[JackSpratts]

Quotes of the week:

“It's time for the R.I.A.A.'s winged monkeys to fly back to the castle and leave the Munchkins alone." - Adam Eisgrau.

“The R.I.A.A. is breeding antibiotic-resistant bacteria.” - Clay Shirky.



Hurricane Issue



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.










EU Delays Vote On Digital Copyright Plan
Matthew Broersma

A vote on the European Union's proposed directive on the enforcement of intellectual property rights, which has been compared to a controversial U.S. law, has been pushed back to November.

A U.K. civil liberties group says it believes the law could even backfire on some of its sponsors, such as Microsoft and eBay, by opening the companies up to more serious legal attacks.

The proposed directive on the enforcement of intellectual property rights, earlier set for a vote in a Thursday plenary session, is now scheduled for discussion on Nov. 4. Janelly Fourtou, the European Parliament member responsible for guiding the proposal, has not yet produced her report on the draft legislation, according to those familiar with the situation.

When the proposal on enforcement of intellectual property rights was first introduced in January, it drew a "dismayed" reaction from the International Federation of the Phonographic Industry (IFPI) and other copyright holder lobbyists, which called for the measure to be beefed up.

The IFPI argued in January that the proposed measures are not tough enough to hold back an "epidemic of counterfeiting," complaining that "the tools the proposal introduces to bring actions against infringers do not even reach the levels already available under some existing national laws" and may "fall short" of what it called international standards, in a reference to the United States' controversial Digital Millennium Copyright Act (DMCA).

The IFPI estimated that more than 1 billion pirated music CDs have been sold, which means that one in every three CDs is illegal. The organization estimates that the industry has lost $4.6 billion because of piracy.

Rather than taking on board the strongest antipiracy measures of the member states, the draft legislation aims to represent "best practice" legislation, according to the European Union.

Civil liberties threat?
Critics say large multinationals would be the biggest beneficiaries of the directive because of its ban on reverse engineering.

But the directive could backfire on some of its sponsors, such as Microsoft, according to Ross Anderson of the United Kingdom's Foundation for Information Policy Research (FIPR). He said while currently, Microsoft is able to "steamroll" most of the civil patent infringement actions against it, these could become more of a threat when such infringement is criminalized.

Online auction giant eBay could also be among the unexpected victims, Anderson said, because sales of intellectual property are subject to lawsuits if sold outside their original legal jurisdiction.

"If you buy a CD in New York, and next year you sell it on eBay to a person in Paris, you can be sued for copyright infringement," Anderson said. "At present, no one bothers. However, once such sales become a crime, they could add up to something nasty."

The European Parliament is also facing criticism over a 2001 directive on copyright. An analysis on the implementation of the copyright directive, published this week by FIPR, said the law was damaging European scientific research as well as eroding consumers' rights on how they may make use of copyrighted materials.

The delay in voting on the new proposal follows the rescheduling of a vote on a proposal on the patentability of computer-implemented inventions, which has attracted heated criticism from computer scientists, economists and developers. Critics charge that it would make efficient software development difficult and increase the grip of large multinational companies on the software industry.
http://news.com.com/2100-1028-5074973.html


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A Downloader Goes Up The River

PARODY By Michael E. Ross, MSNBC

MSNBC.com has obtained an exclusive interview with one of America's newest class of criminals -- the downloader. Convicted of illegally downloading and trading rock and hip-hop music, "Johnny Payless" (his name changed to protect his identity) is one of the Internet users caught up in the recording industry's ongoing crackdown on Internet piracy. Now serving a 100- year sentence at a Supermax prison in the Midwest, Payless offers a cautionary tale -- in his own words.

HE SHUFFLES INTO an interview room under the weight of ankle irons, adorned in the obligatory bright-orange prison-issue jumpsuit. He speaks in a low-key monotone, wary of those around him listening. He is "Johnny Payless," a young, bright, personable man somewhere between 25 and 30 years old -- a man whose future has come undone by his having run afoul of the Recording Industry Association of America, the music industry's largest trade group, which in September 2003 filed more than 200 copyright-infringement lawsuits across the country -- the opening salvo in a war that still goes on.

MSNBC: What are you in for?

Payless: Me, I'm facing hard time for appropriating hard rock. I'm looking down the barrel of a $200,000 fine for stealing 50 Cent. It was all so simple -- the technology was right there, asking to be used.

MSNBC: Didn't you know the recording industry has been getting more and more aggressive about lawsuits against those who take music without paying for it?

Payless: I'd heard about it for years, even read stories in the news. But I never thought I was gonna be in their sights. Hell, I've got a library of maybe 100 songs -- I'm small fry. Or so I thought.

MSNBC: What upsets you about this the most?

Payless: What makes me angry is that they're not even making a distinction anymore between the volume players -- the ones pulling hundreds and hundreds of songs at a rip -- and the little players like me. I was never planning to sell them, they were for my own private use. It's nuts.

MSNBC: So what's life like in here?

Payless: Not much fun, that's for sure. Incredibly tight security. And the place is getting more and more populated every day. Just last week they added five new prisoners on the tier. One was only 12 years old; they caught him downloading "Happy Birthday" for his younger sister. Wham! 25 years, just like that. Someone else got caught on visitors day, trying to sneak an MP3 file inside a cake. Fifty years at the drop of a gavel.MSNBC: Maybe you've heard -- the lawsuits have led to some new legislation ...


Payless: Oh yeah, the Copyright Attorneys' Full Employment Act. I'm glad somebody's getting ahead with all this.

MSNBC: What are your options now?

Payless: Not many. My lawyer's started a legal defense fund for me. I understand I can get a pardon if I sign a loyalty oath to the recording industry, and agree to do community service at a Tower Records store. We'll see, but it all seems a bit heavy-handed to me.

MSNBC: Any advice to other music fans?

Payless: If you love music and technology, get a lawyer. And if you download music ... trust me: Don't take the rhyme if you can't do the time.
http://www.msnbc.com/news/963554.asp?cp1=1


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Eighteen Music Labels Sue File-Sharing Network
Reuters

Eighteen music labels sued file-sharing network iMesh.com Inc. for copyright infringement, the Wall Street Journal reported on its Web site on Friday.

Tel Aviv-based iMesh is the third-largest file-sharing network behind Morpheus and the much larger the KaZaa service. These networks let millions of users around the world trade software, music and video over the Internet.

The suit, filed in U.S. District Court in Manhattan, charges the company with serving as a medium for the illegal distribution of copyrighted material.

Quoting from the text of the lawsuit, the paper wrote, "Without widespread infringement of the most popular copyrighted sound recordings," iMesh "would disappear."

The legal actions come after iMesh said in late August it planned to sell copyrighted music from independent artists, films and games, alongside its file-swapping operations.

At the time, iMesh chief executive Elan Oren told Reuters the company had no intentions to abandon its file-sharing operations.
http://reuters.com/newsArticle.jhtml...toryID=3477563


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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/sto...2-0CEF16FF17CE


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Downloaders Rush To Delete Music Files
Phil Kloer

When University of Georgia junior Lindsay Gritzmaker heard that the record industry had pulled the trigger and was suing individual music downloaders, she got the same feeling as when she's speeding and sees a roadside cop: "Oh no, don't let him catch me," Gritzmaker said.

So on Monday, the day the lawsuits were filed, Gritzmaker deleted the music file- sharing program Kazaa from her computer, and one of her two roommates did the same. On the youth grapevine, from UGA to metro Atlanta high schools, the lawsuits and music downloading are suddenly a hot topic.

The Recording Industry Association of America (RIAA), which represents the major record labels, may have finally hit on a solution to the downloading of copyrighted music via the Internet, something about 60 million Americans do regularly.

By suing 261 individual downloaders on Monday for federal copyright violations, it has struck at its own consumer base, but may put a serious dent in a phenomenon that has been growing since Napster hit in 1999.

The lawsuits targeted people with more than 1,000 songs on their computer hard drives, but RIAA spokesman Jonathan Lamy said the suits are "only the first wave."

"They know they cannot stop this completely, but it will curtail it slightly," said Perry Binder, a Georgia State University legal studies professor and expert in Internet law.

Even the threat of lawsuits, announced in late June, seems to have put a significant damper on downloading. From June to August, people using Kazaa, the most popular file-sharing program, declined from 6.5 million to 4.8 million per week, a 26 percent drop.

Although the lawsuits have caused anxiety among some downloaders, others aren't concerned.

"I bet most Georgia State students have downloaded music. How are they going to track all of them?" said Julia Wysocki, an 18-year-old GSU freshman.

And even as the RIAA goes after users of the major post-Napster programs like Kazaa, Morpheus and Grokster, many other file-sharing programs have been appearing, some of which are designed for greater anonymity.

"I use a Korean server to download so they can't track it," said Georgia State student Jungmin Lee, 19.

The RIAA suits target the person who pays for the Internet connection over which the music was downloaded, which means in some cases parents are being sued when it was their teenagers downloading music.

Adam Nevis, 42, a property damage adviser from Canton, said when he heard about the RIAA crackdown, he warned his 14-year-old daughter Samantha about downloading songs off their shared computer and cable modem.

"I understand they're looking for the big boys, but I'm not going to take that chance," he said. "I told her to lay low."

The industry argues that downloading has caused the huge drop in CD sales of 26 percent since 1999 (the year Napster appeared), a loss of $4.3 billion. Critics of the industry say other reasons are also to blame.

Even though the RIAA campaign appears to have cut down on file-sharing, it hasn't helped CD sales -- just the opposite.

In the seven weeks since the RIAA announced it would sue downloaders, CD sales fell 54 percent compared to the same period last year, although whether any of that was spurred by anti-RIAA campaigns on the Internet or grass roots resentment is impossible to determine.
http://www.ajc.com/living/content/li...5992926970035#


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Everything Is The Same Thing
Jon Carroll

The Recording Industry Association of America, its flop sweat beginning to show, decided last week to hitch its wagon to child pornography. It said that peer- to-peer file-sharing -- the technology used by Internet sites like Kazaa and Morpheus -- was bad not only because citizens could share music without paying for it, but also because it was used to swap pornographic images.

One odd thing here: If you tweak that sentiment just a little bit, it becomes: We join our friends the child pornographers in deploring file-sharing of protected works of art. And indeed, although there are no trade organizations for child pornographers, there is one for adult pornographic videos, and they do indeed claim that their revenues have been hurt by the Internet.

When you hear the phrase "child pornography," it is good to reach for your bowl of salt and sprinkle liberally over all statements pertaining thereto. It is not a large national problem, whatever you have heard. Wherever it occurs, it is of course both illegal and immoral, but it is such a reprehensible act that it has been used to justify all manner of police misconduct and surveillance. No one wants to be seen as defending child porn, so everyone just shuts up when the issue is raised.

This may be the sort of pre-emptive strike the RIAA was after, although there is just a wee bit of hypocrisy in an industry that has made good coin out of barely legal barely clad babes becoming mega- pop-stars complaining about sexual images of dubious morality.

I am sympathetic to the record industry's basic point. Music is created by people who get paid for it, and the people who pay them should likewise be rewarded with sales. That's the system. Ripping off artists is never wonderful -- even though record companies have been known to indulge in the practice themselves.

But the RIAA is running into a sea change in the nature of content. Suddenly, everything is fungible. As soon as it all became 1's and 0's in the great digital universe, it could be transferred from any computer to any computer. Every home became a sound editing studio; why listen to someone else's idea of a good CD when you could have one of your own? And why not share that CD with your friend? And why not put it on the Net where others can get it? It's all keystrokes and clicks.

In a decade, every home will also be a film editing studio. Wanna make a 20- minute version of "The Godfather"? No problem; burn your own CD and send it off into the mediasphere. I wonder whether the lawsuits will ever catch up to the technology. Despite the best efforts of law enforcement and corporations, hackers still rule. Find a way to protect your data, and someone else will find a way to liberate it.

Newspapers sell their content on paper but give it away on the Net. It's not wonderful, but at least it's a protection against hackers. No one wants to bust into a free site.

Human beings are fungible now too. Once they've been reduced to 1's and 0's,

it doesn't much matter who they are. An actor can be a candidate for governor;

a senator can be an actor. Martin Sheen gives his political opinions more gravity because he plays a president on television. HBO is about to air a TV show about lobbyists using many real politicians, and produced so quickly that it is able to deal with current issues.

It's realer than reality television, and yet it's fake!

A newspaper columnist is running for governor; many newspaper columnists now appear on television playing dumbed-down versions of themselves. We're all in the same infomercial; we are all each other's home appliance. Be sure to e- mail this column to a friend, then vote for me in the next election, and then see the movie based on the news story about which I had an opinion: "File- Sharing Slut: Just Stroke Her Keys!"
http://www.sfgate.com/cgi-bin/articl...11/DD46077.DTL


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Peer-to-Peer File Sharing And The Law - What's Next?
ILN

The New York Times has run a series of interesting articles over the past few days examining the RIAA suits against file sharers from a number of perspectives. Articles focus on the role that Hollywood insiders play in leaking movies onto file sharing networks, the growing popularity of new peer-to-peer systems that are safer and more anonymous, the emergence of initiatives providing free content online, the likely effectiveness (or lack thereof) of the RIAA legal strategy, and whether the file sharing trend is irreversible.

(Registration required – Jack.)

http://www.nytimes.com/2003/09/15/te...gy/15DARK.html
http://www.nytimes.com/2003/09/14/we...ew/14LOHR.html
http://www.nytimes.com/2003/09/14/we...ew/14LIPT.html
http://www.nytimes.com/2003/09/14/fashion/14COPY.html

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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/htm...ptmusic13.html


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Music Industry Lawsuits Creating Confusion
Leslie Brooks Suzukamo

Chris Yohnke, a 43-year-old Lakeville mom who home-schools her kids, is trying to use the lawsuits filed by the recording industry against hundreds of music
downloaders as a teachable moment for her 9-year-old son, Jack.

"He has friends who download music and burn it to CDs, and Jack wanted to do it, too because CDs are so expensive," Yohnke said. "And I explained that you can't do that."

Yohnke had Jack read how the music industry had filed hundreds of lawsuits against families who had someone — often a computer-savvy kid — downloading music for free off the Internet.

"He's still not convinced," she said. And Yohnke was confused herself. What was legal? What wasn't?

She has plenty of company.

Parents, children and others who make up the 60 million Americans who download music are starting to ask the same questions — and they're wondering if they've unwittingly placed themselves in the crosshairs of the Recording Industry Association of America. The industry group says it will unleash its next volley of lawsuits against free-music lovers in coming weeks. By some estimates, teenagers make up half of that 60 million figure.

The RIAA, which counts the four largest music labels among its members, showed it was serious about protecting music copyright when it charged 261 people last Monday with possessing illegally obtained songs on their computers — songs they got from peer-to-peer file sharing services with names like KaZaA, Grokster, Morpheus and Limewire. Many of the defendants turned out to be parents or grandparents of the alleged file-traders. To date, the music industry hasn't sued anyone in Minnesota for illegally downloading or uploading songs.

The NPD Group, a market research firm, reported this week that 64 percent of households with access to the Internet have at least one digital music file on their computers. More than half have 50 files, while 8 percent have more than 1,000 files.

Two-thirds of those files arrived through so-called "peer-to-peer" file-sharing. That's a method of getting a free copy of a song from someone who puts the song on his computer and allows anyone else with an Internet connection and the same file-sharing software to make a copy of it.

It adds up to a little over 7 billion free songs copied over a growing army of peer-to-peer sharing services, the NPD Group reported. The rest came from CDs already owned by the computer user.

Yohnke said she's had parents tell her they were in the clear because they paid for file-sharing software, but they may not realize the music industry wants them to pay for the songs.

"The parents are like, 'Oh, it's OK. They've got software to do it, so it's OK,' " she said.

"This is something which most people don't think is wrong," said Jason Schwartz, staff attorney for the Electronic Frontier Foundation, a San Francisco-based nonprofit group concerned with consumer digital rights.

"Here you have kids who have been taught since kindergarten that sharing is good, right? It's a weird message to try to sell this as shoplifting."

The music industry says the people it sued were the most "egregious" song swappers, with an average of 1,000 songs on their computers that they were letting others upload and copy. The industry is after "uploaders, not downloaders," said RIAA spokesman Jonathan Lamy. And, it expects to settle most of the lawsuits.

Legal experts say 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. 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.

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 Boston College Law School professor Joseph Liu. "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.

Copyright infringement cases levied against parents for something their child did are rare, said Fred von Lohmann, an Electronic Frontier Foundation attorney. "It is legally very uncertain and untested," von Lohmann said.

The RIAA has a Web site called www.musicunited.org that contains a list of online music stores where it says people can legally buy music from a growing number of Internet services — as opposed to "shoplifting" it from controversial file-sharing services.


The Electronic Frontier Foundation is offering tools on its Web site (www.eff.org) for nervous file-sharers, advising "How Not to Get Sued by the RIAA for File- Sharing," and how to check if the RIAA had filed a court subpoena to target them for possible lawsuits.
http://www.twincities.com/mld/pioneerpress/6759172.htm


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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/...y030912ram.htm


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Water Wells and MP3 Files: The Economics of Intellectual Property

This post continues a discussion started by Eugene Volokh.

Eugene Volokh blogged recently on the case for intellectual property. His main focus was on incentives, and he made an eloquent and compelling case for intellectual property based on the notion that without exclusive rights, there might be insufficient incentives for authors to write, composers to compose, bands to record, and inventors to invent. But an IP skeptic might reply as follows:

But the need for incentives does not justify a full-fledged property right. In the case of property in tangible resources, there is another reason we create property rights. Consumption of tangible resources is rivalrous. If I use a plot of land, you cannot. If I eat a hot dog, it is unavailable for your consumption. Without property rights in tangible resources, we would have a tragedy of the commons.

One of the nice things about Volokh's post was that he provided an example of an individual case in which consumption of a physical resource was nonrivalrous but we nonetheless confer traditional property rights. You can get the full example from either Volokh's original post or my reply. Let me summarize it here:

A farmer has well with excess capacity. Even if all the neighbors who would use the well if it were free did so, the well's capacity would not be exceeded. (This means: (1) the water table on which the well draws is sufficiently capacious to meet all the demand, and (2) the well itself has sufficient delivery capacity so that it would not be subject to crowding effects, even if unlimited use of it were free.)

Let's call Volokh's hypo, the capacious water well, or, for short, the well. The well is a marvelous example of what the philosopher, Daniel Dennett, has called an intuition pump--for Dennett's explanation of this idea, go here. Even IP skeptics, Volokh argues, will have the intuition that the farmer should have traditional property rights in the capacious water well. We have the strong intuition that the farmer should have a property right in the well, even though consumption is nonrivalrous. And if we have such a strong intuition in that case, then shouldn't the same forceful intuition carry over to the case of intellectual property?

Something bothered me about Volokh's intuition pump. It's not that I don't see the force of the incentives argument. It's that the capacious water well hypo didn't seem quite kosher. Hence my post in reply to Volokh, where I focused on the idea that the well is a club good--because consumption is nonrivalrous up to some threshold. Eugene and I exchanged a couple of emails, and I couldn't convince Eugene that I was right. This bothered me. On the one hand, I was quite sure I was on to something. On the other hand, Volokh is one of the brightest guys in all of legal academia. Clearly, I had more work to do. It was off to the library. (I live in the hills above UCLA, so normally I go to the Young research library, but with the state budget crisis, Young was closed and so I had to drive all the way to Cal State Northridge.)

So I read up on the economic theory of intellectual property law. I reread James Buchanan's original article about club goods and also investigated the differences between club goods and toll goods. And I thought long and hard about my failure to persuade Eugene. This post is the result!

Con’t.


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Pass the Crypto

Fixing Compulsory Licensing

In a previous post I dashed the world’s hopes for a viable compulsory licensing system, no matter how attractive one might seem. Luckily for the world, I’m back to explain how to make a compulsory licensing system that doesn’t run into any of those problems using… cryptography!

(To review, the idea for our compulsory licensing system is this: we tax Internet connections and CD/DVD burners a small amount and send the money to the artists. In exchange, they let us download their songs and movies off the Internet. The problem is how to decide which artists should get the money without losing privacy, accuracy, or security.)

Here’s the key to my proposal: when you pay the tax you get a vote.

So when you buy a CD or DVD burner, it comes with a short string (a random-looking series of letters and numbers) to type into your computer. (The strings are given to the manufacturers by the government when they pay the tax.) When you pay the bill for your Internet connection, you’re emailed another such string. (The string from your email can be handled automatically, and the one in the CD burner box could be made relatively easy to type in.)

The string is a digital gift certificate, worth however much the tax you paid was, but only spendable on donations to artists. Once your computer has the string, it looks at all the songs you’ve listened to and decides what songs to spend your gift certificate money on. (It knows what you listen to because it’s built in to your MP3 player.) If you’ve listened to one Britney Spears song day and night for the past month and nothing else, it will give all your money to Britney. If you listen to a variety of independent bands, it will split your money among them. (Advanced users can of course customize how their money will be spent, but it’s simpler to have the computer choose automatically by default.)

The result is sent anonymously to the government using the string. (The strings will be unique enough that it will be nearly impossible to guess a correct one.) The government checks this against the list of strings they gave out and the list of strings that have already been used to make sure that it’s legitimate, and then credits the appropriate accounts.
http://www.aaronsw.com/weblog/001036


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Beyond File-Sharing, a Nation of Copiers
John Leland

The week the music industry brought suit against 261 users of Internet file-sharing services, Donald L. McCabe was in St. Louis to talk about a different form of digital copying. Mr. McCabe, a Rutgers University professor, has made a career of studying the cheating of American high school and college students. His most recent study found that cheating was spreading almost like file-sharing. Of more than 18,000 students surveyed, 38 percent said they had lifted material from the Internet for use in papers in the last year.

More striking to Mr. McCabe, 44 percent said they considered this sampling no big deal. Because the Internet makes it easy to copy information, he said, "it's made it much more tempting."

"I'm not sure it's shifted values yet," he continued. "But for a lot of students, it's heading in that direction."

In fact, for many people, that shift has already come. Like file-sharing — which 60 million Americans have tried — cutting and pasting from the Internet is just one part of a broader shift toward all copying, all the time.

Consider a night out in the wireless city: Throw on a faux-vintage sports jersey, grab a bootleg Prada bag and head to the Cineplex for the sequel to a movie based on a television show. Afterward, log on to KaZaA and download the movie's title song, based on a digital sample. While you're online, visit a blog with links to published movie gossip and use your pirated e-mail program to send tidbits to your hundred closest friends. Curl up with a best seller by Stephen E. Ambrose or Doris Kearns Goodwin, who last year admitted to slipping materials from other texts into their books.

Most of these activities would have been difficult or impossible a generation ago. They differ widely in their legal and ethical implications. (For example, you can't prosecute someone just for producing "Lara Croft Tomb Raider: The Cradle of Life.") But together they suggest a broad relationship between new technology and a value system that seems shaped to it. In a nation that flaunts its capacities to produce and consume, much of the culture's heat now lies with the ability to cut, paste, clip, sample, quote, recycle, customize and recirculate. It is tempting to ascribe the Culture of the Copy to college students, but its values run deeper. The United States economy shed 44,000 manufacturing jobs last month, continuing a long-running trend away from production. Since the 1980's, when liberalized trade laws made it easier to "outsource" manufacturing to subcontractors in the developing world, companies like Nike or Tommy Hilfiger have competed in what Naomi Klein, in her 2000 book "No Logo," described as "a race toward weightlessness," in which production is a hindrance, not an asset. In the brand market, value lies not in making things but in copying one's logo onto as many of them as possible.

D.J.'s, file sharers, handbag cloners, student plagiarists and some bloggers simply do what brand companies do: they reproduce work made elsewhere at lower rates, adding their own signature and mix. The legal ramifications may be different, but the action is the same.

"The quintessential American company was Enron, which made nothing," said Neal Gabler, author of "Life the Movie." In today's culture, he added, "the product is almost immaterial; it's the consciousness about it."

"What the Internet does is, it pries everything out of moral context and lets people feel knowing about it," he said, because the skills used to cut and paste something with a computer are more valued than those used to manufacture it.

"In a sense, Internet technology is a metaphor for the new morality. As long as you can get it, it doesn't matter how."

On a recent morning on Canal Street, crowds of shoppers, most past their undergraduate years, brought the metaphor to life, plucking up fake Louis Vuitton, Gucci and Kate Spade handbags. A New Jersey woman named Linda Dorian, plumping for two bootleg Vuittons, compared her purchases to downloading music. "Somehow everybody seems to be making out," she said. "I don't see any poor rock stars. I don't see any poor designers."

Besides, she added, buying the fake is cooler, just as Grokster, a file-sharing program, has a cachet the Wal-Mart CD counter cannot match. "Shopping for copies is getting to be a trend," she said.

As technology has produced a new ecology of copying, it has pushed into uncharted territories of ethics and the law, said Siva Vaidhyanathan, author of "Copyrights and Copywrongs: The Rise of Intellectual Property and How It Threatens Creativity" and director of communication studies at New York University. He said he has had 10 percent of his students turn in whole papers copied from the Internet, not realizing that he could Google them into big trouble. "We're coming up on 10 years of widespread use of the Internet," he said. "We should have better discussions of a code of ethics for dealing with these materials. The rule of law will always incompletely and perhaps negatively affect the Internet."

Nearly 70 years ago, the critic Walter Benjamin addressed the aesthetic limitations of the copy in a famous essay about photography and authenticity, "The Work of Art in the Age of Mechanical Reproduction." Benjamin argued that even a perfect copy lacked the contextual meaning of the real thing. Since then, postmodern critics have developed dense theories of simulacra, bricolage and pastiche that could daze a tuna at 20 paces.

Now the bricoleurs are living next door, and they look nothing like the monographs said they would. "Somehow I don't think it comes from avant-garde theory," said Louis Menand, author of "The Metaphysical Club: A Story of Ideas in America." The KaZaA community can burn "All About the Benjamins," the song or the movie, without the endorsement of Walter.

"They wouldn't say it's all a simulacrum anyway," Mr. Menand said. "If they could say that they wouldn't need to copy their papers online."

In the current universe of the copy, the looseness of context is everything. Most users of music file-sharing services do not copy the products for sale by the music industry. While the industry sells albums, artificially shaped to the capacities of their commercial format, LP or CD, file-sharers tend to rip songs.

As their favorite musicians recombine digital samples to create new music, downloaders recombine digital songs in new contexts.

"I don't think they think of it as copying music," said Joe Levy, deputy managing editor of Rolling Stone. "It's a very individual experience for them. They want the songs they want in the order they want. Then it becomes not the new Mary J. Blige album, but their own mix. It's a much more individual package of music. Kids view it as an interactive and creative act."

Betsy Frank, the executive vice president for research and planning at MTV Networks, who studies young TV and music audiences, said the people in her focus groups tended to describe copying as an assertive act, a way of navigating a media environment that bombards them with information — some good, some bad, most of it a little of both. "They can rationalize downloading music or term papers extremely effectively as using their skills to select what works for them," she said.

The law, of course, will inevitably catch up. When rap acts started sampling James Brown records in the 1980's, complaints raged that they were violating copyrights and the principles of art. In a Bronx home studio in 1987, the producer Jazzy Jay described the law of the copy: "The laws on taking samples are, You take 'em until you get caught."

Two decades later, musicians usually pay for their samples, and the aesthetic argument — that sampling was theft, not music — has quieted. Now sample fees are part of the business model, and no one seems to worry about whether it is art.

At both stages, value judgments about copying followed technology and money, not the other way around.

In the culture of copying, technological considerations have trumped ethical ones: if you upload it, they will download.

LAST week's lawsuits against file-sharers are an attempt to get the public to treat copying not as a question of technological possibility or moral implications, but as a threat to the wallet. A study by Forrester Research found that 68 percent of burners said they would stop if they thought they might get in serious trouble. As in sampling, the moral questions should follow the financial ones, said Josh Bernoff, the principal analyst covering media and entertainment at Forrester.

But the process still had some hurdles to get over, Mr. Bernoff admitted. Recently he was discussing his research with an executive at a media organization that has been very aggressive about trying to discourage file-sharing. When Mr. Bernoff asked the executive how he had gotten the report, which Forrester sells for $895, the man hesitated.

"They got a copy from one of the studios," Mr. Bernoff said. "Here is an organization that's saying that stealing hurts the little people, and they took our intellectual property and they shuttled it around like a text file."

The aesthetic fallout of all this copying will be harder to sort. In a culture that assigns diminishing value to production, can copying really fill the void? The hypothetical night out involves many aesthetic decisions but little that can be called art.

Mr. Menand noted that his students who downloaded papers from the Internet often picked mediocre work, perhaps thinking it would be less noticeable. The availability of obscure, non-Britney music on KaZaA — one of the justifications cited by users — has done nothing to stop Hilary Duff, the overpackaged star of the "Lizzie McGuire" movie and series, from having the No. 1 album in the country this week. If this is the democracy of the copy, it is enough to make one long for the elitism of creative genius.

Ms. Frank, the MTV executive, noted the limitations of unlimited customization, even amid unlimited access. For young Americans, she said, "because of the way they've trained themselves to use media, they never have to be exposed to an idea, an artist, or anything that they did not select for themselves."

Ruth La Ferla contributed to this article.
http://www.nytimes.com/2003/09/14/fa...rtne r=GOOGLE


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Can't We All Share?
Emma Poon

For college kids MP3s have been the greatest thing invented since Ramen noodles. Both are cheap, quick, and vital for those late night study sessions. But if Congress has its way, MP3s might no longer be cheap and quick. You could get yourself landed in prison for five years and have a fine of $250,000 imposed for uploading a single file to a peer-to-peer network. The Recording Industry Association of America, the RIAA, intends to file its first wave of lawsuits against file traders this week. In fact, you can check if you're one of the RIAA's Most Wanted by going to this website: http://www.eff.org/IP/P2P/ riaasubpoenas/

Why is everyone so anti-sharing? We have been taught as small children that we need to share, but I guess as we grow up and get rich beyond our wildest dreams... sharing is one of things that gets bought out. The RIAA is nothing more than a big bully trying to steal file- sharers' lunch money. Even the world's largest music company, Universal Music Group, has conceded somewhat to the age of digital music by dropping the prices of new CDs to around $10. They understand that we college kids are poor. But the good old RIAA just doesn't want to give up. They want to continue to line their pockets by pushing their weight around and threatening the little guys with lawsuits. College campuses across the country have been feeling the RIAA's wrath and have banned peer-to-peer network sharing. Taking away our downloading is like taking away our Ramen, it isn't fair and it isn't right.

If my biology classes have UIC have taught me anything, it's taught me that it's survival of the fittest in today's world. And if you don't evolve to adapt to the times, then you will become extinct. The RIAA is an evolutionary dinosaur in an age of free information brought upon by the existence of the Internet. 60 million Americans sharing MP3s and other files can't possibly be wrong.
http://www.uictoday.net/vnews/displa.../3f62279fb035e


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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/news...8738895450518#


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Samsung Players To Integrate Napster
Reuters

Samsung on Tuesday said it plans to co-market a new line of digital music players with the soon- to-be-relaunched Napster 2.0 service, in the latest move to stoke up its brand image among youthful consumers globally.

The new product line was just one of nearly a dozen products ranging from mobile phones with tiny built-in television sets to huge TV screens that will be unveiled at the company's annual showcase here of new devices aimed at U.S. consumer markets this fall.

The new Napster-ready device will be available in retail stores this fall, Samsung Electronics Co. Ltd 05930.KS said in a statement.

"Samsung is trying to do what Apple Computer has done with its iPod music players and iTunes online music store," said Michael Kelleher, an analyst with market research firm Yankee Group in Boston.

"Certainly, if Napster can build itself up as a legitimate file sharing portal, then that's good for Samsung."

In its first incarnation, Napster provided a rogue music downloading service that captured the imagination of tens of millions of music fans.

The original company was snuffed out of business by a court order and its assets were purchased by Roxio, a maker of software for copying digital music, which plans to launch a legal Napster 2.0 music download service this fall.

The Samsung devices will be co-branded and identified as "Napster compatible" on the packaging. The 500,000 song titles will be available from all five major record labels and hundreds of independent labels, according to Roxio.

The partnership will include joint engineering and co-marketing activities for a line of portable music devices that integrate with Napster 2.0, Samsung and Roxio said.
http://www.reuters.com/newsArticle.j...toryID=3456282


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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-...ness-headlines


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Copy-Protected CDs Take Step Forward
John Borland

For the first time in the United States, BMG Music will release a music CD that's loaded with anticopying protection, a move that opens a new round of technological experimentation for record labels.

BMG division Arista Records will include "copy management" protections produced by SunnComm Technologies on soul artist Anthony Hamilton's new album, the company said Friday. Although the label has previously released promotional copies of various CDs with copy protection, this will be the first major test of consumers' reaction to the latest generation of the anticopying technology.

"The consumer experience is BMG's top priority," BMG Chief Strategic Officer Thomas Hesse said. "Because of improvements in the…technology, it is now possible to offer consumers the level of flexibility to which they have become accustomed, while beginning to better protect our artists' rights."

Though unlikely to signal an immediate flood of similar releases, BMGs actions do open a new chapter for the United States labels' flirtation with copy-proof CDs.

Most major labels have said they are deeply interested in technologies from companies such as SunnComm and rival Macrovision, but they've been concerned enough about compatibility problems with various computers and consumer electronics, along with consumer backlash issues, to refrain from many releases in the United States.

By contrast, Macrovision says elsewhere in the world--primarily Europe and Japan--more than 150 million discs have been manufactured with its copy-protection technology.

The new generation of anticopying techniques is more sophisticated than early methods. Along with simple locks that prevent CD ripping and copying, the Hamilton disc includes computer-ready files that can be transferred to a PC, a Macintosh computer and many MP3 players.

Unlike the MP3 files traditionally created from unprotected CDs, these "pre-ripped" files will be wrapped in their own digital rights management protections that keep them from being swapped online and restrict some other actions. Buyers will be able to burn three copies of these songs onto their own CDs, however. The disc will also provide a link that can be shared with other people, who can download copies of the album's music and then listen to it for 10 days.

Analysts said the news did signal a more advanced round of experimentation but that it would likely be some time before large numbers of copy-protected albums were released in the United States.

"I would think the industry would not want to do a major rollout now, given what's happening with the (recording industry's) lawsuits," said independent digital media analyst Phil Leigh, citing the Recording Industry Association of America's legal push against file swappers earlier this week. "That would be a second major aggressive action. I would think they would do these things one at a time."

The Anthony Hamilton album, called "Comin' From Where I'm From," will be released Sept. 23.
http://news.com.com/2100-1027-5075656.html


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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/we...rtne r=GOOGLE


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Seagate Spins 100GB Platter
Ed Frauenheim

Seagate Technology on Tuesday said it has pushed the data-density envelope in the disk-drive industry, announcing a product that squeezes 100GB onto a single 3.5-inch platter.

Today's highest-density hard disk drives pack 80GB onto a 3.5-inch platter, the part of a drive that rotates and contains data. Although Seagate's news can be seen as a step forward for the disk-drive industry, it also reflects a slowdown in the pace of data density advances. For several years beginning in the late nineties, density doubled annually. Drives with 80GB per platter shipped late last year, so this new advance demonstrates the slower growth in data density.

Seagate's new product is part of its Barracuda 7200.7 family of drives. The drive has two platters, for a total capacity of 200GB. It can use the more-traditional parallel ATA interface or the newer serial ATA interface (SATA).

Seagate said the Barracuda 7200.7 is the industry's first hard-drive family capable of supporting SATA Native Command Queuing. This is a feature that allows a SATA hard drive to reorder outstanding commands before reading or writing data, improving the performance of queued workloads, according to Seagate.

Seagate said it would demonstrate the queuing technology on its new 200GB Barracuda 7200.7 SATA hard drive on Tuesday at the Intel Developer Forum in San Jose, Calif.

The queuing technology isn't generally available on Seagate products yet. Seagate said it would be installed on Barracuda 7200.7 SATA hard drives for shipment when computer designs that support the technology become more broadly available.

Seagate said the new 200GB drives are ideal for products such as network-attached storage devices, entry-level ATA servers, mainstream and high-performance PCs and home-entertainment PCs. The 200GB drive with a parallel ATA interface is slated to ship worldwide next month through distributors, while shipments of the 200GB SATA version are scheduled to begin in November.
http://www.nytimes.com/cnet/CNET_210...3-5077293.html


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For the Japanese Connoisseur, Cheap Trick Rules
Ken Belson

TOKYO — Neil Young once sang, "It's better to burn out than to fade away." With all due deference to Mr. Young, the Japanese taste for aging foreign rock stars suggests that some things improve with age.

While Americans are certainly no strangers to dinosaur rock, most Western fans follow their favorite aging act with a wink, understanding all too well that the music is often stale and played by musicians old enough to be grandparents. In Japan, the fans are far more earnest — particularly with performers who long ago fell somewhere below top-tier aging acts like the Rolling Stones and Eric Clapton.

Small wonder then that Japan has become not just a departure point for foreign bands seeking to build a following — something it has long been — but also a final destination for older acts looking to pad a nest egg for retirement.

Just last month, the world's second-largest music market welcomed Chuck Berry, now 76, who lit up the stage as the band Cheap Trick celebrated the 25th anniversary of "Live at Budokan," the album recorded at Tokyo's most famous concert hall. Olivia Newton-John visited in April, trying to generate the same spark the Bay City Rollers ignited here in 2001. King Crimson, Yes and Lou Reed all made whistle stops this year. Journey and the Eagles may arrive next year.

"It was like Beatlemania when we came over the first time," said Bun E. Carlos, the drummer for Cheap Trick, during the band's recent tour. "The Japanese are really loyal fans. If they take to you, you can come back many times."

The Japanese fixation with older musicians is not as whimsical as it may seem. From an early age, Japanese are taught to specialize and refine their skills to perfection — not just in music, but also in the workplace, in sports and in other pastimes. This helps explain why small groups of fans, many of whom have little facility with English, can recite lyrics to every Kiss song ever written.

In a society where everyday life is so regimented, hobbies also provide an outlet for people to express their identity. A Japanese financier might wear a blue suit and starched shirt by day, but by night be found in a bar devoted entirely to the music of the Grateful Dead or the Beatles. Wearing a company lapel pin does not exclude one from donning a ripped concert T-shirt after hours and swapping album liner notes with fellow fans.

Still, some critics have suggested that has-been bands come to Japan less for the doting fans than for an easy payoff and audiences that can't recognize — or are too forgiving of — a bad performance. The country has also been seen as something of a crash pad where jet-lagged and unrehearsed bands come to polish their licks before taking their tours elsewhere.

But touring here is actually only about as lucrative as it is in the United States, given the high taxes and pricier cost of living, Mr. Carlos and others said. And while the sour economy has forced Japanese promoters to cut back on perks they once paid to attract foreigners, like airfare and food, bands are lured to the country for far less mercenary reasons: high-quality studios, comfortable hotels, safe streets and warm hospitality.

"Bands are treated like gold in Japan," said Akiko Rogers, an agent at the William Morris Agency who brings American bands to the country. "It spoils them. All the older bands have fond memories of Japan. Everyone remembers the hospitality, how they were treated. It's an easy sell to get them to go there."

As for the charge that foreign bands use Japan as a place to practice rather than perform, Japanese fans take a philosophical stance. "Professionals like me don't feel satisfied when we see shows and they feel like rehearsals," said Reiko Yukawa, a well-known Japanese songwriter and music critic. "But I know the bands love Japan and the fans, so that's why we accept their music even if it sounds like they are practicing."

And, it seems, even if they're long past their prime. How else could the Ventures, the archetypal 1960's American surf band now relegated to oldies radio, be considered gods in Japan? Nearly four decades after they hit the scene, there are still more than 100 Ventures copy bands roaming the country, where the actual group often tours.

"It was like when a duckling hatches and sees its mother for the first time," said Minoru Shiraishi, a 51-year-old interior designer, recalling the first time he saw the Ventures in concert back in 1966. "I knew I had to follow them."
http://www.nytimes.com/2003/09/07/we...ew/07BELS.html


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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/te...14MUSI.html?hp


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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/we...rtne r=GOOGLE


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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/we...ew/07WEEK.html


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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/newsdige...rticle1_1.html


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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.

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