It’s no secret that the music biz has been using file trading, i.e. “digital piracy,” as a scapegoat for its own poor decisions and mismanagement for the better part of a decade. Thousands of lawsuits against music lovers and the passage of ill-conceived, more draconian copyright laws have done little to stop CD sales from circling the drain. Eric Garland of Big Champagne estimates that more than one billion digital tracks are still being illegally traded each month across peer-to-peer networks. “P2P remains an unacceptable problem,” Mitch Bainwol, president of the Recording Industry Association of America (RIAA) told Reuters earlier this month. “The folks engaged in the practice are doing more of it.”

So what’s the problem? Why hasn’t the recording industry braintrust figured a way out of the Internet quagmire that has become its worst nightmare, a way to defeat the P2P boogeyman?

Lack of vision, that’s the problem. The industry’s self-appointed spokesman, Universal’s Doug Morris, gets up on his hind legs every now and then and thumps his chest like the silver-backed simian he is, bleating about lawsuits and piracy and lost profits. But his verbal broadsides against MySpace and You Tube have done little to stop the flow of dollars out of the recording industry’s pockets and into those of video game companies, movie studios and electronic gadget-makers. Nobody else in the industry has even Morris’ foggy notions about fixing the so-called problem, or at least they haven’t shared them publicly.

Top off the industry’s impotence with its impending contract negotiation with Apple over iTunes. Many scribes, this one included, have written about the industry’s demand that Apple adopt a “tiered” pricing program where, say, a hotter-than-hot, chart-topping Justin Timberlake tune might sell for $2.49 or even $2.99 while an older catalog cut would be a mere .69¢ download. Rather than be satisfied with the tens of millions of dollars of virtual “free money” that they’re receiving from iTunes, Napster and Rhapsody, the RIAA and its patrons want the whole enchilada.   

It’s sad, really, that the “Four Families” of the recording industry want to try and bully Steve Jobs into sharing their point-of-view while shooting themselves in the foot over their demand for “tiered” pricing. Because the sale of digital tracks hasn’t grown fast (or large) enough to replace the loss of CD sales, the industry wants to kill its golden goose with new pricing that is anything but consumer-friendly. The industry’s one great hope – music-ready mobile phones – hasn’t proven itself a likely replacement for the ubiquitous iPod, especially with Apple rolling out its “iPhone” this summer.

So what’s a poor record company exec to do when his bosses upstairs want him to justify his high-six-figure salary and expense account to the shareholders? After giving the industry so many great ideas through the years, it’s really a damn shame that I have to tell them this, but the answer has been staring them in the face at least since 2003.

Weed is the way! John Beezer’s humble little company, Shared Media Licensing (SML), would be a perfect fit for the music biz to roll out its own digital music option. They can “do it themselves” and make a bundle. Journalistic ethics require that I admit up front that I am a Weed “Independent Content Provider” (ICP), one of the people that find bands and convince them to put their songs into the Weed distribution network. I haven’t done a very good job of it, but there is a formal relationship there. That doesn’t stop me from objectively recommending the company and its original concept as a way for the industry to cut its losses and make some money.

Weed works like this – individual tracks are converted to Windows Media format (WMA), a clean and high-quality digital music format comparable to MP3. Then Weed puts their whammy on the file, adding a unique digital rights management (DRM) scheme that allows the listener to download the file and listen to it three times before they have to buy it or delete it from their hard drive.

The real beauty of Weed isn’t its “try-it-before-you-buy-it” file format but rather its unique distribution system, with song files spreading like “weeds” across the Internet…and everybody gets a slice of the pie. It works like this: say I have a website, like “Mondo Weed,” where people can download tracks. If you buy a Kels Koch or Social Kings song from me for .99¢, the artist always gets 50% right off the top of every sale. As the ICP, I receive 35% on the first sale and Weed gets 15% for its trouble. If you post the song for sale on your website – and you’re encouraged to do so, thereby monetizing shared distribution – and somebody else downloads it and subsequently purchases the song, you’ll get 20% and I’ll get 15% and if they sell it to somebody else, you’ll get 10% and they’ll get 20% and I’ll get 5% and it rolls downhill like that.

Although I’m personally not crazy about DRM, Weed’s unique system is perfect for the recording industry in that it protects the file and virtually watermarks it to track it across the ‘net, and Weed files play on almost all portable MP3 players. It could also be adapted easily to the big league usage that a major label catalog would entail, and here’s how. Since labels hold artists in financial bondage, a new digital download system would require a separate clause in their contracts to be fair (fair to the artist…I couldn’t care less about the labels). The 50% cut that is paid out to the artist or rightsholder under Weed’s current system would be split thusly: 10% to the songwriter/publishing company, removing that obstacle; 20% to the artist, and 20% to the record label.

The label would act as its own Independent Content Provider and receive the 35% share on the initial sale of every song, and receive the ICP cut on all downstream sales. Bands would make almost twice as much as they do now from the current digital download arrangement with their labels and the smarter ones would “buy” their own songs and put them on their web sites, encouraging fans to download and buy the songs directly from them. The labels can include the Weed song files on their web sites and launch their own digital storefronts and, best of all, they can institute their own “tiered” pricing program and price tracks any way they want, no matter what Apple thinks. This would also help solve the “P2P problem,” as the labels could flood the remaining peer-to-peer networks with Weed files and let the fur fly!

Of course, this solution isn’t flawless, but it’s better than the industry’s current strategy, which is to bitch and moan and sue everybody they disagree with. Weed doesn’t work with Mac computers, although the files can be converted to work with the iPod player. Otherwise, the Weed system would allow the major labels to offer virtually their entire artist catalogs in a digital format they can live with and generate income for both the artists and the label. I believe that Weed’s “try-before-you-buy” feature would also help increase CD sales in the long run as consumers would feel better about spending money on a new CD once they’re more familiar with the music.

Nothing is going to replace the CD sales that the industry has lost due to shoddy music, high prices, lawsuits and other PR disasters. Weed is the way towards the 21st century, and the system is already in place and ready to roll. Will the major labels listen to anything other than the sound of their own declining fortunes?

(Check out Weed's web site for more information)