Short Nerd Chief

Posts Tagged ‘P2P’

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.

Posted in law, Music, Technology | Tagged: , , , , , , , | 1 Comment »

Hulu, or Who Knew it Would Be So Useless

Posted by Fred on October 29, 2007

hululogo.jpg

The news embargo on Hulu has lifted, so a bunch of tech journalists who haven’t actually used the service are posting pre-reviews of the fledgling video site based on demos NBC showed them and some press releases.

Kara Swisher, for example, who has been deservedly critical of the service, now says that:

From a demo (here are some screen shots of pages) I was given Friday by Hulu CEO Jason Kilar, the boyish former Amazon exec who seems to have learned to swim well with the Hollywood sharks, I am impressed thus far.

I will, of course, reserve judgment until I get to test-drive it for a while, but in concept and tone and aims–that is, more open than I ever expected the service to be–it is off to a good start. (Actual reviews of these sites I will leave to Walt Mossberg.)

If you’ve forgotten what Hulu is, other than another stupid quasi-Hawaiian name reminiscent of Mahalo, recall that NBC got irritated with Apple for its pricing inflexibility (it now appears that NBC wanted to charge $2.99 per episode for Heroes to see what would happen, and Apple said no thanks, competition should drive prices down, not up), and teamed with Fox to form Hulu, which will offer streams of current TV programming and some movies. It thus is an attempt to compete with (a) the iTunes Music Store per-episode download service, (b) YouTube, (c) illegal BitTorrent downloads, (d) the network’s own websites, (e) Amazon’s Unbox and other movie download services, (f) DVRs, (g) DVD sets and a bunch of other stuff besides. In reality, the big dogs are YouTube and iTMS. Hulu will offer a dozen movies to start and the most recent five episodes of current network programs (delayed by at least a day to protect their original airings and give you a chance to skip the ads on your TiVo box). It will be an ad-supported service, but the precise nature of the ads is up in the air. Given that this is NBC, expect at least some ads to be in-stream and unskippable. They just can’t help themselves.

The service hasn’t even launched yet, but the restrictions seem clear (despite what Kara says, it is not open, at least not compared to other non-Hollywood offerings). No user-generated content (no big loss, in my opinion), no downloads, no desktop player, no mobile access, no real-time or close to real-time access, no proper archive of content. You get five episodes of Heroes, which you can watch in a Flash player via a browser or embed in a website so other people can stream it in a Flash player via a browser. You’ll be able to recommend clips or make quasi-mashup highlight reels.

The TV networks are sitting on a treasure trove of content, but they’re just too paranoid to release it into the wilds of the internet. Just think of what Hulu could be if the networks grabbed that brass ring:

  • The archive.org of the TV generation. Sixty years or more of programming, available on demand. Want to see the Vitameatavegamin episode of I Love Lucy? Stream it on demand, or download it for a buck or two. Stick some ads in the free stream or plaster them on the website to get cash for the non-downloaded content.
  • Mashup central. People love best-of clipfests – where would VH1 be without the commentary-laden clipfest? Release downloadable clips of content and let people mash them, combine them, snark all over them. Then let them upload their creations to Hulu, highlight the best of the bunch. If they’re really good, stick them on real TV and come full circle.
  • Compete with the iTMS. This means really compete, offer-an-alternative-like-Amazon compete. iTMS shows are laden with DRM, play only on Apple TV, iPhone or an iPod and cost too much. Provide DRM-free downloads for a buck that can play on anything that plays video, or offer Hi-def downloads for a reasonable price increase. Get creative with pricing, but that doesn’t just mean “charge more for popular stuff.”
  • Replace the DVR and/or DVD box set. This is covered above in a way, but offer a high-quality stream in real-time. That way, I can start watching Heroes at 8:12 on a Monday if I don’t get home in time. Include ads if you want, but let me skip them. It has to be no worse an experience than I get by paying 10 bucks a month to Comcast. You can also bypass the plastic discs for catching up on past seasons. I caught on to Friday Night Lights late and bought the DVD set. Why? Let me download season one and watch it on the PC or stream to the TV via a media server. I don’t need the discs and won’t have time for the extra features.

Hulu, of course, does none of these things. NBC and its partners are too afraid of cannibalizing other channels, too afraid of alienating advertisers, too afraid of P2P and BitTorrent and the internet. Hulu could kill the iTMS, but this version of Hulu won’t. I generally agree with Marshall Kilpatrick:

No user generated content (not even best-of), no desktop player or download of material (it’s all in a Flash player) and very little viewer interaction is enabled. Viewers are allowed to select which section of the precious Hollywood content they are most in love with, that section or the whole video can then be shared with a friend or embedded on a website. This is just a multi-partner content deal with paltry technology behind it and a whole lot of money for marketing. Nothing innovative to get excited about.

Marshall wants social elements, too, but I’m a misanthrope who doesn’t care to be your friend on Facebook or otherwise, so making the solo viewing experience first-class is more important. But Hulu isn’t social, isn’t first-class, and won’t shake anything up. It’s just another half-baked service with a lot of marketing and a stupid name.

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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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