How The Record Companies Committed Suicide, And Hollywood Is Jumping Off The Same CliffHow The Record Companies Committed Suicide, And Hollywood Is Jumping Off The Same Cliff

Everybody knows Napster was a disaster for the music industry. But Cory Doctorow demonstrates that what everyone knows is false. In fact, Cory argues, Napster could have been wonderful for the music industry, and shutting Napster down was a blunder which will prove fatal. What's worse, Hollywood will likely repeat history with YouTube.

Cory's argument in a nutshell: Napster was a well-financed operation with a business model of distributing all recorded music for free. It had a plan in place to start charging customers for the service, and was willing to to cut a deal with the music companies, but the music companies preferred to go to court and shut Napster down.

That could've been a pretty sweet deal for the music industry. It's true it was wrong of Napster to start distributing the music and then offer to cut a deal. But that's no different from how cable TV operated a generation ago when it was getting started. And it's no different from how the record companies themselves operated when they were launching a century ago.

The result of the Napster crackdown: Peer-to-peer file sharing is bigger than it ever was, with services based in places where copyright law is hard to enforce. iTuunes can't keep up. The record companies are flailing around with some supremely lame downloadable music offerings of their own. The music industry is imploding, and music pirates are getting rich.

Now, Hollywood is looking to repeat history with YouTube. Like Napster, YouTube got fat distributing pirated music. Like Napster, YouTube is looking to cut a deal with the copyright owners. But Hollywood doesn't want to cut a deal -- they'd rather go out of business.

Part of me says the heck with it. Let Hollywood slit its own throat. If the studios and TV networks won't join the 21st century, plenty of other, younger companies will get rich serving the market needs.

But another part of me is a patriotic American, and fears that the companies that step up won't be American. America has been the world's dominant entertainer for a century. It's not just big business for us, it's part of the so-called "soft power" that has made us a superpower. While the U.S. is creating intellectual property laws that stifle innovation, a billion Chinese and Indians don't care. They're are smart, talented, hard-working, and hungry.

When you're done reading that column by Cory, take a look at a piece he wrote for the Guardian, in which he compares digital rights management to Soviet Union junk science:

Likewise, DRM is "ideologically comforting rubbish" that comforts record-company execs and Nashville, but does nothing to curb piracy. And if you don't believe that, you're nothing but a dirty commie.