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MP3, Napster, and you...
Waiting for the other shoe.
Well, the first shoe, RIAA vs. MP3.com has dropped,
and MP3.com took a hit. But apparently it's not as bad as all that.
My first instinct was to wish that MP3.com would pay part of the settlement with cds
they purchased, and deduct the retail price they paid from it, but MP3.com has allegedly been
long in negotiations over licensing fees with the labels, and they were waiting for a ruling
as to whether licensing was necessary before proceeding (this from
http://www.wired.com/news/business/0,1367,36027,00.html).
A recent announcement from MP3.com declared that they've signed a licensing agreement with BMI,
a rights clearance organization bears out this contention. Though the details remain murky at this
time, what this means in short is that musicians, songwriters, and publishers who have material on
MP3.com, and who are offered playback service through my.mp3.com, are potentially able to receive
royalties just as they would from any other broadcast. They've also created a classical music
paid subscriber channel.
As their my.mp3.com serviceis closer in spirit to a netcast than
a storage service, this ruling should not have been a great surprise.
The other shoe, Dr. Dre and Metallica vs. Napster:
Napster, for those of you who have just come up from under a rock, is a program that combines
the user to user connectivity of chat and ICQ with the file transfer capability of ICQ, ftp, and
directory sharing. They only permanently maintain user id registrations on their server, while shared
music directories are registered on every new session. Users decide what files and what directories get
shared, and are admonished against piracy by way of a banner similar to the FBI warning on the front
of videotapes.
Metallica and Dr. Dre both seek to hold Napster responsible for the piracy of its users,
and Metallica has named three universities as codefendants. Most disturbing is the invocation of the
RICO act in the Metallica case. RICO is the law under which mobsters are prosecuted for conspiracy
and collusion. Dr. Dre hasn't sued yet, but just given notice to Napster.
Napster has sought refuge in the 'safe harbor' provision of the Digital Millenium
Copyright Act, which absolves service providers from the piracy actions of its users.
Certainly that will hold for the universities, if it will work for Napster remains to be seen.
And a loss for Napster doesn't put an end to piracy.
There are already serverless clones out there that reference no central authority.
But most entertaining is this quote from Metallica's drummer (from
http://www.mp3.com/news/725.html):
"With each project, we go through a grueling creative process to achieve music that we
feel is representative of Metallica at that very moment in our lives," said Metallica drummer
Lars Ulrich, commenting on the band's lawsuit against Napster Inc., the University of
Southern California, Yale University and Indiana University. "We take our craft--whether it be
the music, the lyrics, or the photos and artwork--very seriously, as do most artists.
It is therefore sickening to know that our art is being traded like a commodity rather than the
art that it is."
They seemed to have no problem with their Art being recorded and sold in mass quantities
at Tower Records and Sam Goody's nationwide. They don't seem to have a problem with their
Art being covered on tribute albums, such as Cleopatra's 'Blackest Album', and
Die Krupps' 'Tribute to Metallica'. And I guess their "grueling creative
process" so creatively drained them that when it came
time to name their album and create the cover art, they ripped off the Beatles, Prince, and
Spinal Tap to come up with the 'black album'. If their Art is so better than a commodity,
why don't they just restrict themselves to live performances, and never record again?
Try some Pepto, Lars.
And Lars is being dogged on the net.
http://www.paylars.com/ is seeking donations
for poor Lars, to make up for all the piracy, and maybe buy him some Alka-Seltzer.
To date they've collected $244.00. And in classic bardic tradition, Metallica got skewered
with satire by the Brunching Shuttlecocks (
http://www.brunching.com/features/feature-metallicaletter.html)
In response to Napster's defense 'we don't pass anything, we connect users
and warn them against piracy,' Lars and lawyer staged a photo op by dropping off a hardcopy
list of 330,000 Napster users who are allegedly priating Metallica songs. I rather suspect that
they only provided a list of users that had either 'Metallica' in their offered filenames,
or filenames that mirrored Metallica song titles. Laurence Pulgram, Napster's lawyer accepted
the list and replied simply: "If the band would provide the names in computerized form, rather
than in tens of thousands of pages of paper intended to create a photo op, that would expedite the
process."
Photo op.
And now for the strangest turn of events:
LESTER CHAMBERS d/b/a The Chambers Brothers, CARL GARDNER d/b/a The Coasters, BILL PINKNEY d/b/a
The Original Drifters, TONY SILVESTER d/b/a The Main Ingredient, on behalf of themselves and all
others similarly situated, vs. TIME WARNER, INC. in its own right and as successor in interest to
WARNER BROS. RECORDS, ATLANTIC RECORDS, ELEKTRA RECORDS, and associated labels; SONY CORPORATION
OF AMERICA in its own right and as successor in interest to COLUMBIA RECORDS and associated labels;
BMG ENTERTAINMENT, INC. in its own right and as successor in interest to RCA RECORDS, ARISTA
RECORDS, and associated labels; UNIVERSAL MUSIC GROUP, INC. in its own right and as successor
in interest to MCA RECORDS, POLYDOR RECORDS, and associated labels, and MP3.COM, INC.
You can't tell the litigants without a program.
You see, for the labels and the RIAA to sue mp3.com, they have to assert that they
own the rights to the music. However, they may not necessarily own the rights to the music in
question, so the artists who do own the rights need to defend them, especially in such a
potentially precedent setting situation as this. I haven't examined the legal issues
of the artists in question, but they seem mostly straightforward from these points (from
http://www.mp3.com/news/734.html):
4. Plaintiffs bring this action to determine their rights under the federal
copyright law both in regard to internet use of those sound recordings, (and across
computer networks in general) and the use of their names and likenesses in connection
therewith, which unfairly competes with the sale of the performances in tangible media from
which plaintiffs derive much of their royalty income. In fact, no royalty provision is made for
sale in intangible formats in any written contract with the record company defendants executed
by any class member.
5. These performances at issue were recorded from the early 1950's until
December 31, 1995, the effective date of the Digital Performance Rights in Sound Recordings Act
of 1995. Prior to December 31, 1995, there was no right under federal copyright law for the owner
of a sound recording copyright to exclude others from digitally broadcasting it across a computer
network.
6. Furthermore, as to any of these recordings first fixed in a tangible medium before
January 1, 1978, the effective date of the copyright Act of 1976, there is no applicable federal
copyright protection for them at all.
And all of the above is just background. Here we are now seeing the legislative groundwork being
laid for the Music Industry of Tomorrow. What's missing from all parties is the Vision Thing.
I don't see any credible plans for the radical reshaping that must take place to create a viable music industry in the wired tomorrow, just a whole bunch of trial balloons and retrofits.
What's really going on with Napster, mp3.com and related web music services, and mp3 piracy? What's the huge blind spot that's preventing the Music Industry from Getting It?
There's a disconnect between the publishers and consumers. Consumers know the score. They know that signed artists are doing little better than work for hire, they know the music industry pulled in 15 billion dollars last year. The RIAA is failing to get any kind of a message across that convinces consumers that their swapping of mp3s is hurting artists. Nobody is crying for Metallica.
And the RIAA is in a state of denial.
Music publishers are failing to meet the demands of consumers. They are failing to even identify the demands of consumers. This is evident in their insistence on pushing 'security' as a selling point for digital formats and playback devices and software. They're selling to IP lawyers, not listeners.
Both Sony and BMG have announced digital sales starting this year. Sony is offering singles from artists such as Bob Dylan, Bruce Springsteen, Rage Against the Machine, Macy Gray, Pearl Jam, Jennifer Lopez, and Lauryn Hill. At $2 each, with a suggested retail of $3.49. Compare that with emusic's price of $1 a song, with entire albums running between $3-$10. And these aren't new songs, either. This is older music with all of their promo costs amortized, and no manufacturing or shipping costs. Sony's plan is destined for failure. There's no word from BMG as to what artists they'll offer, or at what prices. Though I look at my Fairground Attraction and Vaya Con Dios imports, both published by BMG, and I have my doubts.
This is also going to be highly experimental for both companies. Both are looking at formats from several different companies. At this early stage, it looks doomed. I only hope they know the law of tech: the most convenient technology wins.
First, people everywhere have to come to grips with the fact that piracy will not be eliminated. There are people willing to pay 3 bucks for the video of a newly released movie recorded on a camcorder, audience participation and all, instead of waiting the six weeks or less for the movie to hit second run theatres. People will still pirate music. Accept it and move on. Now how can we abate the current level of piracy? Simple. Make it easier to buy the music than to pirate it. That's the industry's challenge, and by focusing on security, and atom based price scales versus bit based price scales, they will fail miserably.
What needs to happen? First they need to focus on infrastructure. Napster owns the infrastructure. Sure, there are others, but this is the web, circa 1994, and Napster equals Netscape. Netscape lost by engaging in a feature war with Microsoft rather than a performance war, among other things, but Napster faces no Microsoft. LiquidAudio, a2b, do they, or any of the other dwarves have the userbase of Napster? Nope.
What can Napster do to secure their position as the music distributor of the future?
First, more granular searching. Searching by filename doesn't cut it for product delivery. Recognize and search on ID3 tags.
Second, partner with content hosts, such as mp3.com, emusic.com, and orangealley.com, and musicians to provide free server space and home pages to musicians. Secondary to the first item, once you start hosting musicians, add search fields for 'influenced by' and 'sounds like', such as mp3.com provides, so that users can find new music. (A radio tab, such as the extant chatroom tab might be nice, for users to stream their collections, but it's likely not that immediately useful).
Third, micropayments. Make it easy for users to pay for music. I should be able to
walk in to CompUSA, plunk down $30 for Napster 4.5, and when I install, get $10 in NapsterBuck$
to spend on online music from participating vendors, such as emusic, mp3.com, and orangealley.
The whole point is to make it easy to spend, and to get customers used to the idea of online
shopping and digital delivery. As far as pricing goes, the market should stabilize pretty
quickly. I'm thinking emusic's $.99 single/$9.99(premium) album will probably
hit close to the mark. Maybe some funkier options can be tried, such as mercata.com's
reverse auction. The more people jump in, the lower the price goes. But leave such
experimentation to the sellers, just provide the infrastructure.
Finally, and pirates will hate this, but we're primarily interested in paying
customers, rights management. This shouldn't be the first addition out of the gate, it
should be the very last. And it shouldn't be built into the song file itself, merely
registered with along with the tagged data in the servers. Ideally, musicians will be posting
their own song files, and when they register their songs with the Napster servers, they'll
register bootleg rights. Single A can be freely copied, Single B must be purchased at this price,
but if somebody buys it and offers it on their shared directory, give them a $.10 rebate. Look to
Ted Nelson's Xanadu, http://www.udanax.com/
for inspiration.
Now this is not to say you should put the kibosh on all unpaid transactions and all
unregistered song files, rather the above features should be in addition to Napster's present
functionality. Pirates will pirate, but as long as it's easy to buy and sell, people will.
- Bruce Dykes [05/8/00]
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