Recently in Digital Music Category

In the Listening Post blog at Wired, Eliot Van Buskirk tries out Boomshuffle, a new service from Snocap, New Direction For SnoCap: Free, 15-Song Embeddable Mixes: "The service only plays 30-second clips of the songs unless you include 15 tracks by 15 different artists, because that helps Boomshuffle qualify for a lower internet radio royalty rate -- fine by me, I'd rather include more music anyway. Other royalty-related requirements: the songs shuffle, and users can't skip to a specific song, rewind, or skip more than 4 tracks"

Here is a case of how the statutory licensing has directly shaped the way that this service operates.

Take a look at 17 USC ยง114(d)(2) and compare the limits of interactivity allowed for webcasters using the statutory license with the terms of the Boomshuffle service.

The Wall St. Journal: Music's New Gatekeeper: "Apple has jettisoned some of the conventions of traditional music retailing -- notably, the practice of selling prime promotional spots to recording companies willing to pay for better visibility for their acts. But behind the scenes there's plenty of horse-trading going on that influences which songs are seen and purchased by iTunes customers."

The RIAA released a statement in response to Jobs' open letter, available at Jon Healey's Bit Player blog at the LA Times: "Apple’s offer to license Fairplay to other technology companies is a welcome breakthrough and would be a real victory for fans, artists and labels. There have been many services seeking a license to the Apple DRM. This would enable the interoperability that we have been urging for a very long time."

Is this really the best of Jobs' three scenarios for copyright owners? If Apple did choose to license to third parties, Apple's proprietary DRM scheme would be the underpinning of the entire digital music industry. And while there would be competitors to the iTunes/iPod hegemony, Apple would be the 500 lb gorilla in the room. Its proprietary format would govern the way that music is used. Perhaps the record labels would prefer to have to deal with using antitrust law to reign in Apple's dominance in the music distribution ecosystem, but that seems like the labels would be letting too much of that distribution ecosystem get to far out of their control.

It shows how confident Apple is in its product that the company is willing-- if not enthusiastic-- to prefer open competition to licensing its own proprietary protection scheme.

John Markoff, The New York Times, Jobs Calls for End to Music Copy Protection: "The Universal Music Group, the Warner Music Group and Sony BMG Music Entertainment declined to comment. But several industry executives said they viewed Mr. Jobs’s comments as an effort to deflect blame from Apple and onto the record companies for the incompatibility of various digital music devices and services."

The Economist: Music wants to be free: "Mr Jobs’s argument, in short, is transparently self-serving. It also happens to be right."

John Gruber, Daring Fireball: Reading Between the Lines of Steve Jobs’s ‘Thoughts on Music’: "Interoperability is a good idea. It is simply fair that you should be able to play the music you’ve downloaded and paid for on any brand of music player. “Open up FairPlay” sounds nice, but, as Jobs makes clear, makes little practical sense. If you really want interoperability, then what you want is no DRM, not “open” DRM."

As Gruber, and others, have noted, there are many copyright owners-- independent labels and artists, mainly-- who are willing to distribute their recordings in DRM-free formats. In fact, many of these recordings are distributed DRM-free already. Unless the contracts with the Big Four prohibits Apple from distributing any non-protected content from the same store, Apple could distribute independent music without any DRM.

Previously: Apple, DRM and Digital Distribution

A few European countries, including Norway, Germany, and France, are considering requiring Apple, Inc. to make the songs sold on the iTunes store playable on music players from other manufacturers. ARS Technica reports: iTunes DRM called out by France and Germany: "Apple is being challenged once again to open up its DRM by consumer groups in Europe. This time, Germany and France have joined the slowly-growing number of countries who are asking Apple to allow the protected songs purchased from the iTunes Store to be played on other music players besides the iPod. Norwegian Consumer Ombudsman Bjoern Erik Thon told the Associated Press that France's consumer lobby group, UFC-Que Choisir, and Germany's Verbraucherzentrale are now part of the European effort to push Apple into an open DRM system, with more countries considering joining the group"

Steve Jobs responds in an essay on Apple's web site, noting that use of DRM is at the requirement of the copyright owners who license music to the iTunes store. Apple would be happy to sell unprotected songs: Thoughts on Music:

To begin, it is useful to remember that all iPods play music that is free of any DRM and encoded in ‘open’ licensable formats such as MP3 and AAC. iPod users can and do acquire their music from many sources, including CDs they own. Music on CDs can be easily imported into the freely-downloadable iTunes jukebox software which runs on both Macs and Windows PCs, and is automatically encoded into the open AAC or MP3 formats without any DRM. This music can be played on iPods or any other music players that play these open formats.

The rub comes from the music Apple sells on its online iTunes Store. Since Apple does not own or control any music itself, it must license the rights to distribute music from others, primarily the ‘big four’ music companies: Universal, Sony BMG, Warner and EMI. These four companies control the distribution of over 70% of the world’s music. When Apple approached these companies to license their music to distribute legally over the Internet, they were extremely cautious and required Apple to protect their music from being illegally copied. The solution was to create a DRM system, which envelopes each song purchased from the iTunes store in special and secret software so that it cannot be played on unauthorized devices.

Jobs goes on to explain that Apple has refused to license its Fairplay DRM system because doing so would make the scheme less secure. Because licensees would need to know how to decrypt the protected files, allowing third-parties access to the Fairplay code would make the scheme much more likely to be cracked. Apple would be happy to sell music without DRM, if only the Big Four would be willing to let Apple sell unprotected files.

The major labels seem to be getting closer to attempting large scale use of digital distribution without DRM. From MIDEM, Victoria Shannon reports in The NY Times: Record Labels Contemplate Unrestricted Digital Music: "As even digital music revenue growth falters because of rampant file-sharing by consumers, the major record labels are moving closer to releasing music on the Internet with no copying restrictions — a step they once vowed never to take."

Independent labels are already selling unprotected MP3 files through eMusic. Other Music, here in New York City, is set to launch a digital download store selling indie music in high-bitrate, unprotected MP3 format. Eliot Van Buskirk, Wired News interviews: A Real Music Store Sprouts Online: "Other Music [will take] its handpicked approach to music sales online with the launch of its own digital music store. Located at digital.othermusic.com, the site will stock high-quality MP3s from Pitchfork-friendly bands, without using digital rights management of any kind."

Yesterday, Apple, Inc. and Apple Corp. entered into a new agreement concerning the Apple trademark. In this new Agreement, the Jobs-helmed Apple, Inc. will own the Apple mark and license it to the Beatles' Apple Corp. Terms of the deal were not disclosed.

The Copyright Office ruled that ringtones-- including monophonic versions-- are subject to the section 115 statutory license: In re: Mechanical and Digital Phonorecord Digital Delivery Rate Adjustment Proceeding.

The short result:
Labels (RIAA) = :)
Publishers (NMPA) = :(

Billboard: Compulsory Licenses Cover Ringtones: "The Copyright Office has decided that compositions used for ringtones may be subject to a compulsory license. The decision is a victory for record labels that want to offer ringtone operators the master rights and publishing rights as one package."

Patry: Ringtone Ruling "Since the amount paid for ringtones may be substantially less than the free market rate, the cost to consumers may go down as to payments to music publishers decrease. I imagine not just RIAA, but celllphone providers are rejoicing."

Assorted Reading

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Privacy and Anonymity
Kevin F. Berry, Law.com: How to Unmask an Anonymous Blogger: "When does it make sense to spend the time and expense necessary to determine the identity of an anonymous blogger who is damaging the company?"

New York Times: The Theater of the Street, the Subject of the Photograph: "The suit was dismissed last month by a New York State Supreme Court judge who said that the photographer's right to artistic expression trumped the subject's privacy rights. But to many artists, the fact that the case went so far is significant."

Digital Music and Movies
At Last, Movies to Keep Arrive on the Internet - New York Times: "Six major studios plan to begin selling movies over the Internet today that buyers can download and keep for watching at any time.…New movies will cost about $20 to $30 to download"

John Gruber, Daring Fireball: The iPod Juggernaut: "In short, and I mean this in the nicest way possible, Apple’s iPod competitors are totally fucked."

MP3 Insider: The truth about your battery life. It takes more processing power to play tracks with DRM. That processing power shortens the battery life of portable digital music players. "The Archos Gmini 402 Camcorder maxed out at 11 hours, but with DRM tracks, it played for less than 9 hours. The iRiver U10, with an astounding life of about 32 hours, came in at about 27 hours playing subscription tracks. Even the iPod, playing back only FairPlay AAC tracks, underperformed MP3s by about 8 percent."

British Court Hears Apple v. Apple and 'Le Freak': "In a clash of cultural icons, the Beatles' record company, Apple Corps, wants Apple Computer to stop using its familiar logo, in the shape of an apple with a bite out of it, on the iTunes Music Store. Apple Corps contends that the use of the logo infringes on a 1991 agreement, which it says barred Apple Computer from using the logo in connection with the sale of music."

Copyright
Creative Commons Canada: Dutch Court upholds Creative Commons licence: "Photographs made available on flickr.com under a Creative Commons Attribution-Noncommercial-Sharealike license may not be reproduced in a weekly magazine without the author’s permission."

Raymond Nimmer: Can I download it to try out the music?: "No, not unless the copyright owner permitted or invited that. The idea that downloading a file is permitted because it is so easy on Internet is simply wrong. Downloading is copying and infringement. Indeed, it can have massive adverse effects on copyright owners."

Slate: The Dan Brown Code: "Dan Brown, author of the mega-selling The Da Vinci Code, has brought forth his most thrilling piece of writing to date: a court document. Brown, who is being sued for copyright infringement in London by the authors of Holy Blood, Holy Grail, filed a 69-page witness statement with the British courts back in December.… In its textures—it is at turns snotty, contemplative, and disarmingly personal—it is clear Brown intended the brief less as a legal defense than as a literary memoir."

DRM
Silicon Valley Media Law Blog: Materials from talk on DRM: law and technology

Mark Cuban: Digital Rights Management - The coming collateral damage: "Unfortunately for content owners, digital rights/copy protection schemes have always proven crackable. No matter how smart the good guys think their programmers are, the bad guys have programmers that are just as smart. More importantly, the good guys have to build the perfect protection scheme, impenatrable by any of infinite number of possible attacks."

The RIAA released year-end statistics for the US recorded music market. The NY Times reports: Music Industry's Sales Post Their Sixth Year of Decline: "In the United States, overall shipments of music products, including CD's and digital albums and singles combined, fell 3.9 percent last year."

According to the RIAA, physical unit sales dropped by 8% from 2004 and revenues from those sales dropped by 7.9%. In contrast, digital sales increased by 166.2% in terms of unit sales and 174.5% in revenue. The overall net effect was that total unit sales grew by 35.9% from 2004 and revenues declined by six tenths of one percent.

At The Long Tail blog, Chris Anderson discusses the effect of the digital distribution market (and uses snazzy charts): Music Industry: Is digital making up the difference?: "In revenue terms the industry did about as well last year as it did before, and it's worth noting that the margins on digital distribution are considerably higher because there are no physical goods to manufacture and ship. So 2005 may have been more profitable than 2004 (it certainly was for Warner Music Group). Who knew?"

For the entire world, IFPI also released its 2005 year-end report: Digital formats continue to drive the global music market "Record company trade revenues from digital sales globally nearly tripled in value, from $400 million to $US 1.1 billion in 2005. The total number of digital single tracks downloaded online or to mobile phones rose to 470 million units, up from 160 million in 2004. The US, Japan, UK, Germany and France are the top five digital markets. In general, countries with a greater percentage of digital sales are the strongest markets for music sales overall."

The Silicon Valley Media Law Blog reports that PROs ASCAP and BMI also saw significant growth in new media revenue: PROs see leap in new media revenues: "Public performance rights organizations saw marked increases in new media revenues in 2005, according to their reported financial results."

Pitchfork interviewed attorney Steve Gordon about file sharing, copyright law, the record industry and PROs: Live at the Witch Trials: "I think the culture of the labels have been unable to adapt to the impact that new technology, particularly the web, has had on the recorded music. The labels, for many years, combined two basic characters-- Ivy League-trained lawyers and savvy music business types with "ears." Sometimes one executive was both-- Clive Davis, for instance. But the one culture that was never present were techies. They are there now. But they do not call the shots. The Sony DRM debacle shows they still have no clue."

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