Business shouldn’t fear customers

This article about peer-to-peer file-sharing networks shutting down in the wake of last year’s Supreme Court decision holding companies liable for copyright infringement on their networks is interesting. Specifically, this quote:

Mitch Bainwol, head of the music industry trade group Recording Industry Association of America, concedes some file-sharers will find other means of obtaining pirated music online.

“There will always be new technological challenges,” Bainwol said.

I’m surprised that the RIAA seems to concede what was apparent to everyone else almost from the moment Napster showed up. Technology changes the way people live and consume culture. Change is inevitable. It’s one of the most tedious (and useful!) features of capitalism. Those who anticipate, or even play catch-up on the back side of a change, will succeed. When customers start using a product in a way unexpected and/or unintended by a business, understanding and adapting are the most effective responses.

In the case of downloading music and the RIAA, it’s okay to be surprised at the rise of the mp3 player. It’s not okay to exclusively treat customers as criminals (even when they are acting as such) because the new technology won’t go away. Figure out a way to give them what they want, and do it fast. The legal profitable behavior has a better chance of supplanting the illegal unprofitable behavior. A shorter way of saying that goes something like this:

“The company or companies that find the most effective method for transforming downloaders into consumers will be the biggest winners in 2006.” [- Morpheus founder Michael Weiss]

Replace 2006 with 2000 and that’s what smart people were saying when this nonsense started. Only fearful economic dinosaurs don’t know that.

For further thoughts, see this entry at Catallarchy. The premise of the argument and its eventual conclusion are preposterous, but it’s worth noting that someone entertains such a position.