I read another blog recently that ranted and raved about the request record industry companies recently made to Internet Service Providers to enforce anti-piracy on their servers and networks. The blog was not in favor of that move and I wholly agree that it is not the responsibility of another industry to make up for the problems facing the record industry. True, it would likely be prudent for ISPs to check for anti-piracy issues on their networks, but in the long run it has to be about keeping your own customers and not alienating others with threats against their privacy.

The British government seems poised to deal with the dynamic of this problem directly, after music industry trade groups there asked the government to take action. According to Billboard, the move to fight illegal file-sharing is "intended to ensure the prosperity of the country's creative industries" by taking legislative action as early as 2009 if the music industry and ISPs do not find a common ground. Legislators have also vowed to protect privacy in the face of these challenges. Unfortunately, the challenges of ISPs providing anti-piracy clean-up for the music industry does fly in the face of privacy issues, even if that means protecting the act of illegal file-sharing.

The Australian government has also taken a similar stance, but is keen to implement a "three-strike proposal" where illegal file sharers would be issued warnings before a suspension of access and eventual cancellation. Still, the plan would require ISPs to monitor user traffic and infringe on privacy issues, reports Billboard. Internet industry trade groups in Australia have also defended the position of not adopting these types of policies or "taking responsibility of illegal operations on their networks" because "present legislation already covers copyright infringement, and these should be used against illegal downloaders."

A Reuters article this morning reports that British-based music company EMI "wants to cut its funding to the industry's trade bodies... which could deal a blow to the fight against music piracy." Trade groups are the entities that "represent music companies and the fight against illegal piracy." Between the four major label groups: EMI, Warner Music Group Corp. (NYSE: WMG), Universal Music Group, and Sony BMG; the International Federation of the Phonographic Industry told Reuters that over $130 million each year goes to funding companies like it and the Recording Industry Association of America.

Groups like the RIAA have an important mission of course, and this plan would severely limit the fight against piracy, but one music industry giant dropping out certainly would not add too much of a burden. We should not be surprised that EMI is the company to come out with this plan, even before Terra Firma took over in September the music giant had dropped the digital protection against piracy (Digital Rights Management technology) encoded into its media files.

File sharing and piracy costs the recording industry loads of money every year (Reuters estimates that value in the billions) but it seems clear that the music industry cannot fight piracy while undergoing a major shift away from the "traditional" markets it has utilized for over 50 years. CD sales are plummeting while digital sales steadily grow. One label may not be able to change how piracy is tackled, but the current DRM-free approach coupled with new resources to market those products might make a difference. What difference, if any, is still to be seen. Just apply the Radiohead approach to everything and let consumers name the price of music. Many surely have some conscience...

The Wall Street Journal's "The Numbers Guy" blogger Carl Bailik has an interesting post about sales of Radiohead's latest musical effort, "In Rainbows". The album was offered by the band directly to the public via the internet on a 'pay as you see fit' basis. Since I love the band's music, I paid $12, which I thought a fair compromise between what the tunes were really worth to me and the cost savings they realized by this type of release.

Sadly, if Comscore's stats as reported by Bailik are reflective of the purchasing public, my decision was way, way out of the norm. They show that, on average, purchasers thought that $2.26 was the free market price. Worse, 62% paid nada, depending on schmucks like me to support their habit. Worse yet, according to Forbes, over half a million people chose to download the album from illegal sites, even though they could get it for free (and legally) from Radiohead.

Bialik rightly calls into question the veracity of the stats, though. Since Comscore uses a self-selected group of two million that have agreed to allow the company to track their habits via software installed on their computers, one must question if these users accurately reflect the buying public in the aggregate. I know that my buying wasn't part of that sampling. For example, I'm not a file-sharer as a rule. Perhaps the buying behavior of people like me would make the results less discouraging for those championing Radiohead's model.

After listening to the tunes for a couple of weeks, though, I have to say I don't begrudge a penny of my $12. This band has earned it with an excellent listen. Those of you listening on my nickel; I hope you enjoy it, too.

The next company in my ongoing series of the top 25 stocks for the NEXT 25 years is CBeyond, Inc (NASDAQ: CBEY). CBeyond has a market capitalization right at $1 billion. The company has an opportunity to be a dominant player in the total communications to the small-to-medium business sector.

CBeyond is a communications service provider (CSP), marketing to the small-to-medium business sector, as defined by 2 to 300 employees. The managed services offered by CBeyond include local voice, long distance and broadband internet access. Other services include e-mail systems, unified messaging, virtual private network (VPN) for remote users, and secure backup and file sharing. Soup to nuts, CBeyond offers the smaller enterprise the full package of communications with ease of use and simplified pricing programs.

The systems are delivered through T1 circuits right on the customer's premise and CBeyond guarantees carrier-grade quality of service and functionality. Most customers sign up for 3- to 5-year contracts, thus providing CBeyond with excellent revenue visibility going forward.

Small-to-medium business enterprises are ripe for bundled services, as CBeyond offers the one-stop shopping convenience for these enterprises. CBeyond monitors the "what's new" factor for its customers and builds in to the contracts, the upgrades when available. This allows the end customer to not be concerned about what is new in the technology world. CBeyond provides the so-called peace-of-mind solution.

Will the music and movie companies ever listen to the marketplace and change their business models to accommodate the digital age? There are many pundits -- me included -- who think companies like EMI, Bertlesmann and Sony Music, along with Sony Pictures, Paramount, and Fox, will continue to see declining revenues in music and movie streams due to digital downloads of that same content.

While the music industry has already been severely impacted by this, the movie industry is just now starting to see the fallout. It's true that downloading a song is pretty effortless, but getting a movie from the internet to your PC and then to wherever you'll be watching it can be challenging (except for the technical folks among us). But that's just it -- will the movie industry suffer as with the music industry did? Is it possible movie watchers want that rich experience of a theater instead of that laptop (or any other mediocre quality) screen?

Big media companies -- as strong and powerful as they may be -- still can't stop the consumer's thirst for wanting the content they have to be used on any device, any time, anywhere. All this copy protection mumbo-jumbo is only killing consumer interest in the distribution models of big studios -- forcing many customers to illicit channels for their media. Some business models need to be pulled into the here-and-now, kicking and screaming I suppose.

One thing that is clear: the music industry knows how to score with litigation. Its latest is a $115 million settlement with Kazaa. Several years ago, Kazaa had a YouTube-like trajectory in traffic.

But there's more: Kazaa will take measures to guard against illegal file sharing. Yes, it's like a hard-rock band moving over to Christian music.

Actually, it's unlikely Kazaa will return to its prior glory. Now, the market is flooded with many choices, such as Apple's iTunes, as well as offerings from Yahoo, MTV, and Napster. Besides, Kazaa built its model on giving things away. Now, are people going to be interested in paying? Probably not.

Rather, they will look elsewhere -- most likely, that will be file sharers that are offshore and do not care about US Supreme Court decisions.

The co-founders of Kazaa are also the co-founders of Skype: Niklas Zennstrom and Janus Friis. Apparently, both are pitching in to pay for the settlement. It's really a small price to pay – in light of the fact they got $2.6 billion from eBay when they sold Skype. And, with all legal claims cleared, both can now finally visit the United State without getting served.

Not long ago, media empires sued file sharers. Now, they strike partnerships.

The latest is from Time Warner's Warner Bros. The deal calls for distribution of Warner Bros.' rich content library of TV shows and movies on Guba.com.

OK, in this deal, "sharing" means selling the movie downloads. Interestingly enough, like other video sites, Guba.com shared copyrighted content for free.  Well, it is changing its ways.

Actually, Warner Bros. has been quite visionary.  The company recently struck a similar deal with another file sharer, BitTorrent.

Warner Bros. also realizes that – if it wants to find its customers – it must move to the Web.  Why not go to places where huge numbers of users gather? Yes, it's not brain surgery.  But, in the entertainment business, often the first inclination is to sue, not partner.