The future of digital music is strong

Gary EatonAccording to figures just released by the Recording Industry Association of America (RIAA), digital music accounted for 51% of all US music sales in 2011. This marks the first time in history when digital music surpassed the sale of physical product. Of course, we all knew this day was coming – it wasn’t a matter of if, but when.

Several other things stand out from the RIAA year end numbers; one of the most encouraging being that overall sales achieved a slight increase compared to 2010. Granted, the increase is a nominal 0.2%, but after seven straight years of decline, there’s a cautious sigh of relief that this might just signal the beginning of a turnaround.

Other encouraging news; there was a dramatic jump of 25% for full length digital albums.  Meanwhile, digital singles also increased sales by 13%.

While sales numbers are clearly an important indicator, they don’t even begin to measure how truly important music is to all of us. Numbers don’t measure that feeling you get when you hear a song that reminds you of a first love, a great concert, a perfect summer day. Numbers can’t communicate the experience of hearing a favorite song at just the right time. How can you put an ROI on a powerful memory?

Clearly the future of digital music is strong – and here at Neurotic Media, we’re in a position to help businesses of all types benefit from the growing popularity of digital music.  Perhaps more important, we’re also in a position to leverage the universal appeal and the esoteric power of music in ways that will achieve any number of marketing and branding goals for your business.

(Gary Eaton / VP Sales / @garyeaton)

What is SOPA, anyway?

We’ve all heard so much about SOPA in recent months, and yet many people seem confused about what it means or if it impacts them (it DOES).  Here’s a brief summary that you may find helpful if you’re new to the story:

The Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) were an attempt by lobbying groups representing various intellectual property (IP) right holders (music, movies, books, games) to introduce a Federal law that restricts how IP can be shared online, with the goal of protecting IP owners from the growing impact of piracy on their business. It was defeated by a broad and loud outcry of technology professionals, bloggers, concerned consumers and internet users who lobbied against its perceived heavy-handedness. Some lobbied against the ramifications of certain clauses in the suggested law, and others lobbied against the entire effort as a concept.

The issues that SOPA/PIPA attempted to address are important: Online piracy costs billions of losses to right holders. Businesses and IP creators are in the right to seek improvements in the law to curb online piracy. However, the problems with the suggested law proved to be complex, as it stood to grant the government far-reaching power into the conduct of any company that touches consumer-generated content. In fitting fashion, the opposition was driven by consumer-generated content sites: By bloggers. The nature of the debate, coupled with several parallel incidents, proved why passing a censorship-driven law is a dangerous step for law makers.

The original language proposed in the law would have been very general, and it would have meant that popular sites on the internet – Facebook, YouTube, Wikipedia, and any other site dealing with user-generated data – could immediately be in breach of the law. The bill also proposed allowing the government to quickly shut down such sites with the first indication of any infringement.

The opposition to the bill spread like wildfire – and in January culminated with several leading web sites announcing a 24-hour “black-out” to protest the Bill. The opposition was able to articulate the danger that the Bill, as written, represented to social media, to innovation, and to existing businesses worth many billions of dollars. In that way, it became a debate between which industries deserve more protection, IP owners or technology and internet brands.

But it went deeper than that: Social media and user-generated data are now considered an important tenet of what the World Wide Web is really about for society. So the issue of government right to sensor became a matter of philosophy about social and political issues – extending far beyond the narrow economical issue the bill intended to address.

And so, SOPA/PIPA was shelved. But the issue is not over and dead – the matter is still being worked on by groups on both sides of the argument.

In January, during the same week when SOPA was shelved, the Federal government, swiftly and rather unilaterally, closed a file sharing service called MegaUpload. The authorities arrested its management team and owners overseas, and seized the entire company’s assets (including IP stored in its cloud service by thousands of end-users which were left with no recourse). This was done at the guise of protecting IP owners, but without the usual legal proceedings you would expect to see in a law suit state-side. The incident is being contested in courts, and more information is being revealed every week about the legal process the government used to make it happen. Interestingly, the New Zealand Courts (where the CEO of MegaUpload was arrested) have declared the action illegal.

Many bloggers claim this incident proves the risk of empowering governments with the right to act unilaterally against private companies. Moreover, it brings to question the need for SOPA/PIPA: If the government can do what it did to MegaUpload as is, why do we need additional law that grants the government any more rights?

As well, did the government have the right to take this action against MegaUpload in the fashion it did?  Why was MegaUpload’s case singled out for action while others have not been pursued? Is there any difference, technically and legally, between MegaUpload and, say, YouTube, iCloud, or any other cloud service or user generated site?

These are mission-critical issues that affect the core of what many companies and many individuals do on the web, how we use the internet, and indeed what role technology plays in our daily lives. Plus, the laws governing these issues differ per country, which adds to the complexity of addressing such matters. We can’t ignore this key socio-economical and political issue, and it is our duty to get involved if we expect to have a stake in the results. Stay informed.

(Shachar Oren, CEO)