Depending on who you ask, the music industry is a two-faced beast. Is it all rock gods and pop princesses living a bling-filled (or at least cocaine-fuelled) lifestyle? Or is it struggling artists bringin’ the tunes to mah peeps, man?

The industry’s anti-piracy film for schools, Australian Music In Tune, asks us to sympathise with the latter view featuring the poverty-stricken Jimmy Barnes, Silverchair and The Veronicas banging on about financial hardship. But the campaign, coordinated by Music Industry Piracy Investigations (MIPI), has p-ssed off some of those who donated their cred and inspired a counter-campaign.

Frenzal Rhomb’s guitarist (and Triple J presenter) Lindsay McDougall told the SMH he was roped in under “false pretences” and “defamed”. No-one told him it was part of an anti-piracy campaign, he says.

Frenzal Rhomb guitarist Lindsay McDougall, also a radio presenter at Triple J, told the Herald he was furious at being “lumped in with this witch hunt” and that he had been “completely taken out of context and defamed” by the Australian music industry, which funded the video.

He said he was told the 10-minute film, which is being distributed for free to all high schools in Australia, was about trying to survive as an Australian musician and no one mentioned the video would be used as part of an anti-piracy campaign.

But yesterday morning the In Tune website suddenly went offline. Why? MIPI’s office staff didn’t know. They didn’t even know the site was down until Crikey called. Could it be because of McDougall complaint? One thing was clear when the site re-appeared: McDougall was missing. (Compare it with the original version at emersive.tv.) Though according to the SMH, MIPI disagrees. It was all perfectly clear in the original contracts, they say.

Meanwhile, rearguard action is being fought against the music industry and its lumbering business model. Two internet-savvy guys in Newcastle are seeking signatures for their open letter to the industry at tune-out.com.

You the Music Industry have failed to move with us in our discovery of new and exciting ways to interact, collaborate, and communicate. We have embraced the digital space and the opportunities it affords us, and we have changed because of this…

You wrongly place the blame of declining CD sales on others. Our source of entertainment has diversified, and we are no longer as interested in the concept of the ‘album’.

There is no digital music battle or piracy war. That is a figment of your imagination, and, every time you preach our digital crimes to us, we ‘tune out’ of your deranged ranting. Your declining profits are the symptom of a business model that is fast becoming irrelevant.

And they’re right. Apple’s iTunes is now America’s biggest music retailer. Any musician can play just by uploading, though futurist Mark Pesce says BitTorrent means we don’t need Apple or anyone else for distribution. The audience decides for itself what’s hot or not through “social media” like MySpace. Wired founder Kevin Kelly says any artist can survive with just 1000 true fans, doing it all themselves. Meanwhile, the music industry has been suing dead grandmothers for illegal downloads.

Ah lawyers, a sure sign that things are truly bad…

Stilgherrian blogs at stilgherrian.com