A Couple of Pieces from The Register

  • Belgian watchdog sues record biz over copy protection (Slashdot discussion — CD Copy Protection Case Goes to Court

    Belgian consumer watchdog Test-Achats (Test Aankoop), known for its crusade against Nokia’s “unsafe batteries”, starts the new year with a fresh assault on the music industry. It is taking the music giants EMI, Sony, BMG Music and Universal Music to court for installing anti-piracy systems on their audio CDs.

    In a press release, Test-Achats says it has received lots of consumer complaints in recent months about CDs equipped with anti-piracy systems, in particular ‘Laundry Service’ by Shakira, ‘1 Giant Leap’ by Faithless and Bjork’s ‘Greatest Hits’. Often, these CDs can’t be read by PCs and car stereos, and prevent users from making legal private copies, according to Test-Achats.

  • Music sales are on the mend

    Despite launching a legal assault against its customer base, the recording industry appears to be benefitting from increasing music sales once again.

    While 2003 music sales were flat overall, the record labels enjoyed a healthy spike in the fourth quarter, hinting that the industry doom and gloom so often suggested by the RIAA (Recording Industry Association of America) may be fading. Recent data from Nielsen SoundScan shows that an improving economy is having a positive effect on the music biz.

    In 2003, total music shipments slipped but 0.8 percent when compared to 2002. Sales also fell slightly by 3.6 percent year-on-year. In the fourth quarter, however, unit shipments surged 10.5 percent compared to 2002 with sales also rising 4.3 percent.

NYTimes on an eMusic Misdirection Scam

A Wary Eye on Sites for Music Sharing

On its Web site, Easy Music Download offers unlimited downloads from a catalog of more than 700,000 songs for an annual fee of $21.95. Theoretically, one could own tens of thousands of songs for the same price as just 22 tracks from the iTunes store. If it sounds too good to be true, that’s because it is.

[…] What Ms. Tennant and others found when they subscribed to Easy Download Music was not a song-selling service at all, but merely information on how to download file-sharing services like Kazaa, which provide access to the unrestricted swapping that Ms. Tennant was hoping to avoid.

[…] “Since August of 2003 we’ve been identifying what we view as scam sites, which are trading on the technology and offerings of Sharman Networks and in our view defrauding consumers by failing to disclose the actual service they provide,” Mr. [Roderick] Dorman [of Sharman Neworks] said. Several other cease-and-desist letters had been sent, he said, and he is “exploring with governmental authorities whether the conduct of these sites is criminal and is the appropriate subject of criminal law enforcement.”

Plus, the Times offers up their list of legit services: A Crowded Bandwagon Yields Music Without Worries

Video Games and Ethnic Slurs

Feds to Hear Video-Game Lawsuit

Haitian civil rights groups filed the lawsuit because the game, Grand Theft Auto: Vice City, instructs players to “kill the Haitians” and awards points for each kill.

The New York-based Rockstar Games has agreed to remove the offensive line from future versions of the award-winning video that has sold 11 million copies.

But the Haitian organizations, led by the Haitian-American Coalition of Palm Beach County, have also asked for more than $15,000 in damages.

NYTimes Obituary: Steven Bazerman

Steven H. Bazerman, Who Extended Intellectual Property Law, Dies at 63

Companies today understand the value of such details as the shape of a bottle or the position of a label on a pair of pants. But the idea that these details could be protected under trademark law was largely untested until Mr. Bazerman began taking product imitators to court in the 1980’s.

His legal work helped to build a body of case law around “secondary meaning,” which Mr. Bazerman said could include the unwritten, unspoken signals about a product’s origin that are given off by its appearance.

Some Funny Statistics from Australia

Forget the spin, taping is not killing music (Slashdot discussion: CD-Rs and MP3s Not Hurting Record Sales)

A Record Industry Association survey suggests that an astonishing 40 per cent of us have received homemade CDs as gifts, typically four each during the past year.

The industry wants us to feel bad about this. It says we are guilty of theft (or at least of receiving stolen goods).

[…] But creating CDs is different from stealing CDs from a store, and the industry’s figures bear this out.

The recording industry survey was carried out by Quantum Market Research using a sample of about 1000 people. It suggests that 31 million homemade CDs are given away as gifts each year (about four for each of the eight million Australians it says receive them). If, as seems reasonable, 31 million homemade CDs are kept rather than given away, the total number created each year would top 62 million.

When something is stolen there is normally something missing. A dent of 62 million in CD sales in stores each year should be easy to spot. Except for this problem. CD sales in Australian stores have hardly ever been that high. They peaked at 63 million in 2001.

If, as the industry suggests, each of the CDs made on a home computer was indeed created at the expense of one sold in a store the entire industry would have been wiped out.

In fact while 2001 was the industry’s best year on record, 2002 was its second-best year, with sales only a few per cent lower.

[…] [University of Texas economist Stan] Liebowitz says we are in the middle of a “wonderful natural experiment” which will determine fairly quickly whether the latest high-tech copying machine causes the sort of damage the other machines didn’t. He adds that from an economist’s point of view it would be no real disaster if it did. The present recording industry would be replaced by something better able to make money in the changed environment.

But all the indications are that the recording industry we know will be around for quite some time yet – side by side with homemade CDs. In Australia CD sales through stores rebounded 5 per cent in the first half of 2003. The figures for the second half may well show Guy Sebastian has pushed the industry towards a near-record Christmas.

The Circumvention Market Emerges — We’re All Criminals Now

Via Politech: The high-tech black market — a very extensive and informative article!

But how can the federal government outlaw tools? That’s as silly as making Magic Markers illegal because they could be used as circumvention devices. As activists with the Electronic Frontier Foundation (EFF) argued in a recent white paper, “photocopiers, VCRs, and CD-R burners can also be misused, but no one would suggest that the public give them up simply because they might be used by others to break the law.” Most of the circumvention tools the DMCA is designed to prohibit also have legitimate uses.

Perhaps more important, turning circumvention into a crime means that people who have a legal right to make fair-use copies of their media can’t. Say, for example, you’re a music professor who wants to make copies of certain songs available for students to download and listen to for class. These kinds of copies fall under a fair-use exemption to copyright law because they are being used purely for scholarly inquiry. It’s also legal for people to make personal backup copies of media they have purchased. But under the DMCA, the tools to make these perfectly legal copies simply won’t be available outside the black market. While the DMCA does provide exemptions for research and fair use, getting the tools to make good on said exemptions is such a thorny problem that technologists worry the law will stifle innovation and scholarly inquiry.

[…] Somewhere in Silicon Valley, a twentysomething man who goes by the name Bear is making $6,000 profit a month selling copyright circumvention devices. To be more precise, he sells and installs chips for the Xbox and Playstation that allow people to play copied games. I found him on a community Web site, offering his service — known as “modding” — for $70 a game system. After I exchanged a few e-mails with him, he agreed to an interview with me.

[…] He [one of Bear’s customers, and a Microsoft employee] said the main drawback to modding is that if you forget to turn your modchip off and try to play your Xbox over the Internet, Microsoft will figure out what you’ve done and shut down your online gaming account. He added, “I also think that Microsoft knows how popular modding is and that they are keeping a close eye on what people are doing so they can figure out what to add to the next generation of Xboxes.”

[…] The black market in circumvention devices could soon include smart card hacks that would keep your bank account fat and your phone bill low. But as the stakes get higher in crimes of circumvention, the losers are bound to be innocent consumers and white-hat hackers. In their efforts to stop crime, corporations and the government are using DRM and the DMCA to stamp out our ability to make fair use of our media. When we cannot do what we like with our machines in our own homes, we are losing what Princeton professor Felton calls our “freedom to tinker.” Ultimately, we may lose far more: our ability to innovate, to pass on our knowledge, and to understand how the technology that runs our world works.

Happy New Year!

I see that Derek’s back, and he’s commented briefly on a paper I too am only just getting started with — Andrew Odzlyko’s latest discussion of price discrimination: Pricing and Architecture of the Internet: Historical Perspectives from Telecommunications and Transportation

The concluding paragraph should be enough incentive to study the examples:

The general conclusion then is that the historical record of the transportation industry does demonstrate the importance and prevalence of disciminatory policies that are incompatible with the basic architecture of the current Internet. This probably accounts for much of the push to build new networks, or modify the current ones so as to provide more control for service providers over what customers do. However, the Internet is special, in its importance as an enabler for the rest of the economy, in its migration of costs and capabilities to the edges, in its primary value being in connectivity and low transaction latency, and in its pervasiveness and frequency of use. Hence in spite of the strong push from the industry, there are good prospects that the open architecture of the Internet will survice [sic].

Update: Slashdot’s article picks a different paragraph to highlight: Pricing and Internet Architecture