying to develop local talent have bled money for years. Every time they try to build up a star, the pirates siphon off the profits. "There's no point in spending money to drive demand," says Samuel Chou, Warner Music's CEO for China and Taiwan, "because what you drive all goes to piracy."

It's a scary cautionary tale — but at this point, hypothetical horror stories are almost beside the point. The people have spoken, and they say they want a revolution. File sharing isn't going to save us from corporate entertainment the way the Beatles saved Pepperland from the Blue Meanies, but if it allows more people to listen to more music in more ways than they ever have before, can it be all bad? And does good or bad even matter? Technology has a way of sweeping aside questions of what is right or wrong and replacing them with the reality of what is possible. Recorded entertainment has gone from an analog object to a disembodied digital spirit roaming the planet's information infrastructure at will, and all the litigation and legislation in the world won't change it back. The genie is out of the bottle, and we're fresh out of wishes.