Music industries pursue payment

Record industry executives and online music companies are quietly working with colleges and universities to offer legitimate sources of free or deeply discounted music to students if the schools agree to deter piracy on campus networks.

The goal is to give students a carrot to go along with the stick being waved by the Recording Industry Association of America, which has been cracking down on music piracy with lawsuits. An online music service picked by a university would let students play a wide array of songs at little or no cost, potentially curtailing the use of such hotbeds of unauthorized file-sharing as Kazaa.


The fledgling online music services in the talks are eager to boost their profile among students. They see discounts as a way to hook customers who will eventually pay full price.

"This is a great opportunity to tap into this university base, show them the promise of digital music, show them the compelling digital offerings," said Peter D. Csathy, president and chief operating officer of Musicmatch Inc.


Although the discussions are in an early stage, several executives said they hoped to launch a trial run by early next year.

Many music industry executives blame the slump in CD sales on online piracy, and particularly on file-sharing networks that enable users to download music, movies and other digital media for free from one another's computers.

The most active users of those systems tend to be college students using high-speed campus computer networks.

And many universities are paying for their students' love of file sharing: Campus networks have been clogged by file-sharing traffic, and networks administrators have been forced to respond to a stream of complaints from movie and music companies about illegal downloading.

Still, when university officials were approached about putting the online jukeboxes on their networks, they weren't convinced it was necessary, said Peter Fader, a marketing professor at the University of Pennsylvania's Wharton School and longtime advocate of bringing legitimate services to campuses at discounted rates.

"Part of it was that they weren't yet feeling the real heat," he said. "So, unfortunately, it will come down to when the threats are large enough, either legal or financial. Then it will happen."

The record companies have been prodding colleges and universities to do more to discourage file-sharing, but that won't be easy. A study released July 31 by the Pew Internet & American Life Project found that 80 percent of the full-time students surveyed who downloaded or shared music online didn't care whether it was copyrighted.

The RIAA and Hollywood studios are exploring technologies that universities could use to deter unauthorized downloading. RIAA President Cary Sherman stressed that the university jukebox initiative is separate.


At least one music service - Roxio Inc.'s Pressplay - has been wooing colleges for about a year. And at least one record company is introducing university officials to online music company executives.

People involved in the discussions say the aim is to provide all students with a basic online music service that would allow them to play songs on demand from an extensive online jukebox. The cost, usually $5 to $10 a month, would be waived, discounted or buried among the students' activities fees.

If they wanted to buy songs to burn onto CDs or transfer to portable MP3 players, they would pay $1 or less per track.

"The intent here among all the parties is to find a way to address what is a significant issue for all of us," said Mike Bebel, head of online music services for Roxio.

But for a legitimate service to succeed on campus, he said, colleges would need to curtail access to unauthorized ones. Most surveys show that students would choose a free unauthorized service over a legal one that costs money, Bebel said.

Many colleges have been reluctant to block peer-to-peer networks, arguing that it would run counter to the ideals of academic freedom. But they may have to block unauthorized downloads in order to persuade record companies and music publishers to offer lower royalty rates to campus services, people involved in the discussions said.