Privacy vs. Disintermediation

Barry has updated the issue yet again to discuss the real threat to the music industry – disintermediation.

Whenever we discuss issues such as music sales, P2P, piracy and/or counterfeiting, be aware of the differing items we are discussing. There are 2 key threats to the music business: one challenging the present, one challenging the future: The present threat is simply counterfeiting. Running off bootleg copies of CDs and then selling them is what the International Federation of the Phonographic Industry (IFPI) terms "piracy."

The Future threat, on the other hand, is "Disintermediation."

There's a world of difference between the two.

What the recording industry's present business model must contend with is not P2P, but plain old counterfeiting. A recent report from the IFPI noted that counterfeiting accounts for one of every three CDs sold. That problem impacts the classic model of manufacturing and shipping Polycarbonate discs to consumers.

But that has nothing to do with P2P.

I have long held that the real reason the labels fear of P2P networks has little to do with copyright infringement. It's all about Disintermediation: Removing the middleman, taking out the no-value-added player from between the artists and their music fans.

He even proposes an idea for "Indy P2P" that, to be honest, would problemably end up killing the major record labels while making lesser know groups much more successful. Irony is awesome.

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