R2G, IODA launch music service in China

Wawawa, a new MP3 subscription service in China Ioda_logo_2 Here's a value proposition for you: a subscription music service that lets you download 88 MP3s a month for a little less than $3. And you thought eMusic was a good deal.... The catch is, you have to be in China to subscribe. And in China, music fans aren't used to paying anything for MP3s.

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Yahoo rethinks, offers refunds for DRM-wrapped songs

Yahoo_music_logo One week after notifying customers that it would soon stop supporting the DRM-wrapped songs they had purchased, Yahoo has offered to make whole anyone concerned about a loss of tunage. That's quite a concession, yet it's not a huge surprise -- shortly after Microsoft made a similar decision to shut down MSN Music's DRM servers, it reversed course and said it would keep the servers plugged in for at least three more years. Could it be that two of the world's most powerful Internet companies actually listen to the EFF?

Here are the details, according to the Associated Press: customers who bought downloadable tracks from Yahoo's defunct music service can obtain coupons that they can redeem for replacement MP3 files at Rhapsody, the RealNetworks-MTV joint venture that took over Yahoo's subscription music service. If a coupon doesn't cut it for you, Yahoo may be willing to cough up an actual refund.

My previous post on this issue has provoked an often hilarious exchange between DRM critics and advocates, one of whom dismembers my arguments in unusually vivid terms. Not that it takes a surgeon's skill to do so, but it's still pretty entertaining.

UPDATE: Carrie Davis at Yahoo provided these nuggets of detail: if you're looking for a coupon or a refund, contact Yahoo's Customer Care department. There's no need for proof of purchase. The offer expires at the end of the year. By the way, coupons can be redeemed for any track at Rhapsody, not just the ones the customer purchased from Yahoo. Sounds like a chance to trade in all those disappointing Jimmy Eat World tracks for some Deastro!


The Layaways and Billy Bragg contemplate new business models

The_layaways_logo The Digital Audio Insider blog is a good read for insights about the way the online music business works for indie artists, offering nice details about wholesale prices, royalty rates and the like. Its author, David Harrell, is also in a band called The Layaways. Awesome band name! Anyway, yesterday Harrell's blog post asked the musical question, should his band give away its new album? The tactic seemed to have worked well for Nine Inch Nails and Radiohead, but those bands are well-known quantities with loyal followings. There's also an argument for unknown new bands using their recordings as loss leaders, given that they make their livings (such as they are) off of live performances anyway. My guess is that the wisdom of giving one's music away will depend on one's ability to attract attention to the offer. Plenty of bands have given songs and albums away over the years, so The Layaways wouldn't grab headlines just by joining the pack. Anyway, tell me what you think, but more important, tell David. He's the one with skin in the game.

Billy_bragg_2004_at_afl_cio_hq Another musician with a blog worth reading is Billy Bragg. As dedicated followers of this blog know (OK, it's probably an exaggeration to use the plural form of follower), I'm completely in the tank for the guy. Bragg's blog is mainly about the adventures of a working musician; he seems to prefer publishing his musings about the economics of the business in dead tree media, such as this letter to The Guardian in the UK. In it, he scoffs at the idea of ISPs sending warning letters to suspected file-sharers (as the six top Internet providers in the UK agreed to do yesterday). I'd quibble with his notion of a cozy relationship between ISPs and the labels, as well as his suggestion that the ISPs could be held liable for their users' infringements. But I agree with his bottom line -- the most promising path is to provide an unlimited amount of music for a flat fee or free, with advertiser support. That's the direction the labels are headed, albeit slowly, through initiatives such as Universal Music Group's deal in the UK with BSkyB, ad-supported music sites such as iMeem and SpiralFrog, and Nokia's effort to bundle free downloads with cellphones. Bragg also makes the case for letting royalties flow directly to artists, which is what U.S. law requires for about half of the fees raised from webcasters, satellite radio and non-interactive cable music services.


UK ISPs to warn file-sharers, but then what?

BPI RIAA deal with MPAA and ISPs in UK to warn p2p file sharers Let's see how many acronyms I can squeeze into this lede. In a deal brokered by the BERR, BPI (the UK version of the RIAA) announced that six leading ISPs had agreed to send warning letters on behalf of the labels and the MPAA to people suspected of illegal p2p downloading. BERR is the UK government's Department for Business, Enterprise and Regulatory Reform, which is analogous to the U.S. Department of Commerce. Essentially, pressure from BERR and the threat of legislation motivated the ISPs to stop stiffing the BPI and start compromising. But today's deal involved a relatively painless concession for ISPs. A more interesting question is what enforcement mechanisms, if any, the ISPs will put in place to give the warning letters teeth.

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Yahoo pulls an MSN Music (only faster)

Yahoo_music_logoThis afternoon, Yahoo alerted customers of its erstwhile downloadable music store that it would no longer provide support after Sept. 30 (download the cheerful e-mail here). The upshot: starting Oct. 1, said customers won't be able to revive frozen tracks or move working ones onto new hard drives or computers, because Yahoo won't be providing any more keys to the songs' DRM wrappers. But hey, they can always buy MP3 versions from Yahoo's new partner Rhapsody!

Yahoo is cutting off support at an unusually speedy pace for a company that's not going out of business. Consumer backlash prompted Microsoft to extend support for tracks bought from the defunct MSN Music store by at least three years. And Sony, which closed its Connect music store in March, will continue to support those tracks until the end of the year. Perhaps Yahoo will feel a similar blast of heat and maintain its DRM servers for a while longer. Or maybe it sold so few tracks that no one will care.

I've already said that my outrage needle isn't really moved by decisions such as Yahoo's. Plenty of online music sellers crashed and burned before the major labels stopped demanding that 99-cent downloads be warped wrapped in DRM. Consumers should be used to this routine by now. Beyond that, buyers should have been backing up their purchases onto DRM-free CDs to protect their data. If they hadn't been doing so, the email from Yahoo Music should provide enough incentive to do it now. Yes, they may lose some fidelity in the translation from DRM'ed file to CD to MP3, depending on the bit rates involved. But that's a small price to pay for extended life in an era of accelerated obsolescence.

It's also worth saying that Yahoo Music's last two top executives, Dave Goldberg (now a VC) and Ian Rogers (now at Topspin Media) were both strong advocates of a DRM-free approach to music. That's why it would be ironic for consumers to be ticked off at Yahoo, which didn't have either the leverage to change the labels' policy or the patience to wait on the sidelines (a la Amazon.com). Nevertheless, consumers are most likely to direct their ire at the company that sold them the soon-to-be irreparable goods, not at the wholesaler responsible for the defect.


Nokia phones to come with Warner music

Warner Music Group signs deal Nokia Comes with Music free song downloads The first casualty of this decade's digital music revolution has been music sales, as consumer switched from CDs to 99 cent singles or free downloads. But some industry executives see a chance to reverse the trend and sell music in significantly larger bundles -- more songs, in fact, than the average consumer buys in a year. That's the home-run swing promised by initiatives such as Nokia's Comes with Music, which signed up its third major record company today, Warner Music Group. Universal Music Group, an early advocate of this kind of thing, and Sony BMG were already on board, with EMI still in licensing talks.

The Comes with Music proposition is simple: buy a specially designated Nokia phone, get an unlimited number of seemingly free song downloads for one year. That's seemingly free, not actually free, because the price of the phone will include a hidden sum that Nokia will split with the labels and music publishers.

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ACTA: Turning ISPs into enforcers

Riaa_logo Knowledge Ecology International, a group that seeks to reduce the control wielded by patent and copyright holders, recently posted a list of suggestions that the RIAA purportedly sent to the U.S. Trade Representative for what to include in the proposed Anti-Counterfeiting Trade Agreement. Ars Technica's Nate Anderson took up the issue today, accusing the record companies of trying to disembowel the safe harbor provisions of the DMCA. I checked the legitimacy of the Knowledge Ecology post with Neil Turkewitz, the RIAA's point man on such things, and he said it looked accurate. Not surprisingly, however, he offered a somewhat different take than Ars. Yet he acknowledged that some aspects of the RIAA's proposal for ACTA go beyond U.S. law on the enforcement of copyrights online.

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RIAA argues against Jammie Thomas retrial

The major record companies made their written case today (download the .pdf here) against a new trial for Jammie Thomas, the single mom ordered by a Minnesota jury to pay $222,000 for infringing the copyrights on 24 songs through Kazaa. The main legal arguments include:

  • Thomas downloaded many of the songs in her shared folder from other Kazaa users despite being away that such copying was illegal. Thus, she willfully she violated copyrights even before she made the songs available for others to copy;
  • The RIAA's contractor, MediaSentry, downloaded "numerous" songs in Thomas' shared folder, providing evidence of actual distributions. Bill Patry's arguments to the contrary, the fact that the downloads were by the labels' contractor doesn't make them authorized.
  • Federal law equates "distributing" with "making copies available for others to take," regardless of whether there is an actual distribution.
  • The cases cited by those seeking a new trial aren't relevant or misinterpret the law.
  • The U.S. is obligated under international treaties for the protection of intellectual property to equate "making available" with "distributing."

These are contentions, mind you, and Thomas' lawyers have their own brief.

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iLike Rhapsody - why don't more people?

Rhapsody subscription music service announces iLike deal and MP3 storeToday, Rhapsody (a joint venture between RealNetworks and Viacom's MTV Networks) launches another initiative aimed at selling its subscription music service. My colleague Michelle Quinn has the details here , such as Rhapsody's answer to the new Napster MP3 store, but I wanted to drill down on a couple of elements from the announcement.

iLike free MP3 deal with RhapsodyTo me, the MP3 store is the least interesting feature. Yes, it has more DRM-free tracks than the iTunes store, but so does Napster's. More intriguing are the partnerships aimed at introducing more people to Rhapsody's vast celestial jukebox, the core feature of its subscription service. These deals, especially the one with iLike, may mark the first time Rhapsody or any other subscription-music service has been effectively marketed. (When it comes to selling digital music products and services, Apple has been in a league of its own.) Sometime in July, iLike's 28 million users will be able to play for free just about any song mentioned on its network of sites, not just 30-second samples or the handful of full-length tracks posted by selected artists. The same capability will be rolled out gradually through Yahoo and MTV Networks' online properties, such as CMT.com and VH1.com.

There is, however, a non-trivial caveat.

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Making available=infringing, yes or no?

Chasing_pirates I was reminded today of why I couldn't be a lawyer. My brain's still hurting from the series of briefs I read in Capitol v. Thomas case. Nevertheless, I commend them to you (check out Ray Beckerman's website for a list) for two reasons. First,  the issue in question -- whether the mere act of putting a song file into a folder that others can download from constitutes infringement -- is hugely important. Under the interpretation advanced by the RIAA and the MPAA, making a file available for copying online network is enough to violate its copyright, even if there's no evidence that anyone actually copied it. Although the Jammie Thomas case involved a file-sharing network, the argument could just as easily apply to any folder made accessible to the public via the Web -- for example, the one associated with a certain 9th Circuit Court of Appeals judge.

Second, there's a fascinating line of reasoning in the MPAA's brief about the need to interpret U.S. statutes in a way that's consistent with international treaty obligations. That sort of argument is unsettling, given how aggressively U.S. negotiators have been pushing intellectual property protections on our trading partners. It raises the possibility that copyright owners could win protections through treaties and the courts that they could not get directly from Congress. But Bill Patry offers a counterpoint in this post.

UPDATE -- in a new post last night, Patry also responded to the argument, advanced by Thomas Sydnor of the Progress and Freedom Foundation, that the 8th Circuit's National Car Rental decision doesn't apply here. According to Sydnor, that decision is superceded by the Supreme Court's ruling in the Tasini case, which Sydnor argues established the precedent that "making available" was infringement.

Thomas was the first person sued by the RIAA to face a jury. She lost (to the tune of $222,000) but the judge in her case is weighing whether to grant her a new trial based on his instruction to the jury that making songs available constituted infringement in and of itself. Most of the cases filed by the RIAA include similar allegations of "making available" infringements, but that's not the only evidence the labels bring. Typically, their anti-piracy contractor, MediaSentry, also downloads copies of songs from the targeted file-sharer. Of course, if the RIAA loses the legal battle over making available, that invites a battle over whether MediaSentry's downloads can be considered infringements, given that the company works for the copyright owners.


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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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