The RIAA and every major film studio went to court with the aim of shutting down Kazaa, Morpheus, and Grokster. The plaintiffs in Metro Goldwyn Mayer Studios v. Grokster et al. argued that companies like Kazaa created software that facilitated copyright infringement. Further, the litigants alleged that the P2Ps knew this and were blatantly creating software explicitly promoting copyright infringement. In late April, a district court in California ruled that Grokster and Morpheus could not be held liable for copyright infringement that their users may be partaking in. While Kazaa defaulted judgment, the verdict was a major blow to the RIAA.

What happened next was as bizarre as it was surreal. Four days after the Grokster ruling, thousands of P2P users logged on to their services only to encounter veiled threats in the form of Instant Messages, courtesy of the RIAA. The communications informed P2P users that their continued use of P2Ps for the transfer of copyrighted material was illegal and risked the possibility of court sanctioned fines and penalties. As unusual as an instant message marketing campaign may seem, the barrage of messages was to be the RIAA's last attempt to convince file-sharers to quit before resorting to legal action.

Nobody's Fault but Mine

"The recording industry needed a kick in the arse, and file-sharing did that," Judy Miller tells me when we speak in July. "We're talking about a morally bankrupt record industry that took four years to figure out what the hell they should do about file-sharing."

Miller, proprietor of Motormouth Media, a publicity firm specializing in independent music, is among the throng of people involved with the industries in trying to anticipate how the latest salvo by the RIAA unfolds. As the qualitative output of the five major record labels decreases and consumer ire continues to grow towards the Big Five, the potential for a renaissance amongst independents is growing. Not only are independent labels the qualitative vanguard in an industry suffering an identity crisis, but thousands of disenchanted teenagers-the music industry's life force-are turning to these labels because of cheaper CD prices and the teenagers' disassociation from the enormous conglomerates that produce over 75 percent of music on the market.

"It really burns me," says Miller. "The RIAA is sending out a horrible message: that the record industry is an ogre and you will be killed in some dungeon of darkness if you violate the code of ethics. These are kids for Christ's sake."

The kids are the demographic the recording industry desperately needs to appeal to in order to combat flagging record sales. For seventeen years, starting in 1983, record purchases-fueled by the introduction of CDs-increased every year, peaking at over $14.5 billion in sales in 1999. But in 2001, CD sales began to fall, dropping 7 percent from the previous year and an additional 7.8 percent in 2002. According to the RIAA, over 942 million CDs were sold in 2000 versus 800 million in 2002. The year 2003 has been even more abysmal. Of the major label releases during the first half of the year, only three-Norah Jones, Linkin Park, and 50 Cent-sold more than 2 million copies. The industry attributes this decline to piracy, linking the years in which CD sales have dropped to the same years file-sharing services have ballooned.

But while piracy may have a negative effect on the record labels' bottom line, blaming file-sharing as the only source of industry ills seems myopic. Several factors, including the current economic situation, have also taken a toll on the music industry.

"Labels are trying to sell as many units as possible," Kurt St. Thomas remarks to me during our phone conversation. "They don't nurture bands anymore because of the expenses. In the 70s you'd have an artist like John Denver that broke on his fifth album. Now, if an artist's CD doesn't make millions right away, they're over."

St. Thomas, the former A&R man for Arista and Tommy Boy, is one of many former music executives disheartened by the amalgamation craze that swept the industry in the 1990s. "People working at the labels were once excited about music," he laments. "But because of conglomeration, the business is all about money, which has killed a lot of artist's careers. An accountant now dictates a musician's career and that's made things homogenized and boring."

St. Thomas's story is one of many painted against a backdrop of corporate mergers and industry disenchantment. While at Tommy Boy in 2001, he worked with over 100 others passionate about music and the careers they helped orchestrate. That same year, Warner Brothers bought Tommy Boy. Over 90 people were laid off, and the label was essentially shut down. "I was burnt out on it," says St. Thomas.

"I just wasn't into the corporate aspect of the music business. Now people are afraid of losing their jobs. No one will speak out about the homogeneity because they're afraid of ticking off upper management."

During the 1980s, hundreds of record labels flourished. New talent was scouted across the country, and musicians and record labels worked together over a period of years to coordinate an artist's career. But during the stock boom of the 1990s, the industry caught the merger bug. Over the course of ten years, the industry consolidated itself into five major companies (the "Big Five")-Universal Music Group, Sony, Warner Brothers, BMG, and EMI-four of which became mere fiefdoms in even larger media conglomerates, each with their own conflicting priorities and profit motives.

The merger frenzy that drove the record industry to form the Big Five wrecked havoc on the radio industry. During the 1990s, thousands of radio stations were bought up, creating two super companies-Clear Channel Communications, Inc, and Infinity Broadcasting Corporation-whose profit-driven grasp encompassed every major market in the United States. With so much leverage, Clear Channel and Infinity upped the cost for airtime on their stations. The more a song is played on the radio, the more money a record label is contributing to Clear Channel and Infinity's coffers. Oftentimes, the Big Five endure fees exceeding $250,000. Of course, when the money stops coming in, so does the airplay.

Ostensibly, money for airplay was banned following the Payola scandal of the 1950s. But behind the scenes, millions of dollars flow from label offices to radio stations. This expense alone ensures the uphill battle aspiring musicians must fight to break into the industry. But with a premium on selling millions of records placed upon a group's freshman release, record labels must invest millions more in marketing and promotion. The requisite music video for MTV must also be made, which tends to cost hundreds of thousands of dollars.

The flipside of the Big Five's strategy is the assembly line nature of the groups they promote. After riding arena rock into the ground during the 1980s, record labels seized upon the sound of Seattle's grunge rockers, creating cookie cutter bands with throwaway hits that destroyed grunge's integrity. Looking for a new genre to mass produce, record labels dug deep into their talent pool, introducing the world to such gifted musicians as Brittany Spears, N'Sync, and the Backstreet Boys. These groups appealed to the coveted teen market, selling millions of records in the late 1990s, but left little room for growth. The teenagers matured and lost interest, while CD sales languished.