Warner/Chappell admits it was trigger-happy with a cease-and-desist letter. Is the music industry finally learning to think before it threatens?

The saga started in early December, in what has become almost standard practice: the music industry using legal threats to quash first, question later an interesting new technology.

But on Dec. 15 there was a less typical development: Warner/Chappell chairman Richard Blackstone and Jane Dyball, who handles European legal affairs for the company, privately and publically apologizing to Walter Ritter, the 31-year-old Austrian programmer behind PearLyrics.

PearLyrics was a clever and simple application that searched users’ files and the Web for lyrics to import into their iTunes folder. The soft-spoken Ritter spends his days developing applications as a researcher at the Vorarlberg University of Applied Sciences. “This is just a hobby of mine,” Ritter says. “I like to create simple applications that provide good usability.”

PearLyrics had been downloaded about 15,000 times, Ritter estimates, before he pulled the plug on Dec. 6, following Warner/Chappell’s cease-and-desist letter.

W/C’s action, and the attendant press response, drove the application off of Ritter’s own site and into peer-to-peer land, where it will almost surely be downloaded at far greater rates than it had been pre-hubbub.

W/C’s apology was the right move, but may have come as a result of a publicly posted argument from the Electronic Frontier Foundation. Not only was Ritter’s application probably legal in the United States, reasoned the EFF, but such threats against U.S. developers could open Warner Music Group to federal liability.

The music industry might want to think these actions through more thoroughly, and not just to avoid legal strife. Dyball’s letter to PearLyrics was copied to Kevin Saul, an Apple Computer lawyer, and links to similar applications quickly disappeared from the Apple Web site.

This was two opportunities lost. For one, by taking the text from illegal lyrics sites, applications such as Ritter’s—which seek no revenue and are, at least arguably, legal—were taking eyeballs away from, and thus diminishing the ad revenue of the very illegal, very revenue-seeking sites that archive and distribute unlicensed lyrics.

Major rights holders confronted with these grass-roots software developments might also consider embracing them as possible new business models as aggressively as they have been in recent years about shutting them down. How many casual music fans currently pay for lyrics? And how much revenue might be derived from working to shut down illegal lyric sites and monetizing, at incremental, almost afterthought-like rates, applications such as Ritter’s? (Another possibility, from EFF attorney Fred von Lohmann: Let fans acquire lyrics for free, since publishers are paid when CDs or downloads are purchased.)

We will probably not have clarity soon. WMG has taken some chances in the digital space. Just over a year ago, it became the first major to link its recorded music and publishing arms to streamline the licensing of ringtones. More recently, its digital-only label, Cordless, launched in November and has already yielded some minor iTunes success.

This time around, however, W/C’s press release, issued jointly with Ritter, stopped short of encouraging Ritter (or Apple) to get these applications up and running again. But there may be hope.

Lauren Keiser, president of the 100-plus member Music Publishing Assn. (and of print publishing company Carl Fischer) tells Billboard that, in January, the MPA will start targeting five or six lyrics (or guitar tab) sites that make money from “illegally trafficking copyrighted materials” with cease-and-desist orders. And he says he is not inclined to approach these sites first as potential partners. “If someone was robbing your bank,” he asks, “would you go to them and say, ‘Hey, let’s split the cut?’ ” It is this very same perspective—justified, perhaps, yet ultimately stifling—that has stalled the music industry again and again during the digital revolution.

But Keiser also says that after he made the MPA initiative public in early December, he was bombarded with e-mails from all over the world, from music fans of every age. And some of these responses, Keiser grants, the ones that do not use language that Billboard is uncomfortable reprinting, came up with some good ideas. “I’ve printed out a number of them, which I’ll show the board next month,” he says. “I think our members would be happy to support sites that want to help them exploit writers.”

Similarly, in W/C and Ritter’s statement, the publisher committed to working with Ritter “to provide consumers a convenient, legal way to find accurate song lyrics.” It is vague, but it is a start. Maybe next time, whether it is WMG or another major music company, that dialogue will precede the threats.