Universal Music Group Distribution president and CEO Jim Urie called on the National Assn. of Recording Merchandisers' board of directors to urge Internet service providers to adapt a graduated response policy against unauthorized peer-to-peer file sharing.

He made that call for action tonight in accepting NARM's Presidential Award on the last day of the organization's convention, which began here in Chicago on May 15.

After thanking others, including his friends, mentors and family, Urie said, "Now I want to talk about something that is important. I remember when there was 2000 people in this room.

"I remember when Tower Records was the world standard for music retail and I remember when Musicland had 10% of the business' market share. I have seen countless digital companies, who spent a lot of money building great models, come and go because they competed in an unlevel playing field."

He said CD sales have dropped 55% in the last five years, and that thousands of people have lost their jobs. "There isn't anyone in this room that doesn't know someone who is out of the business," he added.

Urie pointed out there was some good news from other countries, which shows that the music business "doesn't have to be this way."

Around the world, governments are taking action to shut down file-sharing, he noted. In some places it is called the three-strike rule, and in others it is called graduated response. In early 2009, South Korea passed such a law and last year the music business grew 18% in that country—the first sales increase in five years, according to Urie.

The same thing happened in Sweden, where a passed in the early part of 2009 resulted in music sales up 12% overall, with CD sales up 2%. Since the passage of a similar law in France last year, music sales were up 14% in the third quarter, up 7% in the fourth quarter of last year and up 8% in the first quarter of this year, said Urie.

"The government and the ISPs have to come to the party and recognize the value of intellectual property," he said.

If the ISPs won't come to the party, he said the U.S. government must pass graduated response legislation. He noted that some ISPs are "somewhat cooperative" about the issue but that's not because they are sensitive to the music industry's problems. "It's because the top 1% of the users who are doing all the file-sharing and downloading the entire Beatles and Rolling Stones catalog use up 25% of the bandwidth," so implementing such a policy would benefit them too.

Urie said that the NARM board of directors, its member companies, their employees and their families must band together and call on elected government officials to take action requiring the ISPs to take a stand on the issue. "I call on the NARM board to make this issue the No. 1 agenda item for this year," he said. "We need to come together to have an impact on this issue and if we do, we can get something done this year."

Earlier in the evening Tommy Boy CEO Tom Silverman, who was presented with the Independent Spirit Award, said that considering all the industry is facing, it has to come together to do what it is meant to do: "to service people who love music and new artists."

He said that the issue should no longer be about "Sony versus Warner" in market share competition and it can no longer be about labels versus retailers. It should be about "we. If we all take off our blinders, we can see a new way to do business. But we have to let go" of how the industry did things in the past, said Silverman.