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A quick show of hands: Have you ever done anything wrong? I don’t mean something as innocent as taking the last slice of pie without asking. I’m talking about breaking a serious federal law of the United States of America. If you’re like most people, your hand is raised. It’s hard not to break the copyright law when it’s so easy to “borrow” a software program, song, e-book, or even a DVD movie. I don’t mean loaning a movie or CD to your friend, but copying a movie or song to your hard disk.

Believe it or not, this action could cost you up to $100,000 per incident. Each Pink Floyd song you rip off could cost you a pile of cash. Using a utility to copy the latest James Bond movie to your notebook could put you into some serious legal trouble. Actually, the odds of getting caught are about a million to one. This is not why I’m writing this column—it’s the poor person that creates the content we all desire. They are the ones who are getting hurt by all of this.

Before you say, “What poor person?” you have to consider the economics of the entertainment industry. When you buy a CD, the lions share of the profits go to the record label (this term has to be updated!) that represents them and distributors, and the group that created the work may only get 25 cents. The actual artist that sings a song may only make $100,000 in a year for a hit song, because they have to pay for the video, promotion, marketing and tour expenses out of their royalties. Several hit groups lately have gone bankrupt after selling a million records.

When we download an MP3 file off the Internet, we have to take into consideration that the artist is not getting anything for this. Yes, I know that CD sales have actually increased lately, but they have dropped near most of the major universities. I believe that the real problem lies in the current business model. Record labels provide a great service to artists, for without them many groups we love would have never gotten airplay or even made their first CD. However, the Internet is helping make this virtual monopoly in the music industry ancient history. Artists are releasing sample tracks of their songs, or even the entire album, hoping that people will enjoy what they hear and want to buy more. They are trying to sell direct, and although few are major successes, this is just the beginning of a new distribution method for music.

Recently, Stephen King released his own e-book. No publisher, no middleman, and all profit for him. The book was a serial novel, “The Plant.” He based his revenue model on the honesty system. If you read it, you paid. Many people paid for the first episode, but the percentage of paying customers decreased over time. He has recently put the project on hiatus, but expects to resume writing later this year. He considers the experiment a success, even though he didn’t make the amount of money he expected. An interesting thing to note is that the cracker (not hacker) community broke the encryption on the book as soon as it was released, so we don’t know exactly how many people stole the book.

Speaking of stealing, did you know that it has been estimated that up to 10 copies of a program are pirated for each one that is purchased? Have you ever let your brother borrow a copy of Microsoft Office? Or not paid for that shareware program (WinZip?) you downloaded a year ago and have been using ever since? Yet we all complain about the high cost of software. I’ve tried to be 100% legal, and it’s hard. I probably have one or two more share-ware programs to send in registration fees for, and should probably purchase a retail program or two. At least I’m trying.

My observation is that we need a new way of paying for content. We all love television, but we don’t pay for it (pay channels or cable don’t count). TV, and radio before that, have always been advertiser supported. Already, people are creating sites that let you send money to Metallica for that MP3 file you “found” on your hard disk. Maybe we need ads in our MP3, players with a percentage of the profits going to the musicians?

An innovative approach to this is Eudora, the e-mail program that I use daily. Since Outlook comes free with Microsoft Office, I found it hard to pay for another e-mail program. I love Eudora, but didn’t want to pay $79. They came up with a way to display banner ads on my computer while Eudora is running, and I get the program for free.

Other industries have to figure out new innovative approaches to this problem. The recent crash of the Business to Consumer (B2C) Web sites is proving that consumers don’t want to pay for something that they think should be free. We need new thinking on how to compensate artists, distributors, and even record labels and promoters. I don’t think that the Rolling Stones could survive on t-shirt sales alone, but I think we really need new business models before it’s not profitable to create a CD, movie or book.

So, the moral of this story is for you to think about the results of your actions. I feel like an adult writing this, but you have to think about the repercussions the next time you “borrow” a song, movie, or software program. If we don’t pay the creators—the artists— why should they create?