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House Committee
Discusses Online Music
WASHINGTON, DC – The House
Committee on Small Business held a hearing to examine the new
market possibilities for small music labels and entrepreneurs
created by the Internet. According to Forrester
Research, the
market for downloadable music is projected to expand from
virtually nothing in 1999 to over $1.1 billion in 2003.
However, the panel had differing views about the viability of
online music labels. Chuck D, founder of Rapstation.com
stated, "I'm looking forward to the day when there are 1
million labels and 1 million artists on the Internet."
Chuck added that the power of music distribution has been held
for too long by a small number of people, thus stifling the flow
of creative works into the marketplace. "I am working with
an unnamed company right now on a model that will allow free
downloads and compensation for artists," Chuck added.
Tom Silverman, founder of Tommy Boy Records stated,
"Piracy, either via the Internet or through other means is
so rampant, my own artists don't trust me with copies of their
unreleased material." Silverman went on to add that his
copy of one of his acts new singles has a voiceover that says
,"Property of Tom Silverman," three times.
"Without a doubt, the Internet provides a tremendous
opportunity for small record labels such as Tommy Boy
Records," said Silverman, "however, as easy as it is
for Tommy Boy to distribute music over the Internet, it is even
easier for Internet users to copy Tommy Boy's music and
distribute it worldwide."
Peter Harter, Vice-President, Global Public Policy and Standards
at Emusic.com,
noted that the music industry has room for expansion and that
the Internet offers the perfect vehicle to allow new players
into the industry. Emusic.com is the Internet's largest retailer
of authorized and licensed MP3 files. Ric Dube, Senior
Analyst/Editor at Webnoize added that in the age of file
swapping software like Napster, music labels should consider
selling monthly subscriptions to online music sites to provide
listeners, especially younger ones, with the content they
desire.
Chairman Jim Talent (R-MO) noted that the change in the models
of music distribution would allow small labels to prosper if
they are nimble enough to adapt and utilize emerging
technologies. "In the age of the Internet smaller labels
have the requisite flexibility to find innovative ways to market
their works and maintain their revenue streams. Artists like
Chuck D and innovators like Emusic.com and Tommy Boy Records
will be able to survive in the future because of their
commitment to music and their willingness to embrace advances in
technology."
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