Short Nerd Chief

Posts Tagged ‘MP3’

Wired Gets It Right: The RIAA Still Thinks MP3s Are Illegal

Posted by Fred on January 10, 2008

Wired’s Ryan Singel says what I’ve been saying about the RIAA’s view of personal-use CD ripping:

So, to sum up, the RIAA does believe that a majority of American music buyers are thieving criminals, but it’s not going to sue anyone over ripping MP3s because) a) it’s not really a big deal to them anymore b) there’s no real way to find out and/or c) it would be terrible publicity to sue someone for using an iPod.

In the comments to the Wired blog post, Mike Masnick chimed in with his interpretation of the situation – the RIAA thinks that CD ripping is unauthorized, not that it is illegal. This is splitting hairs of the worst sort.  The Copyright Act gives the copyright owner exclusive rights, and anyone violating those exclusive rights has infringed the copyright. Making a copy for personal use won’t expose you to criminal liability, but if it’s unauthorized, you could face civil liability under Section 501. In the colloquial sense, then, there’s no difference between unauthorized and illegal.

Masnick and the RIAA’s defenders argue that ripping the CD is unauthorized, but you may have a defense in an infringement action.  Other than a defense of “I didn’t do it,” the most obvious statutory defense is fair use under Section 107, but it’s hard to see how ripping a CD is “criticism, comment, news reporting, teaching, scholarship, [or] research.” This kind of personal use would seem to satisfy some of the factors in Section 107 (it’s non-commercial and arguably doesn’t impact the potential market value of the copyrighted work as you’ve already bought it), but to my knowledge, no court has ruled that any use is entitled to the fair use defense other than the specific categories listed in 107.

No, I think Wired’s got it right. The RIAA thinks converting your CD to MP3 is copyright infringement, but they haven’t sued anyone for it. They haven’t sued anyone because they have no real means to know who’s done it, and because the PR fallout would be a nightmare.  They definitely think you should have to pay more than once for the same content if you want it in more than one form, however, and agreeing that ripping a CD is legal would give up that fight.  They won’t get what they want in suits against you and me, however.  Instead, they’ll go after Diamond for creating an MP3 player, after Sony for creating DAT, after XM for a satellite radio that can store music. They’ll try to get mandatory royalties on CD-Rs and Zunes and iPods.  They’ll try to get Congress to force consumer electronics manufacturers to include anti-copying circuitry in their products. They’ll fight to keep the DMCA, which allows them to create anti-ripping technology that you can’t circumvent.  The effect is the same – either (a) pay for the CD, then pay for the digital download, then pay again for the ringtone or (b) buy the content once but pay a bunch of royalties on the technology you use to place-shift.

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Sony announces Musicpass, the Betamax of digital music

Posted by Fred on January 7, 2008

musicpass_cards_pr.jpg

Last week, Sony made minor news (call it a newslet) by finally joining the Release a Tiny Portion of their Music Catalog as MP3s Party, becoming the final major label to sell music without DRM.  This week, Sony announced the details of their new Musicpass service, and it just may be the dumbest idea ever to come from Sony, which is saying a lot. Want to download a song via Amazon or iTunes? Nope, because that would actually make sense.  Instead, you’ll have to schlep down to a bricks and mortar store and buy a Platinum Musicpass gift card for $12.99 or $19.99, take the card home, scratch off a little strip, go to the Musicpass site and input the code heretofore hidden by said little strip, and then download the songs and “exclusive bonus content.”

Sounds incredibly stupid, no?  But wait, there’s more.  You can’t buy the gift cards online, you have to have the little plastic rectangle.  You can’t send a gift electronically – maybe Sony’s getting a kickback from Hallmark for all the cardboard rectangles people will buy to send the plastic rectangles as gifts.  If you do buy a Musicpass card, it’s not just for $12.99 worth of digital tunes, it’s for a specific album.  That means there are no singles, and the gift card suddenly became 97% more useless as a gift.

Let’s presume you manage to find an album you want among the 37 available at launch, say Britney Spears’ Blackout or Barry Manilow’s The Greatest Songs of the Seventies. You could go down to Best Buy and drop $12.99 on the gift card, jump through all the hoops Sony has placed in your path, and import the MP3s into iTunes.  Or you could just buy the CDs for $12.99 or $13.99, stick the disc in your computer and let iTunes create its own DRM-less files.  You’d lose the “exclusive bonus content” but gain a handy plastic disc to use as backup or turn into a Christmas tree ornament or coaster.  Of course, in doing so, Sony would say you’ve stolen a copy.

It’s hard to envision the target market for this service, which makes one suspect Sony engineered it to fail.

Customer: That’s stupid.

Sony: Look, we didn’t make any money from our MP3 service, which just proves that people are thieves at heart who need to be held back with new laws. Or rootkits.

Customer: But your service is stupid, and could be improved by a bunch of blind, deaf monkeys typing their new business plan on manual typewriters lacking the letters “s” and “e”.

Sony: Thief!

[via BB Gadgets or Download Squad, I can’t remember which because the utter stupidity of Sony’s plan has broken my brain]

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Does the RIAA believe personal copying is legal? No.

Posted by Fred on January 4, 2008

There’s been a bit of a kerfuffle lately regarding some statements made by the record industry in a brief filed in their case against Jeffrey Howell.  The plaintiffs in that case said that “[o]nce Defendant converted Plaintiffs’ recording into the compressed .mp3 format and they are in his shared folder, they are no longer the authorized copies distributed by Plaintiffs.” Marc Fisher at the Washington Post interpreted that statement to mean that the industry believes that the act of converting your own CDs to MP3s is an unauthorized use.  Others, notably Mike Masnick (notable given his continuing battle against old business models, which inherently includes a lot of criticism of the RIAA), argued that Fisher got it wrong, and what the industry really meant was that placing the MP3s in a shared folder accessible to the world was an unauthorized act.  To wit, rip all you want, just don’t share.

Fisher refused to back down.  The RIAA refused to clarify its position.  Yesterday, Fisher and RIAA President Cary Sherman appeared together on NPR to discuss the issue.  As one would expect in any battle of wits between a lobbyist and a print reporter, Sherman had a decided advantage.  CNET’s Greg Sandoval, himself a former Post reporter, says that the RIAA shredded the Washington Post story in the on-air debate:

But as numerous bloggers and copyright experts have noted, the quotes cited by Fisher are incomplete. Fisher wrote that the RIAA had argued in the brief that MP3 files created from legally bought CDs are “unauthorized copies” and violate the law.

“The Post picked up one sentence in a 21-page brief and then picked the part of the sentence about ripping CDs onto the computer,” Sherman said during the radio show. “(The Post) simply ignored the part of the sentence about putting them into a shared folder.”

The “shared folder” omission is at the center of what’s wrong with Fisher’s story. Anyone who reads the brief can see that the RIAA says over and over again what it considers to be illegal activity: the distribution of music files via peer-to-peer networks.

Sandoval says that Sherman missed a golden opportunity to clarify the RIAA’s position.  In his follow-up post, Masnick agrees with Sandoval.  And indeed, when asked directly whether it is legal for an individual to make MP3 copies of his or her own CDs, Sherman refused to answer the question, arguing that copyright law is too complex for such a simple statement.  Sherman went on to claim that the RIAA’s record is clear — “Not a single (legal) case has ever been brought (by the RIAA against someone for copying music for personal use) … Not a single claim has ever been made.”

So what’s the truth? As usual, it’s somewhere in the middle.  Fisher is almost certainly wrong about the Howell brief, which was inelegantly worded, to say the least.  That case follows the RIAA’s pattern – Howell shared some songs, so the record labels sued him.  Rather than prove that anybody actually downloaded the songs, they rely on proof that he put them in his shared folder.  Whether ripping the songs to MP3 was legal is essentially irrelevant, given that sharing the material via Kazaa certainly isn’t.  But as usual, the RIAA is being disingenuous, and Sandoval and Masnick have gone too far in claiming the record industry believes that converting your own CDs to MP3 is a legal use.

So what does the RIAA actually believe? Go to their site, and you can get the industry’s take on The Law.  Included there is a list of ways you can break the law, with horrendous consequences (Do the Crime, Do the Time…).  The list includes this nugget:

You make an MP3 copy of a song because the CD you bought expressly permits you to do so. But then you put your MP3 copy on the Internet, using a file-sharing network, so that millions of other people can download it.

That’s entirely consistent with the Sandoval/Masnick view of the Howell brief – it’s the file sharing that’s the problem, not the ripping.  But note what the RIAA also says – it was OK to make the MP3 because the CD you bought expressly authorizes you to do so. That is, you don’t have a legal right to make the MP3; the industry granted you a right via the terms of the CD license (remember that in the industry’s view, you don’t own the song, you own a license to play the song).  What the RIAA grants, it can take away.

Later on that page, the RIAA says that you do have a legal right to “copy music onto an analog cassette, but not for commercial purposes.”  They don’t say that this legal right comes from the Audio Home Recording Act, enacted in 1992 as a means to permit electronics manufacturers to produce digital recording devices without fear of RIAA lawsuits.  The RIAA also says that you have a legal right to “copy music onto special Audio CD-R’s, mini-discs, and digital tapes (because royalties have been paid on them) – but, again, not for commercial purposes.”  That’s also a right granted by the AHRA.

So what about MP3s or songs burned onto discs that you haven’t paid the RIAA extra for?

Beyond that, there’s no legal “right” to copy the copyrighted music on a CD onto a CD-R. However, burning a copy of CD onto a CD-R, or transferring a copy onto your computer hard drive or your portable music player, won’t usually raise concerns so long as:

  • The copy is made from an authorized original CD that you legitimately own
  • The copy is just for your personal use. It’s not a personal use – in fact, it’s illegal – to give away the copy or lend it to others for copying.

Ah, so the RIAA position becomes clearer.  You don’t in fact have a right to transfer your own CDs onto your iPod.  Rather, this particular unauthorized use “won’t usually raise concerns.”  This is absolutely consistent with the industry’s longstanding view that making recordings at home is illegal but unenforced.  If the RIAA believed that home copying was legal, we wouldn’t need the AHRA. We wouldn’t have had lawsuits against Sony for the DAT and Minidisc or against Diamond for the MP3 player.

What the record industry really wants is for you to pay again for every copy of a song in a new medium. Pay for the CD, pay again for the download, pay again for the ringtone, pay for using Pandora, pay for using XM.  They were able to extract this concession from Sony in 1992, but customers have gotten around paying twice by using data CDs instead of more expensive (but identical) audio CD-Rs.  They were able to extract a concession from Microsoft with the Zune, but Apple has refused to pay a tribute to our RIAA masters.  They’ve tried to get mandatory royalties from Congress, but have thus far been unsuccessful.  What they haven’t done is sue individuals for making personal copies not expressly authorized by the AHRA. Yet. Sony’s Jennifer Pariser let the industry’s real position out of the bag when she testified that “when an individual makes a copy of a song for himself, I suppose we can say he stole a song.”  Sherman now says that Pariser misspoke because she misunderstood the question, but the question really wasn’t hard to understand – any lawyer worth the parchment her diploma is printed on should have understood it. Certainly she misspoke, but not because she misunderstood – she misspoke because that particular view is not yet ripe for public discussion.

The bottom line really is simple.  The RIAA does not believe you have a legal right to transfer songs to your MP3 player.  You only have that right for media that the RIAA gets its racketeering cut from.  But the RIAA recognizes (a) that suing individuals for making personal copies would be a public relations disaster, and (b) any such claims would likely result in legislation making such copying explicitly legal, which would take away a justification for mandatory royalties from electronics manufacturers.  All they really want is to get paid over and over again.  How they get there is immaterial.

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Amazon vs iTunes – which is better for singles/album only?

Posted by Fred on December 3, 2007

Omar likes Amazon’s MP3 store over the iTMS because he can buy individual Daft Punk songs.  In my limited testing, I think there’s a lot to like about the Amazon offering.  It certainly seems cheaper than iTunes Plus for DRM-free music.  It also seems to have more DRM-free selection.

I also agree that searching for a song on iTunes only to be told it’s Album Only is incredibly annoying.  I’m not sure, however, that Amazon is much better.  For example, search for Nina Simone’s Sinnerman (my usual test of Album Only-ness) on Amazon, and you’ll strike out just like on iTunes :

amazon_simone.png

Truth be told, it’s probably more the labels’ fault than it is Apple’s.  One advantage Amazon does have is variable pricing.  Normally, this operates just as a way to screw the customer, but in this case, if Amazon charges more for an otherwise album only track, you’ll still come out ahead if you don’t want the whole album.  Overall, the Amazon store is great for the music listener if it encourages labels to pick MP3 over AAC or WMA.  Even better is Pepsi’s promotion with Amazon, which will distribute up to a billion DRM-free MP3s and Wal-Mart’s apparent ultimatum that labels give it music in MP3 format only (no more DRM-choked WMA files).

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Universal CEO: We’re Not Malicious, We’re Just Stupid

Posted by Fred on November 27, 2007

In an interview with Seth Mnookin in this month’s Wired, Universal CEO Doug Morris takes a new tack in justifying the music industry’s heavy-handedness with its own customers.  You see, they weren’t malicious, they were just stupid.

Morris was as myopic as anyone. Today, when he complains about how digital music created a completely new way of doing business, he actually sounds angry. “This business had been the same for 25 years,” he says. “The hardest thing was to get something that somebody wanted to buy — to make a product that anybody liked.”

And that’s what Morris, and everyone else, continued to focus on. “The record labels had an opportunity to create a digital ecosystem and infrastructure to sell music online, but they kept looking at the small picture instead of the big one,” Cohen says. “They wouldn’t let go of CDs.” It was a serious blunder, considering that MP3s clearly had the potential to break the major labels’ lock on distribution channels. Instead of figuring out a way to exploit the new medium, they alternated between ignoring it and launching lawsuits against the free file-sharing networks that cropped up to fill the void.

Morris insists there wasn’t a thing he or anyone else could have done differently. “There’s no one in the record company that’s a technologist,” Morris explains. “That’s a misconception writers make all the time, that the record industry missed this. They didn’t. They just didn’t know what to do. It’s like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?”

Personally, I would hire a vet. But to Morris, even that wasn’t an option. “We didn’t know who to hire,” he says, becoming more agitated. “I wouldn’t be able to recognize a good technology person — anyone with a good bullshit story would have gotten past me.” Morris’ almost willful cluelessness is telling. “He wasn’t prepared for a business that was going to be so totally disrupted by technology,” says a longtime industry insider who has worked with Morris. “He just doesn’t have that kind of mind.”

Maybe they were just that ignorant, but it’s hard to believe.  Morris wasn’t prepared for a business that was disrupted by technology? What business isn’t disrupted by technology?  Besides, the music industry had already been disrupted by technology several times over. Cassette tapes replaced LPs, and were in turn replaced by CDs.  By the time Napster hit the web in a big way, the stand-alone record store was already on its way out, replaced by Best Buy and Walmart and Amazon, which were able to leverage supply chain management and diverse merchandise catalogs to undercut the Towers and mall record stores of the world.  The difference is, these disruptive technologies increased industry profits, and the industry could manipulate the technology – there’s a reason CDs aren’t scratch-resistant anymore, and a reason that CDs became more expensive while the price of other technology was falling.

The MP3 changed all that, as it unbundled music production, manufacturing and distribution.  With no physical product, the industry lost its control, and with it its ability to turn the new technology into new profit.  But they should have seen it coming.  Consumers were ripping CDs before Napster, playing them on their PCs (Winamp just celebrated its 10th anniversary) and their MP3 players.  Napster and its progeny didn’t create file sharing; they just made it easier.  So the industry damn well should have known change was coming.  Even if they were in fact that clueless, the success of Napster should have clued them in – customers wanted their music digitally, they wanted to be able to play it on any device at any time.  Lots of them also didn’t want to pay for it, but many of them would have willingly paid for their downloads if they had had the opportunity (I said exactly this on the old blog in 1999 – give me a way to buy downloads and I’ll give up Napster in a heartbeat).

But you can’t compete with free, right?  Of course you can.  What you can’t do is wish the problem away, or offer a half-baked “alternative” that is clearly designed to increase industry profit at the expense of satisfying customers.  Why did iTunes succeed where others failed? Partly because it’s part of the larger iPod ecosystem, but partly because it’s so easy to use.  Millions of tracks at your fingertips, easily searched, with guaranteed quality and speedy delivery.  P2P file-sharing is free only if the value of your time is $0.

So was the industry stupid or malicious?  Probably a little of both.  There’s just no way they didn’t see this coming.  maybe they were late on the draw, but they knew eventually.  They chose litigation over competition and denial over innovation not because they were clueless about the technological seism underway, but because they didn’t see an easy way to use it to create additional profit.  They couldn’t stop the oncoming train, of course, so now they’ve given away millions in revenue they could have made over the last decade and are being dragged kicking and screaming into the 21st century

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Hey Arrington, Bring on the Free Music

Posted by Fred on October 4, 2007

Mike Arrington joins Mike Manick in the “Inevitable March of Recorded Music Towards Free” club:

The economics of recorded music are fairly simple. Marginal production costs are zero: Like software, it doesn’t cost anything to produce another digital copy that is just as good as the original as soon as the first copy exists, and anyone can create those copies. Unless effective legal (copyright), technical (DRM) or other artificial impediments to production can be created, simple economic theory dictates that the price of music, like its marginal cost, must also fall to zero. The evidence is unmistakable already. In April 2007 the benchmark price for a DRM-free song was $1.29. Today it is $0.89, a drop of 31% in just six months.P2P networks just exacerbate the problem (or opportunity) further, giving people a way to speed up the process of creating free copies almost to the point of being ridiculous. Today, a billion or so songs are downloaded monthly via BitTorrent, mostly illegally.

Eventually, unless governments are willing to take drastic measures to protect the industry (such as a mandatory music tax), economic theory will win out and the price of music will fall towards zero.

I think both the Mikes are wrong on the economics – while the marginal cost of production of anything made of and distributed as bits is close to (but not exactly) zero, the argument that the price of a good should trend toward the marginal cost of production exists only if you have perfect competition.  In music, you don’t – the music I produce in my basement is not a substitute for Hey Jude.  Arrington tries to get around this by arguing that every consumer of media can be a producer by copying the bits. But in that case I’m not producing the goods, I’m distributing them, and I’m doing so illegally. There’s still only one entity capable of producing the good in question, and substitute goods are not an adequate exchange.

But from a practical perspective, I hope Arrington and Masnick are right, so I can benefit as a free rider. I have no interest in the “real products” they suggest will be used to meet the fixed costs of the music industry. 39 year olds with kids don’t go to a lot of concerts, and I’d just look stupid wearing Radiohead merchandise. I have no interest in deluxe packaged editions of physical recordings or fan clubs. All I want is a DRM-free copy of a recording to play on my iPod and streamed to my home stereo. If I can get that for free while other people pay to produce the music, then I’m all for it.

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Sony Says “Stop, Thief!”

Posted by Fred on October 4, 2007

As seen on Gizmodo, news from the first file-sharing case to go to trial:

The labels’ first witness, Jennifer Pariser, head of litigation for Sony BMG, offered testimony that pretty much encapsulates everything wrong with the way the RIAA sees things. When asked if it was wrong for consumers to make a single copy of music they’ve purchased, she responded, “When an individual makes a copy of a song for himself, I suppose we can say he stole a song.” Making “a copy” of a song you bought is “a nice way of saying ‘steals just one copy.’ “

It’s worth noting a few things. First, Ms. Pariser was a witness for the defense, not the labels, and she did a very fine job of serving the purpose for which she was called, namely putting in the record just how extreme the labels’ position is.  Second, as many others have noted, Song BMG’s position would seem to be decidedly at odds with Sony’s electronics division, which makes many devices capable of copying digital audio content and playing the copied content back. It’s bad to “steal” but OK to make lots of money selling products on which you can play your “stolen” music, apparently.

Finally, it’s not at all clear that Sony is wrong, legally (they’re certainly wrong morally and ethically). The Audio Home Recording Act purported to make it legal for consumers to make personal copies and for manufacturers to make devices that copied recordings, but the Act only covers “the noncommercial use by a consumer of a [digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium] for making digital musical recordings or analog musical recordings.”  It’s not at all clear whether iTunes, computer hard drives, CD-Rs and iPods are covered by the Act. Common sense suggests they should be, as should anything whose primary purpose is placeshifting music, but when have the labels ever embraced common sense?

Finally, this is a civil trial before a jury, a place where jury nullification thrives. Even if Sony is right legally, this testimony is bound to come back to bite them in the Pariser.

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