Through the auspices of soft money, the content industry has been funnelling millions of dollars to legislators, who in turn allow lobbyists to write laws designed to protect the industry. This is nothing new; such tactics have been widespread since the late 1980's. What has changed is that the record companies and movie studios are more desparate, and that desparation has translated into ever more egregious power grabs. Note what has, and hasn't, happened in terms of campaign finance reform since 1996. It is quite clear that neither party is willing to allow reforms such as those proposed by Sen. John McCain (R.-Arizona) and Sen. Russ Feingold (D.-Wisconsin) to make it out of committee. The degree to which both parties are dependent on this funding, a large portion of which is provided by the content industry, makes it possible for their political land grabs to take place.
Change is bad
The advent of not just the Internet but the raw power of the modern personal computer has put the ability to produce professional quality audio and video in to the hands of nearly everyone. Additionally, the music companies have shown that they are unable to adapt to the new conditions the Internet has imposed upon their business model. The Internet has decreased the cost barrier to reach smaller markets with advertising and meta-content, such as reviews. Coupled with the rapid growth in consumer demand for specialized goods during the 1990's, one would logically have expected the music industry to attempt to exploit smaller niche markets. MP3.com was an attempt to do just that, by providing a common place and set of tools for independent artists to gain exposure to a larger, nationwide audience. Instead, the music industry acted as cartel to force the new competitor out of business, and now MP3.com is languishing as Vivendi SA is attempting to kill it through neglect.
These tactics were also used with great success against Napster. While it is clear that a great deal of Napster's usage was done with intent to pirate, the music companies failed to assess any potential gains that the Napster model could have given them. Essentially, no work was done to make payment for the music seem worthwhile, and no effort was spent attempting to determine what sort of users did purchase the music they had previewed on Napster. Instead, a reactionary turf war ensued, designed to protect an old, familiar business model under the guise of protecting copyright. Many less-restrictive interim responses could have been proposed or negotiated, but it is telling that the music industry was interested more in maintaining their control than exploring new possibilities for doing business.
Perhaps one of the most dangerous aspects to the current content cartel is the means by which they attempt to keep the artists in line. In the past, the recording contract has been a necessity for artists. Only the large recording companies have had the resources to wage national marketing and promotional campaigns. The price for the artists has been a increasingly large share of control over their own intellectual property. This, coupled with incredible consolidation in the industry has meant fewer artists being signed, in order to spend resources on the artists guaranteed to produce large profits. This is nothing new or surprising: the book publishing industry went through a similar shakedown in the early 1990's, culminating in the virtual elimination of the mid-list author. All indications are that movie industry is in the throes of a similar cycle. In today's Internet-enabled world, it would seem that the value of a recording contract would be much less, given that it has become feasible to wage a promotional campaign towards small, but national niche markets. The record companies response to this has to been to sue any facility that gives an artist the opportunity to independently produce and promote their own content.
We control the horizontal...
Unless things change, the music industry, along with the content industry in general, will eventually be able to relegate our personal computers to the status of passive entertainment devices, and completely determine what we watch or listen to on them, just as they do with the radio and TV. The way in which our personal computers are tied into content means that in order to consolididate control of distribution of music, movies, and even books, the content companies must have control of what we can and cannot do on a computer. The push for copy-protected CDs, the DMCA, and CPRM are simply manifestations of this attempt for an industry to retain their markets by legislating away any potential competition.
We can expect this trend to continue. In absence of a change in momentum, I expect to see the large record companies and movie studios to push to either explicitly outlaw or artifically inflate cost barriers to entry for independent production of content. This could take many forms: a "tax" on digital media, such as CD-R, DVD-R, and DAT, litigation to prevent the production of "unlicensed" video encoders, or even the purchasing of legislation to make recordable digital media illegal. They will attempt, by lawsuit or legislation, to force hardware and software providers to enforce their will. I expect they will eventually file suits against the developers of WinAmp and similar software. I also expect an attempt to reduce independent artist's ability to promote and distribute their content. Watch for exclusive record store deals, where a record company will insist that a certain percentage of shelf space be dedicated to their products in return for access to hot new titles. This is common in grocery stores, where "shelf space" is a commodity.
There is hope.
The picture painted here is bleak. But there is hope for the future. We know that technology moves faster than bureaucracy; it is entirely possible that the industry will end up continually fighting yesterday's technology, to their own detriment. Additionally, independent labels are beginning to cooperate in order to collectively bargain with retailers, and the quality of independent music is steadily rising. This again has parallels with the book publishing industry. As consolidation swept through book publishing, the market for midlist authors did not disappear, it only became economically infeasible for the lumbering behemoths that remained. As such, smaller publishers began to rise up, especially in the markets with large midlists. Examples include Barefoot Books, in the children's book market, and Meisha Merlin, in the science fiction/fantasy market. So long as small operations are able to continue to provide and market quality content, the industry can remain healthy.
Another positive note is that the threats that the media companies pose to the computer industry are starting to be noticed by the mainstream public. If public outrage outpaces the industry's ability to buy Congressmen, they will have a harder time pushing their legislative agenda. Ripping a CD isn't a geek phenomenon anymore; a great number of people in all walks of life have become used to doing so, even if it is only to be able to make compilation CDs for their car CD player. Apple Computer has made digital media the centerpiece of their business model, as such ads as their "Rip. Mix. Burn." spot demonstrate. It is no secret that Microsoft wants to make Windows XP a "digital hub" as well. The content industry is essentially waging war against the computer industry, and in this battle, both sides have contributed large sums of money to the politcal process. With this factor levelled out, the public interest will become more relevant to politicians.