Leading Canadian Music Label Challenges RIAA Lawsuits

Nettwerk Music Group, Canada's leading privately owned record label (and a label that refuses to use copy-controls), has taken the remarkable step of joining the fight against the RIAA's strategy of lawsuits against alleged file sharers.  The company, which represents some of Canada's top artists including Sarah McLachlan, Avril Lavigne, and Barenaked Ladies, has intervened in a lawsuit against a Texas teenager.  The RIAA claimed thousands in damages based on alleged downloads, including Avril Lavigne's "Sk8er Boi." 

Nettwerk CEO Terry McBride says in response:

"Suing music fans is not the solution, it's the problem. Litigation is not 'artist development.' Litigation is a deterrent to creativity and passion and it is hurting the business I love. The current actions of the RIAA are not in my artists' best interests."

Nettwerk Music Group has agreed to pay the total expense of all legal fees as well as any fines should the family lose the case against the RIAA.


Update: So "wow" isn't particularly analytical and I think this calls for a bit more.  Bob Lefsetz, of the Lefsetz Letter, comments this morning that this may be the beginning of the end of the RIAA suits.  Perhaps, though the cracks in the recording industry strategy can be seen with IFPI's recent acknowledgment that file sharing usage is largely unchanged over the past two years despite more than 20,000 suits along with the growing number of Canadian artists, including Matthew Good, Steve Paige of the Barenaked Ladies, and Jane Siberry, who are speaking out against the suits or seeking alternative approaches.

While I think this is a good thing, better would be the prospect of shifting the dynamics of two important debates.  At the moment, copyright reform is often treated as synonymous with addressing file sharing (ie. see the Toronto Star response to the Bulte piece last weekend).  This has been one of the most unfortunate side effects of file sharing as a meaningful debate on the future of music in Canada as well as the best path for copyright reform is lost amid the cries of sharing, stealing, and private copying.

We need a real discussion of music in Canada that goes beyond file sharing to include private copying, fair use, the limits on the use of DRM, the transparency of collectives, canadian content requirements in the Internet era, and support for the artists.  It is a debate that must include the independent labels who are responsible for 90 percent of new Canadian music, the artists from all perspectives, and user interests.  It is a debate that is about much more than file sharing.

We also need a real discussion of about copyright reform that goes beyond file sharing to include using new technologies in our schools, encouraging new creativity, as well as protecting privacy and security.  It is a debate that would look to the recent Google cache decision in the United States and question whether we would get the same result in Canada.  It is a debate that would look at crown copyright, statutory damages, and fair use.

If we begin to get these debates, Nettwerk's move won't be the beginning of the end.  It will be the beginning of something much bigger.

Update II: The mainstream media in Canada is starting to pick up on this story with articles in the Toronto Star,, and the CBC.


  1. Wow indeed!
    I haven’t bought a Nettwerk CD in a while… I think I’ll buy two tomorrow.
    We need a way to pass on our tanks to Nettwerk.

  2. spellcheck please!
    ugh…THANKS…not tanks.

  3. seems to be a positive week!
    I will definitely go out and buy some Nettwork CDs also.
    This is great – hopefully the case outcome will be good and set a great precedent 🙂

  4. Rob Hyndman says:

    Maybe There is Hope After All
    First Barenaked on a Stick, and now this.

    I don’t know what to think. But I’m impressed.

  5. Surely to be impressed implies thought?
    This is surely spin by the record company in question, if the next Joe Bloggs gets hauled to court I bet they wont stand up for them. Whilst everyone else will be thinking “how nice of them to do that” the record company will be rubbing their hands together, with the extra revenue that has come in with trust.

  6. This is no surprise
    Keep in mind tricky that their has never been a decision in this kind of case. They have been John Doe suits, or against P2P companies like the all famous Grokster case. This one will result in a decision, with a well funded defendant.

    I really hope CRIA makes a press release on this. I always enjoy reading their propanda.

  7. Neil Leyton says:

    Artist & Label Director, Fading Ways Mus
    I have written to Nettwerk expressing our thanks and solidarity as well, it’ll be interesting to see how other indie labels that have not spoken up on this issue so far react, including CIRPA… I feel like this important issue if finally gathering some momentum (sp?) so thanks also to Michael for all the pre-election blogging…

  8. strewthmate says:

    give Terry McBride a cigar… he’s got it right !!!

  9. T. Townsend says:

    Self-Interest and Corporate Philanthropy
    In response to tricky’s comment:

    It would be unnatural for a company to do something that its management feels does not help their organization in the long or short term. Nettwerk will surely benefit in the short term at the very least from the goodwill it will get from consumers and the exposure in the press. It won’t even begin to cover the legal fees!

    However, I think you may be unaware of Nettwerk’s history. They built a close relationship with their fans, independent stores, campus radio, and the alternative media and it wouldn’t be a cliche to say that they were incredibly “hands-on” in the 80s and 90s. Unlike some large companies in the entertainment business they were small enough, recently enough to remember how music spreads, and gets into the hands of others.

    If you were in their shoes, would you be able to fund every single case of each of your customers? I think not. But they can fund one, and it’s better than none, especially since it is a case that could determine the legal fate of many more people.

    If we must talk about self-interest, then I think that Nettwerk is incredibly smart, because they realize that these type of laws hurt not just consumers but the entire music industry as well. I wish even more companies with clout would have the guts to do what they’re doing.

    They could have sat back and done nothing.

  10. What about Bandlink?
    My wife informs me that Nettwerk used Bandlink on Afterglow by Sarah McLachlin. That CD wouldn’t play in her work PC because she wouldn’t/couldn’t install the Bandlink software. From what I’ve read, Bandlink apparently would phone home to the record company with information on what you were playing and when. Kind of like the iTunes 6 Ministore but in 2003. It would also do a bunch of extra feature things like play videos and such.
    So… all this to say that Nettwerk seems to have dabbled in assorted not-entirely-friendly CDs. And it looks like Afterglow is still sold with that software on it.
    To Nettwerk’s credit, you can also buy many of their artist’s CDs online at their own music store. All DRM-free MP3.

  11. Oh yeah…
    I forgot to add that I, of course, applaud their actions for taking on this case. I’m not a lawyer, but I suspect that people that think this is just one case are not thinking in legal terms. The legal precedent set by a decision generally will strongly affect future cases heard on the same merits. If Nettwerk is able to have this thrown out, or better yet, not have it thrown out and take it all the way to a decision in their favour with a clear statement about user’s rights or the evidence needed to sue, etc. then it would likely affect all future lawsuits of that nature, at least in US jurisdiction. I think there has already been a case like that here in Canada where the courts decided that downloading for your own use is private copying, which is legal.
    Michael, have I got that right?

  12. time to set aside personal boycott of ne
    2 years ago (feb.2004), i purchased a cd from nettwerk’s online store (oh susanna, in case you’re wondering), which contained copy control software. this had not been disclosed on their website and before opening the shrink wrap, i sent a note to them to query about what kind of software was required. they assured me that the cd would play on any computer and that the copy control software would only ‘kick in’ if i tried to make a copy or upload.

    this was not the case and i was unable to play the cd on my work pc due to not being able to install the software (and good thing, as i didn’t want the software installed). i ended up putting the cd into my stereo’s cd player and patching the output to my pc sound card and ripped it that way. i also sent a note to nettwerk indicating that i would boycott their company’s products.

    it sounds like the company has made an about face in the interim. i sent a request tonight to nettwerk asking if they would allow me to exchange my existing copy-controlled cd for one without this ‘feature’. if i hear positively back, then i will gladly end my self-imposed boycott and give kudos to the daring of this canadian-based record company.

  13. BNL
    I may be buying a BNL album soon if Nettwerk keeps up the fight against the RIAA. I had no idea they weren’t part of the CRIA, is that true?

  14. A CRIA Member…
    Believe Nettwerk is a member of the CRIA. CRIA’s website used to display all the member logos and Nettwerk was up there just below the logos of the majors. The CRIA has A B & ‘other’ rank members. Interesting that despite Nettwerk churning gigantic sales – in Avril’s case signifantly higher than any Cdn act at a major since Shania/Celine – McBride never held seat on the board, or enjoyed voting status there. Will be interesting to discover how the lawyers who govern the CRIA respond to his action now… interesting days ahead.

  15. CRIA vs CIRPA
    Nettwerk is a member of CIRPA, not CRIA. On the issue of “protection” (ie. anti-downloading, DRM, etc.) CIRPA has always toed the CRIA party line. I believe Nettwerk to be one of CIRPA’s biggest members…

  16. Slight correction
    hey Tim, right you are – Nettwerk is a member of BOTH CIRPA and CRIA – a “B” member. Sorry for the mix-up.


  17. threerandot says:

    Carrott, not a stick
    The RIAA has got to get the message that they MUST change their way of dealing with consumers and those who share music. The world has changed so much since the 70’s. More technology, the media, TV, the music, the economy, the toys people can buy, that music has fallen down the radar. It’s not just downloading that has had an affect on sales… it’s everything…including themselves.