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Recording industry woke up too late

| Sunday, Nov. 30, 2003

The new P.O.D. CD, "Payable on Death," comes bundled with a bonus disc, a one-track perk that's perfect cross-promotion. Load it into a PlayStation 2 system and you get a new tune that's nowhere on the album -- a song marketed solely through a video game.

So much for letting music stand on its merits.

The major record labels have dug themselves a pretty deep hole. Their sales have slipped 30 percent in the past three years, according to the Recording Industry Association of America. And it's all the audience's fault.

Forget, for the moment, that the economy is wobbly; that CDs are less essential than gas; and that young workers, who buy the most music -- which explains the curse of Fred Durst -- often are the first to be let go. Forget that more than 1,000 record stores closed last year, even before Best Buy bought a monopoly on the new Rolling Stones set. Forget, too, that the five companies the RIAA represents -- including Universal Music Group, which owns the rights to roughly a third of all the music sold each year -- released 25 percent fewer titles over those same three years.

Forget that much of what was released -- box sets, live discs, greatest hits -- broke no new ground. Elvis cracked Billboard's Top Five again this fall, and he's been dead 26 years.

None of that matters, now that the industry has someone to scapegoat. Record companies can bleed money and blame consumers, saying online file-sharing is stealing -- even if you play that downloaded Celine Dion song in the Chrysler Pacifica that paid for it.

The RIAA sued more than 260 file-sharers in September, including a 12-year-old Catholic-school honor student. Most paid $2,000 to settle the suits.

The record companies should bear some of the blame. They charge too much, for starters. The Federal Trade Commission made that point three years ago, when it ruled that the five companies the RIAA represents had fixed minimum prices to CDs, costing customers $500 million more than they should have paid.

Those prices are just now coming down. Universal has promised to cut the shelf price of its titles from $18.98 to $12.98 -- roughly what Target charges for a first-week release. Even that's too much.

Still, the major labels, for all their lawsuits and their yapping about artists' rights -- which never seemed to matter much when the corporation came out ahead -- have finally caught on to one simple fact: The perceived value of any product is the only one that counts.

Maybe it came to them when the RIAA lawyers quarterbacked their reaction to Napster and Kazaa and the other file-sharing services, and the 4 million music fans breaking the law online at any given time. Maybe someone at that conference table opened a bottle of water and understood, with the simple twist of a cap, that people will gladly pay more than they should for a product if they believe what they're getting is good.

Now we're getting more. The new Pink, Sheryl Crow, STP and Eagles CDs come with bonus DVDs. The last discs from Eminem, Tom Petty, Metallica and Neil Young did, too.

The P.O.D. PlayStation tie-in is just the next step.

That snappy packaging is the industry's admission that CDs can no longer compete. Not with hot DVD titles hogging shelf space, and selling for $15.

The record companies caught on too late. Most have coasted, repackaging songs in every way possible. Last week, for example, just in time to prime Christmas sales, they brought out a second best-of Bruce Springsteen set, a Madonna remix disc and box sets by AC/DC, Adam Ant and No Doubt -- DVD included.

Bob Dylan got the dust-off treatment, with 15 classics remastered and repackaged. Columbia, which took a cut when I bought "Blonde on Blonde" on vinyl, and again on CD, gets another crack at me.

Forgive me, then, if I look online instead, and if I brush off the RIAA's bully tactics, which cost the industry $16.7 million in legal fees last year. That blame-the-fan bit is the one song I'm truly sick of.

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