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RIAA Blasts Its Customers, Again

The Recording Industry Association of America (RIAA) just won't give up. The unified front for Sony (NYSE: SNE  ) BMG, EMI, Vivendi Universal Music, and Warner Music (NYSE: WMG  ) , et al., is becoming even more audacious in its campaign against American college students.

A new wave of 407 settlement letters went out to 18 colleges, including above-suspicion law universities like Stanford, Duke, and UC Berkeley. Yale and Columbia were tapped two rounds ago in November.

But they still haven't worked up the gall to take on Harvard, where prominent law professors have advocated strong, direct action. The RIAA probably knows that it would lose the resulting lawsuit, and while the association may be obnoxious, it's not stupid.

Despite the continued attacks, I still believe the RIAA is fighting a losing battle. Its member companies would do better to focus on making the best of this new era in music distribution. You can't hold back progress forever, even with a broken legal framework at your side.

Look at it this way: About a hundred years ago, you'd have to be both lucky and rich to enjoy a raspy, low-quality wax cylinder recording of your favorite banjo duet. Or, you could move to New York and hear a symphony every week. Vinyl records killed the cylinder but not the music; eight-tracks and audiotapes created the mixtape tradition, which again failed to destroy culture as we know it. And so it goes. Music continually strives toward ubiquity and affordability, which could eventually culminate in free music everywhere.

The incumbents of the music industry have been dragged kicking and screaming into each subsequent revolution, desperate to save their precious, established revenue streams. Embracing new technologies could have put them in the very heart of the new wave and replaced their old, dying revenue with new and usually higher-margin income streams.

Instead, Apple Records had been at war with the iTunes kind of Apple (Nasdaq: AAPL  ) ; the RIAA  nipped Napster (Nasdaq: NAPS  ) and complained about XM Satellite Radio's (Nasdaq: XMSR  ) digital recorders, and the big names have agreed to drop demands of DRM-protected digital sales only after small outfits like Nettwerk Music and a label-less Radiohead showed that you can make money selling unprotected music.

Besides alienating those who should be their biggest fans, and driving file-sharing activity further underground, the record labels accomplish very little with their lawsuit campaign. The RIAA should give it up already and join the future. Never mind the students -- your shareholders will thank you.

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