Music Industry to Abandon Mass Suits

After years of suing thousands of people for allegedly stealing music via the Internet, the recording industry is set to drop its legal assault as it searches for more effective ways to combat online music piracy.

The decision represents an abrupt shift of strategy for the industry, which has opened legal proceedings against about 35,000 people since 2003. Critics say the legal offensive ultimately did little to stem the tide of illegally downloaded music. And it created a public-relations disaster for the industry, whose lawsuits targeted, among others, several single mothers, a dead person and a 13-year-old girl.


Instead, the Recording Industry Association of America said it plans to try an approach that relies on the cooperation of Internet-service providers. The trade group said it has hashed out preliminary agreements with major ISPs under which it will send an email to the provider when it finds a provider's customers making music available online for others to take.

Depending on the agreement, the ISP will either forward the note to customers, or alert customers that they appear to be uploading music illegally, and ask them to stop. If the customers continue the file-sharing, they will get one or two more emails, perhaps accompanied by slower service from the provider. Finally, the ISP may cut off their access altogether.

Read full article at the WSJ

Major Blow Against RIAA Lawsuits

In the ruling this week, U.S. District Judge Neil V. Wake denied the RIAA's summary judgment motion and shot down all of the RIAA's theories of file distribution where the digital file did not change hands. This includes the "making available" and "offer to distribute" theories that pertains to storing songs in a shared folder.

This judgment could have significance on all of the RIAA's pertaining lawsuits. It becomes harder for the RIAA to prove that a copyrighted file actually changed hands given the anonymous nature of file-sharing programs and the lack of cooperation from Internet service providers with these lawsuits. And if it's harder for the RIAA to smite these alleged file swappers, it's harder for the RIAA to make a case against file-swappers.

From PC World.

Mark Pesce - Piracy is Good

How to Create Crappy Music

From here.

95% of Youngsters are Illegally Copying Music

The industry's anti-piracy efforts have largely focused on illegal online music swapping - with estimates suggesting only one in 20 digital downloads is paid for. But the online problem is potentially dwarfed by "offline copying", argues BMR. Its research, carried out by the University of Hertfordshire, suggests that, for 18-24-year-olds, home copying remains more popular than file sharing. Two-thirds of people it surveyed copy five CDs a month from friends.

Overall, 95% of the 1,158 people surveyed had engaged in some form of copying, including taking the music contents of a friend's hard drive - 58% - and the more old-fashioned method of recording from the radio.

BMR, which lobbies on behalf of composers, songwriters and music publishers, claims its research is the first academic study of its kind, and fills a hole in the industry's understanding of how people consume music.

A hole in the industry's understanding of how people consume music? I'd rather ask what understanding they have that is *not* a hole.

From the Guardian.

Apple Planning Possible Unlimited Music Device

Having witnessed Nokia pay the labels to offer "Comes with Music" cellphones that let consumers in Europe download unlimited music from a limited catalog, Apple is apparently considering a similar approach.

The Financial Times reports that Apple is trying to lowball the labels for this device, proposing that it pay the labels $20 per device for the right to give the consumer unlimited music -- considerably less than the premium extracted from Nokia (a rumored $80 per unit).

Yet another round of negotiations between Apple and the labels will likely follow, and it's unclear when such a device might be released, if ever.

According to the Financial Times, "subscriptions would work only for its iPhone devices, where it has a monthly billing relationship with customers through the mobile phone operators offering the device, while the 'comes with music' model would work with iPhones and with iPods."

So the idea is you make everyone (who uses a connected device like an iPhone) pay for music, regardless of what they use. My question is, how much of this will actually be repassed to the artists? I doubt it would be a big percentage. Furthermore, what about consumers that don't want to use any music? What about other types of content? This would just be a desperate stopgap measure, not a real solution.

Music Industry Proposes a Piracy Surcharge on ISPs

Having failed to stop piracy by suing internet users, the music industry is for the first time seriously considering a file sharing surcharge that internet service providers would collect from users.

This is absolutely idiotic. So they want get a blanket surcharge, even from people that don't pirate anything? What about newspapers, should they get a blanket surcharge in case people copy and paste their news? What about photographers? Graphic artists? Where do you draw the line? How can this be enforced by the government?

Moreover, who wants to bet they won't be re-passing any of this to artists (or a very minimal part tops) if they get it?

More from Wired.

RIAA "can't run now"

Friday may mark a significant milestone in the RIAA's legal campaign against file-sharing, as it is the deadline for exonerated RIAA defendant Tanya Andersen to refile her malicious prosecution lawsuit against the record labels. Soon afterwards, discovery will begin, and all sorts of unsavory details about the RIAA's legal campaign against suspected file-sharers are likely to emerge.

Andersen is a single mother living in Oregon who was sued by the record labels in February 2005. She eventually filed a counterclaim against the RIAA, and when the labels voluntarily dismissed their case against her last June, she filed a malicious-prosecution lawsuit. In it, Andersen accuses the RIAA of fraud, racketeering, invasion of privacy, libel, slander, deceptive business practices, and violations of the Oregon state RICO Act.

Last month, a federal judge dismissed Andersen's original complaint, saying that she had "not adequately stated claims for relief," but gave her a one-month window to refile. Her attorney, Lory Lybeck, told Ars that he plans to file a new 80-page complaint tomorrow. "The focus of the amended complaint is essentially the sham litigation and abuse of the federal judiciary to operate this criminal enterprise that has harmed Tanya Andersen and thousands of other people," Lybeck said.

With a new complaint, the case is certain to move forward into the discovery phase, as the judge has told both sides that she would not entertain any further motions to dismiss this case. It's an uncomfortable place for the RIAA to be in.

The RIAA is likely to fight the discovery process tooth and nail, however, as the information that is unearthed could prove to be extremely embarrassing, if not problematic. "They've operated in this zone of secrecy for five years now, and we hope to put a stop to that," Lybeck stated emphatically, "because it will become obvious that their conduct is illegal an their whole scheme is flawed at its basic core."

The judge has barred further motions for dismissal, so unless the RIAA decides to settle—a move Lybeck believes is in the group's best interest—the case will proceed through discovery and to trial. Unlike the thousands of lawsuits filed so far, the RIAA does not have the luxury of walking away from this case if there's a real chance of embarrassing information being released. "Once discovery happens in the cases the RIAA brings, they run," Lybeck says. "This is our case now, and they can't run."

From Ars Technica.

BBC iPlayer Cracked

Hackers have cracked the DRM protecting the content on the BBC iPlayer, according to reports.

The breach in security means that consumers will now be able to download shows including Ashes To Ashes and Life In Cold Blood for unlimited viewing.

Previously content was only featured on the iPlayer for up to a week following its TV broadcast and expired 30 days after being downloaded to a PC.

"We've released a fix to prevent unrestricted downloading of streamed TV programmes on BBC iPlayer. Like other broadcasters, the security of rights-protected content online is an issue we take very seriously. It's an ongoing, constant process and one which we will continue to monitor," said a spokeswoman.

The BBC reported that 17m shows had been watched via the iPlayer by mid-February following its launch on Christmas Day.

This leads me to think that the DRM providers, companies that make money out of designing DRM are in the same situation as the Anti-Virus companies. The latter has been on a trend of seeding fear, including labeling harmless cookies as spyware just to sell more product. Why would DRM companies even ever want their technologies to be 100% effective (if it were possible), when it's more profitable to keep playing the cat and mouse game?

Moreover, does anyone think that there's a huge hacker conspiracy to break DRM just out of spite? Hackers are but consumers who feel swindled by artificial limitations on products they want, and respond by lifting those limitations. They don't even feel that they're doing something wrong, but rather that they were wronged.

From NMA.

Random House Going DRM-Free on Books

Could DRM-free audio novels make way for unrestricted electronic books?

They made it look so easy. In a letter dated 21 February 2008, Madeline McIntosh, Random House's senior vice-president of audio, let her authors know that the company would be releasing audiobooks free of digital rights management (DRM). For six months, Random House had been testing DRM-free distribution. "Based on the successful results of that test," she announced, "we are now comfortable broadening this type of distribution."

What does Random House's announcement, together with similar ones from Penguin and Simon & Schuster in the following week, mean for book lovers? In short, it means that those who download audiobooks can listen to them anywhere - on their laptop or on any MP3 player they care to own. They can even back up their collection on to, say, a removable hard drive.

They could also upload it to an illicit file-sharing system and deprive Random House authors of revenue. But McIntosh's research suggests that they won't. During the six-month trial - with the DRM-free retailers eMusic - Random House tracked all the audiobook files it sold without DRM. Not a single one ended up on peer-to-peer file-sharing. Which shows that honest customers, at least of the book-buying variety, are just that: honest.

So... when you treat consumers with respect and provide a better option, everything is just fine. Well... duh. More from Newstatesman.

Society of Automotive Engineers kills DRM on its journal following MIT boycott

MIT dropped its subscription to the database of past articles from the Society of Automotive Engineer because SAE had was using anti-copying DRM technology on the papers that made them less useful for scientists and researchers. After a presentation from an MIT professor about the boycott, the SAE publication board eliminated DRM for its papers

This is probably an example of what happens very often. Managers who really have no idea of what's involved make a decision to use DRM after someone who also has no idea of what's really involved presents the plan. At least in this case, the damage done by DRM was so bad that they had no choice but to reverse the situation.

Via Boing Boing.

RIAA Does not Pay Artists Post Lawsuits

Despite collecting an estimated several hundred million dollars in P2P related settlements from the likes of Napster, KaZaA and Bolt, prominent artists’ managers are complaining that so far, they haven’t received any compensation. According to a lawyer, some are considering legal action.

When EMI, Universal Music and Warner music reached settlement agreements with the likes of Napster, KaZaA and Bolt, they collected hundreds of millions of dollars in compensation - money that was supposed to go to artists whose rights had been allegedly infringed upon when the networks were operating with unlicensed music.

Now, according to an article, the managers of some major artists are getting very impatient, as it appears the very people who were supposed to be compensated - the artists - haven’t received anything from the massive settlements. They say the cash - estimated to be as much as $400m - hasn’t filtered through to their clients and understandably they’re getting very impatient.
...
It’s being claimed that after legal bills were subtracted from the hundreds of millions in settlements, there wasn’t much left over to hand out.

More from Torrentfreak.

Apple is Now Second Largest Music Store

From the Electronista:

Apple's iTunes Store has climbed to second place among all legal US music stores and is second only to Wal-Mart, according to a new study by The NPD Group. The research firm notes that about 29 million users, or 10 percent of all people acquiring music in the US, turned to paid download services throughout the course of 2007 and more often shopped at iTunes than through any other service. The total figure represented a jump of about five million versus 2006 and saw most sales go to buyers between 36 and 50 years old. This same segment largely drove sales of portable media players like the iPod.

This success, however, comes amidst falling sales among younger buyers. Analysts note that while the amount of music added to listeners' collections climbed by 6 percent in 2007, the overall plunge in CD sales actually dropped the amount of actual spending by 10 percent, with most spending just $40 on legal music for the entire year. As many as one million people stopped buying CDs altogether in the last year, with nearly half of all teenagers -- 48 percent -- never having bought their music in the physical medium.

Not by a long shot can you say Apple's Music Business has been successful. If there are 29M users, and they've sold 100M ipods, it means at the same time that their iPod business is booming (well, duh...) and that their music business sucks, with only one account for every three iPods (what?!). Plus, the amount of music climbed while overall music sales dropped... Let me repeat it again, Apple makes money off of Piracy! Their music business is unsustainable except as a sidekick to the iPod business. On the long run, Apple is not out to help the musicians or even the consumers with better (quality) products (iPods nor music). Their sole objective is to make a shinier gadget to make people throw away their old iPods in favor of new ones.

Badi Assad/ New York Guitar Festival

This is absolutely inspiring.
Here's an article about a recent event in New York featuring her and several other Brazilian Guitar luminaries such as Sergio and Odair Assad; my cousin Arthur Kampela; Romero Lubambo with his wife, the singer Pamela Driggs; Celso Machado; Fabio Zanon; and Yamandu Costa.

No disrespect to Argentina and Uruguay and Paraguay and all those other South American countries. They’ve all produced some excellent guitarists and some fine music. But I wouldn’t have made that drive down, and then a six-hour drive back up the following evening, if the traditional Guitar Marathon of the New York Guitar Festival had been eight hours of Argentine guitarists, or Uruguayan guitarists, or for that matter guitarists from almost any other country in the world. So what is it about Brazil, and Brazilian music, and especially Brazilian guitar music?

During the sound check next morning, while the 92nd Street Y echoed with Portuguese (which sounds like Italian being spoken by Russians), I asked the Brazilians themselves.

“Anthropophagy,” said Arthur Kampela—a man worth listening to, as he (a) was born and brought up in Brazil, (b) he has a Ph. D. in composition from Columbia, and (c) he’s a wild man. Anthropophagy means cannibalism.

EU: Singers and Musicians Should Earn Copyright Fees for 95 Years

BRUSSELS, Belgium: Singers and musicians should earn royalty fees for 95 years — almost double the current 50-year limit, a European Union official said Thursday as he promised to draft new copyright protection rules.

"If nothing is done, thousands of European performers who recorded in the late 1950s and 1960s will lose all of their airplay royalties over the next ten years," said EU Commissioner Charlie McCreevy, the union's internal market chief. "These royalties are often their sole pension."

People are living longer and 50 years of copyright protection no longer give lifetime income to artists who recorded hits in their late teens or early twenties, he said.

Most European composers and lyricists currently receive lifetime copyright protection which is passed on to their descendants for another 70 years. The new EU rules would not change that.

But the change would mean that performers would get the same 95-year copyright period enjoyed by their U.S. counterparts.

Record companies that refuse to rerelease a record during the extended copyright period should not be able to prevent artists from moving to a new label, he said.

The EU executive also wants to look again at reforming copyright levies charged on blank discs, data storage and music and video players to compensate artists and copyright holders for legal copying when listeners burn an extra version of an album to play one at home and one in the car.

More.

RealNetworks Senior Exec: The Market Has Voted Against DRM

From The Hollywood Reporter:

The digital rights management debate moved to the mobile space Tuesday as delegates at the GSMA Mobile World Congress heard a RealNetworks senior executive call for DRM-free music to be made more widely available.

While all four major labels have experimented with DRM-free music online, most mobile downloads still come with some form of the technology.

"DRM remains important for subscription models, but the issue is when you buy (an a la carte) track from Verizon or Vodafone it's very difficult to get it to play on something else," Larry Moores, senior vp global product management at Real, said during the "Fight for the Right to Make Money" panel. "If you want to fully enjoy the experience (of that track), you have to buy it three times. Well, the market's voted (against that) by stealing music."

However, Brian Levy, vp and chief technology officer for communications, media and entertainment at Hewlett-Packard, said going completely DRM-free would be "an over-reaction" (...)

Levy predicted that the model of locking in users to one device eventually will prove "unsustainable."

"DRM-free is only an interim solution," he said.

"The problem should have been solved last year," Moores said. "But it's a business problem, not a technology one. DRM-free content is an ongoing experiment, and the expectation is that (sales) volume is going to increase and start mitigating for declining physical sales. If that isn't occurring a year from now and free sharing of music is running rampant, DRM could come back. The dream won't happen unless we generate revenue today."

Obviously the industry wants to make money, but has no clue as to how to prevent piracy and DRM-free tracks from cannibalizing their market.

Amazon Beats iTunes at Usability

David Walker writes:

I have to admit, I'm a bit of an Apple fanboy. I've owned three different Macs, currently have 4 iPods in or around the house, use the Airport Extreme Router and my wife and I both own iPhones (both an 8 and 16GB). I plan on buying the AppleTV shortly and intend on purchasing my 4th Mac - either a Mac Pro or Macbook Pro - within the next few months. I even stood in-line for the Leopard launch. Why share all of that? Because, without a doubt, I will catch flack for what I'm about to say and will probably be called an Apple-hater, which I am not. But the truth is, after this weekend, I don't think I'll ever buy another song from iTunes again. And it's all because of Amazon.

To be clear, I normally purchase CDs and rip them myself. On average, I probably buy 7 or 8 CDs for every album I purchase online. But, whenever I have bought online music, I've always done it from the comfort of the iTunes interface. Having owned several iPods, I was very comfortable with the knowledge that the music I wanted could be found and purchased easily. Certainly, the fact that the music was DRM-laced was a negative for me, but it was never a big enough one so as to deter me. But, if the choice was there, I'd certainly go DRM-free if given the option.

Well, this weekend marked a first for me. I heard some old songs that I really enjoyed and went looking for the original CDs. As is usually the case, I couldn't find these titles in any brick and mortar store. So, I immediately jumped into iTunes and found them. However, before I hit purchase, it dawned on me - I wonder if Amazon also has these albums and I wonder how much they are? Quickly, I launched my browser and within a minute, found both albums on Amazon. Even better? The albums cost less than what I had almost paid on the iTunes Music Store. Before I knew it, I had clicked on Buy Now and had begun my separation from IMS.

So why switch? Why make the change and abandon the store of one of the companies I frequent the most? Here's why:

1. DRM-free MP3s
2. High Bit-Rate Files
3. Variable Pricing
4. Great Downloader with Automatic iTunes Import

Though my love for Apple products has not wavered, my contempt for DRM has grown. Knowing that the MP3s I purchased can be put onto any player I choose and burned to as many CDs as I like is not something I'm willing to compromise on anymore. Until Apple can find a way to compete with Amazon on these points, I'll never buy music from iTunes again.

Just another example. It's about usability and convenience, and that will always trump shoving DRM down people's throats.

Don't Ruin Users’ Experience. Innovate

Eran Writes:

We’ve all been saying this to the music and movie industries for quite a while. More DRM does not translate to more sales, Innovation does. It seems that the gaming industry is now learning a similar lesson:

As we believe that we are decreasing the number of pirates downloading the game with our DRM fixes, combining the increased sales number together with the decreased downloads, we find 1 additional sale for every 1,000 less pirated downloads. Put another way, for every 1,000 pirated copies we eliminated, we created 1 additional sale.

Though many of the pirates may be simply shifting to another source of games for their illegal activities, the number is nonetheless striking and poignant. The sales to download ratio found on Reflexive implies that a pirated copy is more similar to the loss of a download (a poorly converting one!) than the loss of a sale.

It’s good to see another company learning that the standard rhetoric about how piracy equals lost revenue is almost completely false. Most people who pirate your product would probably never have bought it in the first place. So why ruin your paying users’ experience by more limitations? Instead innovate.

Well said. Let me repeat that:

Why ruin your paying users’ experience by more limitations? Innovate Instead.

School Gives Students Names to RIAA, Now What?

Hours after a federal court judge ordered Oklahoma State University to show cause why it shouldn't be held in contempt for failing to respond to an RIAA subpoena, attorneys for the school e-mailed a list of students' names to the RIAA's attorneys. But now that the RIAA has what it wanted, the group is unsure about how to go about sending out its prelitigation settlement letters. Some of the students are represented by an attorney, meaning that the RIAA is barred from contacting them directly.

More details here.

Apple Behaves Worse than the RIAA

The RIAA always claims that its looking out for the livelihood of artists when it sues the hell out of alleged pirates, but in reality it's really fighting to keep record industry executives rich by defending an outdated and unsustainable business model. While before the PR team at least made an attempt to make it seem like artists were priority #1, they seem to have given up: the RIAA is now trying to cut down artist's royalties on digital downloads.

Yes, the RIAA doesn't think the record companies are making enough and that musicians are clearly making too much. I mean, they get 13% now. Like they deserve 13% for writing and creating the music that people are paying for. Hogwash! Someone had to, you know, encode it. That's worth at least 40%. And hey, these shoes don't shine themselves! So they're pushing to get that rate cut down to a shameful 9%, giving artists even less of a slice of the pie than before.

Of course, Apple, Napster and other large online retailers make the RIAA look like a charity in comparison, with Apple pushing to cut the royalty rate down to an insulting 4%. Yes, Apple wants artists to get a 4% of wholesale royalty rate. Really looking out for those artists, aren't you Steve?

So... instead of the industry evolving so that the products are better and the artists make more money the industry is mutating into a monopoly that is even worse for the artist, worse for the consumer and with crappier product quality, right? Oh, the humanities.
More from Gizmodo.

Apple iPod Sales Figures

Maine University Helps Students Fight Back RIAA Lawsuits

According to a post on p2pnet.net a small university legal clinic in Maine are taking up the fight in lawsuits being brought against fellow students. Under guidance from the clinic director and University of Maine associate professor Deirdre Smith law students Hannah Ames and Lisa Chmelecki are representing the students being sued.

If successful this move by the legal clinic could pave the way for other university law students to fight back against these actions by the RIAA providing both protection for their students, a low cost method for the universities to get out from under the RIAA threats and provide the students with some real world heavy weight legal experience.

Via winextra. It is obvious the RIAA has no qualms about stepping on students without means to fight back. Nice to hear about someone helping out the other side. The RIAA has the right to fight for their copyright, but using scare tactics and deeper pockets to try and prevent piracy just doesn't work and destroys some people's lives in the process. I'm sure the lawyers get paid, though...

Album Sales Plunged 20% Last Xmas

From ARS Technica:

Variety has the latest music numbers from Nielsen Soundscan on music sales from Thanksgiving to Christmas Eve. In 2007, 83.9 million albums were sold, down 21.4 million from last year. A 20 percent drop in sales is more than a blip; it's serious trouble.

The recent news suggests that people are turning away from the CD as a Christmas present, due in large part to the rise of online music services like iTunes, eMusic, and the Amazon MP3 shop. Now that non-DRMed music is widely available from many popular artists, giving the gift of digital downloads can be an attractive option for holiday shoppers. Certainly it's becoming more mainstream; even my local supermarket now stocks iTunes gift cards.

Music buying has certainly been migrating online, and the spectacular decline of CD sales is putting extra pressure on labels to move more online copies of the music they publish. This is clearly one of the reasons that Warner, traditionally a staunch DRM defender, agreed to strip DRM from its tracks offered on Amazon; it needed to do something (anything) to shore up flagging sales.

But as albums move online, the "album" is also losing its luster. Download services let consumers pick and choose, and many buyers seem to do just that, snagging the hits and leaving the rest behind. While digital distribution enables this, it's hard to blame digital for the common perception that most top 40 albums contain their share of filler.

DRM and Networked Disks

Samuel Tardieu writes about DRM and Networked Disks:

irst I hoped I had misread the web page. Then I realized I had not.

Networked disks are very useful. At home, they allow you to access your data from any computer on your local network without needing to keep a machine acting as a file server turned on all the time. But wait! You could use a networked disk to store songs and movies that you have illegally downloaded, couldn’t you?

Don’t worry, your networked disk will make sure you comply with the law and much more. (...) Western Digital seems to think that it is best that you do not share it at all, just in case:

Due to unverifiable media license authentication, the following file types cannot be shared by different users using WD Anywhere Access.

If these file types are on a share on the WD My Book World Edition system and another user accesses the share, these file will not be displayed for sharing. Any other file types can be shared using WD Anywhere Access.


...This post could have been titled “how DRM (Digital Rights Management) can hurt the world even when they are not used” or “we assume that you are a criminal”.

This is pretty bad. Just in case someone may be infringing on copyright (i.e. to protect their a$$es from RIAA lawsuits) they hinder the functionality of a product. Sad.

Free our Music

Music should be free. It should be enjoyed with friends and family. It should be a social experience. Music should not be imprisoned in one device. We need to move the focus of music from shiny gadgets to where it belongs: the songs.

This can only be achieved with media that is device-agnostic, and more attractive to users than current options. People don't want pirated music, they want convenience, portability and ease of use.

Projections by Enders Analysis estimate Global music sales, will drop from as much as $45 billion in 1997 to almost half, $23 billion, in 2009. According to the RIAA, revenues from physical music media in the US in 2006 ($9B) were roughly 25% lower than 1996 ($12B). New markets such as legal downloads and mobile music sales combined did not even make up the difference. Why? Because the music industry insists on pushing media burdened with DRM, and that just doesn't work.

We need a solution. Music has value, it doesn't need to be free (as in beer) but it needs to be free (as in speech). Free our Music.