- At
http://www.naphoria.com/p2pwir/wir20sep03.htm
- A Judge Asks The Right Question
In a column back in June I pointed out a basic but overlooked fundamental flaw in the RIAA’s arguments surrounding file-sharing, distribution of copyrighted materials and the Digital Millennium Copyright Act (DMCA). Since the RIAA claims that the DMCA allows them to send out robo-writs to any ISP with a customer who’s allegedly distributing copyrighted files without authorization; and since a Judge agreed with the RIAA and ruled against Verizon in a case between the two, it seemed to me someone should take a close look at what it means to “distribute” something if we’re going to attach so much importance to the word. I wrote,
“The simple fact is that for Kazaa, Winmx, Blubster, BearShare etc it is technically impossible for a user to actively distribute anything at all,” meaning the P2P user does not send out a file in any way that can be considered “active”. The file sits there waiting to be discovered and if and when that occurs it’s the downloader who initiates and completes the distribution process by actively selecting the file and commencing the transfer. Not only is the uploader not a part of the active process, he doesn’t have to be anywhere near his computer for the transfer to take place. He just needs to leave it on. It’s the downloader who decides what’s going to happen with any particular file. The downloader runs the search, finds the file, makes up his mind about it and then acquires it – or not – with no input at all necessary from the uploader. Compare that to the record business and how they run their distribution system with routes, shipping clerks, trucks, drivers, warehouses etc all the way to the store. The distribution is so totally active it’s unrecognizable from a P2P. The recordings don’t get to the customers by themselves simply because the customers want them, they have to be actively carried every step of the way, via a very expensive and laborious process ending either at a retail outlet or in the case mail order right at the customers house. It’s not the complexity of the process that determines the difference either, because the internet is every bit as complex as its physical counterpart. The fundamental difference between the two is the complete lack of active participation on the P2P uploaders part, versus the frenzied activities of record company distributors, and even Apples' iTunes for that matter. For you to download a file from your friend, your friend doesn’t have to do a thing. You do it all. It’s a “taking’ in that sense, not a “giving”.
I went so far as to say that prosecuting a file sharer for uploading songs is like prosecuting a person for being robbed, “If as the record companies are fond of saying, ‘file sharing is like shoplifting,’ then these latest lawsuits are the equivalent of suing the stores.”
This Week A Judge Agreed
In an appeal of the case which it earlier lost, lawyers for Verizon found themselves back in court facing the RIAA over these and other important constitutional questions and perhaps for the first time found themselves in front of a Judge with more than just a passing grasp of the issues. Judge John Roberts of the U.S. Court of Appeals for the District of Columbia put it squarely to RIAA attorney Donald B. Verrilli Jr when he asked him why uploaders were any different than people who have large libraries sitting in their houses instead of their harddrives. What’s the difference between copying a file off a PC or coming into a house and taking a file off a shelf? In either case, where’s the distribution?
"Isn't it equivalent to my leaving the door to my library open?", Judge Roberts asked. "Somebody could come in and copy my books but that doesn't mean I'm liable for copyright infringement.”
Indeed, and there are many instances where uploaders do “push” requests for files. For years certain notorious website operators have thrusted programs onto the drives of unsuspecting visitors, so it’s not as if the internet is configured only one way, for some new type of passive distribution that changes the paradigm and the descriptions. When the RIAA puts their eggs in the “distributor as violator” basket, it becomes the courts duty to fully examine what it means to be a distributor. And when RIAA asks only that “the law be enforced,” the courts bear the responsibility of examining that request, and scant else. If the courts ultimately define a distributor as one who proceeds in an active manner, and they should, they will have little choice but to deny the RIAA’s request under the provisions of the Digital Millennium Copyright Act. Distribution is still an active act, even on the Internet. And so is taking. The two are not the same. The definitions - and the differences - still apply.
Enjoy,
Jack.
- Confessions of a Kazaa Downloader
Lawsuits may stop music thefts but they won't boost sales. -
Mark Evans
A Web surfer uses his laptop to download free music files. Lawsuits may stop the practice but will it enable the world's leading distributors of movies and recorded music to boost sales?
I've used Kazaa to download music files. There, I've said it so I guess it is only a matter of time before the Canadian Recording Industry Association or the Recording Industry Association of America sends me a nasty letter or hits me with a lawsuit for stealing copyrighted music.
To be honest, the RIAA's recent decision to fire off 261 lawsuits in the United States sends shivers up my spine. These guys are have become serious -- even if means further alienating their consumers.
I guess the RIAA is frustrated that after five years of legal warfare, there are still almost three billion music files downloaded from the Web each month.
In the name of honesty, I've been one of those evil downloaders -- albeit a very small player.
The last song I swiped was Don't Pull Your Love by Joe Frank Hamilton. It is not like I'm going after Top-40 hits.
To be honest, the whole downloading phenomena has lost its lustre. At first, it was exciting because you could use Napster to access all kinds of different music. It was a risk-free vehicle. If you downloaded a bunch of songs, and didn't like them, you would hit the delete button. It is not like spending $19.99 on a CD with only a couple good tracks.
The problem today is that there is not much I want or need to download. None of the radio stations in Toronto play anything that intrigues or excites me.
You know there is a problem when you flip channels only to hear Montreal pop-rocker Sam Roberts on stations that apparently have different formats.
Sometimes, I fire up Kazaa and pray for inspiration. It is a lot like what happened after my wife and I bought an 80-year-old house in downtown Toronto. Every Saturday morning, I would head off to Home Depot for supplies. One day, I got there and realized there was nothing I needed to buy.
It is easy to understand why the music industry is taking such a hard-line approach to downloaders. CD sales in the United States tumbled 7% in 2002, and 2003 has been even worse.
The music industry puts the blame squarely on downloaders. If people weren't getting free music, they would be buying more CDs, they claim. That may be somewhat accurate but there are other issues at work. One of them is programming homogeneity.
In the United States, deregulation has seen the radio industry consolidate as small operators sell out to corporate giants that centralize much of their programming in the name of efficiency.
A challenge facing the music industry is engaging consumers. How do you get them excited about a new artist? Does it make sense to promote artists who appeal to niches when the economics of the business encourage music labels to appeal to a wide an audience as possible?
It can be argued that the music industry has been relying on huge stars such as Britney Spears or U2 to drive sales and profits.
The problem is that when the labels fail to produce a mega-hit, sales tumble because they have so much tied into so few sales-friendly artists.
What the Internet offers is an attractive way to easily and inexpensively market a wider variety of artists to niches, while still selling the major artists. There is an appetite for non-mainstream music, but how do you make consumers aware of new releases?
The music industry, however, is so engrossed in tracking down and prosecuting downloaders that its efforts to actually sell music online have been, at best, tepid. Say what you will about Apple's iTunes online music service, it is not the ideal solution. It is hard to believe you should pay US99¢ for a new hit and the same price for a one-hit wonder made 15 years ago.
The RIAA's flurry of lawsuits -- which could expand this fall -- may stop many people from downloading music but it will not boost CD sales. Until the music industry figures out how to capitalize on the Internet's potential, sales will continue to slump and music lovers will look for new technology that lets them get free music without the fear of being legally assaulted by the RIAA.
Personally, I've sworn off Kazaa but my CD purchases will still be few and far between. Until the music industry comes up with a win-win business model for consumers and the labels, I'll just listen to all my old CDs that have been collecting dust.
http://www.canada.com/technology/st...42-0CEF16FF17CE
- Music Industry Forcing People To See The Wrong In Sharing Music Online -
Charles Bermant
Modern life evolves in cycles, with each generation facing different iterations of the cultural speed bumps. For instance, illegally downloaded music seems to closely resemble a surreptitious pleasure of a generation ago, smoking marijuana. Consider the similarities: No one denies that the unauthorized downloading of music is illegal, but doing so on a small scale is perceived as a victimless crime. Everybody is doing it, so the majority rules. And it's unlikely that current transgressors will face prosecution as long as they cease and desist, as the law is now going after the dealers.
More to the point, the problem is solved if you "Just Say No" in the first place.
Facetiousness aside, there is a stark difference between smoking marijuana in the 1960s and downloading illegal music files today. In the first place, marijuana can be to some people a habit-forming drug that can cause mental and physical damage. Downloading illegal music has no physical impact, and it only takes a wee bit of willpower to quit. And unlike marijuana, there is a legal option to the illegal activity.
This week's news about aggressive pursuit of illegal music downloading by the Recording Industry Association of America (RIAA) set many parents wondering about their own children's safety.
On Monday, the five major record labels sued 261 people around the nation who allegedly offered large libraries of songs for copying on five popular file-sharing networks. Those people aren't necessarily the ones using file-sharing networks, but have the Internet accounts on which the alleged pirating of music occurred.
Since we may not be sure exactly what Junior is doing online, it comes as a bit of a shock to know the youngsters could actually be prosecuted. But the RIAA is definitely taking prisoners.
"We are targeting the individuals that are making substantial amounts of files available on peer-to-peer networks," said RIAA spokeswoman Amanda Collins. "This activity is illegal, and no one gets a free pass for illegal behavior."
Which means that once they finish nailing all the dealers, they may go after people for possession.
The RIAA maintains that the victims of illegal downloading are the artists who are not compensated for their work. Collins repeatedly compares an illegal download to walking out of a music store with a stolen CD in your pocket — something most parents would not condone.
In another bygone ad campaign, a father who catches a son with drugs asks angrily "Where did you learn such behavior?" to hear "From you, Dad, from you." The father then is crestfallen to know that his example caused the aberrance.
Downloading music follows a similar path. Today's kids have watched their parents pass along custom-made classic-rock cassettes, and many men wooed their wives with homemade tapes of romantic music. So how wrong could it be, if it helped Mom and Dad get together?
Passing around such tapes, as Collins reminds us, has always been illegal. But potheads paid little attention. Besides, it was hard to believe that you were doing anything so wrong as long as you knew someone who had actually paid for the music. You would not, back then, make thousands of tapes and place them in a shopping mall for anyone to pick up. Which is what the Internet essentially does.
So why, as downloadable music has been available for some time, are the legal activities happening today? The RIAA says that it provided fair warning, announcing its strategy of targeting transgressors early in the summer. So this week's lawsuits were right on schedule, giving the criminals plenty of time to cease and desist.
"They wanted to wait until there were legal alternatives," said RealNetworks spokesman Matt Graves. "We have seen some positive signs of growth in this area recently. And now that kids are going back to school, parents are concentrating more on being parents. It's a good time for them to talk to their kids."
As Graves points out, legal downloads have reached a point where they offer a unique product — even if you are required to pay. "The way to get people to pay is to offer something that's better than free," he said.
Another reassuring aspect comes with perusal of the fine print on the RIAA Web site. Kids who illegally downloaded a few Beatles songs from a Spanish Web site are clear, for now. But those who loaded some of the popular file-sharing software, which allowed others access to their disks, can be prosecuted.
Several of those sued, in fact, claim no knowledge of the peer-to-peer nature of the software. Innocent or not, this excuse no longer holds water.
So there are two steps we can suggest for our errant children: Get rid of the software. Even without the file-sharing aspect, allowing everyone on the Internet to fish around on your computer is an invitation to trouble.
The RIAA also has an informational site, www.musicunited.org and a slightly different mirror site, www.musicunited.net,offers instructions on how to disable the share feature on peer-to-peer software, along with a wealth of background information designed to keep you legal.
Additionally, any reformed criminals can log on to the RIAA's site for a downloadable affidavit that says they will never do this again (go to www.riaa.com and click on "Clean Slate Program Affidavit" at the bottom of the page). If you follow these steps and keep your word, you are in the clear.
While this makes sense for parents who want their kids to take responsibility for their actions, be advised that the "amnesty" program has already generated controversy.
A lawsuit filed in Marin County, Calif., states that the program is designed to "incriminate themselves and provide the R.I.A.A. and others with actionable admissions of wrongdoing under penalty of perjury" without providing any kind of legal release of claims.
So for many, the best strategy will be to stay clean and hope for the best. You would not, then or now, swear out an affidavit that you would never smoke pot again and take it to the local police station.
The digital-music antipiracy forces aren't waiting for a gradual attitude change, where people come around to the notion that this is a crime on their own. Illegal downloading is akin to stealing, and stealing is wrong. This message couldn't be much clearer.
There are people who still flout the law and smoke marijuana. They know the risks — that they could go to jail. So those who download music illegally will either need to start studying the pothead playbook or clean up their act and just say no.
http://seattletimes.nwsource.com/ht..._ptmusic13.html
- Steal This Column
When is a lawsuit shaped like a boomerang? Rick Munarriz argues that the music industry is going to get more than it bargained for in going after individual MP3 file-traders. The major labels may accept the backlash that comes in prosecuting the very copyright-dissing enemies that it is looking to win back... but it doesn't realize how costly this game of alienation might prove to be.
Rick Munarriz
Faces are being attached to the list of names on the Recording Industry
Association of America (RIAA) legal hit list. And let me tell you, some
of them look just like your neighbors. One of them -- I swear -- is the
spitting image of you.
Amidst enough mixed signals to freeze up a recording studio mixing board, we're down to a bloody battle that no one wanted. In filing suit against 261 citizens who have downloaded free music files from the Internet, the fortified music industry has essentially started shelling a galleon manned by 60 million pirates that look like you and me. As a result, the attackers have a daunting challenge on their hands. How do you sink the ship while saving the passengers? And, while we're at it, does anyone know how many olive branches it takes to craft a makeshift lifeboat?
You've got chain mail
Earlier this week, the picture of a 12-year-old New York honors
student accused of unauthorized downloading sprees was a fixture on the
America Online log-in page. It evoked an outcry of overwhelming public
support for the young girl. Facing the first of many public relations
nightmares in this fight, the RIAA scrambled to save face by quickly
settling with the pre-teen's mother for $2,000.
It's easy to see why America Online threw gas on this incendiary topic.
Challenged by stagnant subscriber growth, the Internet specialist is
trying to juice revenues by upselling members into costlier high-speed
connections. Why would folks pay the company roughly twice as much for
its AOL for Broadband service? Clearly, downloading MP3s -- illegal
ones, in most cases -- is the killer app driving DSL and cable modem
growth. Sure, America Online would rather pitch legal alternatives, and
it's clearly marketing the upgrade around its exclusive broadband
content, but who are they trying to kid? The need for speed is almost
exclusively driven by the demand for faster peer-to-peer file-sharing
exchanges.
But here's the kicker: America Online, despite serving as a high-speed
hub of P2P commiseration, is part of the same AOL Time Warner (NYSE:
AOL) media giant that owns Warner Music, one of the five major record
labels. It's a conflict of interest that became notoriously transparent
when the RIAA's list of 261 violators reportedly didn't include a single
AOL subscriber.
So as the names trickle in (including the likes of a repentant Yale
professor and a 71-year-old man who claims he was unaware that his
visiting grandchildren were loading up on song files), one has to wonder
how differently this all would have played out if they had signed up
with America Online -- or if Verizon (NYSE: VZ) owned a record label.
Out of harmony's way
It's not just Warner Music. Check out the HiFi Components page on the Sony (NYSE: SNE) website. Right now, the top headline reads "Burn Your Own CDs." Excuse me, isn't Sony also one of the five major labels that earlier this year took Apple (Nasdaq: AAPL) to task for its "Rip. Mix. Burn." marketing campaign? How is this any different? Sony makes sure that many of its audio systems and Walkman portable CD players can play compact discs filled with hours of raw MP3s.
So, sure, pre-recorded CD sales have fallen for three years in a row now. Everyone knows the music industry has been mired in a slump. But how much of those losses have been offset by major label endeavors that have picked the pockets of the file traders? When the same folks who are arming us with CD recorders and broadband connections are coming after us for using those tools for their most popular purpose, haven't we crossed the line into entrapment?
Pirates of the Scary Being
In a great thread within our Fool Community (subscription required) some of our members were debating whether or not the term "piracy" is an appropriate tag for MP3 swappers. You're welcome to share your thoughts if you'd like to, but I'm not much in the mood to pass judgment. Unlike the RIAA, I have no interest in cultivating 60 million enemies in an industry in which platinum success is measured a million fans at a time.
My point is that, regardless of what you brand it or where it falls within the Digital Millennium Copyright Act, does any of it matter if the collateral damage smells of hara-kiri? Alienation may have merit on an artistic level, but it's certainly not a welcome trait for an industry that is banking on the disposable income of the masses.
Scorched Earth, Wind and Fire
Isn't it obvious where this is all going? Sony and Warner, along with Vivendi's (NYSE: V) Universal Music, EMI and BMG, make up the five major labels. If this desperate legal salvo is a last ditch effort to save the kingdom, they'd better dig those ditches deep. 'Cause they're going in.
Yes, traffic to the P2P file-trading networks fell over the summer as consumers learned to respect RIAA's long arm of the law. However, the decline in music CD sales actually accelerated during the same period. The industry killed the pirate, but in so doing ripped out the soul of the once-ardent music fan inside. While the notion of 60 million people ripping off the industry was painful, at least they valued music as something worth pilfering.
The anti-label sentiment is only going to get stronger. There are many reasons why Apple has been able to sell 10 million digital downloads through its iTunes store over the past four months while the majors have struggled with their own Web-delivery ventures. One of them has to be that Apple isn't seen as the establishment.
The Song Remains the Blame
Like an errant drummer, the major labels have been prone to some real lousy timing lately. When Universal slashed CD list prices by one-third last week, it might just as well have engraved "Exhibit A" on the announcement. That's clear evidence that the labels have been ripping off consumers all along. All those years of whining while CD sales dipped...and the industry never saw fit to question the elasticity of its own beefy markups?
The labels are in the process of offering amnesty, but that's a double-edged olive branch. The RIAA is not qualified to wipe the slate clean on behalf of all potential litigants, so it's coming off like a pompous backstage diva.
Back in July, in my Download No Evil column, I outlined the seemingly radical opinion that the only way the record industry would survive would be to embrace the file-trading platform and learn to monetize it. Make the P2P networks redundant by manning the gates of digital distribution liberally, and work within their artist rosters to tap into mutually beneficial revenue streams -- like concerts and merchandise, which have actually blossomed even as the value of the pre-recorded CD has diminished. I guess the labels didn't take my free advice. That's fine. I'll hold onto it. It looks like I'll be needing it for five eulogies that are coming down the pike.
http://www.fool.com/news/commentary...ry030912ram.htm
- Artists Blast Record Companies Over Lawsuits Against Downloaders -
Joel Selvin and Neva Chonin
Recording artists across the board think the music industry should find a way to work with the Internet instead of suing people who have downloaded music.
"They're protecting an archaic industry," said the Grateful Dead's Bob Weir. "They should turn their attention to new models."
"This is not rocket science," said David Draiman of Disturbed, a hard-rock band with a platinum debut album on the charts. "Instead of spending all this money litigating against kids who are the people they're trying to sell things to in the first place, they have to learn how to effectively use the Internet."
After three consecutive years of double-digit sales losses, and having lost a court battle against file- sharing Web sites such as Kazaa and Morpheus, the Recording Industry Association of America -- the industry's lobbying arm -- trained its sights on ordinary fans who have downloaded music. On Monday, the RIAA filed suits against 261 civilians with more than 1,000 music files each on their computers, accusing them of copyright violations. The industry hopes the suits, which seek as much as $150,000 per violation, will deter computer users from engaging in what the record industry considers illegal file-swapping.
This unprecedented move brings home the industry's battle against Web downloads, which the record business blames for billion-dollar losses since the 1999 emergence of Napster, the South Bay startup the RIAA sued out of existence. The suits are expected to settle for as little as $3,000 each, but the news was greeted with derision by the very people the RIAA said they moved to protect, the musicians themselves.
"Lawsuits on 12-year-old kids for downloading music, duping a mother into paying a $2,000 settlement for her kid?" said rapper Chuck D of Public Enemy. "Those scare tactics are pure Gestapo."
"File sharing is a reality, and it would seem that the labels would do well to learn how to incorporate it into their business models somehow," said genre-busting DJ Moby in a post on his Web site. "Record companies suing 12-year-old girls for file sharing is kind of like horse-and-buggy operators suing Henry Ford."
Artists are feeling the downturn in sales, too. "My record royalties have dropped 80 percent since 1999," said Steve Miller, whose greatest hits album has been a perennial best-seller since its 1978 release. "To me, it's one of the weirdest things that's ever happened to me because people act like it's OK."
Recording artists have watched their record royalties erode over the past few years ("My Van Halen royalties are history," said vocalist Sammy Hagar), but, in fact, few musicians earn the bulk of their income from record sales.
"Bruce Springsteen probably earned more in 10 nights at Meadowlands last month than in his entire recording career," said rocker Huey Lewis.
Many artists painted the record industry as a bloated, overstuffed giant with too many mouths to feed and too many middlemen to pay, selling an overpriced, often mediocre product.
"They have all these abnormal practices that keep driving the price up," said Gregg Rollie, founding member of Santana and Journey. "People think musicians make all that money, but it's not true. We make the smallest amount."
The RIAA did not initiate these lawsuits to defend artists' rights, the musicians say, but to protect corporate profits.
"For the artists, my ass," said Draiman. "I didn't ask them to protect me, and I don't want their protection."
http://www.ajc.com/news/content/new...78738895450518#
- Adults May Not Be Liable For Child's File-Sharing
Music industry suits aim at parents of violators. - AP
The music industry may have a hard time convincing courts that parents are liable for any unauthorized swapping of songs online by their underage children, legal experts say.
Recording companies sued 261 music fans this week, claiming they were illegally distributing hundreds of digital song files apiece over Internet file-sharing networks. Many of the defendants, however, turned out to be parents or grandparents of the alleged file-traders.
Many legal experts believe few defendants, if any, will opt to fight the lawsuits because they can't afford attorneys or won't want to risk judgments totaling millions of dollars. Copyright laws allow for damages of $750 to $150,000 per song.
"In most cases the recording industry has a really strong case," said Joseph P. Liu, a Boston College law school professor. "If I were sued by the recording industry, I'd probably settle pretty quickly."
For adults who don't settle, the music industry has a good chance of prevailing, experts say. But proving a parent's liability for a child's activity is much harder, said Jonathan Zittrain, co-director of the Berkman Center for Internet and Society at Harvard Law School.
"And in general, if you win an action against a kid, you don't get to collect against the parent," Zittrain said.
The music industry has said it was targeting the individuals who had paid for the Internet service at households where digital music was being shared. That often means the parent.
The Recording Industry Association of America could not say how many of the music lawsuits named minors or their parents.
By some estimates, teen-agers make up half of the 60 million people who use file-swapping services. Some adults who spoke publicly about the cases said their children or grandchildren had been using their computer to swap music.
A Richardson, Texas, man said his teen-age grandchildren downloaded songs when they came to visit him. A Redwood City, Calif., man whose wife was sued said neither knew their two teens and their friends were doing anything wrong on the family computer.
But in at least one case, the recording industry sued the child, not the parent. Brianna LaHara, a 12-year-old honors student from New York, was named as the defendant. Her mother settled the case for $2,000 and an apology from Brianna.
Minors can be sued for copyright infringement, but because they don't generally have assets or income, a plaintiff would have to press for a settlement with the parents as in Brianna's case.
Copyright infringement cases levied against parents for something their child did are rare, said Fred von Lohmann, an attorney for the Electronic Frontier Foundation in San Francisco.
"It is legally very uncertain and untested," von Lohmann said.
In the case of adults, recording companies need to establish that individuals made unauthorized copies or were distributing them without permission, said Evan R. Cox of Covington & Burling, who has worked with the Business Software Alliance on piracy.
To win against parents, music companies would have to prove that the parent could have controlled or stopped the child's behavior but failed to do so. Or they must show that the parent knew the child was doing something illegal but still gave them access to the means to do so.
The recording industry may also have to prove that the parent received a financial benefit from the child's illicit activity. An argument industry attorneys could make is the parents saved moneys on CDs, for example, von Lohmann said.
"It's by no means a slam dunk," Zittrain said. "The direct financial interest part of it is pretty hard to meet, if it's not clear the parent is gaining anything"
http://www.sunspot.net/business/bal...iness-headlines
- The Music Industry Reveals Its Carrots and Sticks - Adam Liptak
MOST lawsuits have concrete and focused goals. They usually want money, from particular people in particular disputes. But the 261 suits launched by the record industry last Monday, against people who made the music files on their computers available to others, seek something else entirely: to instill fear.
There is little question the industry can win the individual suits. Whether it can achieve its real goal is dicier all around — from the youth of so many of those named as offenders, to the very idea of using a relatively small number of lawsuits to deter tens of millions of people.
"We have more Americans using file-sharing than voted for the president," said Wendy Seltzer, a staff attorney at the Electronic Frontier Foundation, a civil liberties group, "and the record industry's position is to scare them into submission?"
Some 60 million people have used file-sharing programs, and the suits are battling a public that finds it hard to distinguish among several sorts of copying. It is perfectly lawful, for instance, to tape a television program to watch later. It is a technical violation of copyright laws to burn a CD of music you already own to listen to in the car or at the gym, but the record industry winks at that.
There is no serious dispute, however, that the mass distribution of perfect electronic copies on so-called peer-to-peer networks is illegal if copyright owners object. Legal experts advised those sued to settle quickly, but that doesn't mean the suits will be effective at stopping others.
"What are the chances that anyone is going to get sued?" asked Susan P. Crawford, an expert in intellectual property law at Cardozo Law School. "The odds are still pretty long."
Still, for the people who have been sued, the alternative to settlement is not pretty. The defendants face penalties ranging from $750 to $150,000 per infringement. The first defendants made, on average, 1,000 songs available, and some were copied many times. The Recording Industry Association of America has said that it intends "to leave it up to the court to decide what kind of damages we deserve to be awarded."
Juries would be told they could consider the deterrent effect of a large award, said Charles Sims, a lawyer with Proskauer Rose in New York who has represented the film industry in anti-piracy suits. And people who win copyright suits are also entitled to have their legal fees paid by the losing side, which is unusual in American law.
Which is why anxious parents around the country are likely to be a little more interested nowadays in what their children are doing with the home computer. It's not just pornography anymore.
But parental liability for a minor's use of the family computer is more complicated than a straightforward case against an adult. Indeed, copyright law may give parents a perverse incentive to remain ignorant. In order to be considered a so-called "contributory infringer" (the owner of a computer, for instance, that others use to violate the copyright laws), a parent must have had some knowledge of the wrongful activity to be held liable.
"A lot of parents say, `I have no idea what's going on with my children and their computers,' " Ms. Seltzer said. "That may get them off the hook."
But the availability of that defense in a suit against a parent makes no practical difference, said Mr. Sims, because in most states, an award against a child must be paid by the parent. "If your kid has a car accident, the parent is liable," he said. "This is no different."
The settlements the industry is offering are cheap by lawyers' standards but a little hard to cover from the typical teenager's allowance. They have ranged from $2,000 to nearly $20,000. Defendants who settle are required to promise they will say nothing in public at odds with the agreement, which requires them to acknowledge that their conduct was "illegal and wrongful."
The industry has also offered an amnesty program. In exchange for an admission of guilt and a promise not to share files in the future, the industry's trade association will agree not to support future copyright suits against that person. The deal does not apply to organizations, people who made money sharing files and those already singled out by the industry, whether that is public or not. Legal experts say only a fool would sign up.
"You make yourself more vulnerable," said Gigi B. Sohn, the president of Public Knowledge, a group that studies intellectual property law and technology. "And to the extent the law might change, which is not impossible, it would be signing away your rights to future benefits."
She added that the trade association owns no copyrights itself and cannot promise confidentiality to people who sign up for amnesty. That means that other copyright holders — including music publishers and artists — could simply subpoena the association to find people to sue.
By Tuesday, the recording industry association had settled its first suit, against a 12-year-old girl from New York City named Brianna LaHara. Her mother, Sylvia Torres, agreed to pay a $2,000 fine, and both mother and daughter issued statements reminiscent of those prisoners of war make at the behest of their captors.
"I love music," Brianna said, "and I don't want to hurt the artists I love."
That same day, a trade association of file-sharing Web sites offered to pay the fine.
"We don't condone copyright infringement," said Adam Eisgrau, the executive director of the group, P2P United, "but it's time for the R.I.A.A.'s winged monkeys to fly back to the castle and leave the Munchkins alone."
http://www.nytimes.com/2003/09/14/w...&partner=GOOGLE
- File-Sharing Battle Leaves Musicians Caught in Middle - Neil Strauss
Since the Recording Industry Association of America began its campaign against file-sharing services and unauthorized song swapping online in 1999, it has offered one chief justification for its actions: downloading songs is stealing money from the pockets of musicians.
But the musicians themselves have conflicted responses to file sharing and the tactics of the association, a trade group that represents record labels, not the musicians themselves, who have no organization that wields equal power.
So, many musicians have found themselves watching helplessly from the sidelines as the recording industry has begun suing people who are their fans, their audience and their consumers — who also share music online without authorization. Last week, 261 lawsuits were filed, the first battle in what the association says will be a long campaign of litigation against the most active music fans sharing songs on services like KaZaA.
"On one hand, the whole thing is pretty sick," said John McCrea, a singer and songwriter in the rock band Cake. "On the other hand, I think it'll probably work."
Many musicians privately wish file sharing would go away, though they are reluctant to admit it, because they do not want to seem unfriendly to their fans. So they have been happy to have the industry group play the role of bad cop. But with the escalation of the battle last week (with lawsuits filed against, among others, a 71-year-old grandfather and a 12-year-old girl), some musicians say they are beginning to wonder if the actions being taken in their name are a little extreme.This is especially true because, regardless of file sharing, they rarely see royalties.
"It would be nice if record companies would include artists on these decisions," said Deborah Harry of Blondie, adding that when a grandfather is sued because, unbeknownst to him, his grandchildren are downloading songs on his computer, "it's embarrassing."
The artist Moby, on his Web site, offered a similar opinion, suggesting that the music companies treat users of file-sharing services like fans instead of criminals. "How can a 14-year-old who has an allowance of $5 a week feel bad about downloading music produced by multimillionaire musicians and greedy record companies," he wrote. "The record companies should approach that 14-year-old and say: `Hey, it's great that you love music. Instead of downloading music for free, why don't you try this very inexpensive service that will enable you to listen to a lot of music and also have access to unreleased tracks and ticket discounts and free merchandise?' "
A few artists, like Metallica and Loudon Wainwright III, have come out strongly in favor of the record industry's crackdown. It could be seen as a gutsy move, considering the criticism Metallica faced from music fans when it campaigned against the file-sharing service Napster, which was declared illegal.
In a new song, "Something for Nothing," Mr. Wainwright makes fun of the mentality of file sharers, singing: "It's O.K. to steal, cuz it's so nice to share." As for the lawsuits, he said that he was not surprised. "If you're going to break the law, the hammer is going to come down," he said.
At the same time, other influential musicians and groups — like Moby, System of a Down, Public Enemy, and the Dead — contend that the record industry's efforts are misguided and that it must work with the new technology instead of against it.
But most seem ambivalent, or confused.
"I see both sides," said Rodney Crowell, a country music singer and songwriter. "In some ways, I think the record companies have it coming, but at the same time, being a writer and therefore in the business of copyright, they're saying it's impacting our business by 30 percent or more, so we have to do something."
The Recording Industry Association says there has been a 31 percent drop in sales of recorded music since file sharing became popular more than three years ago, but statistics from Forrester Research show that the sales decline since 2000 has been half that, or 15 percent, and that 35 percent of that amount is because of unauthorized downloading.
The situation has become so thorny that many top-selling artists, even those who have been outspoken about embracing new technology, declined to comment on the lawsuits on the record, for fear of upsetting their labels. In interviews, some musicians and their representatives said that their labels had asked them not to talk. And in a dozen cases, record labels did not grant interviews with musicians on the subject.
"I don't think anyone really understands the impact of what's happening, and they don't want to make a mistake," said Allen Kovac, who runs 10th Street Entertainment, an artist management company in Los Angeles. "The impact of lawsuits on fans is a double-edged sword. If you're a record company, do you want record company acts being persona non grata at every college campus in America?"
Much of the stated concern over file sharing has centered on the revenue that record companies and musicians are losing, but few musicians ever actually receive royalties from their record sales on major labels, which managers say have accounting practices that are badly in need of review. (Artists do not receive royalties for a CD until the record company has earned back the money it has spent on them.)
Even the Backstreet Boys, one of the best-selling acts of the 1990's, did not appear to have received any CD royalties, their management said.
"I don't have sympathy for the record companies," said Mickey Melchiondo of the rock duo Ween. "They haven't been paying me royalties anyway."
Musicians tend to make more money from sales of concert tickets and merchandise than from CD sales. In fact, many musicians offer free downloads of their songs on their Web sites to market themselves.
For some of them, the problem with file sharing is control. Before a CD is released, early versions of the songs often end up on file-sharing services, where fans download the music under the misconception that it is the finished product. Other times, songs online by one act are credited to another act. And fans exchange studio outtakes, unreleased songs, and live performances that some artists would prefer remain unheard.
Serj Tankian of the hard-rock band System of a Down, for example, said he thought that the free exchange of songs by his band and others online was healthy for music fans, but objected when that free exchange included unfinished studio recordings.
Ween, which recently left a major record label, Elektra, to release its records independently, has found a way to coexist with file sharing, which the band actually supports by encouraging fans to record and trade shows.
At the same time, Ween fans police eBay for people who are selling live recordings and KaZaA for people who are leaking songs before an album is released. "Before `Quebec,' came out," Mr. Melchiondo said, referring to Ween's latest CD, "our fans would message people on KaZaA who were sharing tracks and ask them to take the music down. And they also mounted a campaign where they put up fake copies of our record to throw people off."
Mr. Melchiondo said that Ween's fans acted out of respect for the band, not because of intimidation from the record industry or sympathy with it. "We never asked them to do this," he said. "They just took it upon themselves."
http://www.nytimes.com/2003/09/14/t.../14MUSI.html?hp
- Whatever Will Be Will Be Free on the Internet -
Steve Lohr
THE recording industry's long-running battle against online music piracy has come to resemble one of those whack-a-mole arcade games, where the player hammers one rubber rodent's head with a mallet only to see another pop up nearby. Conk one, and up pops another, and so on.
Three years ago, the music industry sued Napster, the first popular music file-sharing network on the Internet. That sent Napster reeling, but other networks for trading copyrighted music — KaZaA, Grokster, Morpheus and others — sprang up. Last week, in the latest swing of the hammer, the Recording Industry Association of America filed 261 lawsuits against individual file sharers, which will surely make some of their estimated 60 million compatriots think twice — for now. Earth Station Five, a company based in the West Bank, surfaced recently with claims of being at war with the industry association. It promises the latest in anonymous Internet file sharing. Its motto: "Resistance is futile."
Since Gutenberg's printing press, new technologies for creating, copying and distributing information have eroded the power of the people, or industries, in control of various media. In the last century, the pattern held true, for example, when recorded music became popular in the early 1900's, radio in the 1920's and cable television in recent years.
But the heritage and design of the Internet present a particularly disruptive technology. Today's global network had its origins in the research culture of academia with its ethos of freely sharing information. And by design, the Internet turns every user in every living room into a mass distributor of just about anything that can be digitized, including film, photography, the written word and, of course, music. Already, Hollywood is trying to curb the next frontier, film swapping. The inevitable advance of technology will make reading on digital tablets more convenient than reading on paper, so the publishers of books, magazines and newspapers have their worries as well. "Nobody is immune," observed Michael J. Wolf, managing partner in charge of the media practice at McKinsey & Company, a consulting firm.
"The cultural and technical principle embedded in today's Internet is that it is neutral in the sense that the people who use it have the power to determine its use, not corporations or the network operators," said Jonathan Zittrain, a co-director of the Berkman Center for the Internet and Society at the Harvard Law School. "The plan for the Internet was to have no plan."
The Net's free-range design, combined with the global proliferation of personal computing and low-cost communications networks, laid the foundation for the surge of innovation and new uses that became so evident by the late 1990's. The World Wide Web is the overarching example, but others include instant messaging, online gaming and peer-to-peer file sharing. And while companies are free to build proprietary products and services in cyberspace, the basic software and communications technology of the Internet lies in the public domain — open for all to use.
It was inevitable, then, that the Internet would eventually force a radical rethinking of intellectual property rights, and the music industry's current travails represent a particularly dramatic example of the mutating rules — though not the only one. Consider, for example, the rise of so-called open-source software. The poster child of open-source projects is GNU Linux, an operating system whose computer code is distributed freely over the Internet and is maintained and debugged by a loose-knit global community of programmers. Linux has become a genuine challenge to Microsoft because programmers around the world can see and modify the underlying source code — instead of jealously guarding it as a trade secret.
That concept of open-source is inseparable from the Internet, because it provides the vehicle for free exchange and widespread distribution — the same idea that is at the heart of file sharing and one that is spreading well beyond the techies. A group, led by Lawrence Lessig, a professor at Stanford Law School, has established a "creative commons" project for collecting and putting creative works including music, film, photography and literature in the public domain, inspired by the open-source software model.
The Massachusetts Institute of Technology is posting the content of 500 of its courses online this fall, a project called OpenCourseWare. In Britain, a small group of artists and editors has set up a Web site for Jenny Everywhere, an increasingly popular open-source cartoon. Its only requirement is that any "Jenny" cartoon include its license, which states "others may use this property as they wish. All rights reversed."
What all this means for the future of intellectual property, and some businesses, is as unpredictable as the open-source revolution itself. In the music business, it seems remarkable that only a few believe the technology cannot be held in check.
One of those few is David Bowie. "I'm fully confident that copyright,
for instance, will no longer exist in 10 years, and authorship and
intellectual property is in for such a bashing," Mr. Bowie said in an
interview last year. The future of the music industry, he suggests, is
that songs are essentially advertisements and artists will have to make
a living by performing on tour.
Others fear that, as the futility of technological fixes becomes clearer, the response may be onerous legal restrictions on the Internet and how people use it. "You don't want to break the kneecaps of the Internet to protect one relatively small industry, the recording business," Mr. Lessig, the Stanford professor, said.
William Fisher, a Harvard law professor, offers a solution for the recording industry's Internet challenge, and one that borrows from the past. When radio became popular in the 1920's and 1930's and began broadcasting copyrighted songs, the record companies, singers and bands protested. The answer was to have the radio stations pay the copyright holders and set up a measuring system so the largest payments went for the most popular songs.
In a book to be published next year, Mr. Fisher recommends placing a 15 percent tax on Internet access and a 15 percent tax on devices used for storing and copying music and movies like CD-burners, MP3 players and blank CD's.
The funds raised, he estimates, would be about $2.5 billion in 2004, roughly the projected amount the recording industry and Hollywood would lose to online piracy. The music business and Hollywood would get refunds based on what works were the most popular downloads.
"It's not perfect," Mr. Fisher admitted.
Still, it does represent what is not much in evidence today — some sort of middle ground that would compensate rights holders but also move with the march of technology and consumer behavior instead of merely trying to fight it.
"With music file sharing, you have a cultural norm that is being established by what is technologically possible," said Daniel Weitzner, a director at the World Wide Web Consortium. "That is very hard to resist."
http://www.nytimes.com/2003/09/14/w...&partner=GOOGLE
- NBC-Vivendi Deal: An Empire Reborn - Evan I. Schwartz
Maybe the lesson is this: Media empires that die some day come back.
The news last week that General Electric is all but certain to purchase the movie, television and theme park assets of Vivendi Universal — and merge them with NBC — recalls a remarkably similar episode at the dawn of the modern era of mass media, in the Roaring Twenties.
In fact, G.E. owned the first electronic media empire. To take in its saga over three-quarters of a century is to appreciate that the company has seen it all before. Back then, as now, fierce fights were waged over media consolidation. Free music — over the radio — threatened the bottom line of record companies.
In the 1920's, David Sarnoff was a fast-rising visionary who presided over G.E.'s radio-making subsidiary, RCA. To spur sales of radio sets, Sarnoff and his bosses founded NBC as the first national broadcasting network. In 1928, he widened his scope. In the biggest media merger to date, he acquired the Victor Talking Machines Company and its associated record label.
A genius at manipulating others, Sarnoff was himself led into the movie business. Leading him was a financial whiz and aspiring movie mogul named Joseph P. Kennedy. Kennedy had started a small film distribution company and persuaded Sarnoff to buy it at a huge premium and to combine it with a chain of vaudeville theaters that could be converted into movie houses. The resulting venture was named RKO Pictures.
Synergy seemed at hand. Until one RKO film after another bombed, the stock market crashed and GE/RCA was left with a $32 million restructuring tab.
Perhaps foreshadowing the rich payouts handed to the ousted Vivendi chief executive Jean-Marie Messier, Kennedy cleaned up. By selling his RKO stock before the market tanked, his $8 million windfall became the basis for his fortune.
Meanwhile, Victor was falling off a cliff, with sales of phonographs and records plunging by 90 percent in the three years after the crash. The near collapse makes today's three-year, 28 percent drop in the number of CD's sold seem mild. But the causes and results are similar: back then, radio listeners short of cash were getting their music free, not unlike many of today's Internet music downloaders.
Just as RCA Victor was forced to slash the prices of its records, Vivendi's Universal Music Group just days ago cut prices on compact discs as much as 30 percent, although the music assets are not part of the current deal.
Finally, in the wake of financial scandals and rising unemployment, the public mood turned viciously anticorporate. Congressmen railed against the G.E.'s "radio monopoly," and Herbert Hoover's Justice Department slapped RCA with an antitrust suit. Late in 1932, the lame-duck president accepted Sarnoff's proposed remedy: split off RCA, Victor, NBC and RKO from G.E.
But G.E. re-entered the business a half-century later when Jack Welch repurchased NBC in 1986. Now G.E. has revealed its plan to get back into music and movies all over again.
Will it work this time? Then, as now, many hopes ride on the shoulders of a giant ape. In 1933, RKO's blockbuster "King Kong" paid down a good deal of debt. Guess who is now remaking "King Kong"? Vivendi's — and soon to be G.E.'s — Universal Pictures.
Can a 10,000-pound gorilla help save an empire once again? Stay tuned.
http://www.nytimes.com/2003/09/07/w...iew/07WEEK.html
- Why Digital Rights Management Won't Save the Entertainment Industry - Christopher Rae
The promise of digital rights management (DRM) technologies have been that they will save the entertainment industry from rampant piracy. Not anytime soon.
DRM, by its nature, is simply a series of checks and balances for content, allowing the content owner to choose how their content is consumed. Should it be allowed to transfer to portable devices? Can it be copied to CD? Does it expire after 30 days? These content rules alone do not protect the content anymore than Blockbuster protects content when they say you need to return a DVD in 48 hours. The robustness of DRM is brought to life through the individual business model implementations.
Take into consideration Apple's successful iTunes service: provide lifetime access to an increasingly large catalog of licensed popular music for a fee of $0.99 per song, or $9.99 per album. The one feature of this service that everyone seems to be rightfully overlooking is the presence of DRM, or more to the point, the transparency of DRM. Each AAC-format file is playable on your Mac, your iPod and for Windows users, QuickTime 6 (until more players support MPEG-4). However, each file is delicately wrapped in a thin DRM that provides a lifetime license, but also limits the file to three machines it can be transferred onto. This protects the content owner's royalties more so than unencrypted MP3s, but doesn't eliminate piracy. (An AAC file can be burned to an audio CD, where it becomes just another unencrypted CDA raw audio track which can be later ripped back to MP3.) It merely makes purchasing the content easier and more convenient than pirating it. The reason iTunes has become successful is because of how transparent the process is to the user. Apple's continued win is its elegantly simplistic user interface. Point. Click. Listen.
Where the music and film industries are failing is that their bread-and-butter is made through the manufacturing, distribution and sales of physical, tangible discs. DVDs and CDs represent the last physical format that media will be sold in, much like how VHS and audio cassettes represented the last analog format. It may not happen this year or next, but the evolution of media distribution will be that all content is distributed digitally through networked subscription and purchase services. Its inevitable, and has already begun with on-demand cable, allowing me to watch any episode of Six Feet Under, whenever I want, for an additional $6.00 per month.
The nebulously-hyped digital media centers are nothing more than expandable hard drives with cable, Ethernet ports and Wi-Fi connectivity, that merge your cable box, DVD/CD player and your gaming consoles into one unit. Your digital media center will be connected to your other computers, televisions, plasma screens, PDAs, portable players and your car's media center through your personal P2P file-sharing network. All of your games will be subscriptions online, for example, Xbox Live. Additionally, your car will become a file-sharing device that will communicate with other cars on the highway, swapping content while you weave between lanes. While sitting in gridlock, the car next to you may have that long lost Twilight Zone episode you've been looking for. And once you get home, you car will instantly sync with your home media center. Since it will have billing information pre- programmed in, when you're ready to unlock that episode, just push "Play", and your micropayment will be deducted from your bank account. Point. Click. Consume. *cue creepy theme song here*
So long as record companies and film studios release content on physical formats, there will be ways to pirate that content. Just because DRM exists today doesn't mean that it will save the billions of files already trading on Kazaa, Morpheus, WinMX and other P2P networks. That content is already the sacrificial lamb of this emerging paradigm shift. Unfortunately, it also has the displeasure of being nearly all the content ever created by Humanity. It's ripped. It's out there. And every Tuesday when a new CD or DVD is released, more content gets ripped and thrown into file-trading networks. It would actually behoove the media companies to stop producing content entirely.
So who can benefit from DRM? Content owners who choose not to distribute via CD or DVD. Such customers include corporations wanting to offer on-demand video of stockholder meetings, or e- learning companies offering entire courses online, or has become the more popular case, adult websites offering Internet-only downloadable and streaming video. These customers have no need to release their content on antique formats such as CD or DVD, and thus, they can benefit the most from offering DRM-protected files on scalable networks. If the content is available in only one place, the biggest risk is the content owner accidentally posting the unencrypted versions. Even if those files are purchased, downloaded and then shared in P2P networks, each individual user must get a unique license to view the content, which requires some form of authentication, be it a pay-per-view model with a valid credit card, or a subscription model with an existing user account with that particular service.
The music and film industries will be invited to return to the sandbox once they sever their dependence on physical media for distribution, which will take years. By only producing one original file and then allowing the true power of P2P networks and peer-based CDNs, such as Jibe, to proliferate with copies, the media companies can deliver content at lower prices with higher profit margin. Without the overhead of warehouses, factories and sweatshop wages, media companies could sell a full-length album or movie less than $5.00. Traditional outlets such as Tower Records or Virgin Megastore could offer digital downloads, sell them via superdistribution models and compete for the lowest prices online. Individual bands and indie labels could offer subscription services to their music for much less than the price of a CD and collect higher royalties per download, because most recording deals take significant cuts for manufacturing and distribution of millions of units of tangible atoms.
Apple has a good start, but they are not perfect. An album still costs $9.99, iTunes is only available on the Mac, and due to MPEG-4 related delays, the AAC-format isn't as widely accepted as MP3 or WMA [yet]. In order for the digital distribution and sales models to succeed, content will need to be protected with an isotope of DRM that is inherently viewable by the widest possible audience, the cost of ownership must decrease to drive interest, and the business model will need to be transparent to the user before it will gain market acceptance.
The future of entertainment sales and distribution isn't doomed because of digital rights management technologies. It will be doomed by poorly designed and executed business models.
http://www.contentworld.com/newsdig...article1_1.html
- Fame vs Fortune: Micropayments and Free Content -
Clay Shirky
Micropayments, small digital payments of between a quarter and a fraction of a penny, made (yet another) appearance this summer with Scott McCloud's online comic, The Right Number, accompanied by predictions of a rosy future for micropayments.
To read The Right Number, you have to sign up for the BitPass micropayment system; once you have an account, the comic itself costs 25 cents.
BitPass will fail, as FirstVirtual, Cybercoin, Millicent, Digicash, Internet Dollar, Pay2See, and many others have in the decade since Digital Silk Road, the paper that helped launch interest in micropayments. These systems didn't fail because of poor implementation; they failed because the trend towards freely offered content is an epochal change, to which micropayments are a pointless response.
The failure of BitPass is not terribly interesting in itself. What is interesting is the way the failure of micropayments, both past and future, illustrates the depth and importance of putting publishing tools in the hands of individuals. In the face of a force this large, user-pays schemes can't simply be restored through minor tinkering with payment systems, because they don't address the cause of that change -- a huge increase the power and reach of the individual creator.
Why Micropayment Systems Don't Work
The people pushing micropayments believe that the dollar cost of goods is the thing most responsible for deflecting readers from buying content, and that a reduction in price to micropayment levels will allow creators to begin charging for their work without deflecting readers.
This strategy doesn't work, because the act of buying anything, even if the price is very small, creates what Nick Szabo calls mental transaction costs, the energy required to decide whether something is worth buying or not, regardless of price. The only business model that delivers money from sender to receiver with no mental transaction costs is theft, and in many ways, theft is the unspoken inspiration for micropayment systems.
Like the salami slicing exploit in computer crime, micropayment believers imagine that such tiny amounts of money can be extracted from the user that they will not notice, while the overall volume will cause these payments to add up to something significant for the recipient. But of course the users do notice, because they are being asked to buy something. Mental transaction costs create a minimum level of inconvenience that cannot be removed simply by lowering the dollar cost of goods.
Worse, beneath a certain threshold, mental transaction costs actually rise, a phenomenon is especially significant for information goods. It's easy to think a newspaper is worth a dollar, but is each article worth half a penny? Is each word worth a thousandth of a penny? A newspaper, exposed to the logic of micropayments, becomes impossible to value.
If you want to feel mental transaction costs in action, sign up for the $3 version of BitPass, then survey the content on offer. Would you pay 25 cents to view a VR panorama of the Matterhorn? Are Powerpoint slides on "Ten reasons why now is a great time to start a company?" worth a dime? (and if so, would each individual reason be worth a penny?)
Mental transaction costs help explain the general failure of micropayment systems. (See Odlyzko, Shirky, and Szabo for a fuller accounting of the weaknesses of micropayments.) The failure of micropayments in turn helps explain the ubiquity of free content on the Web.
Fame vs Fortune and Free Content
Analog publishing generates per-unit costs -- each book or magazine requires a certain amount of paper and ink, and creates storage and transportation costs. Digital publishing doesn't. Once you have a computer and internet access, you can post one weblog entry or one hundred, for ten readers or ten thousand, without paying anything per post or per reader. In fact, dividing up front costs by the number of readers means that content gets cheaper as it gets more popular, the opposite of analog regimes.
The fact that digital content can be distributed for no additional cost does not explain the huge number of creative people who make their work available for free. After all, they are still investing their time without being paid back. Why?
The answer is simple: creators are not publishers, and putting the power to publish directly into their hands does not make them publishers. It makes them artists with printing presses. This matters because creative people crave attention in a way publishers do not. Prior to the internet, this didn't make much difference. The expense of publishing and distributing printed material is too great for it to be given away freely and in unlimited quantities -- even vanity press books come with a price tag. Now, however, a single individual can serve an audience in the hundreds of thousands, as a hobby, with nary a publisher in sight.
This disrupts the old equation of "fame and fortune." For an author to be famous, many people had to have read, and therefore paid for, his or her books. Fortune was a side-effect of attaining fame. Now, with the power to publish directly in their hands, many creative people face a dilemma they've never had before: fame vs fortune.
Substitutability and the Deflection of Use
The fame vs fortune choice matters because of substitutability, the willingness to accept one thing as a substitute for another. Substitutability is neutralized in perfect markets. For example, if someone has even a slight preference for Pepsi over Coke, and if both are always equally available in all situations, that person will never drink a Coke, despite being only mildly biased.
The soft-drink market is not perfect, but the Web comes awfully close: If InstaPundit and Samizdata are both equally easy to get to, the relative traffic to the sites will always match audience preference. But were InstaPundit to become less easy to get to, Samizdata would become a more palatable substitute. Any barrier erodes the user's preferences, and raises their willingness to substitute one thing for another.
This is made worse by the asymmetry between the author's motivation and the reader's. While the author has one particular thing they want to write, the reader is usually willing to read anything interesting or relevant to their interests. Though each piece of written material is unique, the universe of possible choices for any given reader is so vast that uniqueness is not a rare quality. Thus any barrier to a particular piece of content (even, as the usability people will tell you, making it one click further away) will deflect at least some potential readers.
Charging, of course, creates just such a barrier. The fame vs fortune problem exists because the web makes it possible to become famous without needing a publisher, and because any attempt to derive fortune directly from your potential audience lowers the size of that audience dramatically, as the added cost encourages them to substitute other, free sources of content.
Free is a Stable Strategy
For a creator more interested in attention than income, free makes sense. In a regime where most of the participants are charging, freeing your content gives you a competitive advantage. And, as the drunks say, you can't fall off the floor. Anyone offering content free gains an advantage that can't be beaten, only matched, because the competitive answer to free -- "I'll pay you to read my weblog!" -- is unsupportable over the long haul.
Free content is thus what biologists call an evolutionarily stable strategy. It is a strategy that works well when no one else is using it -- it's good to be the only person offering free content. It's also a strategy that continues to work if everyone is using it, because in such an environment, anyone who begins charging for their work will be at a disadvantage. In a world of free content, even the moderate hassle of micropayments greatly damages user preference, and increases their willingness to accept free material as a substitute.
Furthermore, the competitive edge of free content is increasing. In the 90s, as the threat the Web posed to traditional publishers became obvious, it was widely believed that people would still pay for filtering. As the sheer volume of free content increased, the thinking went, finding the good stuff, even if it was free, would be worth paying for because it would be so hard to find.
In fact, the good stuff is becoming easier to find as the size of the system grows, not harder, because collaborative filters like Google and Technorati rely on rich link structure to sort through links. So offering free content is not just an evolutionary stable strategy, it is a strategy that improves with time, because the more free content there is the greater the advantage it has over for-fee content.
More http://shirky.com/writings/fame_vs_fortune.html
- Marcella Bombardieri
When the Recording Industry Association of America sued 261 people last week for sharing copyrighted songs over the Internet, it was a direct attack on Katie O'Hara's lifestyle.
O'Hara, a Boston University junior and classic-rock fan, illegally downloads music on her computer nearly every day. A new song on the radio might strike her fancy, or something she hasn't heard in years might pop into her head as she walks to class, and back in her dorm room she'll download the song off the Internet file-sharing service Kazaa.
If the record industry is to win the battle over online music-sharing, it will have to win the hearts and minds -- or at least the fear -- of students like O'Hara. But the day after the music lobby launched its headline-making lawsuit, O'Hara got up and did what she normally does: Download some free music.
"There are millions of students using it on a day-to-day basis. Think of BU's population," said O'Hara, a Paul Simon devotee. "If they're going to start suing people, there's a lot of people to be sued. I feel like it's a war they're really not going to win anytime soon."
About two-thirds of US 18- and 19-year-olds surveyed download music, according to a study by Forrester Research in Cambridge. Although they do not represent a majority of all file-sharers, college students have been at the center of the phenomenon since the beginning, a population with the time, bandwidth, and techno-savvy to influence the music-listening habits of the nation. After all, Napster -- the now-defunct computer network that put music-sharing on the map -- was created by a Northeastern undergraduate.
"The industry sees this for the cultural war that it is," said cyberlaw specialist Jonathan Zittrain of Harvard Law School. "They think it's important to prevent the up-and-coming generation of lifelong music users from continuing to expect they won't have to pay for it. The purpose of the suits is not to win, but to instill the kind of fear that will change behavior."
Data and interviews with college students suggest that so far, the recording industry hasn't instilled enough fear to have much effect. Traffic on the popular Kazaa network jumped from less than 3 million users a day in August to over 4 million a day last week, after students had returned to school, according to the market research firm BigChampagne.
It's hard for people even a few years out of college to grasp just how central file-sharing has become to university life. O'Hara is not the least bit unusual in that she has not purchased a CD in several years. Stereos have almost become old-fashioned -- you don't need one when you can simply hook up nice speakers to your computer. At parties, the music often comes straight off a computer, or else from mixes burned onto CDs.
There's an infectious feeling of possibility -- most any song is a few clicks away.
"It's download, download, download," said BU senior Lauren Vane. "You can spend all day thinking, `What song do I want?' "
Not to say that students are blind to the risk of a lawsuit. Three-fifths of 18- and 19-year-olds would stop downloading music if there were a serious risk that they would go to jail or have to pay a fine, according to the Forrester study. And the fines in question are potentially serious: Under copyright infringement law, a judge could order a file-sharer to pay $750 to $150,000 for each song he or she makes available to others on the Internet. The record industry association has said it is close to settling with several people for $3,000 each.
Universities, by and large, are not providing any legal protection for their students -- a number of local colleges have already been subpoenaed for the names of file-sharing students. Although BU, Boston College, and the Massachusetts Institute of Technology initially resisted the subpoenas on technical grounds, they have since handed over the names.
The problem for the industry is that so far, students have looked at the risk of being sued and decided -- correctly -- that it is tiny. The hundreds sued represent a minuscule percentage of the 60 million people who are estimated to download music. Also, the industry is targeting only the most prolific file-sharers, those who leave their hard drives open for free downloading.
For users like O'Hara, the odds are in her favor: They're more likely to get hit by a bus than by a lawsuit.
That's why Marian Moore, vice president for information technology at Boston College, is unimpressed by the record industry's strategy. "It's like using a flyswatter on a gorilla," she said. "Unless they are willing to go out and subpoena a couple of million people, this isn't going to stop music sharing."
Some students take steps to stay under the industry radar. They download music illegally and then click a box to shut off their hard drives from other users. "Peer-to-peer" programs like the popular Kazaa, as well as Morpheus, Grokster, and Gnutella, generally give users a choice about whether to grant others access to their songs.
However, a lot of students may be sharing without even realizing it, since they usually have to go out of their way to disable the sharing function, Zittrain said. O'Hara, for example, isn't sure whether her music is available to others. Lorraine Sullivan, a student at Hunter College in New York who says she is being sued by the record industry association, has created a website (suedbytheriaa.com) that asks for donations and says she had no idea her files were "open to the world."
The industry hopes that students will all start to click that box, meaning that their song collections will no longer be available on the Internet for free.
But BigChampagne chief executive Eric Garland called it a doomed strategy, because American users are a minority of people using the global Net, so plenty of people in Australia -- or France, or Canada -- will still be sharing the latest 50 Cent tunes. "There's great redundancy built into the system," Garland said. "Even if most [Americans] got scared and turned off their software, you and I would never know the difference."
http://www.boston.com/news/local/ar...ustry_lawsuits/
- Sharing Music Over Internet Part Of Life On Campus
Copyright suits don't faze local students -
Coleman Warner Staff writer
"We don't steal music. It's illegal now," a Tulane University student with a sober expression said last week as he left a Broadway apartment house. "Nobody steals music in this house."
Maybe he had gotten the message: Two days earlier, a music trade group had filed 261 copyright lawsuits in distant federal courts.
Or maybe not.
The student's deadpan delivery was quickly betrayed by a round of snickers from his companions. Collectively, they scoffed at a much- publicized attempt by the Recording Industry Association of America to curb free downloading and distribution of music via the Internet, a phenomenon that has exploded in recent years among tech-savvy college students hooked into high- speed campus networks.
"It's like the war on drugs; it's a fruitless kind of endeavor," said Adam Breit, an economics major from Atlanta. "The Internet is too difficult to regulate. It's a bunch of faceless culprits."
Across the street, peering out the door of his fraternity house, business major Ben Katz had no sympathy for music executives who say file- sharing networks cut into their profits.
"If they really want to discourage it, they should stop charging like $22 for a CD," said Katz, who is from Boston. "There's tens of millions of people doing it. I guess I'll roll the dice."
Irreverent, come-and-get-me reactions among students contrast sharply with those of local college officials, who take the recording-industry threats quite seriously. They don't relish even a remote chance that their students could be hauled into court, forcing the students' families to spend large amounts of money on a legal defense, regardless of a suit's outcome.
No local students have been hit with such lawsuits, federal court records show.
Universities also want to be seen as vigilant in policing use of their own computer networks to minimize chances that they will be targeted for litigation. The recording industry association isn't threatening to sue schools, but at least 10 universities, mostly in the Northeast, have been served with subpoenas demanding help in identifying offenders. Some Louisiana universities regularly get notices from the trade organization that specific addresses on their computer network have been used to download music.
Bandwidth hogs
Aside from the legal concerns, colleges don't like how downloading music and video files gobbles up their Internet bandwidth, limiting their capacity to send and receive data. Such recreational computer use obstructs professors' research and other business vital to daily campus operations. That's the primary reason Dillard University has blocked communications between campus computers and known music file-sharing Web sites, university officials say.
"Our goal was not to take care of American recording artists' mandate," said Terry Simon, director of telecommunication services at Dillard. "If a byproduct is that we adhere to their guidelines, then so be it."
Despite a 2000 order by a federal court forcing Napster Inc. to shut down a free service that allowed swapping of copyright music, no court has yet ruled that song-trading among individuals is illegal, said Glynn Lunney, a professor of intellectual law at Tulane. He said the recording industry is probably less interested in a resolution of that complex legal question than it is in forcing a significant number of people to spend hundreds of thousands of dollars defending themselves, before settling out of court."Then they will tout the settlement as victory," he said.
"The very fact that they're trading music and video doesn't seem to sink in as a crime. These kids grew up doing it; their friends do it. And I think the music industry has its hands full," said Ron Hay, LSU's computer services director. "Are they reformed? My suspicion is that they are not."
Hay finds irony in the high-tech struggle: Universities that helped launch the Internet are now being forced to restrict its use.
"We're going to have to start closing rather than opening" Internet access, he said. "That's going to be a hard pill to swallow."
http://www.nola.com/news/t-p/index....20872168860.xml
- Pirates Vs. Dinosaurs
The recording industry decided to get tough.
So it sent out its lawyers to find a diabolically clever criminal -- a 12-year-old. Then it filed a lawsuit against her for stealing music over the Internet.
Properly chastised, the pre-teen and her mother (who live in subsidized housing) bought "amnesty" from the multibillion-dollar industry for $2,000 and a promise not to copy anymore songs.
One down, 64,999,999 more lawsuits to go.
This is no way to do business.
Using the Internet to download digital music files has fundamentally
changed the way an entire generation listens to and acquires songs.
Instead of going to a record store and paying an inflated price for a
plastic disc, those connected to the Internet visit online peer-to-peer
(or P2P) networks and search out the music they crave. They download a
song, burn it onto a disc or load it onto an MP3 player, then crank it
up. Beyond minimal P2P and Internet fees, there is no other cost.
Sources put the number of people capable of downloading music in this
way at between 40 million and 65 million. That's in the United States,
not counting Australia, England, Canada and all the other nations where
songs with English lyrics are appreciated.
The increasingly anachronistic music industry, through its lobbying
group, the Recording Industry Association of America, has decided to go
after these freeloading downloaders -- hence the 261 lawsuits filed last
week.
Downloaders are outraged. Web sites such as www.boycott-RIAA.com are
dedicated to beating this attack on "sharing." They have hundreds of
postings from filesharers, testimonials from artists who embrace the
emerging business paradigm and editorials excoriating the RIAA.
"This country revolves around greedy Congressmen and lobbyists," wrote
one. "I'm never buying a CD, DVD or anything else."
"Should the laws stick around even though culture has evolved?" asks
another writer. "Fine. Bring back slavery."
Finally, "Where was all the fuss during the time that the RIAA was
price-gouging the public for the last 20 years? Odd, politicians didn't
seem to care too much about that."
The recording industry, basically, calls downloaders thieves. After all,
says the industry, they are stealing copyrighted property.
Under current law, the recording industry is right. Downloaders -- or
filesharers, if you prefer -- are stealing. No one who uses Kazaa or
Morpheus or another P2P can say they haven't been warned about the
possibility of being sued.
But the RIAA shouldn't lose sight of two critical points:
Most of those "thieves" are also their best customers, often buying CDs
after having heard a song or two via a filesharing site.
The world has changed and the music industry hasn't. To survive they
will have to stop assaulting customers in court and find a way to
harness the new technology to create profit. Napster, Kazaa and Morpheus
figured it out and have at least 65 million fiercely loyal customers.
Regardless of the RIAA members' rights, it is impossible to have
sympathy for the four companies (Sony, AOL-Time Warner, Universal and
BMG) who dominate the recording industry.
Frank Sinatra didn't have any sympathy for them when he tried to
organize artists to get a better deal in the 1960s. The Dixie Chicks --
who sold 20 million copies of their first two CDs (generating $175
million) -- have none. Dixie Chick Natalie Maines told "60 Minutes II"
that they didn't make a penny off those sales. The Chicks sued Sony two
years ago to force a better deal for their third CD. Don Henley
(Eagles), Roger McGuinn (Byrds), Luther Vandross and Meatloaf have all
either sued the record industry or testified about its abusive
practices.
So when downloaders say they aren't hurting the artists by sharing the
songs, they're essentially right.
In an effort to retrieve its customers, these companies lowered the
prices of most CDs. That added insult to injury; they could have done
that years ago when CD technology made producing discs far cheaper than
making LPs. Instead, the price of discs went up and stayed there.
It's impossible for this newspaper to embrace anyone who disdains
copyright laws. After all, this is a copyrighted editorial and not
available for reprint without permission.
But the record companies are dinosaurs, mired in a dying technology.
Instead of embracing the modern and finding a way to profit from it,
they flail at their own customers. Don't expect that 12-year-old or
anyone else to mourn if they fail.
http://www.modbee.com/opinion/story...p-8362855c.html
- RIAA's Pyrrhic Victory -
Barry Willis
It's just about impossible to imagine a worse public relations campaign than the one being waged by the Recording Industry Association of America (RIAA) in the nation's courtrooms.
One of the first victories scored against 261 alleged music pirates was a quick settlement by 12-year-old Brianna LaHara, an honor student who lives with her 9-year-old brother and single mother in a New York housing project. Brianna's mom, Sylvia Torres, testified that she had assumed that her daughter's paid subscription to the KaZaA service made her downloading perfectly legal.
On September 9, that assumption cost the nursing supervisor $2000 in fines, and cost Brianna a public apology for having downloaded songs like "If You're Happy and You Know It" and the theme to the television show Family Matters. A statement issued by the RIAA quoted Brianna as saying, "I am sorry for what I have done . . . I love music and don't want to hurt the artists I love." Prior to the settlement, she told reporters from the New York Daily News that her stomach was "all in knots."
A Washington, DC–based Internet music service trade association known as "P2P United" reportedly volunteered to pay the fines, relieving Ms. Torres of what would have been an immense financial burden and somewhat mitigating a sour public reaction to the RIAA's draconian legal tactics. An RIAA spokesman told the Los Angeles Times that the payment by P2P United was appropriate considering that "it was their members who induced her infringement in the first place." Adam Eisgrau, executive director of P2P United, stated, "Brianna and her mother shouldn't have to pay the price of the recording industry's consistent unwillingness to embrace new technology."
Despite the potential for damaging its already tarnished image, the RIAA went forth with the Brianna case to make its point for zero tolerance of downloading. Damage control will be nearly impossible. Litigation against children isn't popular even among the most ardent copyright supporters. "If you go after too many 12-year-old girls, you can alienate a lot of people," analyst Mike McGuire told the LA Times. Market researcher Phil Leigh commented that the RIAA settled quickly "to get her out of the headlines . . . . They don't want to be seen picking on children. She's not even a teenager."
The music industry is also going after folks at the other end of the age spectrum. On September 10, BBC News reported that Durwood Pickle, a 71-year-old Texas grandfather, was also caught in the RIAA's crosshairs—the result, he claims, of visits by his teenage grandchildren, who used his computer while they were at his home. Mr. Pickle told reporters he didn't understand why he was being targeted for something he hadn't done.
Defendants like Brianna LaHara and Durwood Pickle are exactly the sort of people that Senator Norman Coleman (R-MN) had hoped to protect with his inquiries into the RIAA's antipiracy campaign. "Someone has to take responsibility," responded RIAA president and general counsel Cary Sherman to accusations of heavy-handedness in the effort to contain the downloading epidemic. The RIAA's new CEO, Mitch Bainwol, reiterated that sentiment, saying his organization's goal was "to send a strong message that illegal distribution of copyrighted music has consequences."
Two unlikely consequences of the lawsuit blitz are resurgence in retail music sales and a decline in the popularity of downloading. A September 11 news analysis by the BBC claims that the RIAA's efforts to scare people away from peer-to-peer file sharing simply aren't working. Eric Garland, a spokesman for BigChampagne, a research firm that monitors peer-to-peer network activity, told the BBC that use of the Fast Track network, used by both Grokster and KaZaA, had increased following the avalanche of subpoenas launched by the RIAA in August. "There's no mass exodus, that's safe to say. Ironically, usage this week and this month is up," Garland stated.
Music fans aren't daunted by the RIAA, and some are beginning to fight back. Shortly after the Brianna LaHara case was settled, a Northern California man initiated his own countersuit against the music industry. On September 10, Eric Parke filed suit in Marin County Superior Court in San Rafael. In his suit, Parke seeks an injunction against the RIAA's "Clean Slate" amnesty program, and accuses the trade group of deceptive business practices in persuading consumers that recanting their file-sharing ways will protect them from future lawsuits. Clean Slate is a "misleading attempt to obtain admissions of copyright violations by individuals without giving individuals any meaningful benefit in return or any binding amnesty from suit," Parke told the San Francisco Chronicle. The 37-year-old mortgage broker told reporter Benny Evangelista that he had never downloaded, but initiated his suit out of conviction that "somebody had to stand up to the RIAA."
http://www.stereophile.com/shownews.cgi?1733
- Recording Industry's Missteps - Michael Booth
The best-selling "Chicago" movie soundtrack is available on CD starting at $13.86.
The actual movie, with the soundtrack songs included, of course, plus additional goodies ranging from deleted musical numbers to the director's interview and a "making-of" feature, can be had for precisely $2.12 more.
Therein lies the problem for a critically wounded music recording industry: The "Chicago" CD looks like a rip- off, and the DVD looks like a steal.
Nearly everything the record companies have done wrong in the age of downloading has been done right by the movie studios.
America's love for movies is stronger than ever, while the nation listens to music with smoldering resentment.
While movie companies escort happy customers to newly-installed recliner stadium seats, the music companies escort their biggest fans straight to the courthouse. There is only so much time for entertainment in a busy day, and people will spend their leisure where they meet the path of least resistance.
For every slight by the music world, there's a smarter parallel move by the cinema promoters:
Not until 20 years after the introduction of the CD in the United States did a record label announce across-the- board price cuts that acknowledged consumer anger at paying $19 for one decent Justin Timberlake song. Universal will now drop prices on many CDs to below $10, a breaking point many buyers seem to accept.
In contrast, the movie studios saw the threat from pay-per-view cable and satellite in 1997, when DVDs first arrived here, and slashed prices immediately. DVDs started between $19 and $24; today hundreds of great titles are available in the $10 range. With "Pirates of the Caribbean" still taking in great business in theaters, a two-disc DVD version will arrive before Christmas for $18.
People listen to the average CD many more times than they watch a DVD. Yet CDs are languishing in stores and DVDs are flying off the shelves. How to see this other than sheer music industry incompetence?
Music companies stood by while one of their primary conduits to the public, radio stations, consolidated and grew numbingly homogenized. The variety of music stations offered to the public shrank drastically. Many listeners in their 30s and 40s gave up on trying new material.
In the 1990s, the movie industry increased its product outlets across a wide range of styles. Multiplexes overbuilt to the point of bankruptcy, but the result for the consumer was convenient playing times and a near disappearance of daunting ticket lines.
Art houses expanded screens in many cities, providing venues for truly obscure intellectual adventures as well as extended runs for word-of-mouth hits not big enough for the 'plexes. Thus you can still see megahit "Bruce Almighty" for a buck or the acquired taste of "Winged Migration" three months after it opened.
Movies operate largely from the same why-fix-if-it-ain't-broke box office.
The concert business has Ticketmaster. Enough said.
Threatened over the past decade by various forms of piracy, the movie industry chose to go after profiteering international crime rings while letting the local cable companies take on illicit home descramblers with low- key enforcement action.
The record labels, not satisfied with infuriating a younger generation with high prices and legal threats, is now enraging clueless middle-aged parents forced to pay $3,000 to $15,000 settlements over individual downloading lawsuits. Record companies pursued an act of Congress for the right to invade the privacy of Internet companies and customers in search of burners' personal information. For good measure, the labels forced a New York 12-year-old to pay a $2,000 fine, taking customer relations to a new level.
Through a combination of intelligent design, lucky accident and the good sense to follow the consumer's lead, movie companies settled on the VHS video format for 25 years before gently introducing a DVD alternative. It then let the DVD win out by making it more attractive rather than cynically undercutting VHS. The minor distractions of laser disc and Beta video, which could have irritated consumers if allowed to fester, were dumped.
But the music industry instead allowed format changes to drive its business model.
The CD format saved the business for 20 years because consumers had little choice but to replace vinyl or tape copies with CDs to keep their libraries relevant. CD makers knew they were borrowing from the future the day the last Bob Seger 8-track gave way to a new CD, but did nothing to expand their market on radio or among new buyers.
Even the blank CD formats are mired in confusing infighting over CD-R and CD-RW. Many store-bought CDs can't play in computers or other older components. Mini-disc, anyone?
Record label missteps are legion. But solutions are at hand: Let go of whole-disc sales and create a dollar-per- song online service as good as Apple iTunes. Make it universally available, with all the independents signed up.
Bring Ticketmaster to heel and make live music accessible and fun again. Allow file sharing for a $50 to $100 annual license. Woo 40-year-old buyers as if they were 16.
Most of all, spend less on lawyers and more on creative thinkers. You can't subpoena success.
http://www.denverpost.com/Stories/0...626541,00.html#
- MP3s Are Not the Devil - Orson Scott Card
Since every penny I earn depends on copyright protection, I'm all in favor of reasonable laws to do the job.
But there's something kind of sad about the recording industry's indecent passion to punish the "criminals" who are violating their rights.
Copyright is a temporary monopoly granted by the government -- it creates the legal fiction that a piece of writing or composing (or, as technologies were created, a recorded performance) is property and can only be sold by those who have been licensed to do so by the copyright holder.
Without copyright, once a work was performed or printed, other people who saw or heard or read it could simply do their own performance or print their own editions, and keep all the money without paying a dime to the creator of the work.
At the same time, a book or song isn't land or even corporate stock. In exchange for the private monopoly of copyright, when it expires the work is then free for anyone to perform or print or record.
Until 1978, copyright only lasted 52 years in the U.S. -- and then only if you remembered to renew it. There were other technical lapses that could result in the inadvertent loss of copyright -- it wasn't really user-friendly.
And the most obnoxious feature of the law was that some authors outlived their copyright. Their most popular works would go into public domain while they were still alive and counting on the income. It's like revoking someone's Social Security at age 72, just because they had the temerity not to die when demographics predicted they would.
Since 1978, the law was changed so that copyright lasted until a certain number of years after the author's death. So not only did the author never outlive the copyright, but the author's dependents could continue to derive income from it for some time.
Also, copyright began, not when the work was listed with the Library of Congress, but rather from the moment of creation.
But there were loopholes. If you wrote something as an employee of a company that paid you a salary for creating it, then your writing was a "work made for hire" and the copyright belonged to the company. You had no rights.
Here's where the ugly stuff begins. A lot of publishers began routinely requiring writers to sign contracts that declared that what they wrote was a "work for hire," so that the authors wouldn't own any part of their own work. Of course the companies didn't actually hire the writers and give them benefits, like real employees. It was basically highway robbery -- the companies demanded that either the writers sign their names to a lie and give up all their rights, or the company wouldn't publish it.
Only a few of us were stubborn enough to refuse to sign work for hire contracts. It was an expensive moral quibble, but I have real objections to perjuring myself and pretending that I was hired by a company when in fact I never was. If I took all the risks and wrote something on spec, then the copyright should belong to me. I'd license them to do whatever was needed, but I wouldn't, in effect, declare them to be the author of my work.
So it's pretty hilarious to hear record company executives and movie studio executives get all righteous about copyright. They've been manipulating copyright laws for years, and all the manipulations were designed to steal everything they could from the actual creators of the work.
Do you think these companies care about the money that the actual creators of the work are being deprived of when people copy CDs and DVDs?
Here's a clue: Movie studios have, for decades, used "creative accounting" to make it so that even hit movies never manage to break even, thus depriving the creative people of their "percentage of profits." A few have dared to sue, but most figure that it isn't worth the ill will. (The sentence "You'll never work in this town again" runs through their minds. They remember what happened to Cliff Robertson after he blew the whistle on an executive who was flat-out embezzling!)
And record companies manage to skim enormous amounts of money from ever CD sold. As you can easily calculate by going to the computer store and figuring out the price of an individual recordable blank CD. Figure that the record companies have been paying a fraction of that price for years. Then subtract that from the price of a CD. Figure the songwriters and performers are getting some ludicrously small percentage -- less than twenty percent, I'd bet -- and all the rest flows to the record company.
In other words, the people complaining about all the internet "thieves" are, by any reasonable measure, rapacious profiteers who have been parasitically sucking the blood out of copyrights on other people's work.
And I say this with the best will in the world. In fact, these companies have expenses. There are salaries to pay. Some of the salaries are earned.
But remember that huge fortunes like, say, David Geffen's were made by getting ownership of record publishing companies. Count on it -- Geffen got a lot richer than any but a handful of the actual performers. And when their careers are over, the record company owner keeps right on earning.
Not only that, but the digital technologies that allow perfect-quality copying came as a huge windfall to the studios and record companies.
I basically replaced all my vinyl records and cassette tapes with CDs, and then replaced all our VHS tapes and laserdiscs with DVDs. The record companies and studios would have laughed if somebody said, "This is just an upgrade. I should be able to turn in my vinyl and cassettes for CDs and my videotapes for DVDs, for no more than the actual cost of production." Ha ha ha ha ha.
In all the ridiculously overblown "estimates" of how much the studios and record companies are "losing" from "piracy," nobody bothers to calculate just how much extra money they made from consumers paying full price for music and movies they had already paid full price for only a few years before.
That's all right, you see, because that helps the companies' bottom line, whereas piracy hurts it.
But how much?
http://www.ornery.org/essays/warwatch/2003-09-07-1.html
- Stand on Guard, Canucks
File sharing may not be so legal in Canada after all. - Shawn Abel and Ryan Black
There have been some articles circulating lately on the web which proclaim that file-sharing is legal in Canada. In addition, in the last few days I've seen several references to the latter article in slashdot commentary. I and a fellow law student have become concerned with the effect these articles might have, because in our opinion file-sharing is certainly not legal in Canada, and constitutes infringement that could get you successfully sued. As much as we would love to be able to share music freely, we don't want other Canadians who use p2p apps to increase their exposure to lawsuits because they think they're immune to legal repercussions. When you use p2p apps, please do so knowing that you're still at some risk. We have been in detailed discussion with Jay Currie, author of the techstation article, and this is what we have concluded. And before I get into it, let me say that this is our opinion, but is not legal advice. We are not your lawyers.
To begin with, it is, of course, infringement to make a copy of a copyrighted sound recording in any reproducible format. Data files like mp3s are considered sound recordings the same way that a track on a CD is.
Canada has a relatively unique provision in the Copyright Act, at s. 80, which provides:
80. (1) Subject to subsection (2), the act of reproducing all or any substantial part of
(a) a musical work embodied in a sound recording,
(b) a performer's performance of a musical work embodied in a sound recording, or(br> (c) a sound recording in which a musical work, or a performer's performance of a musical work, is embodied onto an audio recording medium for the private use of the person who makes the copy does not constitute an infringement of the copyright in the musical work, the performer's performance or the sound recording.
The key words here are "for the private use of the person who makes the copy". This means that you may make a copy of any sound recording and use it yourself. You may copy a friend's cd, or you may download music, and listen to it yourself. All of these activities are exempted from infringement.
In contrast, the following activites are not exempted by s. 80. You may not copy a cd or rip an mp3 and give it to anyone else. You may not send an mp3 to a friend over the net, because a copy is made in that process. You may not file share (or upload) over the internet without infringing. This last infringement is due to the nature of p2p file-sharing.
When a person requests a file over a p2p network, like Kazaa, the network sends out requests to the effect of, "Hey, Mr. X is looking for song Y, do you have a copy?" Your computer has results, and sends the information back through the network to Mr. X. Mr. X, seeing the result, decides to download it. He sends a request to your computer for the file. Here's what's key: he does not log onto your computer, make a copy of Song Y, and send it back. Your computer receives the request for Song Y, and then your computer makes the copy by reading the information off of your hard drive and transmits it to him. He now has a copy (which he downloaded, but most importantly, _you_ uploaded simultaneously), as do you.
Thus, whenever someone downloads from your computer, your computer makes a copy for their use. This is infringement with no exemption, because you are entirely responsible for what your computer does. Some have argued that, at least while you are away from your computer, you are not responsible for someone downloading from it. This would only be valid if (a) that person had complete control over your computer and (b) it was private control, rather than public (because only private copying avoids infringement). Complete control would mean physical control, usually, but also might mean full remote access. However, access to some of your files through an application that you, yourself, chose to execute would fall far short of relinquishing control of your computer, even if you turned on the p2p app and left the room. In addition, even if someone had full remote access of your computer, if that access was from outside your "domestic setting" (as the Copyright Board defines it) it would fall under "public" rather than "private" copying. Strangers over a p2p network fall outside your domestic setting. Therefore, when it comes to p2p applications, you are considered responsible for your computer's actions.
One important point of all this is that so long as you use a p2p application with sharing turned off, you cannot infringe copyright with that application. That's an imperfect solution, of course, because some of us need to share so that the system works. It's also worth noting that the RIAA has chosen only to sue "supernode" users in the US. If you are not a supernode, and if you share small amounts of material, you probably won't attract attention. It's the big sharers who are on the hook.
There are other reasons as well that file sharing is infringement, which I will canvas briefly: Offering your files on a p2p network is "public" rather than "private" copying, for two reasons. First, because sharing on a p2p network is allowing the public, in the common sense meaning of the word, to access your files. Second, because the Copyright Board has defined "to the public" as something intended to reach more than one person outside your domestic setting. Any public copying is of course not protected under the private copying provision in s. 80.
In short, when we share our files, we infringe copyright each time someone downloads from us on a p2p app, and we can't avail ourselves of the private copying provision in the Act. We are only safe in downloading. I hope that the Act is updated once again to give us some relief for sharing music through the medium of the internet (although full-on p2p file-sharing will probably always be considered infringment, it would be nice if at least ftp'ing music on a private scale would be legal).
We hope this article serves as a helpful and useful warning to fellow Canadians. Stand on Guard, Canucks.
Pawlo's comment: Please be advised that this is an anonymous (more or less) reader submission and the legal analysis has not been reviewed by the Greplaw staff. If you need help understanding your rights, I advise that you consult an attorney who is versed in the field.
http://grep.law.harvard.edu/article...233&mode=thread
- Cheers and Jeers for the Recording Industry - Cynthia L. Webb
The Recording Industry Association of America's right to pursue a heavy handed legal attack on music pirates. Stealing is stealing, whether it's breaking into a home or downloading a file on the Internet.
No, the RIAA is arbitrarily suing the very people it should be courting and is failing to adapt to a new era of digitally delivered services.
The music piracy controversy is splitting newspaper editorial boards and opinion writers around those two arguments. Here's a sampling:
An editorial in the Detroit Free Press last week blasted the RIAA suits, saying "the music industry just doesn't seem to get it when dealing with its largely youthful audience. The youngest among them were practically born online. And online is where you reach them -- not where you hunt them down with lawsuits and half-baked 'amnesty' offers, as the Recording Industry Association of America started doing this week. ... People who want to do the right thing -- make sure artists are paid -- certainly hope for a cyber-solution. Somewhere between spending $13-plus per CD, when you want only one song, and worrying that the industry will sue you for sampling and swapping, the answer should be found online -- not in court."
• Detroit Free Press Editorial: Online Music -- Industry Should Find Better Solution Than Lawsuits
The Modesto Bee in California also took issue with the RIAA's lawsuit brigade: "The recording industry, basically, calls downloaders thieves. After all, says the industry, they are stealing copyrighted property. Under current law, the recording industry is right. Downloaders -- or filesharers, if you prefer -- are stealing. No one who uses Kazaa or Morpheus or another P2P can say they haven't been warned about the possibility of being sued. But the RIAA shouldn't lose sight of two critical points: Most of those 'thieves' are also their best customers, often buying CDs after having heard a song or two via a filesharing site. The world has changed and the music industry hasn't. To survive they will have to stop assaulting customers in court and find a way to harness the new technology to create profit. Napster, Kazaa and Morpheus figured it out and have at least 65 million fiercely loyal customers."
• Modesto Bee Editorial: Pirates Vs. Dinosaurs
But Mike Langberg of The San Jose Mercury News writes today that the RIAA's legal moves are "absolutely necessary." Langberg: "Internet apologists, who seem to believe the most basic rules of right and wrong don't apply to online activity, are appalled. Not me. Property, whether it's your house or the copyright on a song, deserves to be protected by law. Anyone who takes someone else's property without permission must face the possibility of real punishment."
• San Jose Mercury News's Mike Langberg: Record Companies Are Right to Sue Over Greedy Music Downloading
A Montana newspaper, The Missoulian, also sided with the RIAA in an editorial on Friday. "Do you think the neighbor kids should be able to waltz into your house and steal your stuff? Do you think shoplifters are entitled to take what they can carry out of a department store? Should your broker be able to skim money from your investment portfolio for his personal use? Well, of course not. So, what's all the uproar over the recording industry's filing lawsuits to stop thieves from pirating music over the Internet?," the paper wrote.
• Missoulian Editorial: Recorded Music Is Free Only To Thieves
A New York Times editorial from last week offered a more balanced assessment of the music industry's legal war against piracy. The editorial argued that the RIAA is "right to aggressively pursue people, even minors, who steal their products, but that alone will not solve their problems. They need to change how they do business, and fast, if they want to survive in the 21st century." The newspaper concluded that "[t]he only way for the industry to defend itself is to litigate hard, and publicly, against the copyright infringers. But it also needs to adapt to the times. Consumers do not want to pay $18 or $19 for a single CD, a steep price in absolute terms and when compared with other forms of entertainment, like DVD's, which offer more bang for the buck. Universal Music Group's recent decision to reduce prices as much as 30 percent stands as an example for other companies to follow. The industry also needs to improve its technology. File swappers get their music online not only because it is free, but also because it is convenient. Consumers want to get the music they want in their homes, immediately, and they don't want to be forced to buy a whole CD to get a song they like. Online music stores, which keep prices down by eliminating CD's, packaging, delivery and bricks-and-mortar stores, are the wave of the future."
• New York Times Editorial: Suing Music Downloaders (Registration required)
The Consequences of the RIAA Suits
While a number of musicians have quietly cheered the music industry's moves, some artists are worried that the sweep of lawsuits will alienate their fans, The New York Times wrote in an article on Sunday. "It would be nice if record companies would include artists on these decisions," Deborah Harry of Blondie told the newspaper, "adding that when a grandfather is sued because, unbeknownst to him, his grandchildren are downloading songs on his computer, 'it's embarrassing.'"
The singer Moby wrote about the debate on his Web site: "The record companies should approach that 14-year-old and say: 'Hey, it's great that you love music. Instead of downloading music for free, why don't you try this very inexpensive service that will enable you to listen to a lot of music and also have access to unreleased tracks and ticket discounts and free merchandise?'"
But the Times piece makes clear that artists have serious concerns about the release of their work online: "For some of them, the problem with file sharing is control. Before a CD is released, early versions of the songs often end up on file-sharing services, where fans download the music under the misconception that it is the finished product. Other times, songs online by one act are credited to another act. And fans exchange studio outtakes, unreleased songs, and live performances that some artists would prefer remain unheard."
• The New York Times: File-Sharing Battle Leaves Musicians Caught In The Middle (Registration required)
Meanwhile, in a separate article today, The New York Times reports that the RIAA's moves could backfire and create an anonymous black market of sorts for illegal file swapping. The Times said "hundreds of software developers are racing to create new systems, or modify existing ones, to let people continue to swap music -- hidden from the prying eyes of the [RIAA], or from any other investigators. ... Some experts wonder if the industry's efforts will create more trouble for it than ever. 'The RIAA is breeding antibiotic-resistant bacteria,' said Clay Shirky, a software developer who teaches new media at New York University."
• The New York Times: Crackdown May Send Music Traders Into Software Underground (Registration required)
The Associated Press noted in an article that while the RIAA may have a hard time collecting damages on its lawsuits since so many of the defendants are minors. Even though experts quoted in the articles said the RIAA has a good case against defendants who refuse to settle the charges, "proving a parent's liability for a child's activity is much harder, said Jonathan Zittrain, codirector of the Berkman Center for Internet and Society at Harvard Law School. 'And in general, if you win an action against a kid, you don't get to collect against the parent,' Zittrain said."
• The Associated Press via The Philadelphia Inquirer: Song-Swap Suits May Face An Obstacle
http://www.washingtonpost.com/wp-dy...-2003Sep15.html
http://ancient.thevines.com/leaf/AA180152/2
