Peer-To-Peer News - The Week In Review - May 29th, '04

[JackSpratts]

Quotes Of The Week

"I told her [at the record company] I don't have the money. She told me to go talk to a lawyer and I told her I don't have no money to talk to a lawyer " – Sued single mom Tammy Lafky.

"I can't imagine that (Hollywood lobbyist) Jack Valenti or (RIAA chairman) Mitch Bainwol really wants to come before Congress and give testimony saying, 'We can't afford to bring these lawsuits. That's why we want the taxpayer to pay for them.' I can't believe they want to do that in public." – Philip Corwin.

"The second problem is that the editors wield their scissors differently according to their view of the characters' righteousness. When Americans are shot in "Black Hawk Down," the editors carefully omit the bullet's moment of impact. But when Somali gunmen are blown apart, you see the whole twitching, gruesome scene." – David Pogue writing about the movie censoring machine ClearPlay.

"But as it is, the evidence suggests that ClearPlay's technology is not intended for families at all. It's for like-minded adults, specifically those who are offended by bad language and sexual situations but don't mind brutality, destruction and suffering. Maybe every ClearPlay-sanitized movie ought to begin with a message: ‘This film has been modified as follows: It has been formatted to fit the taste, sensibilities and religious beliefs of a couple of guys in Utah. That'll be $1.50.’" – David Pogue.












Hackers Attack Govt Sites Over P2P Law
dpa

ROME: Hackers attacked several Italian institutional websites Tuesday, days after parliament approved a bill introducing jail penalties for those caught exchanging unauthorised copyright material over the Internet.

Police said the official government and parliament websites were among those targeted by hackers, who caused "only limited damage."

Last week, parliament approved a bill making unauthorised file-sharing of copyright material through such peer-to-peer (P2P) services as Kazaa and WinMX a criminal offence.

Penalties for those found guilty range from fines of between 150 and 1,000 euros (RM692 to RM4,600) to jail sentences of up to three years.

The bill was introduced by Silvio Berlusconi's centre-right government and was promoted by Italy's film industry.

However, parties from across the political spectrum have since said they may consider reducing the penalties for offenders. --
http://star-techcentral.com/tech/sto...sec=technology


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'Pirate Act' Raises Civil Rights Concerns
Declan McCullagh

File swappers concerned about getting in trouble with record labels over illegal downloads may soon have a major new worry: the U.S. Department of Justice.

A proposal that the Senate may vote on as early as next week would let federal prosecutors file civil lawsuits against suspected copyright infringers, with fines reaching tens or even hundreds of thousands of dollars.

The so-called Pirate Act is raising alarms among copyright lawyers and lobbyists for peer-to-peer firms, who have been eyeing the recording industry's lawsuits against thousands of peer-to-peer users with trepidation. The Justice Department, they say, could be far more ambitious.

One influential proponent of the Pirate Act is urging precisely that. "Tens of thousands of continuing civil enforcement actions might be needed to generate the necessary deterrence," Sen. Orrin Hatch, R-Utah, said when announcing his support for the bill. "I doubt that any nongovernmental organization has the resources or moral authority to pursue such a campaign."

The Pirate Act represents the latest legislative priority for the Recording Industry Association of America (RIAA) and its allies, who collectively argue that dramatic action is necessary to prevent file- swapping networks from continuing to blossom in popularity.

"We view this as a key component of an enforcement package," RIAA lobbyist Mitch Glazier said Tuesday. "If you're going to try to make sure that you have effective deterrence, then one of the tools you'll need is to make sure that prosecutors have flexibility."

Foes of the Pirate Act have been alarmed by the unusual alacrity of the proposal's legislative progress. It was introduced just two months ago, on March 25, and not one hearing was held before the Judiciary committee forwarded it to the full Senate for a vote a month later.

"This was an attempt to move it in a stealthy manner," said Philip Corwin, a lobbyist for Sharman Networks, which operates the Kazaa network. "I can't imagine that (Hollywood lobbyist) Jack Valenti or (RIAA chairman) Mitch Bainwol really wants to come before Congress and give testimony saying, 'We can't afford to bring these lawsuits. That's why we want the taxpayer to pay for them.' I can't believe they want to do that in public."

Potential P2P prosecutions
Underlying the public jockeying over the Pirate Act is a classic political war of wills between the federal government's legislative and executive branches.

Under a 1997 law called the No Electronic Theft Act, federal prosecutors can file criminal charges against peer-to-peer users who make a large number of songs available for download. A July 2002 letter from prominent congressmen to U.S. Attorney General John Ashcroft urged the prosecution of Americans who "allow mass copying from their computer over peer-to-peer networks."

But not one peer-to-peer criminal prosecution has taken place in the United States. The Justice Department has indicated that it won't target peer-to-peer networks for two reasons: Imprisoning file- swapping teens on felony charges isn't the department's top priority, and it's always difficult to make criminal charges stick.

The Pirate Act was crafted to respond to the Justice Department's concern. "Federal prosecutors have been hindered in their pursuit of pirates by the fact that they were limited to bringing criminal charges with high burdens of proof," Sen. Patrick Leahy, D-Vt., said in March. "Prosecutors can rarely justify bringing criminal charges, and copyright owners have been left alone to fend for themselves, defending their rights only where they can afford to do so. In a world in which a computer and an Internet connection are all the tools you need to engage in massive piracy, this is an intolerable predicament."

The RIAA's Glazier said: "The idea was to give prosecutors the flexibility to decide whether to bring a civil case against somebody. Giving them a criminal fine with a criminal record was viewed as a fairly harsh penalty for the activity...You're still committing a crime. But (prosecutors) are given a flexible remedy so there's some proportionality."

For copyright holders, there's an additional bonus. Unlike when the RIAA files its own lawsuits against peer-to-peer users, such as the 493 defendants it announced this week, the Justice Department likely would be able to seek wiretaps to collect evidence about P2P infringement. Current wiretap law says electronic communications may be intercepted when a potential federal felony is being investigated.

"Corporate copyright welfare"
In addition, the Pirate Act gives Ashcroft six months to "develop a program to ensure effective implementation and use of the authority for civil enforcement of the copyright laws" and report back to Congress on how many civil lawsuits have been filed. The Justice Department would receive an extra $2 million for the fiscal year beginning in October.

"It represents yet another point in another very long line of major corporate copyright interests pushing for and receiving what amounts to significant corporate welfare," said Adam Eisgrau, a lobbyist for the P2P United trade association. "This legislation literally offloads the cost of enforcing copyrights traditionally borne by the copyright holder onto the federal government and therefore the taxpayers."

Last week, the Pirate Act had been considered for a floor vote under a process normally restricted for noncontroversial measures. But the vote didn't happen, which one foe of the bill attributed to opposition from Sen. Norm Coleman, a Republican from Minnesota.

Coleman has slammed the RIAA in the past for going too far in its fierce legal campaign against individual file swappers. A representative was unable to confirm Tuesday whether Coleman had placed a "hold" on the bill.

Critics also charge that the Pirate Act may invent a form of double jeopardy: It would let the RIAA sue the same people already sued by the Justice Department.

"The kinds of things we have a double-jeopardy doctrine to prevent seem to be implicated by the bill," said Jessica Litman, author of "Digital Copyright" and a law professor at Wayne State University. "I find it disturbing that the committee reported this out without at least having a hearing to consider some of the alternatives."

The RIAA points out that the bill does limit damages it can collect in a subsequent lawsuit, but opponents of the proposal said they weren't convinced.

"Why should someone be sued by the government and then be subject to a second lawsuit brought by a private party?" said Corwin, the Sharman Networks lobbyist. "The RIAA is settling most of these lawsuits. What's the Justice Department's policy going to be?"
http://zdnet.com.com/2100-1104-5220480.html


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Canadian feudalism: Farmers no longer own their own seeds

Monsanto Wins Patent Case on Plant Genes
Bernard Simon

TORONTO, May 21 - In a case central to the international debate over the right to patent gene-engineered organisms, Canada's Supreme Court ruled on Friday that a Saskatchewan farmer infringed Monsanto's patent on genetically modified canola, even though he said the seeds landed in his fields by accident.

While the ruling upholds Monsanto's patent rights, there is no immediate financial benefit to the company. The court said Monsanto was not entitled to profits earned by the farmer, Percy Schmeiser, from his genetically modified crop because he had not financially benefited from the plants' engineered ability to withstand Monsanto's herbicide Roundup.

Mr. Schmeiser and his supporters, including numerous farm and environmental groups, expressed disappointment that the court had confirmed Monsanto's right to patent a plant gene and control its use by farmers.

"It's not nearly the victory that we were looking for," Mr. Schmeiser said at a news conference in Saskatoon.

Pat Mooney, executive director of ETC, a nonprofit environmental group based in Winnipeg, Manitoba, said the ruling suggested that "wherever a gene wanders, it's under Monsanto's control."

But a patent law expert, Eileen McMahon, a partner at the Toronto law firm Torys, hailed the ruling as "a fantastic decision in terms of biotechnology and patents." According to Ms. McMahon, "we have a strong signal that cells and genes are patentable."

Monsanto also welcomed the decision, saying in a news release that it "has set a world standard in intellectual property protection."

While Canadian court decisions have no direct bearing on American law, Andrew Kimbrell, executive director of the Center for Food Safety in Washington, said that the Canadian judgment could nonetheless have an impact on similar claims by Monsanto against American farmers.

Almost 100 such cases have so far gone to trial in the United States, and farmers have paid penalties averaging $100,000 each to Monsanto. Mr. Kimbrell said if American courts followed the Canadian court's example in not requiring Mr. Schmeiser to repay his profits, it might reduce the economic incentive for Monsanto to pursue other farmers.

The case involving Mr. Schmeiser, who is 73, had become a rallying point for critics of genetically modified plants. "He touched upon a long-standing issue that is not resolved globally," said Thomas Redick, a partner at Gallop Johnson and Neuman, a law firm in St. Louis.

In 1997, while spraying around power poles and ditches with Monsanto's Roundup herbicide near a three-acre canola field, Mr. Schmeiser noticed that some canola plants were unaffected by the weed killer. He then sprayed the entire field, and discovered that most of the plants were unfazed.

After he harvested that year's canola crop, Mr. Schmeiser stored a sizable quantify of seed from the Roundup-resistant plot, which he used as part of his planting the following year of 1,000 acres of canola.

A Monsanto investigator had taken samples in 1997 from canola plants growing along a road next to one of Mr. Schmeiser's fields. Testing revealed that the herbicide-resistant plants were Monsanto's genetically modified canola, known as Roundup Ready, which is specifically designed to resist Roundup herbicide. The company confronted Mr. Schmeiser in March 1998, warning him that planting the Roundup-resistant seeds he had saved would infringe the company's patent rights. He planted them anyway.

Mr. Schmeiser has surmised that the genetically modified seed either blew onto his property from neighboring farms or fell off passing trucks. Monsanto acknowledged that Mr Schmeiser had never placed an order for Roundup Ready canola.

The company nevertheless contended that no matter how Mr. Schmeiser obtained the Roundup Ready product, he should have signed a "technology use agreement" and paid the regular licensing fee of 15 Canadian dollars an acre. Under the licensing agreement, farmers are not allowed to save any seed for replanting and must buy new seed each year from Monsanto.

In Friday's judgment, which upholds rulings by two lower courts, the Supreme Court concluded by a 5-to-4 margin that Mr. Schmeiser had "actively cultivated" Roundup Ready canola as part of his business, thereby infringing Monsanto's patent.

"We emphasize that we are not concerned here with the innocent discovery by farmers of 'blow-by' patented plants on their land or in their cultivated fields," the judges wrote.

Nor, they said, were they concerned with the scope of Monsanto's patent or "the wisdom and social utility of the genetic modification of genes and cells."

"The patented genes and cells are not merely a 'part' of the plant," the court said. "Rather, the patented genes are present throughout the genetically modified plant and the patented cells compose its entire physical structure."

Under Friday's ruling, Mr. Schmeiser is barred from using Roundup Ready canola unless he pays Monsanto's license fee. He must also hand over to the company any Roundup Ready seed still in his possession.

Nevertheless, the court set aside the lower courts' decision that Mr. Schmeiser owed Monsanto 19,800 Canadian dollars in profits. The Supreme Court ruled that Mr. Schmeiser had earned the same profit from the Monsanto product as he would have from ordinary canola. It also overruled the lower courts' decision that Mr. Schmeiser was responsible for Monsanto's legal costs.

Farmers and environmental groups, among others, have mounted campaigns in several parts of the world against patents on genetically modified products, on the grounds that no commercial enterprise has sole rights to a living organism.

A court in southeastern France fined three people 600 euros ($722) each on Friday for destroying Monsanto test fields of genetically modified crops and awarded the company 4,000 euros in compensation for the damage. Similar charges have been brought in 11 other cases in France in the last six years.
http://www.nytimes.com/2004/05/22/bu...ss/22crop.html


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Single Mom Overwhelmed By Recording Industry Suit
Leslie Brooks Suzukamo

Tammy Lafky has a computer at home but said she doesn't use it. "I don't know how," the 41- year-old woman said, somewhat sheepishly.

But her 15-year-old daughter, Cassandra, does. And what Cassandra may have done, like millions of other teenagers and adults around the world, landed Lafky in legal hot water this week that could cost her thousands of dollars.

Lafky, a sugar mill worker and single mother in Bird Island, a farming community 90 miles west of St. Paul, became the first Minnesotan sued by name by the recording industry this week for allegedly downloading copyrighted music illegally.

The lawsuit has stunned Lafky, who earns $12 an hour and faces penalties that top $500,000. She says she can't even afford an offer by the record companies to settle the case for $4,000.

The ongoing music downloading war is being fought on one side by a $12 billion music industry that says it is steadily losing sales to online file sharing. On the other side, untold millions of people — many of them too young to drive — who have been downloading free music off file- sharing sites with odd names like Kazaa and Grokster and who are accusing the music industry of price gouging and strong-arm tactics.

Lafky says she doesn't download free music. Her daughter did last year when she was 14, but neither of them knew it was illegal because all of Cassandra's friends at school were doing it.

"She says she can't believe she's the only one being sued," Lafky said. "She told me, 'I can't be the only one. Everybody else does it.' "

A record company attorney from Los Angeles contacted Lafky about a week ago, telling Lafky she could owe up to $540,000, but the companies would settle for $4,000.

"I told her I don't have the money," Lafky said. "She told me to go talk to a lawyer and I told her I don't have no money to talk to a lawyer."

Lafky said she clears $21,000 a year from her job and gets no child support.

The music industry isn't moved. It has sued nearly 3,000 people nationwide since September and settled with 486 of them for an average of $3,000 apiece, according to the Recording Industry Association of America, which represents the major and minor labels that produce 90 percent of the recorded music in the United States.

"Our goal in these cases and in this program (of lawsuits) that we're trying to achieve is to deliver the message that it's illegal and wrong," said Stanley Pierre-Louis, senior vice president for legal affairs for the RIAA.

Since the music industry began its lawsuit campaign, awareness of the illegality of downloading copyrighted music has increased several-fold this year, Pierre-Louis said.

"And we're trying to create a level playing field for legal online (music) services," he added.

These services sell music for under a dollar a song, and some have become well known, like Apple Computer's iPod service, which advertises heavily on TV. Others are just getting off the ground.

Pierre-Louis said the RIAA does not comment on individual cases like Lafky's, but he said the music industry typically finds its targets by logging onto the same file-sharing services that the file-sharers do. Its agents then comb the play lists for names of songs that are copyrighted and that they believe are being illegally shared.

The record companies follow the songs when they're downloaded onto computers, and they also note how many copyrighted songs are stored on that computer's hard drive memory, because those songs are often "uploaded" or shared with others through the file-sharing service.

Since January, the industry has filed 2,947 lawsuits, most against "John Does," until the record companies went to court to get names of the downloaders from their Internet service providers. Last month, the music industry filed 477 lawsuits nationwide, including two "John Doe" lawsuits against users at the University of Minnesota whose identities have not been revealed.

The industry is particularly keen on stopping people who keep their computers open on the Internet for others to share. On Lafky's computer, for instance, record companies like Universal Music Group, Sony and Warner Bros. found songs by groups they publish like Bloodhound Gang, Savage Garden and Linkin Park. Also found were songs by artists Michelle Branch, MC Hammer and country stars Shania Twain and Neal McCoy, which not only were downloaded but also available to others to upload, according to the lawsuit.

Federal copyright laws allow for penalties that range from $750 per infringement or song up to $30,000 per infringement, Pierre-Louis said.

If a defendant is found to have committed a violation "in a willful manner," he or she can be fined $150,000 per song, he said.

The record companies are willing to negotiate cases individually if someone says they cannot afford the penalties. So far, no case has gone to trial, the RIAA said.

Pierre-Louis said the RIAA isn't afraid of a consumer backlash. "We're facing a daunting challenge and we have to face it head-on," he said.

Tammy Lafky is facing her own challenge. She said she doesn't know what she'll do. "I told her," she said, referring to the record company lawyer, "if I had the money I would give it to you, but I don't have it."
http://www.mercurynews.com/mld/mercu...printstory.jsp


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Europe's Net File-Swappers Unfazed By Lawsuits
Bernhard Warner

The threat of lawsuits has failed to deter Europeans from using the Internet to hoard free music, movies and video games, a technology firm that measures Internet traffic says.

The latest Hollywood movies, television shows and albums zipping between Internet users accounts for 70 percent to 80 percent of all Internet traffic handled daily by European Internet service providers (ISPs).

The level of peer-to-peer file-sharing traffic, according to Canadian traffic filtering company Sandvine Inc., has remained steady since the start of the year.

"In the United States, there has been a small decline of about five percent. But in Europe, file- sharing levels remain as robust as ever," said Chris Colman, European, Middle East and Africa managing director of Sandvine.

The findings do not bode well for media companies desperate to derail the popularity of file- sharing networks, which they blame for eating into sales, nor the dozens of industry-backed download services operating in Europe.

Last week, Roxio Inc. launched a commercial version of Napster in the UK to much fanfare, the latest attempt by the music industry to woo file-swappers to industry-sanctioned pay services.

To slow the rampant growth of online piracy, music industry trade body the International Federation of the Phonographic Industry (IFPI) announced in March it would begin suing the most prolific song-swappers in Germany, Italy, Denmark and Canada.

The clampdown is patterned on a controversial campaign by U.S. trade body the Recording Industry Association of America (RIAA), which has sued thousands of the most prolific American music file-sharers since September.

Declines In U.S.

Sandvine said file-sharing activity in the United States has dipped five percent to account for 65 percent of all Internet traffic in recent months, suggesting the American law suits are having a modest impact.

There have been a number of studies conducted to determine whether lawsuits are actually deterring Internet users from downloading and trading music over the Internet -- with mixed results.

The music industry said its own study shows the number of music files in circulation has dipped since the U.S. lawsuits, but there is no data yet for Europe.

For both Europe and North America, 30 percent of all high-speed broadband customers use peer-to-peer networks to swap all manner of files, Colman said.

There is one stark difference between the two regions. Europeans tend to download more bulky movie-sized files, making users of such file-trading protocols as Bittorrent and eDonkey more popular among Europeans.

"The trend seems to be more multi-media files are being downloaded by Europeans. EDonkey has really grown on the back of this," said Colman.

As broadband connections get faster and PCs memory expands, the capability to download and store larger files -- namely films -- has expanded rapidly, creating a big potential headache for movie studios.

Europe's biggest broadband markets -- Germany, the UK and France -- have some of the most active peer-to-peer users, Sandvine said.
http://www.reuters.co.uk/newsPackage...4&section=news


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DVD Rot, File Sharing and Consumer Rights
News Roundup

There's been some media attention lately on the issue of CD/DVD rot. CD/DVD rot occurs due to poor manufacturing of discs which allows oxidization to occur and eats away the aluminum layer of the discs, causing failed playback. While CD/DVDs are still far more long lasting than their tape cousins, they are apparently not as indestructible as first thought (the often quoted 100 year lifespan might be pushing it a little). Add this to the fact that children + DVDs = fingerprints, scratches and unplayable discs, allowing DVDs to be backed up properly, as a core consumer right, seems more important than ever.

While the RIAA/MPAA cry foul at the damage online file sharing to their respective industries, there is more and more evidence everyday that the loss in sales, if there are any, are most likely due to other factors. This article mentions games as a factor in the decline of box office revenue, as the limited income of younger-adult consumers plus the wide range of products and services aimed specifically at them will lead to someone losing out - in this case, it's Hollywood, although they still seem to get by alright with what they do earn. The music industry, on the other hand, have been experiencing both increasing and decreasing sales in the same time period. More the case of "potential income" lost, rather than "actual income" gained, perhaps?

Meanwhile, the digital rights community's favorite Congressman, Rick Boucher, is hard at work again pushing his DMCRA (Digital Media Consumers’ Rights Act) amendment to the Digital Millennium Copyright Act. The amendment aims to ensure fair use is allowed under the DMCA, and that scientific research is not hindered by the flaws in the DMCA. The other part of the amendment tries to ensure proper labeling of copy protected discs, which is especially needed if the copy protection can lead to potential playback problems.
http://www.digital-digest.com/dvd/sh...php?newsid=105


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The Piper Wants Polk City To Pay

Music industry group wants town to obtain license -- but for what?
Lauren Glenn

POLK CITY -- This small town has no elevators, and consequently, no elevator music.

And the town hall doesn't use music to entertain callers who are placed on hold.

But the American Society of Composers, Authors and Publishers, a music copyrighting and licensing agency, says the city must be using some form of music it shouldn't be. The organization has made clear to Polk City officials that it can sue if the town does not receive a license and is discovered to be using copyrighted music.

Along with other music copyrighting organizations such as Broadcast Music Inc. and the Society of European Stage Authors and Composers, ASCAP manages licensing and distribution of royalties for songwriters, composers and performers whose music others may wish to use publicly.

These groups have been among the major crusaders against the free distribution of music over the Internet, a fight that has already resulted in thousands of lawsuits throughout the country, the most notable taking place against file-sharing giant Napster and its customers. Polk City isn't the only local municipality being warned.

Haines City officials have received a letter and phone call from the music licensing agency advising them to register for a license also.

"Our city attorney has suggested we look into this further," Assistant City Manager Amy Arrington said. "We don't use music when people are on hold.

"We have a few instances where we use music, like during the fireworks for our Fourth of July celebration," Arrington said. "That eight-minute tape could be an example of when a city would need to have this kind of license."

The city of Bartow received notice six months ago and chose not to register with ASCAP or any other licensing agency.

"Our position is we don't do anything that would trigger the requirement of being licensed by them," said City Attorney George Dunlap.

Vince Abbatiello, vice president and director of general licensing at ASCAP, said the cities were contacted because "most municipalities play music at some point whether it be during parades or arts and craft fairs."

Until recently, local governments had to buy licensing agreements for each event that music was used for.

Now, Abbatiello said, cities can purchase a blanket agreement that allows the use of copyrighted music throughout the year without penalties.

The cost ranges from $260 annually for a town of up to 50,000 residents to a maximum fee of $52,000 for a city of more than 500,000.

According to ASCAP, about 700 municipalities nationwide have signed the blanket agreement.

The city of Lakeland has an agreement with both ASCAP and BMI, licensing productions that take place at The Lakeland Center, said city spokesman Kevin Cook. He was not aware of any other productions, musical or dramatic, that the city needed or had a license for.

In Polk City, few, if any, town functions involve music. The only music heard in the town hall comes from the small radios some staff members keep on their desks.
http://www.theledger.com/apps/pbcs.d...405240365/1039


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Internet Offers Unfiltered Look Into Iraq War
http://www.ohio.com/mld/ohio/business/8720769.htm


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Napster Arrives in Britain, But Success Isn't Certain
Jon Newton

Britons don't know Napster 2 is a shallow attempt to cash in on what was. They haven't been exposed to Napster 2 in the same way North Americans have. They still remember the old Napster, the P2P file-sharing application that first freed music lovers from the iron grip of the corporate music industry, and they think there's a similarity.

There's an article in Britain's prestigious Times Online today called "Q&A: Napster and the Music Industry," which seems -- at least on the surface -- to explain what Napster 2 will mean to Britons now that its owner, Roxio, has succeeded in snaking it into the United Kingdom.

"Easy, safe and legal" Napster relaunched, said the Financial Times yesterday.

Does that mean OD2 or iTunes, for example, or LimeWire, Blubster, BearShare, Morpheus, Grokster or any of the other commercial P2P applications is hard to use, unsafe and illegal?

No, although the implication is there. It's a reference to Shawn Fanning's Napster, the application that fired the first, resounding shots in what have since become the file- sharing wars.

Shallow Attempt To Cash In

Britons don't know Napster 2 is a shallow attempt to cash in on what was. They haven't been exposed to Napster 2 in the same way North Americans have. They still remember the old Napster, the P2P file-sharing application that first freed music lovers from the iron grip of the corporate music industry, and they think there's a similarity.

However, Napster 2 bears not the faintest resemblance to the application from which it draws its name. It's a cynical -- and not very effective -- hard-core marketing tool designed to get people in the United Kingdom to spend far too much on far too little.

Napster, High-Flying Internet Store?

Digital download service Napster scored a major victory over archrival iTunes by launching in Britain Thursday, the first of the high-flying Internet music stores to make its European debut, according to Reuters.

High-flying Internet music stores? The flaccid online sites supported and supplied by the Big Five music labels?

"Napster goes live in UK, beating rivals," said an International Herald Tribune headline. "First blood to Napster in the battle for online music sales," said the Telegraph.co.uk. "Napster's a British beachhead," said Daily Variety. And "Napster relaunch takes music industry by surprise," said the Guardian.

Napster 2, which hasn't made a ripple in the North American music pool, "is launching in a brutally competitive European market," the Reuters story said, completely ignoring the reality that, at this point, there is no European market, brutal or otherwise. Nor is there much in the way of competition.

The music industry supplies everyone, everywhere, with the same 500,000 to 700,000 tracks that the corporate online music "stores" then attempt to resell at more or less the same grossly overblown prices.

Big Music's 'Product'

The launch of Phonoline, Germany's addition to the online corporate music store line-up, was a fiasco -- even embarrassing German Chancellor Gerhard Schroder. Critics claimed the selection was too limited and the price of downloading individual songs too high.

Napster 2 is offering the very same Big Five "product" at twice what it's trying -- and failing -- to get in North America: 1.09 pounds (about US$1.94) per track. In the United States, the same product goes for 99 cents -- about .56 pence UK.

In the meantime, a serious lack of credibility isn't all Napster 2 has to contend with. In North America, when it comes to corporate music services, iTunes reigns supreme, and although the Recording Industry Association of America shoehorned Napster 2 into the American university system as its campus sales division, in effect, it isn't even a shadow on the wall.

ITunes, too, is on its way into the United Kingdom. But even without that as competition, Napster 2 must still go toe-to-toe with OD2, which -- with Peter Gabriel flying its flag -- is thoroughly entrenched throughout Europe as the primary corporate music presence.

Napster 2 Hasn't Beaten Anybody

Napster II hasn't beaten anyone at anything in the United States and certainly won't get anywhere near OD2 -- or anyone else, for that matter -- in Europe. So is Napster the future of music? "Until an even bigger idea comes along, yes," said the piece in the Times.

That is, of course, ridiculous. "Will Napster kill High Street record stores?" asks a BBC story. No fear -- not even nearly.

Meanwhile, as Big Music struggles to eliminate uncontrolled and unauthorized file-sharing, and while Apple boasts that it sold 70 million tracks in its first year of sales, online music lovers are downloading 1 billion free tracks every month, according to stats from music- industry tracker Big Champagne.

Thus, at the end of the day, legal downloads aren't that interesting to consumers.
http://www.technewsworld.com/story/global/33938.html


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Filesharing affecting box office? Not hardly.

Records Fall at Box Office as 'Shrek 2' Opens Big
Jesse McKinley

Shrek 2," the sequel to the 2001 animated hit about a grumpy green ogre and his obnoxious donkey sidekick, earned a whopping $104.3 million over the weekend and has brought in an estimated $125.3 million since its release on Wednesday, its distributor, DreamWorks, said yesterday.

The opening for "Shrek 2" broke or flirted with breaking a number of box-office records. The film's weekend gross was second all-time only to "Spider-Man," which earned $114.8 million in a single weekend in 2002. On Saturday "Shrek 2" broke the record for single-day ticket sales with $44.8 million. And if the preliminary numbers hold, the movie is expected to break the mark for biggest five-day opening, surpassing "The Lord of the Rings: The Return of the King," which brought in $124.1 during its first five days in theaters last December.

The success of "Shrek 2" was welcome news in Hollywood, which has watched two big-budget adventures, "Van Helsing" and "Troy," do respectable but not blockbuster business during May, the traditional start of the lucrative summer season.

"This is definitely the movie that Hollywood needed right now," said Paul Dergarabedian, president of Exhibitor Relations, which tracks ticket sales. "The box office compared to last summer has been down significantly, so I think everyone in Hollywood was rooting for `Shrek 2' to do well. Of course it cut into everybody's audience, but it proved that there is an audience out there that wants to go to the movies."

Executives at DreamWorks, which has struggled to find commercial hits of late, seemed particularly pleased by the wide appeal of "Shrek 2," which opened in a record 4,163 theaters nationwide. According to the company's polling, the movie drew 60 percent of its sales from families, and almost equal numbers of boys and girls under 12.

"I think people were really ready for something fun in the marketplace," said Jim Tharpe, president of distribution for DreamWorks, who attributed the movie's big opening weekend to a number of factors, including name recognition and quickly spreading word of mouth. More than 70 percent of those polled by the company said they would consider seeing the movie again, he said.

That should also be good news for Hollywood, which has been suffering from a bad case of instant audience malaise, with both "Troy" and "Van Helsing," fading badly in the week after opening.

"Troy," for example, a $200 million epic loosely based on the "Iliad" and starring Brad Pitt as Achilles, was down 49 percent from last weekend — its opening weekend — bringing in an estimated $23.8 million.

That was good enough for second place behind "Shrek 2," but with a total gross of $85.8 million those numbers cannot thrill its distributor, Warner Brothers.

"Van Helsing," Universal Pictures' monster-slayer movie, which opened May 7, was No. 3 over the weekend, with $10.1 million in sales, down 51 percent from the previous weekend but enough to boost its total gross sales to a little more than $100 million.

With two popular comedians as its stars — Michael Myers gives voice to Shrek, the green ogre, and Eddie Murphy is his braying sidekick — "Shrek 2" may also indicate an audience hungry for some laughs. Another comedy, "Mean Girls," Paramount's teenage satire, was No. 4 at the box office and has grossed nearly $65 million since opening April 30.

"I think both `Troy' and `Van Helsing' offered very intense and action-oriented movies, and audiences tend to love those during the summer months," Mr. Dergarabedian said. "But `Shrek 2' came along and offered something different. And I think there was definitely a pent-up demand by families — and pretty much everybody else — for this kind of movie."
http://www.nytimes.com/2004/05/24/mo...es/24BOXO.html


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File-Sharing Developer An Internet Celeb

TOKYO (AP) -- A Japanese professor arrested on copyright charges for developing file-sharing technology is emerging as a celebrity and has received more than $62,000 toward his defense.

Word about a defense fund for Isamu Kaneko, a 33-year-old assistant professor at the prestigious University of Tokyo, spread mainly through "blogs," or Internet journals, which are rapidly attracting thousands of users in Japan.

Kaneko, a well-known figure here on a popular Internet bulletin board as "Mr. 47," was arrested last week for developing Winny software, which lets people swap movies and video games online.

If convicted, Kaneko faces up to three years in prison or a fine of $26,000. His lawyer, Toshimitsu Dan, says there are no laws in Japan that declare file-sharing software itself illegal.

Kaneko's defense fund is drawing people who'd met only through blogs, said Shunichi Arai, a software engineer who helped create the fund. Web pages are sprouting here, urging support for "Mr. 47" and updating news on his case.

About a million Japanese are believed to have used Winny, largely because of its reputation for anonymous file-sharing.
http://cnews.canoe.ca/CNEWS/TechNews...468173-ap.html


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Some swappers drift further underground

Online Music Plays a New Tune
Liane Cassavoy

Recovering Kazaa users are everywhere. They might be fearful of the recording industry's litigious rampage. Perhaps they're tired of pop-ups and promotions. Maybe they went straight--to Apple's ITunes or Musicmatch. Or perhaps they've just gone further underground for their digital music.

Kazaa's file-sharing software is still used by more than 20 million people, according to research from ComScore Media Metrix; that number is down from almost 35 million users less than one year ago. But the steep decline doesn't mean the death knell is ringing for free--and illegal--music online. Paid music services may be growing, but so are some of the smaller peer-to-peer services. And many Web surfers are finding new sources and new methods for trading music online.

So in the war against online music piracy, who is winning? It depends on whom you ask.

File-Sharing Under Fire

The Recording Industry Association of America began filing lawsuits against alleged file swappers last September, and calls the suits an effective deterrent against piracy. So far, 2454 individuals have been sued. The RIAA won't say how many suits are still pending, but it recently filed 477 new cases.

"The barometer of success for us is not the day-to-day traffic on any particular pirate peer-to-peer network. There will always be a degree of piracy online, just like there is always piracy on the street," says Jonathan Lamy, RIAA director of communications.

"The idea here is to create an environment where legitimate online music services can flourish. We look at whether we are facilitating the expansion of the legitimate online music market, and so far it's been very encouraging," he says. "Clearly, file sharing is still an enormous problem, and that means that we need to continue the course of deterrence through legal action and offering great legitimate alternatives."

Researchers confirm that file sharing appears to be on the decline.

"Our long-term tracking indicates that the usage of peer-to-peer services is down compared to a year, or a year and a half ago," says Russ Crupnick, president of music and movies at researcher NPD Group. However, he notes, "overall tracking tells us that peer-to-peer usage has been pretty stable for the last six to nine months."

Use of peer-to-peer services is down slightly in a recent survey by the Pew Internet Project and ComScore Media Metrix. ComScore also noted a drop in the use of the WinMX file-sharing service, says Graham Mudd, a senior analyst with ComScore. In December 2002, the service had an estimated 7.5 million unique users. By February 2004, ComScore's most recent data, that number was down to less than 6 million users, ComScore says.

Can You Hide?

However, ComScore notes an increase in the use of several smaller, lesser-known peer-to-peer networks, such as BitTorrent and eMule. BitTorrent, for example, had slightly more than 200,000 unique users in November 2003. By February 2004, the number was just under 400,000.

"There has been some speculation that these services have lower visibility, and it may be more difficult to track users on them," Mudd says. "More savvy Net users may be switching to these applications because they think they can fly under the radar."

The RIAA, however, disputes that assumption.

"The nature of these networks is such that if you are distributing music files to thousands or millions of other users, you can be found," Lamy says. "And why would you? There are great legal alternatives available, so there isn't any excuse for getting your music illegally."

While BitTorrent's usage almost doubled over a three-month period, it remains small. Clearly, not everyone uninstalling Kazaa and WinMX is moving to an alternative service, Mudd says. "The pickup in smaller applications does not make up for the overall decline in peer-to-peer usage," he says.

Some users are switching to legal services, such as ITunes, which celebrated its successful first year in April. (ITunes for Windows users launched last October.) ITunes sold 70 million songs in its first year, Apple CEO Steve Jobs said in celebrating the anniversary last month. While admitting that number falls short of Apple's goal of selling 100 million songs in its first year, Jobs called the growth "phenomenal."

ComScore's Mudd agrees ITunes' success is impressive but says users of legal music services are not all repentant file swappers.

"The drop-off in peer-to-peer is not necessarily being picked up by the paid services," he says.

Overzealous vs. Uncertain

Ironically, the RIAA campaign is also scaring off potential customers, the Pew and ComScore study finds. Sixty percent of people who have never tried downloading music say the threat of lawsuits will deter them from downloading music from any source--legal or illegal--in the future.

The RIAA's actions--intended to stop illegal file swapping--are clearly confusing some people, says Mary Madden, a Pew research specialist.

"This is a mixed message for the RIAA," Madden says. "On the one hand, they have significantly intimidated people from logging on to peer-to-peer services. But there's also the potential for people to be scared away from legal services. People are still very confused about what constitutes legal and illegal behavior."

After all, some file-sharing services promote premium or other fee-based services, and some also have legal uses, she notes. "So the potential is there for confusion," she says.

And there's still the matter of price--itself a moving target.

"There's only so much you can do to compete with free," says David Card, a senior analyst with Jupiter Research. "Guaranteed file quality helps. People cite that as a reason they'd be willing to pay."

Once Hooked, Pay More?

Music fans worry that the music industry will raise prices on its sanctioned sites once people switch over. Some reports said Apple was under pressure to raise the price of downloadable songs from 99 cents to as much as $2.49 each. Jobs felt it necessary to address the topic at the ITunes anniversary.

"Apple and the music labels will continue to offer songs for 99 cents," he said. He declined to discuss the status of any pricing negotiations with record labels.

Raising prices is a "terrible idea," says Jupiter's Card. Jupiter's research suggests 99 cents is a "sweet spot" for pricing, and that users will not pay more, he says. ITunes competes not only with free--if illegal--services, but also increasing competition from legit services. Wal-Mart recently launched its own music services, offering downloadable songs for 88 cents each; and RealNetworks and Sony both market similar services.

And ITunes and the rest still must compete with those newer, smaller services and alternative sources of music. Some savvy Web users are turning to newsgroups such as Usenet to swap music, and some are even creating their own private file-swapping networks.

Such ventures aren't immune from RIAA lawsuits, representatives for the industry group say. The RIAA won't discuss any particular legal steps it may take in the future.

But the lawsuits against alleged file swappers will "go on as long as necessary," RIAA's Lamy says. "Right now, the online music marketplace is overwhelmed by pirated and illegal music, and the legitimate services are put in a position of competing against free. Stolen copies of the same products are offered for free. We're never going to eliminate piracy, but we need to bring it down to a level where the legitimate services can compete."
http://www.pcworld.com/news/article/0,aid,116262,00.asp


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RIAA Lawsuit Binge Continues
Erika Morphy

"[The music industry] lawsuits are a dead end," says Eric Garland, CEO of BigChampagne. "After the RIAA filed the first lawsuit, file- sharing, in fact, exploded. It prompted a lot of articles about file- sharing in general and gave consumers -- basically -- a road map to these sites."

Another fiscal quarter, another 500 online music consumers sued. The Recording Industry Association of America announced it has sued 493 people for infringing copyrights when they illegally downloaded songs from the Internet.

This brings the total to close to 3,000 people sued by the group since September, when it first took off the gloves to combat this worrisome -- to the industry, that is -- trend.

Why are they doing it? Clearly, not for financial gain. The RIAA reportedly has settled some 486 cases at an average of US$3,000 each. Through the legal actions, the association is hoping to stem the overwhelming tide of people who have gone online to procure music instead of buying a CD or patronizing a legitimate music Web site. But surveys and studies conflict as to whether this strategy is effective.

Empirical Evidence

For example, a recent study from Pew Internet & American Life Project shows that file- sharing, while still popular and growing, has declined since the RIAA first started warning people they could be sued.

However, even though the RIAA might be winning the battle, it almost certainly is losing the war.

Another poll -- taken between April 14th and April 20th by Harris Interactive and commissioned by the Business Software Alliance -- found that more than half of the children and teenagers involved in downloading music for free are continuing the practice, even though they know they are breaking the law. Indeed, their primary concern was not that they were breaking the law, but that they might be downloading viruses, the survey found.

Viruses Feared More Than Lawsuits

In short, the lawsuits are almost useless, says Eric Garland, CEO of BigChampagne , a firm that tracks the most popular online downloads. "Lawsuits are a dead end. After the RIAA filed the first lawsuit, file-sharing, in fact, exploded, he told NewsFactor. "It prompted a lot of articles about file-sharing in general and gave consumers -- basically -- a road map to these sites."

As for the threat of being sued, he says, many people are placing odds that it will not happen to them. And chances are good that it won't, he says. "With the millions of people online using these sites, even if the RIAA sued 500 people every few months for the rest of our lives, that is still a drop in the bucket."
http://www.newsfactor.com/story.xhtm...story_id=24202


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RIAA Files Suits Against 493 More U.S. Music Swappers

The Recording Industry Association of America (RIAA) on Monday (May 24) confirmed it has sued 493 additional individuals for alleged copyright infringement. The lawsuits, RIAA said, are a key part of the association’s ongoing campaign to curb so-called “file sharing” on peer-to-peer networks resulting in the copying of music over the Internet.

The RIAA’s actions Monday brings to nearly 3,000 individuals the association has sued since September in its efforts to stop people from copying songs through peer-to-peer networks such as Kazaa and LimeWire. The association, which represents the five largest recording companies, has settled more than 400 of those cases for about $3,000 each.

The RIAA said it does not yet know the identities of the 493 individuals targeted in this latest round of lawsuits, but will set about to discover them via court-issued subpoenas. The association began using “John Doe” lawsuits last January when an appeals court ruled that Internet service providers like Verizon Communications don’t have to provide the identities of their customers to the RIAA.
http://www.telecomweb.com/news/1085417205.htm


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Music Industry Takes New View On Music Downloads
Simon Aughton

The music industry appears to have something of a change of heart about the effect of music downloading on CD sales.

Sales in the US are up 9.4 per cent this year despite the success of online stores such as iTunes and Napster. There is also little evidence that unauthorised peer-to-peer music sharing has significantly declined since the record industry began taking legal action, to which it added another 493 lawsuits yesterday.

Keith Jopling from industry lobbyists the IFPI told the BBC, 'I have a theory that there is something about these services such as iTunes and Napster which is sparking an interest in music which is leading to increased physical sales. The people joining legal services are music fans who have a chance to get excited about music again. What we are most happy about, so far, is most people who are consuming music online are buying CDs as well.'

Which contrasts somewhat with the comments of IFPI chairman and CEO Jay Berman, who in March this year wrote, 'For those who still doubt it, virtually every major independent survey and research project shows that file-sharing directly impacts on sales of legitimate music.'

Meanwhile, AOL has tied up a music licensing deal in the UK that will give it access to over 10 million recorded works.

The agreement is based on the Joint Online Licence (JOL) developed by two UK rights organisations, the MCPS and the PRS. The JOL was developed to make it easier for online music services to secure the rights to broadcast or stream music across the Internet.

It does not enable AOL to sell music downloads, although the company plans to do be doing just that before the end of the year.
http://www.pcpro.co.uk/?http://www.p...y.php?id=58236


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Sony’s Missteps
joegratz

Today, Sony made its second major misstep along a path to failure in the digital music space. The first was Sony Connect, YAPDDS (Yet Another Proprietary Digital Download Store), selling tracks in ATRAC format. Then, today, they introduced the VGF-AP1, a 20GB iPod-like digital music player. But it only plays Sony’s proprietary, DRM’d ATRAC format, not MP3 or AAC or WAV or anything else. So, in order to get their MP3s onto this new player, users will have to re-encode their collection into ATRAC format. Re-encoding always introduces additional compression artifacts, making the tracks sound worse.

Why would you buy one of these when you can buy an iPod, which will play MP3s too? I realize that ATRAC is and has always been a better codec than MP3; I have a Sony MZ-1, the first MiniDisc machine (MiniDiscs use ATRAC), and it still sounds fantastic. But requiring consumers to re-encode is just stupid. (What? You expect us to buy all of our tracks on Sony Connect? I don’t think so.)

This is an attempt at format lock-in, but happily it’s so ham-handed that it won’t work.
http://www.joegratz.net/archives/200...onys-missteps/


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Nielsen Rating System At Odds With RIAA's Claim Of "Lost Sales

RIAA says sales are down. Soundscan says "Wha..?" Who should you believe?
Moses Avalon

When speaking this month to a representative from Soundscan, the company that provides much of the data for the Billboard Top 200 Chart, I learned things that would contradict reported statements by the RIAA. Mainly that US labels have had a significant reduction in sales over the past three years. Cary Sherman, president of the RIAA, responded personally, put his rebuttals on the record and in the process exposed intriguing insight into the way the RIAA calculates "losses."

Soundscan is a service owned by Nielsen, the company that computes TV ratings. Soundscan uses the barcodes on CDs to register sales at record stores. The correlated data contributes to the Billboard chart listings, as well as much of the market research that record companies use to determine which artists are worth keeping under contract.

My original reason for speaking to Soundscan was to determine if the "free" barcode many CD Replicators provide with a substantial order is a real added value to the indie artist, or just a bogus premium that sounds more intriguing than it really is. Replicators claim that with the barcode they give one can track indie sales on Soundscan. I have my doubts.

The answer will be revealed in my Keyboard article over the next few months, so I'm not going to spoil the punch here. Through my interview with the Soundscan rep, however, I learned the following:

- For the first quarter of 2003 Soundscan registered 147,000,000 records sold.

- For the 1st quarter of 2004 Soundscan will report 160,000,000 records sold.

That's 13,000,000 more units, almost a 10% increase in sales since last year. He also confessed that 1st quarter "album sales" (as opposed to overall sales) had increased 9.4% since 2003.

What gives? Didn't Cary Sherman recently attest to the "fact" that there was a "7% decrease in revenue since last year." (This quote was taken from Mr. Sherman's speech to Financial Times Media at a Broadcasting Conference in London.) And didn't he name piracy/file-sharing as the main reason? Yes, according to more than one source. (http://musicdish.com/mag/index.php3?id=9338)

So, I asked the Soundscan rep, who would only speak to me if I didn't use his name, "Would you disagree with what the RIAA is implying?"

"I would NEVER disagree with the RIAA," he said.

Of course he wouldn't; the RIAA is, after all, arguably Soundscan's biggest sycophant. But he did do the most amazing thing; he proceeded to explain the rational that would allow both of these seemingly inconsistent realities to exist in the same universe, "The RIAA reports a sale as a unit SHIPPED to record stores. Whereas Soundscan reports units sold [to the consumer] at the point of purchase. So, you're talking about apples and oranges."

Really!?! I fact-checked this with Cary Sherman, who confirmed, "He is correct," and added, regarding RIAA and Soundscan data, that "The two sets of numbers tend to be similar, but because of timing differences, they're usually a little different at any point in time."

Similar?!?! How is a 10% increase for first quarter of 2004 similar to, or a premonition of, a 7% decrease for the entire year of 2004?

THE SECRET: "SHIPMENTS" = "SALES"

Now armed with the secret decoder formula, I went back and read the RIAA and International Federation of the Phonographic Industry (IFPI) Web sites more adroitly. Sure enough, every time the RIAA complains of large drops in "unit sales" it includes international sales, not strictly domestic. Every time it speaks to domestic "losses" it is speaking ONLY of "units shipped in the US" to record stores. It seemed obvious that if the RIAA confined their revenue statistics to the US market alone they may not be able to publish ANY losses in REVENUE at all.

But what about Sherman's statement of 7% "losses" at the London conference? He answered, "I was speaking to an international audience, [and] thought they'd want worldwide figures, rather than just US."

Sherman's statements hinged on a statistic published by the IFPI. "Surveys in all major markets prove [file-sharing] is a major factor in the fall in world music sales, down 7% in 2003, and down 14% in three years." (Their Web site, which claims to "represent the industry worldwide," but, oddly enough, doesn't readily explain what the anachronism, IFPI, means, has a "fact sheet" at (http://www.ifpi.org/site-content/ press/20040330c.html) But the RIAA's website chart claims only a 7.1% drop in units SHIPPED. (http:// www.riaa.com/news/newsletter/pdf/2003yearEnd.pdf)

There is only one logical integration of all these statistics with the recent Soundscan data: even though actual point-of-purchase sales are up by about 9% in the US - and the industry sold over 13,000,000 more units in 2004 (1st quarter) than in 2003 (1st quarter) - the Industry is still claiming a loss of 7% because RIAA members shipped 7% fewer records than in 2003.

Forget the confusing percentages, here's an oversimplified example: I shipped 1000 units last year and sold 700 of them. This year I sold 770 units but shipped only 930 units. I shipped 10% less units this year. And this is what the RIAA wants the public to accept as "a loss."

I'll go a step further. This fact, that Sherman seems to confirm, should logically mean a smaller percentage of returns. But, shouldn't fewer returns mean higher profit margins and faster turnaround; and shouldn't that be good for both the retail and wholesale side of the industry? "Sure," admits Sherman today, "but I have no idea what US shipments looked like in the first quarter." Then how can he claim world-wide "losses" in his March speech to Financial Times New Media?

Roger Goff, an Entertainment lawyer in Los Angeles confirms that, indeed, retail has reacted this way in the Post-Napster era. "Retail used to buy 10 weeks-worth [of records] and now they realize, in most cases, they don't have to carry more than two weeks-worth." In other words, retail has adapted to more of an "on demand" model (similar to the Internet) as opposed to the, accepting-tons-of-product-shoved- down-the-pipeline model record companies imposed on them in the past.

I misplaced my MBA this morning, but my mental math assures me that fewer returns and shorter reserves should mean an INCREASE in record company profits and artists' royalties. If this is true, and file-sharing is responsible, one could conclude that "on-line piracy" has been the single greatest factor in increasing profits, because it forces record companies to keep a tighter lid on mass-production and costs.

Sherman's response is pithy, "Managing shipment and returns better is obviously a good thing. But to credit file-sharing is silly. That's like saying if enough thieves were holding up delivery trucks and causing massive losses to the industry, the thieves should be thanked for forcing record companies to keep a tighter lid on mass production."

My pithy rebuttal: No, it's like acknowledging what most retail industries have been doing for the past ten centuries; theft (even by employees) needs to be built into the cost of doing business, and file-sharing has forced the record sales side of the industry to finally adjust to that dynamic. Should we thank the "thieves?" No, but we shouldn't let off the hook those who blame others for "losses," only to ask Congress to legislate fix-its due to their own mismanagement.

SO ARE THERE REAL LOSSES?

Maybe, but "we, the people" will never be able to figure them out due to this confusion, deliberate or not. Regardless, it's certainly been a great excuse for majors to clean house of over-paid executives. But as for a US major label's bottom line, the effect could never rise to the RIAA's/IFPI's claim that file-sharing is the "major factor" of revenue loss for labels, and certainly not for artists.

Nope. My analysis suggests that the number one reason for the loss of jobs in the industry is self- perpetuating major label PR, and that the number one cause of loss of unit sales revenue for artists is STILL record label accounting practices.

Take a bow, fellas; you finally beat the geeks.
http://www.kensei-news.com/bizdev/pu...le_23374.shtml


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Do-it-Yourself Ringtones Encroaching On Potential Profits, Some Record Labels Say
Dawn C. Chmielewski

New software that lets anyone create unique cellular phone rings for free has some record labels worried it will kill the cash cow that is the ringtone.

The software, called Xingtone, evokes the same ``oh wow, oh no'' reaction from the labels that greeted the original Napster. The fear is that people will make ringtones out of pirated songs, thus compounding the file-sharing problem while robbing the music industry of a new source of revenue.

The quest for a distinctive cell phone ring has created a $3 billion global market for everything from computer-generated renditions of such classics as The Temptations ``Just My Imagination,'' to near-CD-quality snippets of popular songs like OutKast's ``Hey Ya!.''

Ringtones are brisk business in Europe and Japan. They're catching on fast in the United States, where sales are expected to reach $140 million by year's end, according to market research firm Yankee Group.

But just as the record labels have begun hailing ringtones as a welcome windfall to help offset free-falling CD sales, along comes Xingtone.

The Los Angeles company's $15 software, sold online, allows anyone with average computer skills to take an MP3 file or favorite CD track, trim it to create a 30-second ringtone and send it to the phone with the press of a button -- just like a text message.

``It's problematic, because it has the potential to eviscerate the business model early in its development,'' said Ted Cohen, EMI Music's senior vice president of digital development and distribution.

`That's really cool'

Xingtone fans, like Kathy Schader, a 29-year-old who lives in West Hollywood, see things differently.

She describes it as a tool to express her individuality and varied musical tastes, which spans Bob Marley's reggae to the alternative rock of The Sundays.

``I had a few ringtones on my phone, but they were all sort of the beep bop boop: the Atari version of ringtones,'' Schader said of the songs she purchased from her phone company.

Now, Schader enjoys creating a sensation when her phone rings, while she's performing such mundane tasks as waiting in the supermarket checkout line.

``People stare. They wonder where the sound is coming from,'' said Schader. ``Then they have a reaction like, `Oh that's really cool.' ''

Reaction from the music industry is mixed.

Walt Disney's music label, Hollywood Records, entered into a promotional partnership with Xingtone to distribute ringtone songs from Hilary Duff, The Polyphonic Spree and Josh Kelley. And Artemis Records started distributing a free copy of Xingtone's software with every copy of Sugarcult's new album, ``Palm Trees and Power Lines'' to make it easier for fans to convert favorite songs to ringtones.

``The benefits of this technology are obvious,'' said Artemis Chairman and Chief Executive Danny Goldberg. ``Every Sugarcult fan's phone will be like a mini-radio station, introducing passersby to the new album.''

Other label executives are less convinced of the promotional benefits -- especially when ringtone sales are starting to pay dividends.

Until now, cellular phone carriers and music publishers have been the biggest beneficiaries of the ringtone trend. That's because most of the ringtones sold have been computer-generated compositions of popular songs. The record labels -- and by extension, the performers -- only get paid when someone buys the computerized version of a song.

The ringtone market is poised to explode with a new generation of mobile phones capable of playing actual recordings. Larry Kenswil, president of eLabs, Universal Music's new media and technologies division, predicts the global market for these real-sounding ringtone songs will be ``massive.''

``It's a lifestyle identification. It's more than consuming music. It's people labeling themselves with the music,'' said Kenswil.

Some cellular phone networks, such as Verizon Wireless, have taken steps to block songs they don't sell. Sprint PCS has opted not to; saying that software like Xingtone stimulate demand for wireless data services.

Jeff Hallock, Sprint's senior director of consumer marketing, quickly adds that his company doesn't support piracy: It works with the labels and the music publishers and sold 20 million licensed ringtones last year. He thinks do-it-yourself ringtones have limited appeal.

``It's not a mass-market kind of behavior,'' said Hallock. ``But for a younger consumer who's more tech savvy, it's going to be more popular.''

Xingtone's president, Brad Zutaut, said there is nothing ethically or legally wrong with people taking a snippet of a song they own -- or indeed any other audio artifact, -- and transferring it their own phone.

``It's not just about music. It's about audio. These are 10-second alerts,'' said Zutaut. ``Why shouldn't it make you smile when your phone goes off?''
http://www.kansas.com/mld/kansas/bus...gy/8685217.htm


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TDK Fone Styla Lets Users Rip, Upload Content To Handsets For Free

Technology and recordable media firm TDK has launched a Bluetooth package called Fone Styla that makes transferring content such as ring-tones and games easier.

"Mobile content has become big business," said Nick Hunn, Managing Director of TDK Systems. "As mobiles morph into games consoles, movie and audio players, the demand for entertaining and amusing content continues to soar – but until now, users have had little choice in how content is delivered to their devices and they’ve had to pay premium rates set by the network operators and content providers. Fone Styla changes all that," he said.

"First, users learnt they didn’t need to pay for music, next they learnt the same for videos. Now, free mobile content has reached the web - polyphonic ring-tones, themes, wallpaper, games and even movie clips are widely available. Analysts have already warned mobile operators that mobile content that is for sale can be obtained from peer- to-peer networks - until now the limitation has been that the means of getting content onto your phone has been limited to a few hardcore geeks," said Nick Hunn, Managing Director of TDK Systems.

Fone Styla allows users to use their own PC to source content from websites on the internet and peer to peer file sharing sites. Included in the product package is a software application developed by TDK Systems that enables users to transfer content from their PC to their handset.

The software application with FONE STYLA allows users to put the content they want onto their phone in seconds without for free. "Now, if they want to change their ring tone every day, they can," said Stuart John, TDK Systems’ head of products and services.

The product in the UK market retails for about €57 (£38) and consists of a Bluetooth USB Adaptor and software applications on a CD. The adaptor and software support 18 handsets with more in the pipeline.
http://www.dmeurope.com/default.asp?ArticleID=1877


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TDK Plugs P2P Into Bluetooth Phones
Matt Whipp

Why pay for content when you can download it off KaZaA is a question familiar to computer users. Mobile phone users however have not had to deal with that conundrum as they have been stuck with expensive ringtones and content downloaded off their network.

TDK though is hoping that the lure of free content from peer- to-peer networks will prove tempting enough for users of Bluetooth-enabled phones to stump up £38 for its Fone Styla gadgetry. Essentially it is a Bluetooth USB dongle for your PC and a software interface to load up mobile goodies downloaded from the Web across to your mobile.

Nick Hunn, MD of TDK Systems, said: 'Until now, users have had little choice in how content is delivered to their devices and they've had to pay premium rate sset by the network operators and content providers.

'Respected analysts have already warned mobile operators that "mobile content that is for sale can be obtained from peer to peer networks" - until now the limitation has been that the means of getting content to your phone has been limited to a few hardcore geeks.'

A quick search on KaZaA will net you 111 ringtones, not that we condone such behaviour if it falls the wrong side of the law.

And whether TDK will be as positive about peer-to-peer networks should its Fone Styla software ever appear on them remains to be seen. After all, a Bluetooth dongle is only around £20.
http://www.pcpro.co.uk/news/news_story.php?id=57921


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It’s like really huge, and like, really fast

Cisco's $500 Million Router
Marguerite Reardon

After four years and $500 million in investments, Cisco Systems unveiled its high-end router--but it could be six months to a year before it starts seeing any revenue from the product.

The router, dubbed the Carrier Routing System-1 (CRS-1), is designed for carrier networks that handle the highest volumes of Internet traffic. It is the first product engineered by Cisco that will allow several boxes to be clustered together to function as a single router.

CRS-1, which previously had been code-named HFR for Huge Fast Router, also is the first core router to offer 40 gigabit-per-second optical interfaces. Rumors and speculation about the product have circulated for almost a year.

Four carriers, including Deutsch Telecom, Sprint, MCI and NTT Communications, were at a Cisco event here Tuesday to kick off the router. The carriers said they have been working with Cisco for the past few years to develop the product, which can be clustered through a switch fabric chassis to reach a routing capacity of 92 terabits per second. One gigabit is a billion bits; 1 terabit is a trillion bits.

So how long will it take for Cisco to make its money back? Executives say that's hard to tell.

"It purely depends on the growth of the Internet," John Chambers, CEO of Cisco, said in an interview after the event. "The key is how fast the Internet grows. A conservative estimate is that it's growing 100 percent per year, but then you look at Japan, and they are having growth of 400 (percent) to 500 percent per year."
http://zdnet.com.com/2100-1103_2-5220313.html


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The Big Five Subpoenaed My Baby

How the RIAA spun music industry sales data
Nick Buono

It's easy to take sides on the issue of file-sharing and, more specifically, sharing copyrighted material such as music. On one hand, there are people who have essentially grown up using p2p (peer to peer) programs like Napster and vehemently continue to download music in the face of what they see as draconian legislative and judicial action by the corpulent corporate entity that is the mainstream music industry. On the other hand, there are those who see the simple click of a download as a blow against a legitimate business and against the artists that it represents and feel that it's unreasonable for a person to expect to be able to break the law free of repercussions.

The Recording Industry Association of America (RIAA), which represents the "Big Five" record labels (Sony, EMI, Universal, BMG and Warner Brothers), has been the most outspoken opponent of file- sharing and, to date, the only one who has taken direct action to stem the tide of copyrighted material flowing freely from computer to computer.

These five corporations have a huge influence over distribution and creation of music, as they are responsible for the bulk of CDs and other media that reach stores.

The Big Five's expansive rosters of artists have access to the marketing and promotional muscle that only a multinational conglomerate can provide them, with access to mainstream radio and television, which undoubtedly reach a greater audience than any other format.

The RIAA claims that digital piracy has accounted for the slumps in sales that their data show, up to 7 percent in 2003, according to a statement made at a March broadcasting conference by RIAA President Cary Sherman. Based on this, they have aggressively filed lawsuits numbering over one thousand, subpoenaing Internet service providers for information on clients that have large numbers of copyrighted MP3 files on their hard disks. However, in the past few months the RIAA's presentation of data has come into question, seriously damaging the validity of their extrapolations about the woes that file sharing causes their business.

RIAA market data is collected by SoundScan, a division of the Nielsen corporation, the same corporation that is responsible for tracking television viewership. SoundScan analyzes record sales from data collected weekly at the cash registers of music stores around the country. This is then used to (among other things) calculate chart success. However, the presentation of these data on the RIAA Web site focuses on units shipped rather than units sold.

For 2003, the industry's data claims a 7.2 percent drop in units shipped. But the SoundScan year-end data, as reported by Business Wire, points to an overall sales loss of only 0.8 percent for 2003, with purchases peaking at the end of the year and gaining 9.2 percent over the sales at the end of 2002. If all media is taken into account, including the exploding markets of DVD music and legal download services such as iTunes, then there was a 10.5 percent increase in sales.

So where did the extra 6.4 percent loss come from? Essentially, by presenting the number of units shipped instead of the number of units actually sold, the RIAA is able to put a spin on their numbers to better serve their cause against digital music.

The industry may be shipping fewer records, but retailers are selling about the same amount, and DVD and digital music go a long way to make up the gap. If anything, this means that labels are streamlining the process of distributing records to retailers, with less overstock and a more on-demand approach to sales.

Is illegal downloading responsible for the relatively small decreases in sales that the music business has suffered since 2000? There's really no way to be sure, but it seems somewhat unlikely, especially now that legal download services such as Apple's iTunes have opened up, with catalogs of music that can compete with the wide variety of official and bootleg material available on the larger p2p networks such as Kazaa or WinMX.

Not only that, but since the turn of the century the country has been falling progressively deeper into an economic recession similar to the one experienced in the early '80s with Reaganomics. Interestingly enough, at that time there was also a significant drop in record sales. Is this a coincidence or a trend?

The RIAA's reactionary view of digital album distribution is reminiscent of the past.

The early '80s saw an industry backlash against the new technology of cassettes, which were supposed to herald the death of the music business at the hands of this new, easily duplicated and easily distributed music format. Music buyers were greeted by a menacing skull-and-crossbones logo warning them not to pirate their new recordings, lest they destroy the livelihoods of the musicians that they loved.

This ended up not being the case. Cassette format became a staple until the CD took its place. Many people, including an increasingly large number of musicians, believe that digital distribution of music is now the most viable method. Digital distribution supersedes physical media such as CD and vinyl albums due to its global reach and ability to grant such huge distributing power to individual artists, independent of a record company.

With the increasing homogenization of radio and music television, artists that aren't big sellers and don't enjoy the financial and promotional support a huge label bestows on such cash cows have a hard time gaining exposure, and the Internet provides a venue for them to do so.

Instead of trying to quash this new technology with litigation, it would seem beneficial for the industry to embrace it. It has been made obvious over the past few years that the demand for digital music is present, with up to 200 million worldwide users willing to risk legal consequences to have access to their choice of free music.

The Big Five were slow to exploit this market, however, and only now are they beginning to establish online stores that can hope to rival the pioneering iTunes. Some IT professionals even feel that if the music industry is unable to adapt to the changing way people listen to, obtain and distribute music, they will cease to become relevant players in that process and may face extinction.

"Basically, the labels have a choice," said Mitchell Reichgut of Jun Group, a communications firm that studies file sharing. "They can fight and continue losing money, or try to tweak this 100-year-old model and get immediate results for artists, consumers and sponsors."



2003 Music Industry Statistics*

•Internet album sales increased by 3,621,326 units from 2002 to 2003.
•Overall music business down by 0.8 percent units sold.
•Overall album sales down 3.6 percent.
•CD album sales, which comprise 96 percent of all music sales, down 2 percent.
•19.2 million digital tracks sold from June 29, 2003, to December 28, 2003.
•Overall Music Video sales up 78.5 percent.
•DVD Music Video sales up 104.5 percent.
•Alternative, jazz and Latin album sales up.
•Cassette album sales down 39.8 percent.

*Information provided by SoundScan



Top Ten Selling Albums in 2003*

1. 50 Cent - Get Rich or Die Tryin'
2. Norah Jones - Come Away With Me
3. Linkin Park - Meteora
4. Evanescence - Fallen
5. OutKast - Speakerboxx-Love
6. Beyoncé - Dangerously In Love
7. R. Kelly - Chocolate Factory
8. Hilary Duff - Metamorphosis
9. Toby Keith - Shock N Y'all
10. Coldplay - Rush of Blood to the Head

*Information provided by SoundScan


How Do Musicians Feel About The Recording Industry's Actions Against File-Sharers?

"They're protecting an archaic industry."
Bob Weir, Grateful Dead

"Lawsuits on 12-year-old kids for downloading music, duping a mother into paying a $2,000 settlement for her kid? Those scare tactics are pure Gestapo."
Chuck D, Public Enemy

"I don't know that there's any one factor behind the industry. Maybe it's downloading, or maybe people just didn't feel like buying so many records. So Metallica makes $10 million instead of $20 million, who cares? To me, the sympathy is unwarranted. Some of this is just the hazard of doing business. It's the nature of the world. At the end of the day, it's just rock 'n' roll. It isn't that big of a deal."
Wayne Coyne, Flaming Lips

"For the artists, my ass."
David Draiman, Disturbed

"Record companies suing 12-year-old girls for file-sharing is kind of like horse-and-buggy operators suing Henry Ford."
Moby, on his website

"Downloading is a great way to find out about music. I'm not going to criticize somebody for loving music. People come up to me and say, 'I downloaded your album, and I can't wait to go out and buy it.'"
Alex Kapranos, Franz Ferdinand, to Rolling Stone

-Quotes reported by San Francisco Chronicle in "Artists Blast Record Companies over Lawsuits Against Downloaders," Thursday, Sept. 11 2003, unless marked otherwis



Indie Label MP3 Distribution

Most of the fuss about online music piracy seems to come from major labels, with smaller independents having a more holistic approach to the distribution of their music. Labels such as Seattle's Sub Pop Records, home to such luminaries as Kinski, Mudhoney and Iron and Wine, aren't afraid to post a few dozen MP3 files on their Web site to draw people in and turn them on.
"We believe any way you can get people to hear the music is good," said Chris Jacobs, Sub Pop's head of publicity. Although there's really no way for the label to track the effect that downloading has on their sales, it's relatively easy to infer that having samples of their music readily available hasn't hurt either. "In the past year or two we've been doing better than we ever have," Jacobs said.
The files made available help offset the lack of radio and television exposure, even for a larger indie like Sub Pop. "Downloading and people passing around songs can sort of fill that gap in a way," Jacobs said. The label already has a foot in the door in terms of digital distribution, as Sub Pop's catalog is available on their Web site by mail and they have already partnered up with Apple's iTunes distribution service as well.
http://www.dailyvanguard.com/vnews/d.../40b4456b98a29


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Online Music Plays A New Tune
Liane Cassavoy

Fed up with spyware or fearing lawsuits, file swappers are going underground or giving up

The number of surfers using Kazaa's file-sharing software is down to 20 million people, compared to almost 35 million users less than one year ago, according to research from ComScore Media Metrix.

But the steep decline doesn't mean the death knell is ringing for free and illegal music online. Paid music services may be growing, but so are some of the smaller peer-to-peer services. And many Web surfers are finding new sources and new methods for trading music online.

So in the war against online music piracy, who is winning? It depends on whom you ask.

"The barometer of success for us is not the day-to-day traffic on any particular pirate peer-to-peer network. There will always be a degree of piracy online, just like there is always piracy on the street," says Jonathan Lamy, Recording Industry Association of America director of communications. "Clearly, file sharing is still an enormous problem, and that means that we need to continue the course of deterrence through legal action and offering great legitimate alternatives."

Researchers confirm that file sharing appears to be on the decline. Use of peer-to-peer services is down slightly in a recent survey by the Pew Internet Project and ComScore Media Metrix. ComScore also noted a drop in the use of the WinMX file- sharing service, says Graham Mudd, a senior analyst with ComScore.

However, ComScore notes an increase in the use of several smaller, lesser-known peer-to-peer networks, such as BitTorrent and eMule. BitTorrent, for example, had slightly more than 200,000 unique users in November 2003. By February 2004, the number was just under 400,000.

"There has been some speculation that these services have lower visibility, and it may be more difficult to track users on them," Mudd says. "More savvy Net users may be switching to these applications because they think they can fly under the radar."

The RIAA, however, disputes that assumption. "The nature of these networks is such that if you are distributing music files to thousands or millions of other users, you can be found," Lamy says.

While BitTorrent's usage almost doubled over a three-month period, it remains small. Clearly, not everyone uninstalling Kazaa and WinMX is moving to an alternative service, Mudd says. "The pickup in smaller applications does not make up for the overall decline in peer-to-peer usage," he says.

Some users are switching to legal services, such as iTunes, which celebrated its successful first year in April. (iTunes for Windows users launched last October.) iTunes sold 70m songs in its first year, Apple CEO Steve Jobs said in celebrating the anniversary last month. While admitting that number falls short of Apple's goal of selling 100m songs in its first year, Jobs called the growth "phenomenal."

Ironically, though, the RIAA campaign is also scaring off potential customers, the Pew and ComScore study finds. Sixty percent of people who have never tried downloading music say the threat of lawsuits will deter them from downloading music from any source, legal or illegal, in the future.

The RIAA's actions, intended to stop illegal file swapping, are clearly confusing some people, says Mary Madden, a Pew research specialist.

"This is a mixed message for the RIAA," Madden says. "On the one hand, they have significantly intimidated people from logging on to peer-to-peer services. But there's also the potential for people to be scared away from legal services. People are still very confused about what constitutes legal and illegal behaviour."

After all, some file-sharing services promote premium or other fee-based services, and some also have legal uses, she notes. "So the potential is there for confusion," she says.
http://www.pcadvisor.co.uk/index.cfm...view&news=3967


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Italy Cracks Down On Internet Piracy
AP

ROME -- The Italian Parliament has passed a law to fight Internet piracy, with punishment as stiff as three years in prison, making Italy's crackdown one of the toughest around the world, observers said Tuesday.

The law, which went into effect Friday, provides for a maximum penalty of three years in jail for those convicted of using the Web illegally for commercial purposes -- to download products they have not paid for and want to make money from or to sell products whose rights they don't hold.

Fines for infringements go as high as 250,000 euros (US$300,350). The Culture Ministry says the law was necessary to update rules on the protection of intellectual property by incorporating Internet file sharing. "What we intended to do with this decree was to favor the development on the Internet of a legal market for artistic products" said Culture Ministry spokesman Carlo Zasio. But one expert argued that such laws are usually hard to enforce and discourage artists who rely on the Internet to promote their work. "This is the most extreme law that been passed against peer to peer file sharing internationally," said Robin Gross, head of IP Justice, a nonprofit that promotes a balance between protection of intellectual property and free use of the Internet. "I think it will have the effect of chilling the exchange of information," said Gross, speaking by phone from San Francisco.
http://www.detnews.com/2004/technolo...ogy-163999.htm


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Reporter's Notebook: Ad:Tech San Francisco, 'Darwin On Speed'
Tobi Elkin

"The Internet is Darwin on speed," enthused Peter Weedfald, senior vice president- strategic marketing and new media, Samsung Electronics America, and Tuesday's keynoter at Ad:Tech, San Francisco. "The Internet is a disruptive technology that is changing technology and the life cycles of business."

Weedfald cited the ways in which the Internet has changed the rules of the game, disrupting business models in the music, TV, and movie industries. For example, he cited dismal CD sales figures, attributing the weakness to the supremacy of peer-to- peer file-sharing networks and for-pay online music services.

Weedfald, known for his outspoken evangelism of the Internet and his drive to put Samsung advertising, marketing, and promotions on the Web "24/7, 365 days a year," spoke to a packed audience of show attendees who came to hear the marketer's idiosyncratic view of the Web. For example, Weedfald defined CRM, best-known as customer relationship management, as "customers really matter." He said that he and Samsung are in "launch mode 365 days a year" in order to have the "freshest lettuce on the shelf." And, he said, "people are trading up, not down." But Weedfald noted that these issues extend across categories. "You must have an integrated, Internet-ready company and [be] in launch mode 365 days a year, and overhaul your entire Internet infrastructure," he maintained.

Weedfald said the disruptive influence of the Internet has made its presence known in the content business, in the so-called "pipe" business via cable, Wi-Fi, broadband, digital subscriber line, and other distribution systems, and in Samsung's diverse and gargantuan global business.

Through Weedfald's efforts, Samsung in the United States reels in more than 1 billion impressions per month via the company's advertising presence on 360 Web sites (appearing above the fold), 24 hours a day. Samsung runs 40-50 different ad campaigns per month online. The company is currently conducting a global agency review. Its current agencies are Interpublic Group of Cos.' Foote, Cone & Belding, New York, and Cheil Communications, the company's in-house ad unit.

Weedfald offered several examples of Samsung's online promotional efforts, including a 2-week effort flagging a Jon Bon Jovi concert simulcast live on the Web. The simulcast drove 150,000 people to Samsung's U.S. Web site to tune in. Weedfald called the concert promotion part of the company's CRM (customers really matter) efforts.
http://www.mediapost.com/PrintFriend...ticleId=252775


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Microsoft Behind $12 Million Payment To Opera
Evan Hansen and Paul Festa

Microsoft agreed to pay Norway's Opera Software $12.75 million to head off a threatened lawsuit over code that made some Web pages on MSN look bad in certain versions of Opera's Web browser, CNET News.com has learned.

Opera disclosed the payment last week in a terse press release that omitted other details, including the name of the settling party and the nature of the dispute.

But a source indicated that the payment came from Microsoft in order to close the books on a clash over obscure interoperability problems. On at least three separate occasions, Opera has accused Microsoft of deliberately breaking interoperability between its MSN Web portal and various versions of the Opera browser--charges that the software giant has repeatedly denied.

A Microsoft representative said the company does not comment on rumors.

Reached by phone, Opera executives refused to name the company involved in the settlement or describe the nature of the legal claims, citing a confidentiality agreement.

"We forwarded a few facts to a big international corporation and settled before we took legal action," Opera Chief Technology Officer Hakon Lie said Tuesday. "This resolves an issue very close to my heart."

The deal marks the latest in a string of settlements from Microsoft, which is seeking to simplify its business by clearing up potentially damaging legal claims. In the past year, the company has agreed to pay billions of dollars to wrap up litigation with Sun Microsystems, digital rights management developer InterTrust and Time Warner's Netscape Communications division, among others.

While the Opera payment is relatively tiny, it underscores ongoing ripple effects in the browser market that stem from the overwhelming dominance of Microsoft's Internet Explorer. Having used its desktop operating system monopoly to help trounce its primary rival Netscape, Microsoft has effectively abandoned significant browser development efforts. That's left companies with negligible market share such as Opera and Netscape's Mozilla open-source project to lead innovation in the field.

For example, IE 6, the latest version of Microsoft's Web browser, released in August 2001, does not yet offer a tool that automatically blocks Web pop-up advertising. Microsoft has promised pop-up blocking as part of a Windows XP upgrade due out later this summer known as SP2. That puts it well behind Opera and others that have offered pop-up blocking for months in response to overwhelming consumer demand.

Last year, a member of Microsoft's IE team indicated that the company planned to drop independent development of the browser altogether, opting instead to fold its functions into the next major overhaul of its Windows operating system, a project code-named Longhorn.

Since then, however, Microsoft has remained largely silent about its long-range browser development plans.

"I'm not sure what their plan is, whether they'll do some upgrades with SP2, wait for Longhorn or break out a separate release," Directions on Microsoft analyst Matt Rosoff said. "Whatever they do, IE is not a major strategic technology for Microsoft anymore...They don't have a huge team working on IE, and there hasn't been a lot of evolution in IE for a couple years."

Web authors bow to IE
IE's dominance has also created fallout for Web standards, because Microsoft delivers the Web to roughly nine out of every 10 people who use it.

Although IE 6 provides good standards support, some Web site developers have decided that it's easier to create sites that work best with versions of IE, rather than use code that works equally well on all standards-compliant browsers. For example, Shutterfly, the online photo store backed by Netscape co-founder Jim Clark, does not support any version of Opera or Mozilla browsers, according to a warning displayed on the site this week.

The problem has been a top issue for Web standards advocates for some time, shifting the focus of standards compliance away from browser makers and toward companies behind popular Web authoring tools, such as Macromedia and Adobe Systems.

Opera's past complaints with Microsoft included charges that the software giant deliberately sought to undermine the experience of Web surfers using its browser by delivering a different set of instructions to Opera than those sent to IE for rendering Web pages on MSN. The results included misaligned margins and indentations that cut off some words, among other things.

Microsoft in 2003 admitted that it had taken steps to detect different types of browsers accessing MSN and sent different Web page layouts to different products. But the company said its efforts were aimed at promoting standards compliance rather than at hurting products that compete with its dominant Internet Explorer browser. Microsoft said it has since stopped the practice.

"MSN is committed to providing the best experience we can to all of its consumers, and there is no intent to degrade the consumer experience for any visitors to MSN," a Microsoft representative wrote in an e-mail. "When this issue hit last year, MSN tested Opera's latest browser, determined and made adjustments to ensure all Opera 7 users had a quality experience while visiting MSN."

Opera, by contrast, has long contended that Microsoft's alleged maneuvers were intentional and hurt its reputation.

MSN's browser lockouts at the time provided incendiary ammunition for Microsoft critics, including anti-Microsoft industry group ProComp, which in 2001 accused Microsoft of unfairly exploiting its massive lead in the browser market to muscle out smaller competitors.

"Who else could it be but Microsoft?" ProComp President Mike Pettit said this week, referring to the payment.

Pettit cast a jaundiced eye at the transaction, along with other settlements Microsoft has made with rivals that have alleged wrongdoing.

"If you really analyze the harm that is inflicted and measure the damages paid, it's a very small dollar amount to Microsoft," Pettit said. "It's just the cost of doing business to them, so they're just going to keep doing it over and over. They pay 5 or 10 cents on the dollar in damages way after the fact, and the net effect of it is to further unbalance the playing field. In the final analysis, they got away with it."

These days, Opera is looking to move past the PC to distribute its Web browser on devices such as cell phones and personal digital assistants. As a result, Opera will in the future face less of a threat from Microsoft, Opera director John Patrick said.

"People wonder why anyone would get into the browser business," he said. "But this isn't about Microsoft and the PC. It's about every other kind of device, from set-top boxes to cell phones. IE doesn't dominate that. It's a different market...The opportunities are enormous."
http://news.com.com/2100-1032-5218163.html


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United States: D.C. Court Of Appeals Holds That Digital Millennium Copyright Act Does Not Require Disclosure of Subscriber Information
Jennifer Elgin

The U.S. Court of Appeals for the District of Columbia Circuit has held that the Digital Millennium Copyright Act ("DMCA") did not authorize the Recording Industry Association of America ("RIAA") to obtain subpoenas compelling Verizon and other Internet service providers ("ISPs") to disclose the names and other information about subscribers alleged to have violated copyright laws by illegally downloading over 600 songs in a single day from the internet using a peer-to-peer file sharing network. Recording Industry Association Of America, Inc. v. Verizon Internet Services, Inc., 351 F.3d 1229 (D.C. Cir. 2003).

The District Court Ordered Compliance With The Subpoena.

Under subsection (a) of Section 512 of the DMCA, a service provider is not liable for "infringement of copyright by reason of the provider's transmitting, routing, or providing [Internet] connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections," 17 U.S.C. § 512(a). In addition, subsection (c) provides that: "A service provider shall not be liable for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider. Id. § 512(c)(1). Only subsection (c) spells out certain requirements to be met by copyright owners for effective notification of copyright infringement under this subsection – there is no equivalent provision in subsection (a).

The DMCA contains a broad subpoena power, 17 U.S.C. § 512(h). A copyright owner may obtain and serve a subpoena on a service provider seeking the identity of a customer alleged to be infringing the owner's copyright. The subpoena must contain "a copy of a notification described in subsection (c)(3)(A)," and a sworn declaration ensuring that the subpoena is solely to obtain the identity of the alleged infringer, which information will be used only to protect rights to the copyright." Id. §512(h)(2).

The RIAA served subpoenas on Verizon seeking the identity of alleged infringers using a peer-to-peer file-sharing network. Verizon refused on the principle that the DMCA subpoena power applies only if the infringed material is stored or controlled on the service provider's system or network pursuant to subsection (c) of the DMCA, and presented several constitutional challenges to the DMCA. The RIAA contended that the DMCA subpoena power under section 512(h) applies to all service providers falling within the provisions of subsections (a) through (d), including Verizon. The district court rejected Verizon’s statutory and constitutional challenges to § 512(h) and ordered the disclosure of the names of the alleged infringers.

The Court of Appeals Reversed And Ordered That The Subpoenas Be Quashed.

On appeal, Verizon renewed its alternative arguments for reversing the orders of the district court. First, it argued that §512(h) does not authorize the issuance of a subpoena to an ISP acting solely as a conduit for communications the content of which is determined by others. Verizon argued that the subpoenas obtained by the RIAA fail to meet the requirements of the DMCA in that they did not – and cannot (because Verizon is not storing the infringing material on its server) – identify material "to be removed or access to which is to be disabled" by Verizon, and § 512(h)(4) makes satisfaction of the notification requirement in subsection (c) a condition precedent to issuance of a subpoena. According to the RIAA, the purpose of § 512(h) being to identify infringers, a notice should be deemed sufficient so long as the ISP can identify the infringer from the IP address in the subpoena. If the statute does authorize such a subpoena, Verizon argued, then the statute is unconstitutional. The Court of Appeals found the statutory issue dispositive and failed to reach the constitutional issues.

Writing for the Court of Appeals, Chief Judge Ginsburg concluded that, "We conclude from both the terms of § 512(h) and the overall structure of § 512 that, as Verizon contends, a subpoena may be issued only to an ISP engaged in storing on its servers material that is infringing or the subject of infringing activity." The Court of Appeals found it significant that the so-called "notice and take down" provision noticeably is present in sections 512(b)-(d), and noticeably absent in section512(a). The Court concluded that the defect in the RIAA’s notification was not a mere technical error nor "insubstantial" notification: "The RIAA’s notification identifies absolutely no material Verizon could remove or access to which it could disable, which indicates to us that § 512(c)(3)(A) concerns means of infringement other than [peer to peer] file sharing." 351 F.3d at 1236. The Court flatly rejected the RIAA’s argument that the definition of "[internet] service provider" in section 512(k)(1)(B) makes section 512(h) applicable to an ISP regardless what function it performs with respect to infringing material as borderline "silly". The Court wrote: "Define all the world as an ISP if you like, the validity of a § 512(h) subpoena still depends upon the copyright holder having given the ISP, however defined, a notification effective under § 512(c)(3)(A)." Id.

The Court of Appeals next agreed with Verizon’s argument that the presence in section512(h) of three separate references to section512(c), and that the absence of any reference to section512(a) suggests the subpoena power of section512(h) applies only to ISPs engaged in storing copyrighted material and not to those engaged solely in transmitting it on behalf of others. The Court held that, although the subpoena power applies to an ISP storing infringing material on its servers in any capacity, it "does not apply to an ISP routing infringing material to or from a personal computer owned and used by a subscriber." Id. at 1237.

Finally, the Court of Appeals rejected the RIAA’s contention that the legislative history of the DCMA indicates that the subpoena power should be interpreted to reach peer-to-peer file sharing networks. The Court held that it is "clear (albeit complex), [that] the legislative history of the DMCA betrays no awareness whatsoever that internet users might be able directly to exchange files containing copyrighted works." Id. at 1238. The Court refused to re-write the DMCA to address a problem that Congress left unsolved.
http://www.mondaq.com/i_article.asp_Q_articleid_E_26315


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Cracking Down-load

The recording industry is launching another round of lawsuits this week against nearly 500 people they say are illegally sharing music on the internet.

This follows a stream of lawsuits last month where almost 70 people targeted were using university networks.

In Bloomington, Jesse Magenheimer is listening to music he downloaded at Illinois Wesleyan University. It took him only a few minutes to download this song because he got it from I-Tunes.com, a website that provides legal copies of music.

But for some other university students who may download illegal copies of music from some peer file sharing sites.

''It's a significantly longer process for them. If you want to download something as simple as a 3 meg song, you'll be waiting 2 to 3 days,'' said Magenheimer.

University technicians installed a monitor box on their network that limits the amount of bandwidth for certain online activities. They call it the shaper.

''It will actually look at the bit level, at the traffic and try and determine 'is this web traffic'?'' said IT Director Fred Miller.

It will also determine what traffic is email and what traffic is coming from peer file sharing websites that may be illegal copies of music.

''We have various rules setup to help determine what kind of speeds that traffic can get through our internet connections,'' said Miller.

Miller says regular web traffic gets the highest priority, e-mail is second. They only allocate a small amount of bandwidth for downloads from peer file sharing sites.

The university doesn't stop with 'behind the scenes' technology to discourage illegal downloads.

''We start with students when they enter the university. We start with what is legal, what is illegal,'' said Miller.

Through education and bandwidth monitoring equipment, the university hopes to avoid litigation. And for students like Jesse, who download legal copies of music, he can avoid the 2 or 3 day wait time.

This week's recording industry lawsuits bring the total to almost 3,000.
http://week.com/morenews/morenews-read.asp?id=4491


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Frontline: The Way the Music Died
Michael Kirk, Filmmaker

The modern music scene was created in 1969, at Woodstock. Half a million fans, dozens of artists, and the politics of the times came together as a big bang moment that eventually would generate billions of dollars. But over the last twenty years, MTV, compact discs, corporate consolidation, Internet piracy, and greed have contributed to a perfect storm for the recording industry. Frontline examines how the business that has provided the soundtrack of the lives of a generation is on the verge of collapse.

Filmmaker Michael Kirk was online Friday, May 28 at 11 a.m. ET, to discuss his exclusive report, "The Way the Music Died."

"The Way the Music Died" airs Thursday, May 27 on PBS.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

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Boston, Mass.: What might the music industry do differently in the future to create an environment where quality music of different genres can thrive?

Michael Kirk: It needs to find a way to make it profitable to develop and nurture artists, not musical commodities.

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Lyme, Conn.: If the modern music business is dying, then please tell us this: what was the total sales of CDs, and how much profit did recording companies make on these sales? Can this business survive at this level of profitability? Can it allow music to evolve so the music doesn't die?

Michael Kirk: The advantage in economic terms is very much in favor of record companies if the CDs sell at high enough numbers to repay the following rule of thumb costs: $1 million to sign an artist and record their first album, at least half-a-million dollars to promote it. Therefore using simple mathematics, how many units must be sold to make a profit on a $1.5 million investment at $10 a unit. The simple answer is -- especially given the fact that one out of 10 albums (units) is marginally successfull -- so the simple fact is this is worse than gambling on longshots at the racetrack for the record companies. And if that album is downloaded illegally or not available because of the record stores all over America are going bankrupt, it's a real uphill struggle to find profitablility in the current marketplace.

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Waldorf, Md.: Do you feel by cutting back on TV exposure -- ie. MTV, VH1, etc. -- of music videos and increasing the tour schedules we can regain the demand for music industry product? It seems like in the old days, the artists' accessability was less visual, therefore more demanding.

Michael Kirk: The last point is the right question to ask. We're not gonna in reality be able to do anything in a free society with a marketplace orientation to control what MTV or consolidated radio decides to play. The best one can hope for if one's interest is nurturing the careers of artists, is a varied and thriving multi-faceted marketplace: clubs, the Internet, other ways of artists getting their music before people.

But that flies in the face of the trends of the last 20 years. The consolidation of the record business itself under multinational corporations; consolidation of radio at the hands of three major corporations; and some of those corporations are actually now moving into the live venue business. The musical futures of artists are therefore in the hands of fewer and fewer people.

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Columbia, S.C.: I enjoyed your program. A couple of questions:
Why didn't Scott Weiland participate in the interviews?
Has Sarah Hudson's album picked up any airplay since you completed filming?

Michael Kirk: Scott at the time we were making the film was in rehab. Happily, for his fans, he is now out and singing with the band.

Sarah's album is due to be released in July. Her single as we mentioned was released in early May, and its too soon to tell whether our program has had any effect on its sales.

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Chapel Hill, N.C.: Any musician with a bit of knowledge knows that when signing to a major label, there is a 99.999 percent chance of ending up tens or hundreds of thousands of dollars in debt. What the smart bands (who have a strong following) are doing is signing on to big independent labels like Epitaph. They by no means become famous or rich, but they are able to make a living on their music and constant touring. The independent labels, like the ones in the 50s, give musicians the creative space they need -- they pay attention to the music. So in this way the music didn't die, the independent music scene is just being ignored by the mainstream media.

Michael Kirk: The independent music scene is thankfully alive and thriving and that is a very good sign. Whether the work of those artists will be heard and appreciated by millions of Americans and exported in the way it used to be to the world as one of the nation's thriving cultural exports is no longer in question. They will not be heard by millions of Americans, exported to the world, and therefore their art is limited.

That may not matter to some artists, but its a shame that the major means of distribution and financial reward are extremely limited for those who aspire to it.

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Alexandria, Va.: Mr Kirk, one of the questions that I have always asked myself is why have British bands been more successful then American bands? (Particularly in the 60s 70s and 80s.) The one reason I believe is that American record companies are adverse to taking risks. Do you feel that this is accurate?

Michael Kirk: I'm not sure I agree with the premise of your question. Sure, there have been many very good and successful British bands, but it's not hard to list countless great American bands from the 70s, the 80s and early 90s. Risk certainly enters into the calculation any major label makes and there are those in our film who argue that that has caused some very uninspired choices lately.

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Atlanta, Ga.: What a wonderful program. Its really such a sad story. There are so many artists fighting that same fight. One band in particular I have taken recent notice of is Hanson. They are taking the indy route with their own label after parting ways with their label IDJ, which they fell on to after serveral corporate mergers. They are now on the charts with moderate success so far. Taylor Hanson often performs wearing a shirt bearing the phrase "The Music Lives." Thank you for the show. Enlighting, heartbreaking, glimpses of hope... well done.

Michael Kirk: Hanson and others who have left major labels to go their own way have a slightly easier route partially because of the notoriety derived from their years of association with major labels. The hardest route is the unknown, independent, but very talented performer who tries to make it in today's marketplace.

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Sterling, Va.: With the proliferation of file-sharing applications available, the current generation of teens have the mindset that, why pay for music if it's available for free? What does the music industry, particularly the major conglomerates, need to do to change this mindset?

Also, do you think that the quality of music today has declined from the past? If so, do you think the domination of the industry by major conglomerates who operate primarily with their bottom lines in mind and concerned more with demographics than with creativity and innovation have contributed to the decline in quality?

Michael Kirk: Sounds like you watched our program last night, so obviously I agree as do most of the people in the film.

As to why young people download -- many industry observers believe it is because the major labels convinced young people to buy a CD based on a great song they heard on the radio only to discover after they paid $18 that the rest of the CD was junk. It's not a surprise then that offered with the opportunity to download that single for free or even for $.99 at iTunes, they would do it.

What that means is downloading is surely a problem, but is it because downloaders are inherently larcenous or is it because of the greed of record companies?

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Austin, Tex.: Frontline didn't offer any new information about the music industry. I'm wondering if you see any movement in the industry toward looking for newer talent rather than scapegoating technology and blasting listeners rather than looking for new, fresh talent?

Michael Kirk: I disagree that we didn't offer new information -- sorry we didn't offer any to you, but maybe you're one of the lucky ones who is very knowledgeable. Reporting on music and culture is always an interesting proposition because it's the type of material everyone has an opinion on and most people feel expert about.

Regardless, there was -- for me, obviously -- information I didn't know before I started making the film.

As to the search for new talent, because of the consolidation of the ownership of both radio (the primary marketing outlet for music) and the corporations -- the people most willing to make a million dollar bet on a new artist -- the odds are very slim that they will scour the country looking for untested, untried commodities. On the other hand, there is the promise of independent Internet distribution. A group or performer can, if willing to make the investment -- financial and in terms of years of their lives to build a touring fan base -- there is a potential to at least make a living in the music business. But, the odds on stardom and millions of dollars are infentesimal in an environment where 30,000 albums were released last year and 100 were certifiable hits.

Did you already know that?

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Arlington, Va.: Hi Mike. What do you think of the show American Idol? Do you think this is a good vehicle for some aspiring singers to get the opportunity to gain exposure they would otherwise have much more difficulty getting? Or does the show represent some of the worst aspects of the industry as major companies try to make money at the expense of these aspiring singers?

Michael Kirk: Well, I personally find myself in agreement with the second half of your question. It feels a bit like marketing over substance (again, like MTV). Which is not to take anything away from the skills and aspirations of the talented performers on American Idol. But to comment on a business where the development of singer/songwriters and people who play instruments and carry cultural messages are not nurtured and rewarded. In this case, in the clash of art and commerce, commerce wins. And that's not necessarily good for anybody.

But, there has always been one form or another of American Idol in American popular music and there always will be.

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Washington, D.C.: All we hear from the record companies is that peer to peer networks are theft and cost the industry millions of dollars. I didn't get that impression from your show. IS p2p that big a threat?

Michael Kirk: There's no question that "sharing" or what some people in the industry would call "stealing," has had a significant effect on the record business. Now, the prevailing opinion is that in order to survive, the major companies must find a way to participate in the Internet as a vehicle for distribution and marketing of music.

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Qu?bec, Canada: What is the percentage of artists in today's Top 40 who are total marketing fabrications?

Michael Kirk: Total marketing fabrications is harsh, but it is true that in order to succeed in a business that has given itself over to marketing over substance through MTV, through an emphasis on singles, to what it takes to get a song played on the radio, and to the way record companies can maximize their profits -- that is by employing a performer (Britney, Jessica, Justin, JLo, Marya) rather than an artist (singer/songwriter) -- is the state of play because an artist takes time and money to develop.

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Boston, Mass.: I am in a band right now that has received some pretty serious interest from a few major record labels. We are working with a guy that has been in the industry for a long time, and will be shopping my band for the next year. We are working with a big-time producer right now, and we are all very jaded because we have been forced to cut our songs down in length, change lyrics, and basically tone everything down. Half of my band would like to forget the whole thing, and go back to doing it ourselves (making the music we want to make, and continue to get more interesting and complex musically). The other half of the band wants to continue "selling out," so to speak, and see where it takes us. What are your suggestions? And how did bands like Radio Head get to the point where they are now, where they are able to do whatever they want? That is what I want! How do we get there?

Michael Kirk: Where were you when I was starting to make this film, following the journey of your band right now is the stuff of a great story about the record business. In the story you've just articulated are all of the questions that have faced every artist who find themselves at the edge of a deal. The thing you probably know and surely will discover is that the odds against you are very high and that you will be faced with the choice between selling out and not making it. Or being true to your art and not making it.

In most cases, artists have to make that decision.

As to Radio Head and other bands who have finally reached a place -- through persistance, stubborness or good fortune -- where they get to do more or less what they want, it seems to be about whether a performer or an artist can catch lightning in a bottle and hold on long enough to get to control some of their destiny.

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Dallas, Tex.: It seems one of the biggest problems is the consolidation of radio stations in the hands of companies like Clear Channel, which is now going into the live concert business, & Infinity Broadcast. These companies have created monopolies. The FCC gives them the green light to do so. Is there ANY chance that music fans, artists, etc. can stop this from further happening & force them to relinquish control?

Michael Kirk: Well the FCC is a government agency that represents an administration and in the case of radio consolidation was lobbied extensively by the powerful broadcast lobby. It's the age-old question about how citizens in a democracy can independently affect policy. In this case, changing the way radio and the concert business is managed in political terms is virtually impossible. There's really only one vote that matters and that's the kind of voting you do with your feet. You don't attend the concerts and you don't buy the music and you don't listen to the radio.

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Lorne, Springdale, Ark.: It seems the recording industry has only targeted the 12 -30 year old market thinking that people over 30 don't buy music or if they do they're not going to give anything new a try. I think there a plenty of people like myself who still go out and by newer groups like OutKast and Evenessence even though I'm almost 15 years removed from high school.

While this formula has worked in the past do you think that limiting their target market has come back to bite them now that a lot of Brittany's and Justin's fans have outgrown them.

Michael Kirk: The answer is yes and the answer is not anymore. Clive Davis at RCA revived Rod Stewart's career by having him recently record CDs based on old standards. In fact, because "older people" do not download the major labels have discovered a vibrant marketplace where babyboomers are re-entering and re-buying much of their collection. Hence, Michael McDonald (former Doobie Brother) is back big. James Taylor continues to almost always sell between 700,000 - one million copies a CD, and Simon and Garfunkel are touring this summer at $70 a seat, selling out major venues.

The major companies are very happy to have older people back in on the marketplace.

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Pittsburgh, Pa.: Enjoyed the show - it was especially gratifying to see Mark Hudson in a Bob Mackie dress again - and he's still got that great figure, too. His reminiscences about the Hudson Brothers Razzle Dazzle days served as a reminder that the music 'biz' has always been about eating its young. Even the lawyer you interviewed said as much.

Michael Kirk: That's right.

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San Antonio, Tex.: How important is it for a new artist, to have
grassroots success before a major label picks
them up? And was Sarah Hudson a "local"
success before her shot at the majors?

Michael Kirk: The classic route to success continues to be the best way, they tell me, to proceed: build a touring fan base, small clubs first, larger clubs in a geographic area, opening for a headline act, becoming a headline act, selling your own CDs (either with a small label or that you've recorded yourself) and then signing on with a larger label that can use the power of your fan base to convince radio in a region to play you and hope that you catch on fire across America.

In Sarah's case, she has not performed around Los Angeles, but has entered the business another way (perhaps a harder way). She is in a family that is embedded in the entertainment business -- her cousin is Kate Hudson, her aunt is Goldie Hawn, her father Mark Hudson is Ozzy Osbourne's, Aerosmith, Ringo and others' producer -- and she is connected to a good label, S-Curve, has good management, a powerful attorney and might -- based on that -- get a chance to be played on the radio. But as a female singer/songwriter aiming at the same pop music demographic that Britney, Jessica Simpson, Avril Lavigne, Sheryl Crow and countless other performers aim at, she will live or die in the business on the strength of whether radio programmers like her songs.

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Columbus, Ohio: I've actually read that there's quite a resurgence among
rock music with some really talented young, creative
bands (Modest Mouse, Yeah Yeah Yeahs, White Stripes)
selling thousands and millions of records? Your
documentary didn't even address that and seemed about
five years behind the times...

Velvet Revolver? aack...

Michael Kirk: Velvet Revolver, the rock band we followed created out of Guns n' Roses and Scott Weiland of Stone Temple Pilots is hardly five years old. They are the hottest rock band in America this week. We followed them for months as RCA records and Clive Davis decided to spend $2 million marketing them with the hope that they would be the standard bearers -- the new standard bearers in a rock revolution.

As good as the White Stripes and other bands you mentioned are, they are yesterday. Today, like it or not, Clive Davis' band, Velvet Revolver, is the band of the moment.

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Morgantown, W. Va.: Nice to see you cover the issue of Radio ownership. Any consideration for a Frontline special on the subject specifically?

Michael Kirk: Frontline is always interested in reporting on issues that matter to a wide range of people. Radio certainly touches most Americans and in music - - the soundtrack of most peoples' lives -- on radio is important and clearly a subject that Frontline is considering.

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