by Christopher Paul on July 19, 2007

I’ve read a lot of articles lately about companies “leveraging” one option over the other. In a specific context, the RIAA and its partners at SoundExchange, are rumored to be leveraging their fee increases to push DRM on Internet Radio stations. The thought goes that SoundExchange would be OK with reducing the fees considerably if the stations began using some sort of DRM to prevent “stream rippers” from recording high quality feeds. The radio stations wouldn’t go out of business because the fees were reasonable and the RIAA would be content knowing they could control the music the way they see fit and prevent piracy.

I’ll take a brief moment to highlight some flaws with that possibility: Any fee increase hurts the radio stations and extra technology on top of that (at a cost to the stations, no doubt), will be no different than a straight fee increase. Plus, DRM doesn’t solve the “analog hole” where someone reads the analog output of the audio and, with little loss, digitizes it back again in one easy step (or two). Plus, who’s to say that after the DRM is applied the precedent is made for other fee increases. I should also point out that DRM doesn’t work as a crime prevention tool as it is easily broken and will be time and time again. DRM only controls enough to annoy most people but hardly stop the real criminals who download files illegally or, in most cases, use mass produced counterfeit CDs. But back to my thoughts on leverage.

The idea that SoundExchange would impose heavy fees on the radio stations only to (at the 11th hour) suggest that these companies can avoid the fees buy doing a particular action sounds a little fishy. In fact, if someone were to threaten to beat me up only to say I can avoid the smackdown by paying them money, I’d call that extortion. I’d also venture to call that the same kind of quid pro quo that get’s people into sexual harassment situations. The notion of the RIAA saying you owe us a ton of money for promoting our music but saying we’ll reduce the bill if you put restrictions on what your listeners can do with that music is something I would expect of organized crime.

Funny how that sounds?

I’ve heard of this done in other contexts, too, but no matter how you look at it, leverage is another word for extortion.

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