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"We have no interest in putting anybody out of business. Our interest is in promoting the online business with as wide a diversity of business models and opportunities for licensed music as possible."
—Hilary Rosen
THE SUBJECT WAS ROSEN
A Digital Dialogue With The Battling RIAA Chief
After a relatively short stint in her current post, hilary rosen',390,400);">hilary rosen',390,400);">Hilary Rosen, President and CEO of trade organization the Recording Industry Association of America, has been cast as the music industry's chief advocate of artists' rights and its top crusader against those who infringe upon copyrights and engage in music piracy.

Perhaps reluctantly, Rosen has garnered worldwide exposure as two separate, high-profile lawsuits filed by the RIAA against renegade online music companies MP3.com and Napster have quickly gained the public's interest.

So far, Rosen and her RIAA are 2-0 in the courts. In her first interview since the dual victories, Rosen clarifies the record labels' positions in these conflicts and discusses possible solutions to existing and future problems that face the music industry.

The first two court decisions involving the RIAA came down, and you won both of them. Obviously, you're happy with the outcome. But what do the victories actually mean?

They're very different issues and very different cases. The Napster decision was really just a ruling. Napster had tried to dissuade the court from even pursuing the copyright liability question at all by using a tactic that they thought was available to them—the new Digital Millennium Copyright Act. So the Napster ruling was not a victory in the court case as much as it was sort of eliminating a roadblock in it going forward. Obviously, whether or not Napster is liable for contributory copyright infringement is the big question—and, I'm certainly cognizant of the impact of that question on a whole number of other commercial file-sharing services.

What recourse do you have when dealing with unincorporated file-sharing services like Gnutella? When there's no central server, what recourse do you have?

We've been concentrating our enforcement efforts on trying to facilitate the introduction of the legitimate business. And therefore, those businesses that are cropping up—or being essentially created to make money off of the use of copyrighted works without authorization—have been, I think, our first and most important target in terms of protecting the legitimate entrepreneurial business. I don't have any illusions, nor should anybody in the industry have any illusions, that the RIAA or anyone can stop all downloading of music. Litigation and the legal system is not the appropriate business strategy to deal with all of these issues. The marketplace has to provide the answers to the customer demand.

Have the labels worked together well in this effort, or are there problems between them? Secondly, why does Warner Bros. have its own attorney acting solo from the rest. Is it because they have their own agenda in the wake of the AOL deal?

Warners has separate legal counsel on MP3.com but not on Napster, although we're totally in sync on the legal strategies. The companies have worked well together on the enforcement side. These folks are competitors in the marketplace, and they act that way in the marketplace. The RIAA has always tried to build consensus on issues of common interest, and on those issues, I think that they work well together.

In terms of the settlement talks with MP3.com, are you or the RIAA getting involved only in their past indiscretions, or are you involved in future licensing deals? Is that being worked out on a company-to-company basis?

It wouldn't be possible to comment on any possible settlement discussions.

In the current negotiations with MP3.com, are you trying to cripple the company with the damages that are being sought? Do you want MP3.com to stay in business?

I don't think it's my decision whether or not they stay in business. Our intention has always been to have a legitimate enforcement operation that recognizes the interest of copyright owners. Obviously, we have no interest in putting anybody out of business. Our interest is in promoting the online business with as wide a diversity of business models and opportunities for licensed music as possible.

What's your take on artists like Metallica, and now Dr. Dre, coming forward against Napster and actually naming names?

You know, Napster basically dared Metallica to do this. And Metallica took up the challenge, and I admire the band a lot for standing up for what they believe in, as well as Dr. Dre. The interesting thing about Napster is that they argued in court that they are not the pirates. Their motion was, "Don't go after us, go after our users." And then Napster tries to make a big deal out of protecting their users when, in essence, they're offering up their users as the ones who should be held liable. Napster really can't have it both ways.

Does the Limp Bizkit deal with Napster have any bearing on the suit whatsoever? Do you think it was just them looking for a place to raise $2 million?

I think it was the latter—$2 million plus a lot of publicity. I think they thought it was kind of an anti-establishment rock & roll thing to do.

But don't you think it's strange also that fred durst',390,400);">fred durst',390,400);">Fred Durst holds a Senior VP position at a label that's actually suing Napster?

I think the multitude of artists who have expressed their concern about Napster's strategy speaks for itself. Limp Bizkit got some good publicity, but the artists' community is overwhelmingly concerned with business models like Napster's, which seem to hold their work in such disregard.

Speaking of business models, do you think the business model of My.MP3.com is a valid one and would you adopt it as a record company model?

It should be clear that neither me nor the RIAA has anything to do with actually putting companies in business or not. We don't license the music and we don't create the business. Having said that, I think there are some business models out there that provide a more natural migration to the Internet than others. To the extent that My.MP3.com tries to encourage buying an artist's CD, that's interesting. It's too easy to say that the record companies are simply not interested in trying new things. I think that one only has to look at the recent Retailer's Manifesto, which is all about trying to preserve some existing chains and business models, to understand the pressure that record companies are getting from all of their various constituencies not to make dramatic changes in how they do business.

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