If copyrights didn't exist, there'd be a lot more than poor artists on the streets. There would be a lot of out-of-work lawyers in the world, too. In the realm of online music, where the digital sludge has hit the fan first, there are a couple of lawsuits that help to define the current state of consumers' demand for tunes on the World Wide Web. And they're going against the desire of controlling media conglomerates that want to hold onto the proverbial butter that covers their bread.
On one side are the record labels, who are being represented in court by the Recording Industry Association of America, which have shot their cannons over the bows of two prominent Internet sites whose business models rely on the ability of Netizens to download songs for free: MP3.com and Napster.com.
And, of course, lawsuits beget other lawsuits. MP3 has filed a countersuit against the RIAA. But delving into the claims involved in the suits against MP3 and Napster, one finds that there are different charges being levied against each company.
"With Napster, it's contributory infringement," said Webnoize.com senior editor Ric Dube. "The RIAA is saying that these downloads wouldn't have happened if it weren't for Napster. With MP3, the accusation is that they're providing a database made up of illegally copied files."
Sharing files
The difference comes down to who does the "ripping," the new Internet terminology used to describe when software converts CD tracks into MP3 files.
With the Napster service, end users rip their own tracks, then go onto the Napster site and share MP3 files. In fact, each user logged onto the site has access to every other user's database. It's sort of like the Internet version of free love with everyone communally sharing each other's goods.
RIAA's beef with MP3, though, comes from its "My MP3" service, which creates MP3 files out of any CD placed in a user's disk drive.
"It's a new way to listen to the music that you already own," Dube said. "The fallibility of the service is that the only way to prove that you own the CD is to put it in your computer. But I could've borrowed those CDs."
For its part, the RIAA has gone on the record, so to speak, to distinguish what it feels is illegal copying of protected content from the compression algorithm called MP3, which in and of itself is not illegal.
"Our record is clear in distinguishing legitimate uses of MP3 technology from piracy," said RIAA president/CEO Hilary Rosen in a recent statement. "The lawsuit against MP3.com has nothing to do with MP3 technology. It has to do with MP3.com, the company, taking music they don't own and haven't licensed to offer new services to make money for themselves. And there is nothing illegal in my saying so."
RIAA SVP Cary Sherman likened Napster, on the other hand, to a "giant online pirate bazaar" that gives Internet users the "means to engage in massive copyright infringement," according to a statement issued by the RIAA.
Straddling the fence
One company that straddles both sides of this issue is Tokyo-based Sony Corp. and its American subsidiaries Sony Music Entertainment Inc., which houses record labels under its corporate umbrella, and Sony Electronics Inc., which makes two portable MP3 players: the VIAO Music Clip and the Sony Memory Stick Walkman.
Sony Electronics' answer to this problem is to use copyright protection standards pertaining to portable digital devices, which are being formulated by the recording industry-sanctioned Secure Digital Music Initiative (SDMI). Sony's devices include software and other processes that, according to the company, provide a secure environment. A "check out" process controls and limits the amount of times a song can be accessed by Sony's portable players.
But similar to the way cassette tape copies of records and CDs have always found their way into the stereo systems of consumers, there will inevitably be those who will try -- and possibly succeed -- in beating these new digital controls. "The huge difference is digital copies are theoretically identical to their predecessors, unlike the pop and crackle recordings that many times are found on cassettes.
One way around Sony's current digital copyright protection is for a user to rip CDs that he or she doesn't own, either by trading them with other users or by some other means.
Age-old problem
But hearing the Sony Electronics folks tell it, it's a problem that has existed since Thomas Edison invented the first phonograph out of tin foil in 1877.
"As far as ripping CDs, the user has the right to make copies for personal use," said Sony Electronics VP of personal digital products Bob Nell. "Those are basically the guidelines. The issue you're referring to has basically existed forever. But end users are expected to use their CDs to make their own recordings in a responsible fashion."
On the label side, Sony Music execs could not be reached for comment at press time due to the recent Grammy Awards ceremony in Los Angeles. But one Sony Music source who asked not to be named said, "We don't see there being a conflict (between Sony's music label and its electronics companies). There are things that they need to do in terms of downloading, but there's nothing inherently illegal about MP3."
Meanwhile, sites like MP3.com keep rolling along. And music consumers continue to fail to exhibit anything even close to what Sony would call "responsible behavior" as it pertains to their music.
Driving this point home, MP3.com said last week its database of members had grown to more than 10 million since the site was launched in February 1999. And so the lawsuits will probably continue to fly.
RELATED ARTICLE: Rx: Internet Music Will Survive
BY JOSHUA CHO
The battle over downloadable music isn't over yet. Or in other words, the fat lady hasn't sung.
While MP3.com's stock has recently shown some weakness due to the pending copyright lawsuits against it, industry experts and analysts are confident that some form of Internet music model will survive in the future.
In particular, Raymond James Financial Inc. Internet analyst Phil Leigh believes that MP3.com has at the moment the best chances of surviving, especially when compared to the stocks of other Internet music companies.
"Whether the company wins or loses the lawsuit, the outcome will have little impact on the revenue growth expected this year," Leigh said in a recent e-mail report.
MP3's revenues for the year are estimated to be $85 million as compared to $22 million last year, according to the analyst, Competing online music companies Launch Media Inc., Liquid Audio Inc., eMusic and Audible.com, on the other hand, are projected by Leigh to have fiscal year 2000 revenues of only $30 million, $17 million, $8 million and $4 million, respectively.
And that's even before the whole copyright issue is resolved. However, many believe that record companies will eventually be forced to come to terms with the Internet.
"In the future, we believe that the Music Service Provider (MSP) concept will become an accepted convention within the industry," Leigh said. "We even think that it will be as eagerly embraced by the traditional record label industry as by any constituent, once they overcome their present culture shock."
Leigh and others believe that the labels will embrace the format because it will lead to wider distribution of music and thus lead to increased sales. It will also allow companies to track each customer's individual tastes and possibly facilitate personalized marketing opportunities,
"Downloadable music is a threat but it's also an opportunity," said Webnoize.com senior editor Ric Dube. "It will enable all kinds of new ways to sell and experience music, if the industry can set up satisfactory methods and standards for doing so."
One possible method of selling songs, according to Dube, is similar to the pay-per-view model. Dube said it could be called something like "Free for Now," where the first 10 times a song is downloaded it's free while the eleventh time incurs a charge, allowing the song to be heard indefinitely by the user.
Another scenario, according to Dube, has record companies encouraging music downloaders to e-mail song files to their friends to receive discounts or other freebies.
So even though MP3 is finding itself under fire today, it could exist in some other incarnation in the future.
"If MP3.com's MSP model fails in the courtroom it will likely be re-invented in the marketplace in some mutant form by someone else," Leigh said. "Following such an eventuality there is no reason why MP3.com cannot replicate whatever future modified format becomes legally and commercially adopted."
[GRAPH OMITTED]
Комментариев нет:
Отправить комментарий