U2 manager Paul McGuinness launched a blistering attack on the world’s Internet providers Wednesday, accusing them of strangling the music industry.

Speaking at the Music Matters confab in Hong Kong, McGuinness likened ISPs to “shoplifters” and accused them of “turning their heads” away from the music industry’s troubles and “rigging the market.”

“The recorded music industry is in a crisis, and there is crucial help available but not being provided by companies who should be providing that help — not just because it is morally right, but because it is in their commercial interest,” McGuinness said.

He and numerous others speaking on the first day of the confab said the industry was caught between rampant piracy and ISPs’ extortionate terms of trade.

Warner Music prexy Lachie Rutherford pointed out that the 2% of revenues from downloads and ringtones is shared with performers. “There are huge amounts of money being made from music (by portals and carriers) that are not supporting music or radio or magazines,” Rutherford said.

McGuinness targeted many for contributing to the music biz’s ills. “Cable operators, ISPs, device manufacturers, P2P software companies — companies that have used music to drive vast revenues from broadband subscriptions and from advertising. They would argue that they have been neutral bystanders to the spectacular devaluation of music. I don’t believe that is true,” he said.

But McGuinness saved his sharpest criticism for China and Chinese companies.

“ISPs and mobile operators are the business partners of the future for the recorded music business — but they have to share the money in a way that reflects what music is doing for their business,” he said. “That’s true nowhere more than in China. China Mobile makes hundreds of millions of dollars each year from sales of ringtones yet pays a minuscule fraction of that to performers, producers and composers.”

McGuinness said ISPs were unwilling to act against piracy and had ignored music-industry proposals — even though they were not being asked to police the Internet.

- Variety

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