September 15, 2003

From Findlaw’s Entertainment Newsletter E-mail [7:47 pm]

  • From the Christian Science Monitor: As music adapts, consumers win

    “The only way to win people over is to offer online downloading sites that have just as much flexibility,” [Forrester Research's Josh] Bernoff says. “Ten different companies are planning Windows-based services…. This stuff is on a tear right now, and if 10 different companies can’t among them somehow find the right model for selling to people, then I don’t know if there’s any solution at all here.”

    Even RIAA spokeswoman Amanda Collins admits that the industry relies heavily on the success of these services. “The ultimate measure of the success of our multipronged effort [to fight piracy] … is the long-term growth and success of that legitimate online marketplace,” she says.

    [...] But Bernoff doesn’t think the message is instilling a sense of ethics as much as it is instilling a sense of fear.

    “The news is out there and people are nervous,” he says. “The Recording Industry’s best strategy is for [journalists] to write an article about it - even if they’re only suing several hundred people.”

    [...] [Grokster's Wayne]Rosso takes a more cynical view. “I thought Joe McCarthy was dead, but lo and behold, he’s alive and well and running the RIAA.”

  • Music Lawsuit Targets Ind. Karaoke Bar

    In a lawsuit filed Monday in U.S. District Court in Indianapolis [complaint, pdf], Broadcast Music Inc. alleges an eastside bar violated copyright laws by hosting karaoke and live music shows without paying licensing fees to use popular songs.

    New York-based BMI is a performance rights organization that collects license fees on behalf of songwriters when their music is played on radio, television, the Internet, or is performed publicly.

    The lawsuit claims that Parrotheads Bar and Grill failed to pay licensing fees for using songs such as “God Bless the USA” and “Old Time Rock and Roll.”

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Slates Editorial Cartoons on RIAA Lawsuits [5:01 pm]

Via The Shifted Librarian: Music Swapper Suits!

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BCC Commentary and Discussion with EMI chief [10:06 am]

This defense of the industry by EMI Music’s vice chairman, David Munns, has a lot of interesting commentary as well: EMI boss defends music industry

The BBC’s Music Industry at a Glance gives a quick run through of the basic industry argument.

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The RIAA works the PR [10:00 am]

From the BBC: Music firms claim public backing

The Recording Industry Association of America (RIAA) released a survey showing that 52% backed the move.

It questioned 800 people for the poll, two days before targeting 261 individuals for distributing songs on the internet without permission.

The RIAA says piracy is hitting sales, but critics say CD prices are too high.

In the survey, 52% said they supported the music industry’s position, while 21% said they did not support it.

Wonder what the poll results would be now?

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Denise Howell on the Music Wars [9:48 am]

Denise Howell has captured some the Rhetoric From The Music War Front that merit a run through. (in re. TechTv’s the Music Wars)

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Ted Rall on RIAA Lawsuits [9:35 am]

Ted Rall, whose cartoons I love and who never manages to make a point without also being extremely antagonistic (and ususally pretty offensive as well), decides that moral relativism is at the heart of the critics’ arguments against the RIAA lawsuits and in favor of filesharing in this September 15, 2003 cartoon.

While he makes a parallel between two crimes that most would agree are not at all comparable, he is highlighting the weaknesses in the current arguments. The challenge is to find a four panel cartoon argument that points out that the role of IP is somewhat different from that from other forms of properties, and the torts against these properties are enforced in service of different social objectives.

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Jenny Levine’s recent music postings [8:18 am]

Two excellent pieces from Jenny Levine: Will Dropping CD Prices Be Enough? and New Sarah McLachlan Single!

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Another digital distribution medium for music [8:15 am]

Nielsen//NetRatings’ Data Show Musicnotes Has Over 80% Market Share

Custom data from Nielsen//NetRatings indicates during the first and second quarters of 2003, Musicnotes’ captured over 80% of the online traffic in its market segment – the commercial downloading of digital sheet music, guitar tablature and lyrics.

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Strange Bedfellows in the FCC MediaCon Debate [8:13 am]

From mi2n: Dorgan And Lott Say 342,000 Petitions Begin Landing On Capitol Hill Today In Support Of “Congressional Veto” Of FCC Broadcast Ownership

“The FCC’s action was one of the most complete cave-ins to corporate interests I’ve ever seen by what is supposed to be a federal regulatory agency,” [Sen.] Dorgan [D-ND] said. “It is clear the public agrees. In just a few weeks, one-third of a million petitions have been collected asking that the FCC rules be rolled back, and hundreds of thousands of others are speaking out as well. The FCC ignored the public in their process. In Congress, the public will be heard, and the public interest will be served.”

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A kuro5hin article on DRM [8:09 am]

Valve, Steam and DRM

Technical glitches and decisions made by the copyright holders are turning the simple act of buying a game, installing it and running it into a minefield of checks, any of which can stop you from playing your rightfully purchased game or software should they fail.

I suppose the question is now “will consumers stop feeding copyright holders now that they have bitten the hand?”. From the comments I’ve seen so far, not on a scale that copyright holders will actually notice. Half-Life 2 is set to come out at the end of this month and looks set to be digital distribution’s biggest test. Whether consumers will accept everything that will go along with it, only time will tell.

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Sunday’s UserFriendly [8:04 am]

A look at record company accounting in the wake of the recent settlement by Brianna Lahara: September 14, 2003 UserFriendly

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Long term optimism for e-Books [7:59 am]

From Wired News; E-Books, Once Upon a Future Time

E-books may find their niche with tech-savvy youth unfazed by the notion of browsing literature on a screen, and the growing legion of retirement-age readers, according to Richard Doherty, research director at Envisioneering Group.

“Two audiences that will benefit best are young people who loathe the idea of a library … and aging people who want the convenience of large type on demand,” or freedom from lugging heavy hardcover tomes.

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Another Disney experiment [7:56 am]

From CNet News; Disney, CinemaNow ink Net-movie deal

On Monday, Walt Disney Company unit Buena Vista Pay Television begins its deal with CinemaNow, a service that lets people rent downloadable or streamed movies. Marina Del Rey, Calif.-based CinemaNow will sell viewing for nearly 100 Disney new release and library films, including those of Disney-owned studios Miramax Films and Touchstone Pictures. Those include films such as Martin Scorsese’s “Gangs of New York” and Oscar-winner “Chicago.”

[...]

The agreement is Disney’s second foray into Internet movie rentals. In July, the company licensed some films to Movielink, a film distribution site backed by five major studios, in the first test of its kind. Earlier plans for Disney’s own video-on-demand service in partnership with 20th Century Fox ended more than a year ago when Disney pulled out of the project.

Also, the move fits in with Disney’s broader strategy to test new digital delivery systems for its film library. This week the company started distributing some movie titles on a new self-destructing DVD format, called EZ-D, in four U.S. cities. The discs, which sell for about $5, are sealed in plastic and, once exposed to air, expire after 48 hours.

The company also plans to start testing a new video-on-demand film service in the fall, called Movie Beam. It will use leftover broadcast “bits” to download recent first-run releases onto TV set-top boxes. Customers will be able to store up to 100 feature films at a time using the service and a related storage product, which will include DVD and TiVo-like features.

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Piracy as an inside job [7:52 am]

Pointing out that the file sharing networks are not all there is to the issue by looking at a forthcoming AT&T research paper: Hollywood Faces Online Piracy, but It Looks Like an Inside Job [pdf]

Hollywood is desperately worried that it will soon face the widespread illegal copying that has bedeviled the music industry — and that prompted record companies to file lawsuits last week against 261 people accused of illegally distributing copyrighted music online. Piracy of works in digital format, like DVD’s or high-definition television is, in theory, so simple that whole movies could be zapped around the globe with a click of a mouse — a prospect that Jack Valenti, chief executive of the Motion Picture Association of America, has told lawmakers “gives movie producers multiple Maalox moments.”

But the early debut of “Hulk” was not the work of the armies of KaZaA-loving college students or cinephile hackers. The copy that made its way to the Internet was an almost-complete working version of the film that had been circulated to an advertising agency as part of the run-up to theatrical release. And “Hulk” is not alone.

According to a new study published by AT&T Labs, the prime source of unauthorized copies of new movies on file-sharing networks appears to be movie industry insiders, not consumers. The study is “the first publicly available assessment of the source of leaks of popular movies,” according to its authors.

[...] The insiders might be workers in production or promotion, or even Academy Awards screeners, to whom the studios send thousands of advance copies of DVD’s each year. “The movie industry ought to treat everybody within its influence equally, from studio executives and investors, down through movie editors, truck drivers and out to the critics,” concluded Ms. Cranor and her coauthors, AT&T Labs researchers Patrick McDaniel, Simon Byers and Dave Kormann, and Eric Cronin of the University of Pennsylvania.

Ken Jacobsen, senior vice president and director of worldwide piracy issues for the motion picture association, said he had not yet seen the report, but added that its conclusions seemed off.

“The industry experience is the awards screeners are a source for piracy,” he said, but primarily during the Oscar-judging season. “The industry experience also is, on a rare occasion, a copy gets out of a postproduction house and enters the pirate marketplace. And the industry experience is that a majority of movies enter the pirate marketplace as a result of illegal camcording” in theaters. Digital piracy, he said, is “a serious problem for us now.”

The article refers to the paper Analysis of Security Vulnerabilities in the Movie Production and Distribution Process [pdf file], from Proceedings of 10th ACM Conference on Computer and Communications Security, ACM, October 2003. The abstract:

Unauthorized copying of movies is a major concern for the motion picture industry. While unauthorized copies of movies have been distributed via portable physical media for some time, low-cost, high-bandwidth Internet connections and peer-to-peer file sharing networks provide highly efficient distribution media. Many movies are showing up on file sharing networks shortly after, and in some cases prior to, theatrical release. It has been argued that the availability of unauthorized copies directly affects theater attendance and DVD sales, and hence represents a major financial threat to the movie industry. Our research attempts to determine the source of unauthorized copies by studying the availability and characteristics of recent popular movies in file sharing networks. We developed a data set of 312 popular movies and located one or more samples of 183 of these movies on file sharing networks, for a total of 285 movie samples. 77\% of these samples appear to have been leaked by industry insiders. Most of our samples appeared on file sharing networks prior to their official consumer DVD release date. Indeed, of the movies that had been released on DVD as of the time of our study, only 5\% first appeared after their DVD release date on a web site that indexes file sharing networks, indicating that consumer DVD copying currently represents a relatively minor factor compared with insider leaks. We perform a brief analysis of the movie production and distribution process and identify potential security vulnerabilities that may lead to unauthorized copies becoming available to those who may wish to redistribute them. Finally, we offer recommendations for reducing security vulnerabilities in the movie production and distribution process.

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A new name for the celestial jukebox [7:52 am]

From the NYTimes: Some Advise ‘Everywhere Internet Audio’ [pdf]

Instead of clinging to late-20th-century distribution technologies, like the digital disk and the downloaded file, the music business should move into the 21st century with a revamped business model using innovative technology, several industry experts say. They want the music industry to do unto the file-swapping services what the services did unto the music companies - eclipse them with better technology and superior customer convenience.

Their vision might be called “everywhere Internet audio.” Music fans, instead of downloading files on KaZaA - whether they were using computers, home stereos, radios or handheld devices - would have access to all music the record companies hold in their vaults. Listeners could request that any song be immediately streamed to them via the Internet.

If consumers could do this, the argument goes, they would have no interest in amassing thousands of songs on their hard drives. There would be no “theft” of music, because no one would bother to take possession of the song. To clinch music fans’ loyalty to the new system, and make them willing to pay for it, the music companies and the supporting industry would need to provide attractively priced, easy-to-use services to give consumers full access to the hundreds of thousands of songs available to them.

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A comparison of the recording and movie industries [7:47 am]

Slashdot (Music Industry Compared to Movie Industry) points to an article from the Denver Post: Recording industry’s missteps

The best-selling “Chicago” movie soundtrack is available on CD starting at $13.86.

The actual movie, with the soundtrack songs included, of course, plus additional goodies ranging from deleted musical numbers to the director’s interview and a “making-of” feature, can be had for precisely $2.12 more.

Therein lies the problem for a critically wounded music recording industry: The “Chicago” CD looks like a rip-off, and the DVD looks like a steal.

Nearly everything the record companies have done wrong in the age of downloading has been done right by the movie studios.

America’s love for movies is stronger than ever, while the nation listens to music with smoldering resentment.

[...] The CD format saved the business for 20 years because consumers had little choice but to replace vinyl or tape copies with CDs to keep their libraries relevant. CD makers knew they were borrowing from the future the day the last Bob Seger 8-track gave way to a new CD, but did nothing to expand their market on radio or among new buyers.

[...] Record label missteps are legion. But solutions are at hand: Let go of whole-disc sales and create a dollar-per-song online service as good as Apple iTunes. Make it universally available, with all the independents signed up.

Bring Ticketmaster to heel and make live music accessible and fun again. Allow file sharing for a $50 to $100 annual license. Woo 40-year-old buyers as if they were 16.

Most of all, spend less on lawyers and more on creative thinkers. You can’t subpoena success.

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Ernest Miller on Google and Compulsory Licensing [7:41 am]

Compulsory Licensing - The Death of Gnutella and the Triumph of Google, wherein Ernest points out that the inefficiencies of pure P2P are only defensible in the face of litigation. Should compulsory licensing become the norm, the pure P2P solutions will no longer be necessary.

However, if filesharing becomes legal through a compulsory license, what is the purpose of the Gnutella-based software anymore? Napster’s liability was based on theories of contributory and vicarious liability, which requires an underlying copyright violation. To the extent that filesharing is no longer copyright infringement, Napster could no longer be held liable. Since the Napster solution is far more efficient, particularly for searches, why would anyone use a Gnutella (or any decentralized P2P) network anymore? Virtually anything a Gnutella network can do can be implemented in a Napster-like network as well. Sure, current interfaces are better than Napster’s, but they could easily be ported from a Gnutella client to a Napster-like one.

All that effort, all that clever programming optimizing the Gnutella protocol, gone in a flash of compulsory licensing. Sure Gnutella will still be around, but what will it be used for? Why will so much effort be devoted to develop and optimize it? Gnutella will be, as far as I can see, a dead end technology, at least for filesharing.

Slashdot discussion: Google Wins the Filesharing Wars?

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And someone needs to point out the obvious [7:36 am]

From the NYTimes: Crackdown May Send Music Traders Into Software Underground [pdf] (note that this may be the NYTimes’ first use of "darknets" as a descriptive term outside the famous Microsoft paper of last year.)

“With the R.I.A.A. trying to scare users around the world, the developer community is pumping up to create networks which are safer and more anonymous,” said Pablo Soto, a developer in Madrid who designed the software for two file-sharing systems, Blubster and Piolet.

Some experts wonder if the industry’s efforts will create more trouble for it than ever. “The R.I.A.A. is breeding antibiotic-resistant bacteria,” said Clay Shirky, a software developer who teaches new media at New York University.

[...] The developers of the new systems say there is nothing illegal about writing software that helps people keep secrets. United States courts have held that file-sharing software may not be banned if it has both legitimate and illegal uses.

The Recording Industry Association of America has said that it is unconcerned about the increasing anonymity of file sharing. The stated purpose of its lawsuits is not to catch every hard core music pirate, but to show millions of casual file sharers that what they are doing is illegal.

In addition, none of the new methods offer perfect anonymity, experts say. Yet many of the new systems are likely to make the recording industry work harder to find file traders.

[...] “The needs of businesses and the needs of file traders are the same,” Mr. Shirky said. “I want a secure way to send you a three megabyte PowerPoint file with no way for anyone else to see it. That is not different from an MP3 file.”

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One strategy to spur CD sales [7:18 am]

Although, it’s going to be a hard sell: Fighting Song Piracy the Willie Wonka Way [pdf]

Some musicians try to halt online piracy by turning to lawyers. Others have turned to hackers. The rapper Obie Trice, a protégé of Eminem’s, is turning to Willie Wonka.

To entice fans to buy his new album “Cheers,” scheduled for release Sept. 23, Mr. Trice and his label, Shady Records, are hiding “golden tickets” inside 3 of the first 500,000 copies released.

The listeners who happen upon the tickets will each win an expense-paid trip to Detroit to watch Eminem record his new album.

[...] Songs from his new album are already being bootlegged, Mr. Trice said. “We’re trying to eliminate the bootleggers, trying to get them to buy the album.”

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Sounds like the hedging has already begun [7:13 am]

From The Boston Globe: Future uncertain for self-destructing DVDs [pdf]

With major retailers such as Wal-Mart Stores Inc. already selling more cut-price DVDs, industry experts say it is far from certain whether consumers would be eager to shell out $7 for a DVD movie they can’t keep or watch beyond a 48-hour deadline.

This week Buena Vista Home Entertainment, the home video arm of Walt Disney Co., began distributing a limited number of movie titles on the self-destructing DVD format — known as EZ-D — to a few US markets.

The EZ-D comes vacuum sealed in plastic. It looks and plays like a regular DVD but once it is exposed to air, consumers have just 48 hours to watch it before it goes black and stops playing.

[...] Video-on-demand and pay-per-view movies from satellite or cable also pose a challenge to the EZ-D, whose key selling points are convenience, no late fees, and no endless trips to return movies to the corner shop.

Dennis McAlpine, an analyst with McAlpine Associates, said the EZ-D was more “a learning experience for Disney than it is an opportunity to make money.”

[...] “We think the consumer proposition on this [EZ-D] disc is pretty tough,” Blockbuster chairman and chief executive John Antioco told Reuters in a recent interview.

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