Real’s Entry Into Music eTailing

With some truly striking characteristics — as in weird: Real to launch song store. Is this a backlash against Microsoft’s developing WMA codec hegemony, or a reflection of some kind of record industry perception that ACC + Helix will solve some of the woes of DRM?

Sources said the new store will be based on the Advanced Audio Coding (AAC) format–as are the songs in Apple’s rival service–but wrapped in RealNetworks’ own Helix digital rights management technology.

[…] The release of RealNetworks’ new service highlights increasing fragmentation in the online music market, in which different companies continue to adopt incompatible copy-protection mechanisms, each of which in turn are supported inconsistently by different portable music players.

For a song to play on a digital device, the gadget must both be able to play the underlying music format and to decode any proprietary content locks that protect against unauthorized copying. For example, both RealNetworks and iTunes will distribute songs encoded in the AAC format, but Apple’s iPod will not be able to play Helix-wrapped songs unless Apple licenses that technology.

Along with Real, Apple, Microsoft and Sony all offer or plan to offer music wrapped in their own proprietary anticopying technologies. Most of the other song stores proliferating online, including Napster, MusicNow and Musicmatch, use Microsoft’s digital audio format.

However, RealNetworks’ adoption of the AAC format does add momentum to a standard that many see as the logical competitor to Microsoft’s proprietary Windows Media technology.

Some Anti-RIAA Activism From DownhillBattle.org

While reading the comments to the Ars Technica article on the Pew statistics on RIAA lawsuits and P2P network use, I came across one that pointed to a WWW site that I had not seen before that at least appears to be taking some interesting action — downhillbattle.org. Some samples:

This could be fun!

LawGeek on Remix Culture

[Via BoingBoing] We fought the Kuleshov effect and The Law won?

[A]ccording to this court, the more uncommon (and provocative) the context of the remixing, the less likely it is legal. Of course, this raises the question of how new contexts can ever become legal. Presumably, at some point in history, no one framed art. Then the first person came along and put a painting in a frame. Under the theories in Mirage and Munoz, that person would have been historically guilty of copyright infringement because the context of their remix was uncommon at the time.

The Mirage and Munoz decisions have also been criticized by many commentators as wrongly decided in light of the First Sale Doctrine, which basically says that once you buy a copy of some media, you can do whatever the heck you want with that particular physical copy as long as you do not make additional “copies” that would otherwise violate the law. This is why Blockbuster can rent films without the MPAA’s permission and why used bookstores exist.

One would think that under First Sale, the thing you buy is the thing you own, even if its digital. Ergo, when Kuleshov acquired his films, he could remix them anyway he wanted because he was only manipulating the one copy he owned, not making any additional ones. But Mirage and Munoz cast some doubt on that, again suggesting that if you do anything creative with something you bought, you’re violating the law. Not a very good message for the artistic community.

A First Real Test of the Market Response to DRM?

Tech firms betting on digital living room: Consumer Electronics Show to open in Las Vegas

At the Consumer Electronics Show, which begins later this week in Las Vegas, computer industry giants such as Intel, Hewlett-Packard, Dell and Microsoft will be making their strongest push yet into digital entertainment. The major theme of this year’s show will be on products that give consumers new or more efficient ways to manage their libraries of digital songs, videos and photos.

Computer-makers are trying to capitalize on the fact that their technology has already extended deeply into devices like televisions and video players, products that were formerly the sole domain of traditional TV- and radio-makers like Sony, Sharp, Samsung, Panasonic and Philips.

“The (personal computer) guys want to own the consumer electronics space, ” technology analyst Tim Bajarin said. “The really big battle we’re about to see undertaken is the clash of two big industries — computers and consumer electronics. And the prize is owning the hearts and minds of consumers in the digital living room.”

[…] What’s happening is a confluence of events and technology that are further blurring the lines between the personal computer, which started as an information and productivity device, and home entertainment. Bajarin believes the shift can be traced back to the keynote speech Apple Computer Inc. Chief Executive Officer Steve Jobs gave at the Macworld Conference and Expo in January 2001 in San Francisco, when he declared a strategy to make Macintosh computers the home digital hub of the future.

The Neilsen/Soundscan Numbers

That have been in the press so much these last two days: Nielsen Soundscan And Nielsen BDS 2003 Year End Music Industry Report

  • The overall music business is down 0.8% units sold as compared to 2002.

  • Overall Album sales are down 3.6% as compared to 2002.
  • CD album sales, which comprise 96% of all music sales, are down 2% as compared to 2002.
  • 19.2 million digital tracks have been sold since June 29th, 2003.
  • Overall Album sales were up 20% in the last reporting week of 2003 as compared to 2002.
  • In December 2003, Overall Album sales were up 5% as compared to December 2002.
  • In December 2003, CD album sales were up 6.1% as compared to December 2002.
  • Fourth quarter 2003 Overall music business is up 10.5% as compared to fourth quarter 2002.
  • Fourth quarter 2003 CD album sales were up 5.6% as compared to fourth quarter 2002.
  • Fourth quarter 2003 Overall Album sales were up 4.3% as compared to fourth quarter 2002.
  • Overall Music Video 2003 sales were up 78.5% as compared to 2002.
  • DVD Music Video 2003 sales were up 104.5% as compared to 2002.
  • Single 2003 sales were down 4% as compared to 2002.
  • Alternative, Jazz and Latin 2003 album sales were up over sales in 2002.
  • Cassette album 2003 sales were down 39.8% as compared to 2002.

Jon Johansen and iTunes

Just in time for MacWorld we get this from The Register: iTunes DRM cracked wide open for GNU/Linux. Seriously. (the code)

Norwegian programmer Jon Lech Johansen, who broke the DVD encryption scheme, has opened iTunes locked music a tad further, by allowing people to play songs they’ve purchased on iTunes Music Store on their GNU/Linux computers.

“We’re about to find out what Apple really thinks about Fair Use,” Johansen told The Register via email.

Johansen cracked iTunes DRM scheme in November by releasing code for a small Windows program that dumps the stream to disk in raw AAC format. This raw format required some trivial additions to convert it to an MP4 file that could be played on any capable computer.

But in the best Apple ease-of-use tradition, Johansen has now made this completely seamless, integrating it with the VideoLAN streaming free software project.

Update: Slashdot discussion: DVD-Jon Breaks iTunes Encryption For Linux Users

Spooky Argument

CNet News carries a lightyly-veiled neo-con call for the elimination of all regulation of telecommunications services under the guise of a discussion of VoIP: The metaphysics of VoIP. Sadly, he fails to discuss any number of key issues, assuming that "competition" is all that really matters — everything else will come out in the wash. Unless there’s some magic way to distinguish "economic" regulation from all the other ones that we might care about…..

What’s a regulator to do? I say: Just focus on the observable fact that to the VoIP customer, the service not only seems substitutable for POTS, but is, in fact, essentially substitutable in terms of the trade-offs involving price and service quality. And given the rapidly growing competitiveness of the telecom marketplace, there is no sound rationale for traditional economic regulation of VoIP.

What’s more, there is no longer a sound rational for economic regulation of the incumbent telecom companies’ services. As digital broadband increasingly displaces analog narrowband service–and as unregulated wireline, cable, wireless and Internet service providers compete for the consumer’s communications dollar, often with bundled service packages–the policymakers should use VoIP to seize the opportunity to move quickly to create a uniform deregulatory environment for all the players.

DRM To the Rescue — Of Whom?

Five Giants in Technology Unite to Deter File Sharing

A global consortium of technology companies is laying the groundwork for a campaign to convince Hollywood and the recording industry that it has finally found an acceptable way not just to limit the copying of music CD’s and movie DVD’s, but to protect digital content in the fast-growing market for hand-held devices capable of playing music, video clips and computer games while wirelessly connected to the Internet.

[…] The consortium – known as Project Hudson and made up of Intel, Nokia, Samsung, Toshiba and Matshushita – plans to announce its new approach in early February to precede the Grammy music awards and the movie industry’s Academy Awards ceremony, executives say. Unlike the system used to protect DVD content, an Internet-based wireless protection plan could permit users of hand-held devices to share movie or music files on a limited basis or permit files to be shared for promotional purposes. Users could also hear a song before deciding whether to buy it.

For the entertainment industry, the Internet has often been viewed primarily as a threat because it makes it possible to transmit copies of just about any original work that can be converted to digital code to just about anyone in the world. But it is increasingly being viewed more positively by some entertainment strategists, who recognize that the Internet’s nature as an “always on” medium makes it possible to refine new “digital leashes” to help ensure that copy protection plans are not subverted.

[…] Balancing the proliferation of competing digital information protection plans is a growing realization that the industry needs common standards.

That failure is hampering the growth of digital technologies, said Leonardo Chiariglione, an Italian electrical engineer who founded the group that developed the original MP3 digital audio compression standard widely used to play music on computers and share it across networks.

“Content should be as transparent as it is today with MP3,” Mr. Chiariglione said. “It should be movable anywhere and still be protected. If we stay with digital islands people have a legitimate excuse to piracy.”

The NYTimes on the Pew Study

In Survey, Fewer Are Sharing Files (or Admitting It)

“Clearly, the R.I.A.A. suits were a watershed moment for the downloading community,” the director of the Pew Internet project, Lee Rainie, said, referring to the lawsuits by the recording association.

[…] Mr. Rainie said that the steep drop represented a sharp turnaround among Internet users. “I’m trying to think of any significant Internet activity that was popular, and on an upswing, and saw a decline of this level,” he said.

A representative of the recording industry hailed the news from Pew. “This is another data point that tells us that the lawsuits have had an impact,” said Mitch Bainwol, the chairman and chief executive of the recording association. He called the new figures “encouraging” and said that, along with other measures that his group tracks internally, “it tells us that we’re on the right track, and ought to continue with the lawsuits.”

[…] To Ms. [Cindy] Cohn of the Electronic Frontier Foundation, the lawsuits may have helped the industry address the problem of downloading, but they cannot fix a broader issue: giving people the music that they actually want to buy. “Who will the labels blame next if file sharing actually has gone down,” she asked, “but they still haven’t seen a corresponding bump in their revenues?”

See also Pew Says the Lawsuits Are Working

Songwriters Heard From

Songwriters Say Piracy Eats Into Their Pay — a look at another constituency that’s working to get heard, and is positioning itself alongside the RIAA. Plus a call for compulsory licensing from the EFF’s Wendy Seltzer.

Writers can receive as much as 8.5 cents for each song that appears on an album, each time a copy of that album is sold.

In practice, however, many songwriters receive less, since royalties are typically split with their publishers, leaving them with 4 cents. If a song is co-written, that 4 cents is split again, so the total can amount to just 2 cents. Songwriters also receive royalties of varying amounts when a song is played on the radio, or is used in movies or television.

“Eight cents is nothing; it’s cheap,” said Carey Ramos, a lawyer for the National Music Publishers’ Association, which represents music publishers and their songwriters.

But “a penny here, a penny there – they add up,” he said. “In the aggregate, it’s a big difference in the paycheck of a songwriter.”

[…] [The EFF’s Wendy] Seltzer cited the sluggish economy and consolidation among record labels and radio companies as other reasons that record sales had fallen sharply over the last four years. She argued that, assuming the downloading is authorized, online music distribution actually lowered costs and increased exposure for songwriters and artists.

Songwriters “will have to learn how to adapt to the new technology,” Ms. Seltzer said. “The buggy manufacturer doesn’t have a place in the world of automobiles.”

She suggested that the music publishing industry adapt for the recording business a model similar to one used in radio, where broadcasters pay blanket fees for rights to play songs and the money is split among the songwriters.