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Dana Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
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Moore’s Law defines the history of technology. It held that the number of circuits etched on a given piece of silicon could double every 18 months as far as its author, Intel co-founder Gordon Moore, could see. Moore’s Law has spawned constant revolutions since then, not just in computing but in communications, in science, in a host of areas. Moore’s Law applies to radios, and to optical fiber, but there are some areas where it doesn’t apply. In this blog we’ll take a daily look at new implications of Moore’s Law in real time, as it rolls forward to create our future.
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October 03, 2005

Music Industry Profits Down

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Posted by Dana Blankenhorn

ifpi.jpgThe big news in the recording industry's results today are not the growth of digital sales, or the continued fall in CD sales.

It is that the industry has become addicted to lawyers in order to maintain its business model. And those lawyers will bleed the industry dry long before pirates can.

Here is the money quote from John Kennedy (no relation), who chairs the International Federation of the Phonographic Industries (IFPI):

"Without the legal crackdown, it would be a different situation. You certainly have to have the legal services to make it all work."

In other words the industry assumes that without the terror of lawyers its current success would be unsustainable.

Which is precisely why it is unsustainable.

Markets cannot work under coercion. The decision to purchase a good must be a free choice, or else you don't have a market.

The admission by Kennedy that coercion is at the heart of his industry's success is proof positive that the current model cannot survive for very long.

The question is what will replace it.

This was the question before the Copyright Wars began. It remains the question.

That's the story no one is telling.

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