Legal – Page 28 – Digital-Lifestyles

Major Labels: US$0.99 is Too Cheap!

Even though many listeners think that the current average price for a downloaded music track is a tad on the high side, the five major labels have got together to discuss putting the price up – by quite a bit, too.

At US$0.99 (€0.83), music is doing OK, if not exactly flying off the servers – yet a hike to US$1.25 or even US$2.99 per song is being talked about. Online music stores are expensive to run, say the industry, and most of them lose money. Apple does very well out of iTunes, and sells a lot of iPods because of it, but the labels don’t see much out of it.

The legal download business is only just starting to flourish – a price rise on this scale will surely kill it off completely.

Slashdot on the story

Microsoft and Sun Kiss and Make Up

It came as a surprise to many, but Sun and Microsoft agreed to a settlement to their long-running anti-trust dispute on Friday. The dispute was centred around Microsoft’s treatment of Sun’s Java programming language.

Microsoft has never liked Java, seeing it as a direct competitor with many of its own technologies such as ActiveX and C#. Microsoft support for Java was always patchy – MS’s own Java virtual machine was not strictly standard, and Java implementation and integration in Internet Explorer was troublesome. For a while Microsoft tried to divide the Java community with its own, not strictly compatible J++ language, but is now promoting C# as a substitute for Sun’s write-once-run-anywhere platform. Whilst C# is syntactically similar to Java, and has a remarkably similar API, it does not have many of the benefits of the Java platform, nor is it so widely supported.

However, it was J++ that angered Sun Microsystems – further inflamed when Microsoft declared that they would stop supporting Java, forcing users to download a VM if they wanted to run Java applets. It was this dispute that kicked off the EU’s case against Microsoft – and led to rulings relating to including better Java support in Windows and the uncoupling of Windows Media Player.

“Our companies will continue to compete hard, but this agreement creates a new basis for cooperation that will benefit the customers of both companies,” said Steve Ballmer, chief executive officer of Microsoft in a statement, “This agreement recognizes that cutting edge R&D and intellectual property protection are the foundation for the growth and success of our industry. This is a positive step forward for both Sun and Microsoft, but the real winners are the customers and developers who rely on our products and innovations.”

Microsoft will pay Sun US$700 million (€578 million) to resolve the Java dispute, and a further US$900 million (€743 million) for patent issues. Both companies have agreed to pay each other royalties for the technologies that they license from one another, with Microsoft paying US$350 million (€289 million) up front.

Sun on the agreement

Sharing Copyrighted Works in Canada is Legal

In a surprising setback to record labels, a judge in Canada has ruled that downloading copyrighted works from peer to peer networks such as Kazaa and Morpheus is legal. Recording industry bodies have enjoyed success in a variety of countries by suing individuals for downloading and uploading music files, so this ruling must have come as quite a shock.

The ruling is specific to Canada, but will have far wider implications especially when other countries’ legislative bodies look too their peers for guidance – however, courts in Canada have yet to decide if the uploading of copyrighted files is legal.

The decision was made when Canadian record labels began the process to sue 29 alleged file swappers – and were denied authorisation to identify them. The ruling is based on legislation in Canada that states that most copying for personal use is permitted – this is possible because there is a levy imposed on all blank tapes, CDs and MP3 players to make up for potential lost revenue.

News.com on the story

Korean Music Industry Demands Poor Quality MP3 Phones

Manufacturers like Samsung and LG are of course resistant to the idea, but the Korean Association of Phonogram Producers (KAPP) and Korean Music Copyright Association (KMCA) are demanding that new phones can only play MP3 music at low-fidelity, radio quality.

This demand is after a compromise – KAPP and KMCA originally required phones to only play MP3 files that had been purchased legally. In a market where 95% of MP3 files are said to be illegal, phone manufacturers felt that this would put consumers off.

The battle has become so embittered that Samsung has decided to delay the launch of their new MP3 Anycall handset.

Amid claims that MP3 players and pirated CDs have halved the value of the Korean music market, phone with music playback are expected to be extremely popular – there will be 150 new phones launched in Korea next year, and half the population already carry a mobile.

Yoon Seong-woo, a director of the Korea Association of Phonogram Producers said in a statement: “Our industry has been in a nose-dive since the release of MP3 players in 2000. At that time, we felt hopeless because Korean people were insensitive to copyright issues and we did not have any unified organization that could cope with the situation. Because the MP3 phone market is big enough to destroy the music industry, we’re struggling to defend it.”

It’s somewhat striking that the music industry should expect handset manufacturers to develop and sell inferior product to save their dwindling sales.

There are no currently legal download music services in Korea – surely giving consumers the option of buying music from an attractive, easy to use, reliable source would be far better? Samsung certainly think so and is looking to partner with a music site to provide a download service for its phones.

The Korea Herald on the story

International Federation of the Phonographic Industry Takes Action Against 247 Music Swappers

The International Federation of the Phonographic Industry (IFPI) has begun taking action against 247 alleged illegal music sharers in four counties. They are targeting individuals making a large number of files available on a range of P2P systems including Kazaa, DirectConnect, WinMX, eMule and iMesh.

Although much of the action consists of letters threatening a legal response, individuals in Italy and Canada are already being taken to court.

Jay Berman, Chairman and CEO of IFPI. said: “Today’s announcement should come as no surprise. Over the past year the record industry has been extremely active internationally and locally, educating the public about the huge damage being done by illegal file-sharing, explaining the laws and promoting all the sites where large catalogues of copyrighted music are available for consumers to access legitimately.”

The IFPI is promising legal action against more illegal sharers in coming months – but is keen to stress that this first round of action comes only after an extensive attempt at educating the public. Yet, and independent survey reveals that some 45% of respondents did not know that downloading music from P2P sites like Kazaa is illegal.

The industry is getting tough: Peter Zombik, CEO of IFPI Germany said in a statement: “The unauthorised distribution of music on the web has increased to such an extent over the last few years that it is threatening the livelihood of the German music industry. Whilst we have so far concentrated our legal actions on illegal music offers on websites – in the last two years we were able to close down more than 2000 such websites in Germany – we also carried out an extensive public information campaign in the last year in order to increase the awareness for the legal and technical dangers involved in illegal file swapping. Excuses about being unaware of the legal position are no longer acceptable. ”

IFPI’s press release

Harvard University and North Carolina: Music Sharing Doesn’t Harm CD Sales

Harvard University and the University of North Carolina have just published what they claim to be the most detailed economic modelling survey using direct data from P2P networks. The report’s authors claim: “We find that file sharing has only had a limited effect on record sales. While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing.”

The survey used 17 weeks of logs from a pair of OpenNap servers in 2002, taking a random sample of 500 albums and comparing the sales of these albums in shops.

Record labels have seen sales of CD albums and singles fall dramatically in recent years, and are keen to blame this on P2P sharing and other illegal downloads. Could it be that the real reason is that people just have more things to spend their money on, and are less interested in buying CDs than they once were? DVD and video game sales have rocketed over the past five years – and there’s only a finite amount of cash in disposable incomes – so something has got to give somewhere.

The study seems to lend weight to the argument that downloading actually helps CD sales. “Participants could substitute downloads for legal purchases, thus reducing sales. Alternatively, file sharing allows users to learn about music they would not otherwise be exposed to. In the file sharing community, it is a common practice to browse the files of other users and to discuss music in file server chat rooms. This learning may promote new sales”, says the report.

The RIAA was quick to disagree: “Countless well-respected groups and analysts, including Edison Research, Forrester, and the University of Texas, among others, have all determined that illegal file sharing has adversely impacted the sales of CDs. Our own surveys show that those who are downloading more are buying less,” spokeswoman Amy Weiss said in a statement.

The report

British Music Industry Issues Warning to Music Sharers

The British Phonographic Institute (BPI) has stated in a new report (linked below) that, of the 8 million people downloading music in the UK, 7.4 million of them are doing it illegally. That’s right – 92% of you out there using music services are pirates. They also claim that people who download music spend 32% less of albums and CDs, and 59% less on singles.

To protect artists’ and record labels’ incomes they are prepared to take “serial filesharers” to court.

Backing this up, the BPI also issued a chilling warning to filesharers: stop downloading music illegally, or we’ll send you unwanted instant messages. They are proposing an IM service that warns uploaders that they are breaking the law and advises them to disable their file sharing clients.

BPI Report (Adobe Acrobat PDF)

Fraunhofer Institute Develops “Fair Use” DRM System Update

Germany’s Fraunhofer Institute, creators of the phenominally successful MP3 music format, has developed a content protection extension to MP3 – and it could end the controversy over file sharing.

The Light Weight Digital Rights Management (LWDRM) system is based on a principle which has been used in video and audio media for some time – and in fact is already built into Microsoft’s Window Media platform.

Users pay for an audio file and can use it as they wish, but if they want to transfer it to another device or give it away to someone else, they must download a certificate from a certification body. Because the file is signed with your identity, if several thousand copies of an MP3 you once bought are found on the internet, then they know whose door to knock on.

We really think that Fraunhofer are missing a trick here. Rather than just flagging who once owned the file, why not make it so that an unauthorised recipient must download and pay for a license before they can play the media? This is already implemented in various ways in Windows Media, and we’re a but baffled why the technique isn’t employed here.

The system was originally developed for MPEG4, but has adapted it for use with MP3. Fraunhofer say that LWDRM will allow users fair use of the media they have bought whilst protecting the artists’ and record labels’ investments.

To support adoption of the new system, Fraunhofer aim to launch their own online shop, which will be free to small labels.

Fraunhofer on LWDRM

Fraunhofer on the MP3 standard – recommended reading!

Record Fine for Microsoft

Did we get it right? No – we were way off, but then everyone else was caught out too, especially Microsoft. Last week we said “we predict that Microsoft will get hit up for a couple of hundred million euros”, but no-one expected a fine of this scale: €497 million (£330 million).

Microsoft will also be required to make changes to Windows: Microsoft must supply a version of its desktop operating system that does not include Media Player and it must make it easier for other server operating systems to interoperate with Windows desktop clients. Microsoft have already made progress on this later condition, and indeed their Services for Unix product recently won a Linux award.

Microsoft have said that they think that the size of the fine is inappropriate, given the size of their European operation and the fact that they are already being fined, or prosecuted, in other countries. “We believe it’s unprecedented and inappropriate for the Commission to impose a fine on a company’s U.S. operations when those operations are already regulated by the U.S. government and the conduct at issue has been permitted by both the Department of Justice and the U.S. courts,” said Microsoft’s counsel Horacio Gutierrez in a statement.

Reuters

New Zealand Government Makes Transferring Music Files “Fair Use”

Long since regarded as progressive, New Zealand’s copyright laws are about to have a small revision: format shifting (transferring content from one media to another, or to another device) is to be defined as fair use. Record companies are howling that this will make everyone pirates – and is a good indicator, that secretly, they don’t want you moving media at all – they want consumers to buy a version for each device they want to play it on.

It’s already legal to sell or give away a piece of media you have a license for – so you could sell that music track you bought off iTunes without any trouble.

Under current legislation, all copying, even for personal listening is illegal – but the Economic Development Ministry want to make it legal to make a copy for personal use. The change will possibly be implemented in the middle of the year.

The recording industry claims that 10 million CDs are pirated every year in the country – quite a bold estimate given that the entire country only has 3.7 million inhabitants. We think they might be a little on the high side.

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