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May 27, 2003

2003 May 27 [6:46 am]

(entry last updated: 2003-05-27 17:58:11)

  • Musicrypt and EMI Music Canada Make History:

    Music Delivered From Recording Studio to Record Label to Radio Entirely in Secure Digital Format

    Music history was made at 12:55 PM ET, Tuesday May 20, 2003 when, for the first time, a major record company completed the delivery of music files securely from recording studio to record label to radio stations across Canada via the Internet using Musicrypt’s Digital Media Distribution System (DMDS).

    That’s one way to keep the bootlegs off the street….maybe.

  • A couple of Billboard articles:

    • Jewel Pleasing Fans Online, On Tour

      Atlantic Records is offering something extra to Jewel fans who buy her forthcoming album “0304,” due June 3, during its first week of release. Each copy in the first run of “0304″ will include a download card with a unique PIN number allowing access to a secure site from which users can download solo live MP3 versions of “The New Wild West” and “Life Uncommon.” The promotion runs through June 9.

    • Britney Copyright Infringement Suit Dismissed

      A federal judge dismissed a copyright infringement lawsuit against Britney Spears, saying two Philadelphia songwriters failed to prove the pop singer copied the melody of one of their songs. U.S. District Judge Berle M. Schiller ruled last week that Michael Cottrill and Lawrence Wnukowski couldn’t provide enough evidence to prove Spears had access to their song titled, “What You See Is What You Get,” when she recorded, “What U See (Is What U Get).”

  • Yesterday’s odd article floating the PSU president’s solution to illegal file sharing gets the Slashdot treatment: University Sponsored Music Services?

    Other Slashdot discussions of note:

  • I had planned to take a Starbucks photo this weekend, but got to the store and didn’t have any “film” in the camera (I have one of the Mavicas that burns miniCDs). So, I failed to participate in Larry’s exercise, but I enjoyed Donna’s writeup of the potential theories of damage.

  • Derek points out some of the developments in the video rental business, both from a historical perspective as well as the current considerations of the next generation of video delivery.

    Note that the reason that audio CDs and software CANNOT be rented (versus VCRs) lies in specific legislative constructs developed in the Congress (1984 for audio recordings and 1990 for software) - see Title 17, Chapter 1, Section 109, subsection b.1.A. (The Cornell listing also has Notes that are worth reading.)

    Note also that video rental is not necessarily allowed under the 1996 WIPO treaty, which puports to protect exclusive rental rights to video as well as audio and software. In particular, a showing of sufficient market effects is enough to kick in the need for signatories to explore legislative relief. Thus, the Blockbuster arrangesments that Derek cites could be interpreted as a negotiated settlement balancing the first sale doctrine rights of video stores against the potential legislative threat that might emerge under the WIPO.

    Finally, if you’re interested in the price discrimination angle, you want to look up Hal Varian’s work - try Differential Pricing and Efficiency - or these PDFed slides if you’ve got the economics background.

  • Via ScriptingNews, this CNet article: File swapping shifts up a gear

    Going by names like eDonkey and BitTorrent, many of the latest generation of file-swapping tools have been designed specifically to increase the efficiency and speed of transfer for large files such as movie files. Some of these tools have been in development for several years, but are just now reaching the critical mass needed to make a dent in the file-trading world.

    Some in the copyright community say these new tools are finally starting to rival the piracy potential of the post-Napster generation of swapping services.

    … The BitTorrent technology isn’t intended for movie piracy. Indeed, open-source advocates recently used it to distribute a new release of the Red Hat Linux software, making an end run around clogged company servers. One Web community that specializes in swapping high-quality recordings of live jam bands such as Phish, usually with the bands’ permission, also uses the technology.

    “It’s definitely a technological marvel,” said Wayne Chang, a Massachusetts college student and system administrator for PickATime.com who has used the technology. “The more people using it, the faster the whole system is.”

  • Larry Lessig also liked the Frank Rich piece from Sunday’s NYTimes. However, I doubt that yesterday’s article on media consolidation is what Larry had in mind with his posting:

    Easier Rules May Not Mean More Newspaper-TV Deals [pdf]

  • This article from the BBC suggests that, between free downloads and online CD retail, the online music download for fee sites are getting squeezed: Positive signs for online music

    People are beginning to pay for music on the net but they are more likely to buy CDs online than individual tracks, research suggests.

  • Wired News also carries a Reuters piece on the rise of the ring-tone business in the US, matching similar trends overseas, albeit possibly without the copyright issues they once engendered.

  • Wired News has a Reuters newswire that suggests the sale of PressPlay to Roxio means that the record companies are coming to a new way of thinking about digital distribution - sacrifice control and take a slice of the equity - Let Someone Else Do It: Dig Tunes

  • Jenny Levine points to a PCWorld interview with Jack Valenti, who’s up to his usual tricks, with all sorts of rhetorical tricks. A few examples:

    PCW: Why can’t people who legally purchase DVDs make one backup copy? How come the same fair use rights that let you make a backup copy of other media do not extend to DVDs?

    Valenti: That question has nothing to do with fair use because a DVD is encrypted and the Digital Millennium Copyright Act says to circumvent an encryption violates that law.

    …Do you know anything else in the country that if something is abused for any reason they’ll give you a backup? If I go down to the hardware store and buy an electric lawn mower and I take it home, and three weeks later my wife runs over it in the driveway, I can’t take it back and get a new one. I can’t get a backup.

    PCW: You have suggested in some of your comments that the computer industry is profiting off Hollywood by selling computers that rip, burn, and copy digital content. Are you suggesting the movie studios’ profits are more important than the computer industry’s profits?

    Valenti: I’m not suggesting anything. I’m only saying that there is a huge avalanche of thievery today. Researchers estimate that 400,000 to 600,000 movies are being illegally uploaded and downloaded every day.

    People will say, “Well, you Hollywood guys are always whining. Why don’t you change your business model?”

    Well, my answer to that is: There is no business model ever struck off by the hand and grain of man that can compete with free. It can’t be done.

    If I have a Pizza Hut and I’m selling pizzas at $1.50, somebody puts up a Pizza Hut next to me and gives them away, who do you think is going to get the business?

  • The Music Industry News Network has the text of remarks by FCC Commissioner Jonathan S. Adelstein Before The Media Institute on the upcoming FCC vote: Big Macs And Big Media: The Decision To Supersize (A PDF version from the Commissioner’s WWW site)

    From the outset of broadcasting, policymakers have always understood that localism and diversity are inefficient. If efficiencies were all that mattered, Congress would have told the FCC to give out national or regional broadcast licenses. After all, the most efficient possible structure is for one large company, let’s call it Pravda, to gather the news for everyone. American broadcasting has never been about maximizing bottom-line efficiencies over all else….

    Localism continues to be the core organizational principle of the Commission’s dispersal of valuable spectrum rights. Nothing in the 1996 Act jettisoned this core principle. In fact, the 1996 Act’s legislative history strongly reaffirms localism over efficiencies, saying “Localism is an expensive value. We believe it is a vitally important value, however, [and] should be preserved and enhanced.”

    So to avoid backlash from the public and its representatives, it will be up to many of you in the room today to prove that efficiencies gained by any relaxation of broadcast ownership rules are channeled in the direction of serving local communities and local residents.

    I often hear from industry sources, “we’re just giving people what they want. After all, that’s our business. And as we get bigger, we just have more resources and ability to deliver a better quality product.”

    …You might call it the “McDonaldization” of the American media. McDonald’s spends a lot trying to give people what they want. They only put products out after expensive field testing. Every product is analyzed to satisfy the greatest number of people, even if the local community may have its own unique tastes. Don’t get me wrong, I like McDonald’s, and eat there sometimes. But I don’t eat there every day. And even if I did, I know it wouldn’t be very healthy.

    The same goes for the media. People also need a balanced media diet – a diverse menu, if you will. But it’s a lot harder to set up a broadcast station than a new restaurant. …Neither cable nor the Internet has changed the huge market power granted by federal license to use scarce broadcast spectrum, particularly when that license comes with the requirement to be carried on cable. If these scarce licenses weren’t valuable, their price wouldn’t continue to skyrocket as they have in recent years.

  • A look at the current thinking in re DRM and music downloads/subscriptions can be found in this CNet News article on Microsoft’s planned release of their next-generation Media protocols: Microsoft prepares reply to iTunes

    Subscription services are “ahead of their time” according to a senior executive at another record label, who said a key stumbling block is providing unlimited access to subscription music away from the PC on portable music players and other devices. “Ultimately, there will be a huge audience for this, but the services need to provide portability,” he said.

    “Downloads are very close to an old-fashioned experience,” he added. “Subscriptions are much more of a shift…but the technology isn’t right for the shift to happen. We’re hoping it will happen this year, that the technology companies will provide portable players that can play the music.”

    … Microsoft plans to add support for a clock in portable music players and other consumer-electronics devices. The clock would provide a “time out” feature much like that used in PC versions of its DRM software. If customers don’t pay their monthly subscription bills by a certain date, access to the files on those devices is cut off.

    Time-outs can be supported relatively easily on PCs, which have plenty of memory and processing power to handle a clock and the associated DRM. But supporting clock DRM on small handheld devices poses a considerable engineering challenge, thanks to limited CPU resources and battery life. Usher said Microsoft is working with consumer-electronics device makers to add clocks that can be hooked up to its rights-management system.

  • CNet also has an opinion piece, Steve Jobs’ half note that discusses the limitations of iTunes when it comes to solving the real problems of music distribution, starting with this statistic:

    But in the end, iTunes Music Store is just a music fulfillment service. It has done little or nothing to change the ways people explore and learn about the music that they eventually buy, and that’s a disappointment.

    If online music were approached in the right way, it would have the power to transform and enrich an industry that historically has courted consumers with a blunt marketing instrument.

    Currently, a mere 2 percent of releases account for 80 percent of music industry sales. (emphasis added) Online distribution could help rebalance that ratio, building careers for hundreds of artists who now linger in obscurity, and drawing in millions of new fans bored and alienated by the industry’s star-making machinery.

    The key is getting more and better information to consumers. The music store of the future can and should be a primary force in making that happen.

    There’s a letter to the editor that makes some damning charges regarding record industry innovation.

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