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 New International Entertainment Retail Alliance Formed Top Priority Is Digital Distribution Strategy
GERA’s founding members include representatives from Australia, Canada, Germany, Mexico, the Netherlands, New Zealand, the United Kingdom, and the United States. GERA’s priorities include issues relating to the rapid growth in new technology being rolled out on a global scale, which are fueling a race to deliver sound recordings digitally via the Internet and wireless telecommunications systems. The retail community has always been quick to adopt new formats for music delivery that benefit consumers, artists and copyright owners. However, technological developments have begun to outstrip the ability of market participants to grasp the full consequences of implementing new formats for delivery without due consideration to consumers’ interests or the long-term health of the creative community. Because retailers are the front line linking the artist to the consumer, the retail group expressed greatest concern for maintaining the currently high level of retail customer satisfaction. Retailers fear that unauthorized third party invasions of privacy in consumers’ music selection choices, unauthorized collection and use of personally identifiable consumer data, confusion in conflicting formats, and efforts to limit consumer enjoyment of the music after the sale, may all inhibit the growth of online distribution. "When a download doesn’t work, the customer will come to the retailer for answers," noted Al Herfst, from the Retail Music Association of Canada. He added, "Retailers don’t cause these problems, explaining that the problems are likely to be caused by other factors such as software incompatibility and automated circumvention of the retailers’ privacy policies. In addition, restrictive technologies designed to limit what the consumers can do with the copies they purchase will also cause a consumer backlash," Herfst concluded. The Alliance is particularly concerned about the practices being challenged by NARM in its lawsuit against Sony impact music retailing around the world. Participants noted that there are few laws to protect consumers from being denied competitive music buying choices, or to protect artists from having to give up creative control over their own Internet sites as a condition of doing business. While agreeing that litigation is never the preferred solution, all participants stated that they absolutely supported NARM’s legal action to resolve these issues, and intend to analyze how the claims made in NARM’s lawsuit might find a parallel under their own domestic laws. The founding members of GERA emphasized the importance of dialog as a means of avoiding litigation. "It is evident that the major record companies’ corporate plans for the Internet and electronic commerce are being made by a separate division outside of the normal channels of communication," observed Martin de Wilde, of the Dutch group, who added that individual territories are afforded no opportunity at all for input into global plans that affect them. Therefore, the Alliance is seeking to engage executives at the highest corporate levels to develop compatible Internet strategies. Members of the group also resolved to work with their own government officials to address not only the impact of the dizzying pace of consolidation on the supply side, but also the issues of consumer privacy, fairness in trade practices, and greater uniformity in copyright law treatment of sales through digital distribution. Two cornerstones in the search for common international ground are the principle that technology should not be used to (1) fuse onto copyrights the ability of the copyright owner to prevent distribution to anonymous consumers, or (2) arbitrarily restrict lawful consumer choices concerning the use of lawfully acquired music. GERA intends to serve as a forum for tackling other issues that have arisen as a consequence of the new global economy. At the top of the list are the reduction of piracy and the development of uniform government regulatory practices. Bob Lewis, of BARD in the United Kingdom, noted, for example, that when retailers are competing with other retailers in foreign countries, it becomes imperative that their own nation’s laws not place them at a competitive disadvantage. The consensus is that greater global uniformity in the treatment of electronic commerce will benefit all participants. NARM serves the music and other prerecorded entertainment software industry as the pre-eminent forum for insight and dialogue for its more than 1,200 member retailers, wholesalers, distributors, entertainment software suppliers, and suppliers of related products and services. International Music Retailers Explore Closer Collaboration On Internet Commerce Issues
### National Association of Recording
Merchandisers
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Executives from four music retailing
trade organizations met during Popkomm in Cologne, Germany, in mid-August to discuss
issues of common interest, with particular emphasis on the Internet.