The Losing Battle

The entertainment industry is fighting a battle that it can’t win. Holding on to the concept that business will be conducted as usual is no longer a positive perception. Today’s retailers, radio executives and record companies must now morph into something new, exciting, and technologically astute to maintain profitability. Some recent developments seem to verify the veracity of my statements. South Florida has the largest amount of pirate radio stations in the nation. A lot of reasons have been given for this phenomenon from the typical “No one is playing what the public wants to really hear”, to “How can we have a prosperous local music scene when there is NO LOCAL music on the airways” and even “The mix of different cultures here means that we need a different mix of music on the air” Well this conglomerate of new & exciting stations has now come to a halt. “The FLORIDA STATE SENATE passed a bill THURSDAY (April 22, 2004) to make operating a pirate radio station or interfering with radio transmissions a third-degree felony.

The bill, sponsored by Sen. ALEX VILLALOBOS (R-MIAMI), passed the SENATE 30-8, with a companion bill ready for a house vote. FLORIDA is a particularly popular area for pirate stations, especially in the MIAMI-FORT LAUDERDALE, WEST PALM BEACH, FORT MYERS-NAPLES, and ORLANDO areas.” Reported by All Access.com This bill will allow authorities to not only confiscate equipment but also arrest the users of this broadcasting equipment all without an arrest warrant. Broadcasters in South Florida are now looking for an alternative and one is on the way.

On demand Wireless Internet Access for mobile devices. Internet Radio and Internet TV usage has grown significantly and is now being compared to the rise of FM radio in the '70s. A study from Arbitron/Edison Media shows that, as of January 2004, the estimated number of Americans using Internet Radio and Internet TV per month has reached 51 million. That's an increase of 10 to 21 percent in four years...

We're less than a year away from Internet Radio and Internet TV invading the final fortress for AM, FM and satellite radio: the car. That's when KVH Industries based in Middletown, R.I., plans to release a product that will allow Internet Radio and Internet TV broadcasts in cars. Your choice: a 100-channel subscription satellite radio or more than 10,000 worldwide radio streams and hundreds of video streams The monthly Internet Radio audience represents approximately 38 million, with a weekly audience of nearly 19 million. That's eight times greater than XM and Sirius satellite radio subscribers combined... This should completely change the way radio is programmed and heard. Households trading in dial-up for high-speed broadband have grown from 6.2 million in 2000 to a projected 30.5 million by 2005. Translation: A year from now broadband will have surpassed dial-up for Internet access The day most record retail stores have dreaded is upon us.

Nielsen Soundscan figures now report the number of legal US music downloads on a regular basis. For the last 6 months of 2003 over 19.2 million downloads were reported. This phenomenon shows that Internet downloads have outsold the single format by over 3 to 1 during the same period. During the same period in Europe half a million customers purchased legal downloads from more than 30 official websites with a repertoire of over 300,000 songs. The international music trade association IFPI has published its first comprehensive study on the development of legal digital music services. Based on studies from IFPI, RIAA, Sound Scan, and NARM digital downloads are fast approaching the most sought after way to purchase music on the planet. Every major label and distribution company is developing a music & movie download scheme for themselves. It is not a coincidence that the RIAA has placed two Washington insiders as there chief executives.

Mitch Bainwol Chairman and CEO the Recording Industry Association of America, highly respected by both sides of the political aisle, most recently led The Bainwol Group, a lobbying firm in Washington. The Washington Post recently called Bainwol a "Top D.C. Lobbyist and Man in Demand." Several years in a row, Capitol Hill's Roll Call newspaper hailed Bainwol as one of the 50 most influential "politicos" in Washington. Cary Sherman is the president of the Recording Industry Association of America. He coordinates the industry's legal, policy and business objectives and his responsibilities include technology, licensing, enforcement, and government affairs issues, among others. He also serves as the General Counsel of the organization. National Journal has described Mr. Sherman as an "intellectual property guru" and "one of the top copyright attorneys in the country."