www.dpingram.com

The RIAA’s (Recording Industry Association of America) argument that merely ‘making files available‘ is in and of itself a copyright infringement, argued in January in Elektra v. Barker (awaiting decision), is raging again, this time in a White Plains, New York, court in Warner v. Cassin. Ms.

Cassin moved to dismiss the complaint; the RIAA countered by arguing that ‘making available’ on a p2p file sharing network is a violation of the distribution right in 17 USC 106(3). Ms. Cassin responded, pointing out the clear language of the statute, questioning the validity of the RIAA’s authorities, and arguing that the Court’s acceptance of the RIAA’s theory would seriously impact the Internet. The case is scheduled for a conference on September 14th, at 10 AM (PDF), at the federal courthouse, 300 Quarropas Street, White Plains, New York, in the courtroom of Judge Stephen C. Robinson. The conference is open to the public.”

Another case built on this arguement was found in favor of the record company, see here which may go towards setting a precedent for future cases.

We should note that this action by RIAA is directed at end users of file sharing websites and services, not the operators of those websites and services.

Article from Slashdot here

So, we’ve all seen the various stories over the last year or so about ISPs blocking P2P and other bandwidth intensive services. I’ve been reading yet another one this morning and and it just occured to me: this is a parody of the music industry’s biggest mistake - trying to block the adoption and distribution of MP3 with law suits and DRM.

I’ve written previously about this here and here and here.

You can’t stop an advancing tide, forget it. If you try to prevent the natural progress you’ll lose, instead consumers will go elsewhere (either to your more open mined innovative competitors, or to new disruptive competitors who will enter the space).

The best option is to embrace the change AND work out how your business can make money from it. You either see it (and treat it) as a threat, or you see it (and treat it) as an opportunity. Its widely accepted that DRM is dying and that music companies must embrace new revenue models, same goes for ISPs and P2P.

Now here’s a really disruptive idea…

Why should we pay for ANY music??? Maybe it should be free to consumers?

Digital rights management (DRM) is dying, no doubt about it. It was invented by record and film companies who wanted to restrict an amazing new distribution opportunity instead of embrace it. But, as King Canute discovered, you can’t stop an incoming tide, you either find a way to benefit from it or you drown trying to resist it.

There never was any DRM on vinyl or tapes, and people ripped them off left right and centre. What scared the record companies into creating DRM was how much wider the ‘problem’ became with the ease of communication and distribution enabled by the birth of the internet, email, MP3, P2P, etc, etc.

But these days business never stays static, it changes faster than ever and companies, no INDUSTRIES, must be agile enough to respond to the change and not try to prevent it. The companies that embrace the inevitable chance early, run it alongside their existing business perhaps as an experiment, hedge their bets, will win out over the old school – they will outshine them, outpace them, out-innovate them, and outlive them.

So, here is the idea. Music is media content right? It attracts and engages people, it excites people, they live it, they love it, they mould their lives on their stars. For years the music industry has licensed its music content to the media channels, who have been happy to pay for that license in order to offer engaging content via their distribution channel, to a bunch of consumers, in order that they can either charge people to watch it, and/or charge advertisers to place ads between the media. Why can I turn on the radio and listen to a commercial radio station for free? Its because they make their money from the advertisers, not from me.

Now, years back when I was in supply chain management at the birth of e-commerce the buzzword was disintermediation. The new technologies collectively described as e-commerce enabled businesses to move up and down the supply chain much more easly than before, taking a larger piece of the commercial pie, attacking new markets, increasing margins, creating greater efficiencies, and the natural consequence of this was disintermediation in the supply chain – the removal of entire links in the process – business and whole business models died as new ones were invented.

I see similar opportunities. How about a producer doesn’t sell their content to us. How about they give it to us, but make their money from commercial sponsors? That way you can forget DRM, in fact its in the producers’ interest to make it even easier to share the content, not restrict it. The technology exists to track the distribution path or digital media around the web and that paves the way for producers to monetize their content by ‘selling’ those impressions to advertisers. Its what happens with UGC content, blogs, etc. People produce the content and distribute it for free, the payback being the advertising dollars.
Everything changes. I see no reason why we music producers, and most likely other types of professional media content won’t go this way. In the future we won’t pay for music, it will be sponsor-subsidized.

The Wired magazine blog talks about Microsoft patenting a technique for preventing and reversing music piracy at the hardware level.

“Microsoft and Apple are thinking along the same lines when it comes to enabling users to copy music between their wireless devices.

Certain cellphones already allow you to do this via Bluetooth file transfer, but Microsoft’s patented idea would take the concept further, by allowing users to trade MP3s that may have come from file sharing networks to one another, expiring the song on the recipient’s device after three plays, unless the user pays Microsoft a fee in order to continue to listen to the track, with a percentage going to the person who provided the song. As the abstract puts it, “even [the] resale of pirated media content [can] benefit… the copyright holder.”"

Here’s an excerpt from the patent application:

“Systems and methods are described for an off-line economy for digital media. In one implementation, exemplary media devices of buyer and seller participate in the off-line economy by performing secure off-line transfers of digital media content between themselves. The media devices store proof of the off-line sales transactions, so that a percentage of the sale price can be applied to a copyright owner and a percentage of the sale price can be applied to the seller as an incentive. Even resale of pirated media content benefits the copyright holder. The off-line economy opens an effective and inexpensive distribution channel for copyright holders and allows buyers to obtain media content anywhere, at any time, from any participant in the off-line economy without connecting to the Internet. The off-line economy allows copyright holders and media sellers to optimize pricing by market probing.”

If Reuters news yesterday is to be believed (and is not an April fool joke like this from Google), EMI and Apple may be about to release the first DRM free music on iTunes. Jobs spoke out recently about DRM, effectively saying it was pointless, so maybe this is a natural step for Apple and EMI. Other labels will prob follow suit.

Engadget has a good piece on this here

Boy, I am sooo slooow these days. Of course I’d heard about Steve Job’s open letter discussing the abolition of DRM, but I only just got round to reading it myself.

For me, this is perhaps the most important section - doing away with DRM actually makes good sense. They’ve been selling DRM free music for ever, and today over 90% of it is still DRM free.

and I quote from Jobs…

Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven’t worked, and may never work, to halt music piracy. Though the big four music companies require that all their music sold online be protected with DRMs, these same music companies continue to sell billions of CDs a year which contain completely unprotected music. That’s right! No DRM system was ever developed for the CD, so all the music distributed on CDs can be easily uploaded to the Internet, then (illegally) downloaded and played on any computer or player.

In 2006, under 2 billion DRM-protected songs were sold worldwide by online stores, while over 20 billion songs were sold completely DRM-free and unprotected on CDs by the music companies themselves. The music companies sell the vast majority of their music DRM-free, and show no signs of changing this behavior, since the overwhelming majority of their revenues depend on selling CDs which must play in CD players that support no DRM system.

So if the music companies are selling over 90 percent of their music DRM-free, what benefits do they get from selling the remaining small percentage of their music encumbered with a DRM system? There appear to be none. If anything, the technical expertise and overhead required to create, operate and update a DRM system has limited the number of participants selling DRM protected music. If such requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies.

The original piece is in full here

Advestigo’s AdvestiGATE filter is for spotting copyrighted content.

PARIS, Jan. 22 /PRNewswire/ -­ Advestigo, provider of content recognition technology, launches AdvestiGATE(TM) to automatically filter copyrighted files uploaded to user-generated content (UGC) websites.

In their own words (remember its their PR!)…

Video sharing websites, which might handle upwards of 65,000 newly uploaded clips every day, are permanently at risk of litigation by unintentionally distributing copyrighted content online. AdvestiGATE automatically filters uploaded content, putting a stop to accidental copyright infringement. Until now, this has been impossible. UGC websites can now develop sustainable, profitable business models without the risk of litigation, and copyright owners can safely decide how and where they want their content to be used.

AdvestiGATE uses Advestigo’s patented Theraography(TM) technology to calculate a fingerprint for each uploaded video file. AdvestiGATE then automatically cross-references new fingerprints against a database of existing fingerprints from copyrighted material; in a matter of seconds, files that contain full or partial, perfect or degraded copies of copyrighted content are identified and flagged.

AdvestiGATE can manage video and audio in one comprehensive solution. For audio files, it either relies on Advestigo’s audio fingerprint technology or interoperates with existing audio recognition technologies.

“Our technology, which is already in industrial use around the world - embedded in our range of peer-to-peer monitoring solutions - is shaping the future of online video sharing,” says Michel Roux, President and CEO of Advestigo.

AdvestiGATE is delivered on a plug-and-play 1U rackable appliance for seamless integration into existing UGC infrastructure. Scalability is assured through multiple appliances within a single process. Prices start at 15,900 USD plus subscription to a fingerprint database.

About AdvestigoAdvestigo is a technology leader in the fast- growing digital asset management market. Using Theraography, a unique technology that analyses digital content to generate content-based “fingerprints,” Advestigo provides solutions to automatically monitor and identify multimedia content.

DI> See also Gracenote which has something similar. Gracenote is generally known as the company that owns CDDB, the service that many apps use to look up CD titles and track names.

The folks who make movies, TV shows and music have had an often hostile relationship over the years with the companies that make the cool new devices to display, record and move that content around.

Only a few years ago, entertainment executives railed against digital video recorders that allowed TV viewers to skip ads (think TiVo), and lambasted music players that encouraged users to “rip, mix, burn” their songs onto portable devices.

But over the past year or so, studios have done an about-face and now regularly court technology ventures such as YouTube. Rupert Murdoch’s News Corp., owner of the Fox TV network and movie studio, went so far as to spend $580 million buying the social networking site MySpace, which is now jammed with snippets of video and music that entertainment companies once went to court to have taken off such sites.

Nowhere has this new, almost giddy relationship been better displayed than at this year’s International Consumer Electronics Show, where disruptive technologies that once gave studio executives nightmares often make their debut.

Leslie Moonves, chief executive of CBS Corp., and Robert Iger, chief executive of Walt Disney Co. both gave keynote addresses this year that emphasized cooperation between studios and device makers.

“If you asked me two years ago, did I want Disney in the keynote? No,” said Gary Shapiro, chief executive of the Consumer Electronics Association, annual sponsor of the show. “Disney was the poster child in Washington for the most anti-technology company there was.”

Moonves made the most aggressive push at this year’s show, sharing his stage with Chad Hurley, co-founder of YouTube, Philip Rosedale, founder of virtual reality creator Linden Lab, and Blake Krikorian, founder of Sling Media. That company’s Slingbox enables TV viewers to stream live and recorded video over the Internet from a home cable box to a computer.

A packed ballroom cheered Moonves when he said that the lines between “old media” and “new media” have been erased.

Disney’s Iger sparked much of the current rapprochement in October 2005 when, only weeks after being named CEO, he signed a deal to sell individual ABC-TV episodes on Apple Inc.’s iTunes store.

The groundbreaking deal sparked a flurry of similar deals, with networks selling shows on iTunes, Google Inc.’s video store and elsewhere. This week Apple said it would sell movies from Viacom Inc.’s Paramount Pictures, increasing Apple’s online selection.

Warner Bros., a unit of Time Warner Inc., even agreed to distribute its content using peer-to-peer technology from BitTorrent, but only after the once-renegade company agreed to share revenue.

“Change is always difficult for people who have invested millions or billions of dollars in basic business models,” said Dan Glickman, president of the Motion Picture Association of America. “Companies that keep up with what consumers want will make money.”

OA by Gary Gentle is here

Michael Arrington on Techcrunch writes…

Notwithstanding Apple’s announcement today of the sale of 2 billion songs on iTunes (all with DRM), most of the recent market signs suggest that the eventual demise of DRM is inevitable. Consumers are more frustrated than ever that certain file types are playable only on certain devices. The only real questions are when, and will it be replaced with something far more sinister?

The signs:
A year ago, Yahoo Music GM David Goldberg urged labels to abandon DRM
CD sales continue to drop and are down at least 15% from 2000, and current digital sales are not offsetting that lost revenue
eMusic, which sells only MP3s, is the no. 2 digital music reseller behind iTunes
Amazon is rumored to be opening a MP3-only music store
Sony Exec says “DRMs are going to become less important” as time goes on
etc.

Then there’s the Apple factor. The digital music market is starting to look like a monopsony for the big labels, with Apple as the only real reseller (20x the sales of no. 2 eMusic). No one else can gain enough critical mass to get users to buy a player and the music, or otherwise make much of a dent in iTunes. The only way others can sell music playable on the iPod is if it’s DRM-free. The labels will see it as a poison pill, but Apple is on a roll and their lead is getting stronger over time.

I [Arrinton] spoke with Yahoo Music GM David Goldberg and VP Product Development Ian Rogers last week about their views on the future of DRM, given Goldberg’s comments about DRM a year ago (see above). The forty minute podcast is up at TalkCrunch. While they don’t quite agree that DRM’s demise is inevitable, they do have valuable insights as music insiders as to what may happen in the short term. One interesting prediction that Goldberg made is that we might see DRM and DRM-free tracks being sold side by side, with DRM music sold at a discount. I think that the general availability of illegal and quasi-legal alternatives may not allow that market to develop, but we’ll see. They also predict the rise of music subscription services.

OA is here

By Antony Bruno, Reuters
Tuesday, January 2, 2007; 1:10 PM

LOS ANGELES (Billboard) - The anti-digital rights management (DRM) bandwagon is getting more crowded by the day. Even some major-label executives are pushing for the right to sell digital downloads as unprotected MP3s.

In 2007, the majors will get the message, and the DRM wall will begin to crumble. Why? Because they’ll no longer be able to point to a growing digital marketplace as justification that DRM works. Revenue from digital downloads and mobile content is expected to be flat or, in some cases, decline next year. If the digital market does in fact stall, alternatives to DRM will look much more attractive.

Revenue from digital music has yet to offset losses from still-declining CD sales, and digital track sales remain a cause for concern. Month-over-month download figures were largely flat through 2006, even in the face of year-over-year gains. If the expected post-holiday spike in download numbers that has occurred in the past two years is weak, look for the glass on the panic button to break.

“People in the industry will have a very different conversation in January when the dust clears and they realize just how bad this year really was,” says Eric Garland, CEO of peer-to-peer (P2P) tracking firm BigChampagne.

Even more of a concern is mobile. According to Gartner G2 analyst Mike McGuire, the ringtone market — currently contributing more than half of all digital revenue — will soften during the next 12-18 months as it matures.

Meanwhile, the music industry wants a strong competitor to the monster it created called iTunes. Forcing would-be competitors to sell music incompatible with the popular iPod is not showing any signs of working. Removing DRM would attract powerful new players to the market, and that — the theory goes — will result in more buyers.

“The majors . . . have got to capitulate, or they will continue to have a fractured digital media market that will slow down and stagnate,” says Terry McBride, president of Nettwerk Music Group, management home of such acts as Sarah McLachlan and Avril Lavigne.

Here are five places to watch this year’s DRM developments:

AMAZON
The online retailer reportedly is itching to get into digital downloads but is holding out for a DRM-free service. It sells as many iPods as anybody and is a haven for music that is disappearing from physical retail shelves. “They already have a relationship with our consumer the way that a lot of others don’t,” Blue Note GM Zach Hochkeppel says. Viewed as the biggest threat to iTunes, Amazon has the power to force a DRM strategy shift.

LIMEWIRE
Still in the process of settling with the music industry, the P2P file-sharing service wants to start charging its 40 million users $1 per download and share the revenue and user-behavior information with the music industry. But it wants to stay DRM-free. The company hired TAG Strategic consultant Ted Cohen, a former EMI exec, to convince the majors to at least test the idea for six months.

MYSPACE
The most popular Internet destination in the world is working with SnoCap to launch a music download service that would let musicians sell music directly from their profiles and that of their fans. But it will only sell files as MP3s. It is moving ahead by focusing on independent and unsigned artists willing to release unprotected music, and a successful showing would make the majors take notice.

EMUSIC
The indie-only specialist just surpassed 100 million downloads; it’s the second-largest digital music retailer after iTunes, all sans DRM. CEO David Packman says he is not interested in selling major-label fare, but he may have no choice if majors suddenly allow his competitors to sell in MP3 as well. But even if the majors did relent to MP3 sales on eMusic, the company’s business model would have to change–no label will agree to 50 downloads for $15 per month.

YAHOO MUSIC
GM David Goldberg has convinced Sony BMG and EMI Music Group to test the DRM-free waters with limited, promotional “experiments” involving Jessica Simpson, Jesse McCartney, Relient K and Norah Jones. The lessons learned from these tests will either speed or slow their path to eliminating DRM.

OA is on the Washington Post website