Comment Articles

Quit litigating and start innovating

Andrew Donoghue ZDNet.co.uk

Published: 08 Jan 2004 14:45 GMT

It's heartening to see that the UK music industry has kicked off the New Year full of optimism and with an open-mind to the potential of the Internet to re-energise its business. Echoing the kind of forward-thinking attitude that typified the decision by the Recording Industry Association of America (RIAA) to sue file-swappers last year, the British Phonographic industry has launched a lawsuit against online discount music retailer CD Wow, and possibly Amazon.com as well.

This week, the BPI announced that it has begun proceedings against CD Wow for importing CDs from outside the European Economic Area and selling them here for around £8.99, about £4 cheaper than the going rate in the high-street. While CD Wow probably calls this clever business practice, the BPI has another term: parallel importing.

The case is due to go to the high-court next month and, given the precedents around parallel importing, things don't look good for CD Wow. Back in 2001, Tesco lost its case against Levis over its right to sell cheap jeans imported from the US, where lower trade prices would have allowed the retailer to sell jeans at a 40 percent discount.

But if the BPI wins, it will probably be a short-lived victory. Just how much belligerent behaviour does the record industry think its customers will put up with? And given the twin pressures of CD piracy and peer-to-peer file-swapping, it seems ludicrous that industry executives are focusing their attention on legitimate retailers who are actually making money for them.

The CD Wow case seems harsh enough, but it now looks like the BPI may go after Amazon.com, according to reports in the Financial Times. Not content with seeing its traditional business eroded by piracy and file-swapping, the BPI has settled on the public-image coup of investigating one of the Internet's biggest success stories. That should really help get the kids back on side again.

This whole deal seems like PR suicide: moves like this will probably see more young people than ever file-sharing or buying from CD Wow just to stick two fingers up at an industry doing a very good job of portraying itself as unimaginative and out-of-touch. Not a great combination for companies whose target market is in its early teens and twenties.