Sherman said that even though he played the piano in his youth, his first involvement with the music industry came when he was a young lawyer at a Washington D.C. law firm and wound up representing the RIAA.
"It was a totally random assignment, which could have gone to anyone, as I knew nothing about copyright or legislative work," Sherman recalled. "It was in 1974 and my three week assignment was to get Congress to establish a public performance right for sound recordings, so that AM/FM radio would have to pay artists and labels for the use of their music. I am still working on that project today." (The National Association of Broadcasters has successfully turned back every music industry effort at trying to get Congress to establish a master recording performance right for almost 70 years.)
Sherman said that assignment led to 45 years of continuous work representing the record industry, which means he has been involved with "virtually all of the technology and legal issues" that have confronted the music business.
The mid-1990s provided the most overwhelming disruption of all -- the digitalization and compression of music files, which meant music could be freely distributed on the internet, leading to a "veritable explosion of FTP [file transfer protocol] sites hosting illegal music files for people to take at well," Sherman recalled. "And in 1999, along came Napster and Kazaa and Grokster and Aimster and Streamcast and Morpheus and Limewire and more. We had to begin lawsuits and litigate them all the way to the Supreme Court to establish once and for all that those services were illegal."
While the industry may not have foreseen all the piracy that would be coming its way, Sherman said it did actually -- at least conceptually -- get "ahead of the curve on streaming." He explained, "Back in the 1980s we had imagined the possibility that someday somebody might figure out how to beam music to a home for listening. We thought it might come from a satellite or something. It was a hypothetical celestial jukebox."
Sherman, who will step down from his RIAA position at the end of the year, said it took a while, but the industry finally got that legislation in 1995 [the Digital Performance Right In Recordings Act] and again in 1998 [the Digital Millennium Copyright Act], establishing the right to be paid for what is now online streaming. "And also the right to negotiate marketplace deals with services that streamed on demand ... with the subscription streaming services that are producing the bulk of our revenues today," he added.
That legislation passed because the industry secured the rights it needed "before powerful technology companies emerged that would oppose the legislation," he said. "There are still big gaps in the law that need to be closed, gaps that only became obvious as technology forced a change to our business model. Figuring out what those gaps are and how to fix them, that's the key to ensuring that the music business stays in business.
"So for those of you who think that music policy and government regulation are not relevant to you, think again. Whether you're an artist, label, a songwriter, a publisher, a digital music service or a start-up, governmental policy will determine how you can operate and how you can earn money -- or not."