Newsweek: Record execs see customers as pirates

Longtime Mac industry pundit and Newsweek columnist Steven Levy chimed in this week with his own opinions of the congressional study that elicited negative comments about Apple from Disney president/CEO Michael Eisner last week. Levy's piece is called The Customer Is Always Wrong.

Levy was talking ostensibly about the Security Standards and Certification Act, a piece of legislation that, if passed into law, would make it mandatory for computer and consumer electronics makers to install technology that would prevent users from duplication copyrighted content like pre-recorded movies and music.

Levy clearly rankles at the opinions of music industry executives and their friends in Congress, like SCCA sponsor Senator Fritz Hollings. "That's where citizens stand -- not as potential consumers, but as candidates for prison denim," said Levy, referring to Hollings' assertion that the Internet is a "haven for thievery."

"Despite a plethora of problems that have nothing to do with the Net, media executives are obsessed with the idea that their customers are shiftless pirates who want their wares for free," said Levy.

To Hollings' proposed legislation, Levy said, "Earth to moguls: beware of what you wish for. Business-school professors could feast for years on the unintended consequences that come from treating Britney Spears tunes like nuclear secrets. Clearly, clamping locks on electronic equipment and intentionally crippling CDs wouldn't increase sales. Would it depress sales? Almost certainly."

Noting that many users today buy music and legally rip copies of it to their hard drives, CD mix discs and MP3 players, Levy posited that a world of copy-protected CD audio would create another economy entirely. Users would either scramble to buy older CDs without the copy protection or download pirated versions of new music with already-defeated copy protection.

In fact, Levy echoed recent comments from Apple CEO Steve Jobs when he suggested that music industry executives are missing the boat on digital music distribution over the Internet, which Levy called "a potential gold mine: an instant, ultra-low-cost delivery system and a targeted marketing vehicle."

"If media companies adopted a perfectly feasible system of 'digital-rights management' that allowed music fans to make a few copies for personal use, most people wouldn't bother to do the pirate thing," offered Levy.

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