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Universal Music Defends DRM; P2P Litigation

NEW YORK -- Larry Kenswil, the president of Universal Music Group's (UMG) eLabs unit, is defending the recording industry's decision to use Digital Rights Management (DRM) technology alongside a litigation strategy to stamp out music piracy, arguing that the survival of the industry was dependent on copyright protection initiatives.

In a lively keynote presentation at the Jupiter Plug.IN Conference & Expo here Tuesday, Kenswil slammed pundits who have been "trying to dictate how to reinvent the music business" by encouraging the theft of copyrighted works.

"We are battling a nasty infection of image-itis. The tobacco company can kill us. The package food companies can clog our arteries. The oil companies can provoke wars. But, apparently, there's no industry more despicable than the music industry. We are hated just because we refuse to acknowledge the public's God-given rights to steal music," said Kenswil, referring to the piracy epidemic that online file-sharing represents to the music industry.

The head of UMG's new media and technologies division also had some choice words music industry executives who he said were more interested in fighting among themselves. "The bickering among record companies, publishers and retailers is impeding progress. We need to focus on making sure the pie is large enough to slice in a number of ways," Kenswil added.

Kenswil, who sits on the Board of Directors of the Recording Industry Association of America (RIAA), believes it is crucial for the online music sector to create a business that "makes it easier to buy music than to steal it."

"Every day wasted is another day the online guy steals the music. We will have plenty of time to hate each other in the future but only if there is a business to fight over," he declared.

For now, he said it was important that the recording industry control the distribution of music online and called for a unified approach to making the "legals" as easy to use as the popular file-sharing networks. "If it's available on a P2P service, we want to make sure it's available for sale legally online."

On the use of DRM technologies to limit usage rules on the legal music services, Kenswil, argued that the purpose of copy-protection has been misunderstood. "At Universal, we really don't care about how many copies (of tracks) you make. But, we do care about what happens when the copies leave your possession. As content companies, we're trying to prevent unauthorized distribution of music," he argued.

"It's very hard to stop unauthorized distribution unless you stop copying the music in the first place. That's why we have the restriction of copies there."

In the long run, Kenswil said newer technologies will support personal area networks to transfer content from the PC to stereo systems, portable devices and cars but, until that day comes, the industry will rely on DRM technologies to protect its interests.

Kenswil said Universal Music will insist that music sold on legitimate services be wrapped in DRM and tied to the computer. "They can have as many unprotected CD burns as they like because we recognize that users want to listen to the music on CD...99 percent of music in his country is still played on CDs," he added.

"If someone pays for a download, you want to be extra careful not to treat customers like idiots. Eventually, they'll find ways to make as many copies as they want. We're trying to avoid a PC full of MP3 files so it's self-defeating to limit burns. If you enforce limits on burns, you are forcing them to use ripping software and you're hurting yourself. You are irritating the consumer," he argued.

His support for unlimited CD burns was seen as a veiled criticism of rival music labels that refuse to free up usage rules for the legal services. Some labels allow unlimited burns while others set strict rules on how download music can be copied.

Kenswil said Universal Music would continue to digitize its catalog with metadata to expand the tracks available on the legal services. "We look forward to the day when the entire world's catalog is available legally for consumption globally," he said, arguing that consumers appear comfortable with the 99 cent per-song price point.