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An anonymous reader quotes BGR: Sales from individual song downloads have unsurprisingly been falling with no end in sight, thanks to the convenience of streaming options like Spotify and Apple Music. A new report, though, makes clear just how few people there are these days who will buy individual digital songs -- there are so few of them, in fact, that they were outnumbered in 2018 by people who went old-school and bought actual compact discs and vinyl records.

According to the Recording Industry Association of America, total download sales in 2018 -- for which iTunes led the pack -- dropped almost 30%, to a little more than $1 billion. Purchases of full album downloads likewise fell, by 25%. To put that in context, download sales represented more than 40% of the music industry's revenue back in 2013. Last year? About 11%.

Meanwhile, that drop in sales has resulted in a lop-sided reality that harkens back to the pre-iTunes days. Sales of physical media including CDs and vinyl, according to the RIAA's new report, were down 23 percent but totaled $1.15 billion, thus edging out digital download sales. Another interesting takeaway from the new report: Music fans bought almost $420 million worth of vinyl in 2018, which Cult of Mac notes in a piece today is almost as much as people spent buying album downloads from iTunes last year.
The RIAA reports that "virtually all the revenue growth" for 2018 came from streaming music platforms like Spotify, Apple Music, Amazon Music, and Tidal, which last year collectively added 1 million new subscribers every single month, and now have a record number of more than 50 million subscribers.

"By the way, don't be fooled into reading something positive about CDs from the title of this post," adds BGR. "While physical media sales were down 23%, CD sales themselves slipped 34% for the year to $698 million. That's the first time CD yearly revenue has come in below $1 billion since 1986."

Mallory Locklear reporting via Engadget: The Recording Industry Association of America (RIAA) has released music industry revenue statistics for the first half of 2018 in the U.S., and on average, revenue growth has slowed. While overall revenue was up 10 percent compared to the same time last year, clocking in at $4.6 billion, that rate is only around half of the increase observed between the first halves of 2016 and 2017. Streaming revenue growth slowed as well, though it was still up 28 percent compared to last year. Notably, streaming accounted for the vast majority of revenue so far this year, with 75 percent of overall revenue coming from streaming services like Spotify, Apple Music and Tidal.

The numbers also show that more people continue to join paid subscription services, with subscription rates growing by about one million per month. But while streaming revenue is still on an upward trend, the news isn't so good for digital downloads and CD sales. Digital downloads have only made up 12 percent of overall revenue so far this year, down from 19 percent last year, and CD sales saw a whopping 41 percent drop in revenue. To compare, during the same time last year, CD sales were only down three percent from the year before. Vinyl revenue, however, is up 13 percent.

AmiMoJo writes: The RIAA is modernizing its gold and platinum album certifications to include streaming. An album must reach 500,000 sales to go gold, 1,000,000 for platinum and 2,000,000 for multi-platinum. The RIAA set the new Album Award formula of 1,500 on-demand audio and/or video song streams = 10 track sales = 1 album sale. Also effective today, RIAA's Digital Single Award ratio will be updated from 100 on-demand streams = 1 download to 150 on-demand streams = 1 to 'reflect the enormous growth of streaming consumption'.

JustAnotherOldGuy writes: Peter "brokep" Sunde, co-founder of The Pirate Bay, has built a machine that makes 100 copies per second of Gnarls Barkley's "Crazy," storing them in /dev/null (which is of course, deleting them even as they're created). The machine, called a "Kopimashin," is cobbled together out of a Raspberry Pi, some hacky python that he doesn't want to show anyone, and an LCD screen that calculates a running tally of the damages he's inflicted upon the record industry through its use. The 8,000,000 copies it makes every day costs the record industry $10m/day in losses. At that rate, they'll be bankrupt in a few weeks at most.

ozydingo writes "The RIAA has scored a victory in a decision on a copyright case that they filed back in 2007. US District Judge Harold Baer ruled in favor of the music industry on all its main theories: that Usenet.com is guilty of direct, contributory, and vicarious infringement. In addition, and perhaps most important for future cases, Baer said that Usenet.com can't claim protection under the Sony Betamax decision stating that companies can't be held liable of contributory infringement if the device is 'capable of significant non-infringing uses.' Bear noted that Usenet.com differed from Sony in that the sale of a Betamax recorder was a one-time deal, while Usenet.com's interaction with its users was an ongoing relationship. The RIAA stated in a brief note, 'We're pleased that the court recognized not just that Usenet.com directly infringed the record companies' copyrights but also took action against the defendants for their egregious litigation misconduct.'"

xseedit writes "The RIAA has moved their main Web site www.riaa.com from IIS on Win2003 to Apache 2.2.3 on Red Hat. It appears that the move did not go smoothly as it resulted in an 8-hour downtime starting yesterday around noon, according to Netcraft. And the RIAA is still showing a 'temporarily under construction' page. They also moved their DNS from the small company that had been hosting them for the past 4 years, Tomorrow's Solutions Today (TST Inc.), to Mindshift Technologies. One can only guess what happened here, but the move seems to have been sudden and unplanned. They still haven't moved the riaa.org, riaa.net, and musicunited.org domains — those are still pointing to the TST nameservers that no longer accept queries for those domains. TST Inc. deserves credit, however. They seem to have managed to host the RIAA quite successfully for the past 4 years. Will Mindshift do a better job hosting one of the most reviled, and therefore most attacked, Web sites in the world? I wonder if anybody at the RIAA or TST would care to comment on the reasons behind this sudden move. Could it be that the RIAA is being sued by its hosting provider? Or perhaps the sue-happy organizaiton is suing its provider?"

Nomihn0 writes "The RIAA has announced that the House Education and Labor committee is considering an amendment, HR1689, to the Higher Education Act of 1965. The proposal would allocate federal education funds to anti-piracy measures on college campuses. Most concerning is the bill's wording. It's claimed that the proposal would 'save telecommunications bandwidth costs.' In other words, the government will fund private packet filtering and preferential bandwidth allocation. 'The Higher Education Act (HEA) generally allows schools to spend the money they receive only on certain prescribed areas such as financial aid grants and Pell loans. The new bill would allow that money to be used for more things, but does not contain a request for additional funding. Whether schools would be interested in using a limited pool of federal money to police student file-swapping remains to be seen.'"

EatingSteak writes "The folks over at Techdirt just put up a great story today, with the RIAA claiming the cost of a CD has gone down significantly relative to the consumer price index. The RIAA 'Key Facts' page claims that based on the 1983 price of CDs, the 1996 price should have been $33.86. So naturally, you should feel like you're getting a bargain. Sounds an awful lot like the cable companies saying cable prices are really going down even though they're going up."

IANAL writes "MIT is offering Introduction to Copyright Law as a free online course. Interested Slashdotters might find it a good way to challenge their firmly held misconceptions about copyright law as it concerns fair use, Napster, Grokster, the GPL, and P2P filesharing, among other things. There's also an article about the course over on Groklaw."

Y'arr, Matey writes "CD Freaks is reporting that pirates are not happy with the quality of the DaVinci Code. According to the article, "A sales assistant at one Shanghai DVD shop said the initial copies were 'pirated overseas' and that 'better quality' versions would probably be available early next month.""

E. Vigilant writes "The new Trojan/Erazor-A has an interesting twist. In addition to deleting or disabling various security products and competing malware, it deletes any porn, warez and music in your P2P directories. While some opine that this trojan might have good intentions, remarkably few things infect the text files this trojan also deletes. No one yet knows who wrote this or why."

Conor Turton writes to tell us that the RIAA has set their sights on Russia for their newest push into anti-piracy. A recent bill was sponsored in the Senate to deny Russia's entrance into the WTO (among other things) if they did not take major action against piracy. From the press release: "The effective protection of American intellectual property has been sorely lacking in Russia. This resolution is significant because it expresses the will of the U.S. Congress that Russia must take effective action against those who would steal America's knowledge-intensive intellectual property-based goods and services. We must not enter into political arrangements with countries ill-prepared to adequately protect our greatest economic assets."

Take a Byte Out of Crime writes "According to this article, British classical labels are claiming that the BBC giving away the these symphonies, which were performed by the BBC Orchestra for free, constitutes unfair government competition. Apparently all free music really is illegal these days, or soon will be, public domain be damned."

jsc writes "On Sunday, the Pittsburgh Post-Gazette published an article by Cary Sherman, president of the RIAA, stating that university students are hijacking Internet2 to pirate copyrighted works, and schools who don't actively combat file-sharing are teaching their students bad values like "acceptance of theft". The Post-Gazette didn't let Sherman get away with it, though... Today they published a letter to the paper from Roger Dannenberg, a professor of Computer Science and Music at Carnegie Mellon University, reminding everyone how past/present behavior of the RIAA and its members is an even worse model of values..."

thesp writes "The BBC is reporting that UK music lovers are 'frustrated' with DRM restrictions and pricing of online music purchases. The confusion over file formats and player compatibility are being compounded with the desire to 'own' rather than 'license' an album or track, leading to widespread concern. This debate has recently been the province only of the technologists and the media companies, with the consumer being regarded as unaware and unwitting. Is this a sign that this picture is changing, with consumers begining to realise and leverage their own market power?"

Daverd writes "Hundreds of students at 18 universities nation-wide have had lawsuits filed against them by the RIAA for filesharing over Internet2." The official RIAA Press Release and commentary at MSNBC is also available. From the article: "i2Hub has been seen as a safe haven, and what we wanted to do was puncture that misconception," said Cary Sherman, president of the RIAA. "This has been a subversion of the research purposes for which Internet2 was developed."

joepa writes "According to this MSN/ZDNet story, MP3 is dying. Overall, the data has not shown a clear trend, but at least one recent study reports that people are deleting MP3s faster than they are downloading them. AAC and WMA, meanwhile, are apparently gaining market share. Is this evidence that MP3 is being used largely to sample music rather than for permanent archival and listening purposes? They still don't think so. "

robochan writes "In a charming twist of fate, CNET is reporting that Altnet, a company that sells music and other digital goods through file-swapping services, is suing the RIAA for alleged patent infringement. Altnet CEO Kevin Bermeister stated, 'We cannot stand by and allow them to erode our business opportunity by the wholesale infringement of our rights.' Goodness, that sounds all too familiar..."

mammothboy writes "News.com.com has a story about the new so-called Pirate Act, which seeks to allow federal prosecuters to file civil suits against file swappers. These lawsuits can reach hundreds of thousands of dollars, and if you guessed that the RIAA is lobbying for it, you're right. What's scary is how fast and how quiet its march through the legislative process has been. In '97, the No Electronic Theft Act allowed for criminal lawsuits, but none have been filed, so isn't it clear that the Justice Department has better stuff to deal with?" There actually have been some prosecutions filed under the NET Act, but not many. Update: 05/26 18:51 GMT by T : Declan McCullagh (author of the linked News.com story) writes to clarify: "FYI there have been prosecutions under the NET Act, as you say. But there have not been any of P2P users. That's why the Senate is doing this."

prostoalex writes "AnonX allows Kazaa users to connect to its own VPN, effectively obfuscating their original IP address that certain association has been using to subpoena the file-sharers. The company is created by a Texas ISP employee, but is registered in Vanuatu, and already has 7,000 users paying $6 a month."

extra88 writes "Following in Penn State's footsteps, the University of Rochester has struck a deal to provide access to Napster's premium service for dormitory residents. From the press release: 'In addition, Napster and the University's prestigious Eastman School of Music will be developing ways in which Napster can begin to provide original content from Eastman students and faculty to service members across the entire Napster network.' What does this mean? Perhaps not coincidentally, the university is also hosting a panel discussion about P2P file sharing on Feb. 16. Cary Sherman from the RIAA, university administrators and others will be on the panel and there is to be a live audio stream of the event."

Lapzilla writes "In an article from LA Weekly, it would appear the RIAA has taken their fight to the streets. Wearing jackets with "RIAA" emblazoned upon them, they have taken to busting street vendors in an FBI fashion for selling bootleg CDs and DVDs."

mattOzan writes "Charter Communications, the third largest cable provider in the United States, has filed a motion in St. Louis, Missouri, to block the RIAA's requests for the identities of about 150 Charter customers in the St. Louis area. In the over 1100 subpoenas that have been issued so far, Charter claims they are the only major ISP that has not provided the RIAA with 'a single datum of information.'"

killthiskid writes "The Webcaster Alliance, a small group of 198 webcasters has sued the RIAA. CNET has the news, along with a growing number of other sites (google news). As many /.'ers know, in 2002 the Library of Congress decided on .07 cents per song (retroactive to '98). After that another bill was passed to protect smaller webcasters. Aparently, many webcasters are still not happy." Their complaint is online.

FurbyXL writes "With the RIAA roaring to grab peer-to-peer users by their IP addresses, Freenet - fully anonymized production and consumption of content - is gaining renewed attention. Articles in New Scientist, ZDNet UK, Wired and CNET (and here) set a somewhat typical context for Freenets major release 0.52. Significant performance improvements through NIO-based messaging, probabilistic caching etc. should provide increased rest to Chinese dissidents, but may finally wake-up the RIAA's Matt Oppenheim..." The announcement on the Freenet home page lists several improvements found in the new version: "a new NIO technology that brings improved performance using less CPU and system resources," "Individual nodes are now more efficient," "the speed and routing of the entire network have significantly improved," probabilistic caching, user interface improvements, and more.

miladus writes "The Electronic Frontier Foundation is launching an ad campaign to counter the RIAA's lawsuits about file swapping. There are more details available at the File Sharing: It's Music To Our Ears subsite." The press release kicking off this campaign says that "EFF's Let the Music Play campaign provides alternatives to the RIAA's litigation barrage, details EFF's efforts to defend peer-to-peer file sharing, and makes it easy for individuals to write members of Congress."

williwilli asks: "Musicians face a multitude of challenges in this day and age, yet there are a number of musicians also trying to work towards the future. One constant challenge in almost any profession in money. With CPU's continuing to advance at a rapid rate, many musicians are finding computer-based software synthesis to be much more cost effective than traditional hardware synthesizers. While some musicians are using portable systems, the lack of expandibility limits the systems capabilities in terms of synthesis, multitrack recording, etc. While one could always throw more computers at the problem, many users will no doubt find a rackmount system provides much more capability and expandibility. As such, what insights might the Slashdot crowd be able to provide towards building your own rack? Is shockmounting necessary? Are parts readily available, or are there any 'open-source' CAD files out there? Are there music-specific materials, designs, or tips to recommend or avoid?" Would rackmounts for a mobile musician really differ so greatly from rackmounts made for a small server cluster?

spmkk writes "The NY Daily News has an uplifting look at the fate of a (hypothetical) 4-piece band "making it big" in today's RIAA-driven music industry. The condensed version: A band that sells 500,000 records for $8,490,000 gross ends up (after a few iterations of the new math) with $161,909 in their pocket. Split four ways, that's a whopping $40,477.25 each for a record that probably took close to a year to produce. And this is for a record that goes gold (as per the article, only 128 of some 30,000 records released in 2002 were so privileged). And I bet you wanted to be a rock star when you were a kid..."

icewalker asks: "There has been a lot of news (here, here, and here) lately about music, copy protection, and other related issues. What I find interesting is that there are literally thousands of free bands out there that are more than worthy of listening too. Free as in they have not sold their souls (not to mention music rights) away to the devils of the music industry. But how does one get to listen to these pioneers of music? The solution could be sites like mp3.com (until the mp3 royalties are forced). But what people want is a locals only site that streams, guess what, the music from free local bands only. Not just for your community but local bands from all over the US (and the world). We need a site that collects these bands and we need a streamer that plays them. No CARP royalty problems since these bands are unsigned and own the music themselves. Make it so that the artists can hopefully sell their own CD's or single songs from the same site. Anyway, mix and bake at multiple bit rates and you have a solution to the copy protected CD (I haven't bought one yet from an Indie Band). The big guys go down because they can't compete with free, better than great music on the web with a low cost distribution. So, where is this utopia? Oh! And dump the necessary registration required to listen (are you listening mp3.com?)."

detroitindustrial writes "The Register reports on a backroom deal that screws small webcasters. The Voice of Webcasters, working with the RIAA, negotiated a deal that Congress is trying to make into a law. These rates give big discounts to the largest webcasters, while leaving around 96% of the smaller webcasters to suffer and die under the CARP rate. This is being done through the bill H.R. 5469, the Small Webcaster Amendment Act of 2002. It was originally a one paragraph bill to delay the CARP rates for 6 months, and was widely supported in its original form by the webcasting community. After the RIAA rewrote it, it turned into 30-page monstrosity that had no relation to the original bill. It has already passed in the House. Ann Gabriel, who was on the International Webcasting Associaion legislative committee, recently resigned in disgust over this sell out." It appears that the Register article misrepresents a few of the issues. Rusty Hodge, of SomaFM, has more on the actual effects of HR 5469... This is an email from Rusty Hodge, SomaFM's head honcho, which was sent to the Pho emailing list. Reprinted with permission:

Date: Mon, 14 Oct 2002 01:26:57 -0700
From: Rusty Hodge

The RIAA seems to have managed to really get a rift going in the
webcasting community.

I'll tell you all I know.

"Somebody shine a light of truth into the nature of these proceedings. You have many friends on pho list. Speak up. This is another dirty deal."
-- [ quote from The Register article ]

This article is based on a lot of incorrect information. What appears
to have happened was that someone on the carp@voiceofwebcasters.org
mailing list forwarded a bunch of messages from that list to the
author. (Nevermind that the mailing list messages have a disclaimer
which say that they are confidential and not for publication without
prior consent). I am annoyed that I was quoted out of context in the
article.

Tthe headline is based on one message that someone who opposed HR5469
posted, a message which is not accurate. The 96% number came from a
person who opposed all webcasting royalties and based his
calculations on the Shoutcast.com directory. It did not take into
account the broadcasters who operate via Live365 (which includes
thousands of broadcasters), the Windows Media radio directory,
Real.com, etc. It also assumed that all stations listed in the
Shoutcast.com directory are actually accessible. Because of the way
that the shoutcast automated directory works, even if you setup a
shoutcast server to privately distribute audio in your house or
within an office, by default it will appear in the shoutcast.com
directory. So will stations that do not have the network bandwidth to
reliably stream to a single listener. Anyone can run the Shoutcast
software on a DSL line, yet can't sustain a single listener because
of bandwidth limitations. And the statistic does not take into
account that many of those Shoutcast broadcasters are not based in
the US nor does this take into account where the listeners are.
(Remember, the DMCA/CARP fees only apply to listeners in the US.)

Now the current CARP rates - if you broadcast 12 songs an hour, and 7
average concurrent listeners, you'll be paying $516.50 a year. If you
only look at stations with more than 7 concurrent listeners on
average, or 5040 hours for the 30 day sample period, you get about
320 stations, and those stations represent 98% of the shoutcast
audience (based on listener numbers)!!! The remaining 2700 "stations"
are fighting for about 400 listener.

Of that 3000+ shoutcast stations listed who will be "screwed", more
than half of them do not have any listeners. If you have sampled
some of those near the bottom of the rating stations, you'll find
that many of them are either broadcasting silence, or their stream is
technically unlistenable (more dropouts than audio or you can't
connect to the stream at all).

(http://shoutcast.com/ttsl.html - has a rolling 30 day statistic
snapshot, which these numbers are based off)

HR5469 grants a lot more relief to a larger body of webcasters than
you'd think from reading that one mailing list. To the rest, HR5469
DOESN'T CHANGE ANYTHING. If it passes or fails, nothing changes for
the smallest webcasters.

(By the way, Live365 is neither harmed or hindered by this bill.
Their statement is here:

http://www.live365.com/carp/hr5469statement.html

Live365 is also represented ONLY by DiMA. Additionally, Live365 covers
the royalties for their member broadcasters, their member broadcasters
are not directly affected by this.)

Any webcaster with an average of more than about 25 concurrent
listeners is better off under this deal than the previous CARP
ruling. Beneath that limit, there is no difference.



There is another quote that is very misleading in the article:

``And privately, even members who support HR.5469 agree that it will
"seal the fate of this industry to be dominated by big webcasters,"
according to correspondence seen by The Register. ``

Actually, the quote "seal the fate of this industry to be dominated
by big webcasters" came from Kevin Shively (also fellow pho) of
Beethoven.com, on 9 Oct 2002. Kevin has stated many times that he
does not support the version of 5469 that was passed.

The Register should have attributed this quote because it completely
changes the meaning of it. Beethoven.com, a 14-employee company, is
owned by Marlin Broadcasting, a company that owns several FCC
licensed over the air stations. Kevin does not support HR5469 because
he believes that it sets the definition of small webcaster at too low
of a level. But I'll leave it to him to tell you what he thinks about
the bill. Kevin has been a driving force in lobbying for fairness for
small webcasters, and ironically, HR5469 would probably not have
passed without him, and it is very saddening that he will not benefit
from it. Kevin will hopefully post his concerns with the bill (I
recall it is Section 4 that he has problems with).

For the record, SomaFM feels that 5469 is far from a perfect bill.
However, we think it is a good starting point. Kevin has expressed
concerns in this bill setting precedents that will harm many
mid-sized webcasters. I believe that NAB is not supporting the bill
for the same reason.

``But the compromised Bill has some surprising backers. SomaFM and
KPIG are urging listeners to support the revised, RIAA-negotiated
venture.``

I was quoted somewhat out of context talking about advertising. I was
talking about a variety of options available for small webcasters,
one of which was advertising. However HR5469 extends the definition
of non-commercial webcasters to any non-profit organization, not just
FCC licensed non-commercial broadcast stations. That rate is less
than a third of the rate that commercial webcasters pay under the
current CARP fees ($0.0002 vs $0.0007). This I believe is a big win
for non-commercial internet only webcasters.

I was also pointing out that $500 a year minimum, vs the small
webcasters demand for $250 a year minimum, was negligible. I was also
pointing out that as they grew, and hit the $2000 minimum under the
new plan, that they would have an audience of over 25 average
concurrent listeners and at that point should have not trouble
obtaining advertising. They could bill up to $20k a year and have an
unlimited audience size.

SomaFM is listener supported and commercial free. We are not a
501(c)3 non-profit. Under the CARP rates, we would have to pay $500 a
DAY - over $180,000 a year in royalties. We generate about $20,000 a
year in donations now, which has covered about 85% of our costs
EXCLUDING the CARP FEES, and was on its way to covering all our
costs. (The cost that isn't covered is the cost of all the CDs I have
to buy!) SomaFM operates bare bones, our studios are in my garage.
We believe that we can generate enough additional donations to keep
us on the air with the rate proposed in HR5469. For us, it's
$2000-5000 a year instead of more than 10 times that under the old
CARP rates. So it's a no brainer for us to support this.


Another inaccurate quote:

"Many webcasters have already resigned in protest from the body
that's supposed to represent them: the Internet Webcasters'
Association. "

One person, Ann Gabriel, resigned. And Ann Gabriel was not a
webcaster, she produces live web events. She is not liable for past
CARP fees. In her open letter (which I've included below) she seems
to imply that IWA and VOW are the same.

Voice of Webcasters and the International Webcasting Association are
two separate entities.

The International Webcasting Association or IWA (which SomaFM is a
member), is not a lobby group on behalf of small webcasters. However,
since the IWA dues are far less than the other webcasting-related
trade group, DiMA, it has many more small webcasters than does DiMA.
As I recall, DiMA dues are $20k a year, IWA dues $300 a year. DiMA
represents bigger companies like Microsoft, AOL, Yahoo and smaller
guys like Live365. Jon Potter can tell you more about DiMA's goals.


Here's Ann's letter. I'm only forwarding it because it says it's an
open letter to the streaming community and the press, which i believe
describes many here on pho:

>Date: Wed, 09 Oct 2002 20:24:40 -0400
>From: Annmgabriel@aol.com
>Subject: [carplist] HR 5469
>
>Open Letter to the IWA Board of Directors, The IWA Legislative
>Committee, David Oxenford at Shaw-Pittman, CARP-List Members,
>Members at large of the Streaming Media Community and the Press:
>
>On October 1, 2002, at 12:00 pm Pacific Time, I began a 10-hour per
>day live broadcast with the intent to draw attention to the plight
>of Internet Radio broadcasters and raise money to benefit the IWA
>Legal Defense Fund.
>
>I did this based on the belief I was working to support HR 5469 as
>it was originally introduced into Congress; a bill calling for a
>stay in the rates imposed by the Librarian of Congress and due on
>October 20, 2002; and because I believed that Shaw-Pittman, the law
>firm involved in negotiating the deal with the RIAA was working on
>behalf of the International Webcasting Association (IWA).
>
>I am appalled, outraged and disgusted by the turn of events I have
>witnessed over the last week and will no longer sit and watch the
>blood, sweat and tears of the many be drown out by the disingenuous
>hue and cry of the few.
>
>I will NOT support HR 5469 as it was introduced and passed on the
>floor of Congress on October 6, 2002, nor will I encourage anyone
>who asks me to support it. I will immediately turn my attention to
>contacting every Senator I can, both by telephone and by fax, to let
>them know about the grave injustice that has been carried out in the
>name of the small webcasting community.
>
>Regardless of the stand the IWA takes on this issue, I, today,
>resign my membership in the IWA. I cannot stand by and continue to
>support an organization that allows its members to be bullied into
>accepting legislation that was negotiated one, under duress and two,
>by a team which originally set out to negotiate a private deal for
>themselves with the RIAA.
>
>I call on the members-at-large of the webcasting community to ask
>themselves why the press release about the deal on HR 5469 was done
>in the name of the RIAA and the Voice of Webcasters. I contend that
>the IWA was not represented here and its members are not responsible
>for the legal bills incurred by Shaw-Pittman. It is my belief that
>this was not a deal negotiated on behalf of the IWA or all of its
>members.
>
>I have been asked by many in the webcasting community how this could
>have happened. I think it is time for me to respond, and to let the
>webcasting community know all the facts about how HR 5469 could
>change from one paragraph as it was originally introduced, to a
>30-plus page bill serving only the RIAA and a few on the negotiating
>team.
>
>I believe I have an obligation to tell the truth NOW, as I know it,
>to the many who have banded together to fight for a common cause.
>They have seen their hopes go up in smoke because of a backroom deal
>negotiated under duress by a team that did not set out to represent
>webcasters at large and does not accept that the RIAA has a complete
>lack of respect for the webcasting community and never intended to
>deal fairly, honestly or forthrightly with the issues facing
>webcasters today.
>
>I wish you all the best of luck moving forward in a very difficult time.
>
>Sincerely,
>Ann Gabriel

SomaFM was not involved with negotiating this deal, although we did
sign a letter in support of it.

If you think my support is wrong, I'd like to hear the reasons why.

--Rusty Hodge
SomaFM.com

fini writes "The RIAA and MPAA just sent a letter to 2,300 colleges or so, asking to crack down on P2P. Juicy nugget: 'Not only is piracy of copyrighted works illegal, it can take up a significant percentage of a university's costly bandwidth.' Also mentioned, some quasi-FUD on security issues. Six higher-ed honchos also sent a concurring letter. From the RIAA website, here's the story and the letters (PDF only). Mentioned as examples of model policies: Drake University, UNC Chapel Hill and University of Michigan . Interestingly enough, there is no threatening 'or else' stuff in those letters. Not yet..."

fini writes "The RIAA and MPAA just sent a letter to 2,300 colleges or so, asking to crack down on P2P. Juicy nugget: 'Not only is piracy of copyrighted works illegal, it can take up a significant percentage of a university's costly bandwidth.' Also mentioned, some quasi-FUD on security issues. Six higher-ed honchos also sent a concurring letter. From the RIAA website, here's the story and the letters (PDF only). Mentioned as examples of model policies: Drake University, UNC Chapel Hill and University of Michigan . Interestingly enough, there is no threatening 'or else' stuff in those letters. Not yet..."

This hasn't been a good year for music lovers since the RIAA has removed the kid gloves. In the past 3 months they have declared war on their own customers, silenced Internet Radio, and are targeting 3 other P2P networks for shutdown. At about this time last year, they wanted unprecedented access to your personal property, but fortunately saner heads prevailed here. It has been 4 years since Slashdot posted it's first story containing the phrase "RIAA", and in that time the RIAA has waged war on the Internet rather than try and use the technology for the benefit of their artists. Now there are people willing to play by the rules, but the RIAA is unresponsive, and their web site seems to provide more questions than clear answers. Who do you need to contact? What forms need to be filled? What agreements need to be signed? By whom? What do you have to pay? How is this value determined? If you are planning on offering the RIAA's music, what do you really have to do to play their music legally?

I've Read the Frelling Manual, and I still have Questions!
J.Charles asks: "Always looking for new ways to help out the independent music scene in my region, I recently started thinking about putting together a streaming radio station. Mind you, this is to be non-profit, with the sole purpose to help out independent artists. I had made a small stream years ago using Shoutcast, but this was before all of the RIAA stipulations were being crammed down everyones throats, and I really paid no mind to copyright law.

If I am to do this, I would like to keep it fully legit in the eyes of the RIAA, because we've already seen the MPAA come after file sharers, citing gigantic fines, at the university I work for, and I really don't have the money for legal counsel.

So I've found adequate hosting, and read up on the stipulations published on the RIAA website, but most of it is quite murky, and skims over the 'how-to' of things.

For example, do I really have to pay royalties for each stream running? If so, how do I keep track of that, or do I just have to pay the royalty times the number of my maximum consecutive streams available? Is there Shoutcast plugin software for generating the play list information that must be sent to Soundexchange? Are there any grants available to help offset the cost of paying royalties and license application fees ($500 a year!)?

Basically, I can't find any streams that appear to be running 'legit', so I have no one to answer all my questions. I've even thought about contacting the RIAA to see if someone there would assist me, and perhaps help fund this project, since it would make a good example of a legit site, and afterwards I could serve as educated help for other people in my situation. I mean, the RIAA recognizes streaming as an important business, you would think their interests would lie in helping educate people to use it the way they would like.

Is anyone out there running a legit stream, or know someone who does? better yet, has anyone seen a guide for people in my shoes?"

I'm, Trying to Play Nice, But They Won't Return My Calls!
Jarrett Wold asks: "I was working on a chat client earlier this year, and I wanted file sharing capabilities (a la Napster). However I did not want any of the legal liability so unlike Napster, I actually contacted RIAA and the MPAA before I started any development.

Considering RIAA and MPAA's itchy trigger finger regarding copyright issues I figured I would pitch a solution to them. It was simple, since they represent a large number of copyright holders, they should create a database listing all of those copyright holders. It's easy enough to determine that Metallica has copyrighted material, what happens with that unknown band that you're not sure about? At least this way we would have a definitive list for all the people represented by RIAA and MPAA. Who also bring the largest number of lawsuits against file sharing applications.

Now I'm not rich, I don't have a lawyer and considering I live in North Dakota, I make on average $8.25/HR for data driven web development. If you work at Burger King in another state, you make more than I do flipping burgers. I started a month long stretch of making phone calls and sending emails. I called RIAA around 15 times proposing that they construct a database of copyright holders so I could be compliant with copyright law. I even suggested that if they charged a penny per user they could pull in 250K a month for use of their database. It would also force file sharing apps to have a business model. I'm all for avoiding '.COM The Bubble, Part 2'.

The RIAA was flat-out uninterested. They would listen politely, and take down my number or refer me to a voicemail of either a legal person (who never returned phone calls) or some person in management who simply stated it wasn't their responsibility to compile such a database. So, after fifteen or so emails, a half dozen long distance phone calls I gave up on RIAA. They obviously want publicity about the injustice of file trading rather than fixing the problem.

I then proceeded to call the MPAA. They were amazingly helpful, everyone that I spoke seemed enthused about doing something along this line. I suppose when you represent studios rather than individual artists the motivation to fix a leaky faucet is top priority. However, after sending a variety of emails and speaking with half a dozen people on the first phone call, I was sent off to someone in their technical department and curtly told that they were working on their own solutions. Do not get me wrong, the MPAA was keenly interested in a fix, but it seems that they too feel that the burden of listing copyright holders is not on them. In fact one executive I spoke with noted that there would be thousands, if not hundreds of thousands of entries, in such a database. I suggested the revenue model again. It was received with interest and shot down in the next moment with the same argument.

So needless to say I gave up. I am now targeting my product specifically for the business market. I have noticed that CD-R manufacturers are not being sued for all the MP3's that are being burnt onto the media they freely distribute. The same goes for Samsung, I have yet to hear of them being sued for making VCR tapes that can record TV shows without commercials (if you're quick about it... ahem TiVo). Nor do I hear of ICQ being sued for it's file transfer abilities that also enable piracy if a user is so inclined.

At what point does the responsibility of the copyright owner come into play? Should it not be the representative groups (RIAA, MPAA) to come up with an 'exclusions list'? In fact technically speaking it's just not possible to determine what's copyrighted without something along those lines.

Who else has gone through this? I figure that the person who pirates is the one responsible, rather than the service itself. File sharing applications have valid purposes. However, if RIAA and the MPAA do not want to make a definitive list of copyrighted material it's nearly impossible to comply to excluding copyrighted material. Saying that file sharing applications facilitate piracy is the same thing as saying search engines facilitate piracy.

Napster had the wrong idea, if they could have worked out something with RIAA regarding this same concept they would be a leviathan. However it makes you wonder if these lawsuits weren't strategic in nature. I believe in the end, history will show that killing Napster was the worst mistake the music industry could have made. They lost control of a contained problem. It wasn't fixed. However when 26 million people scatter to the winds and start their own file sharing networks (Morpheus, Gnutella and many more) the problem is decentralized and unsolvable.

The biggest question of all is to the artist: why aren't you demanding some form of technical action out of the RIAA, instead of lawsuits? Why aren't you asking them to 'Sit down in a room with those file sharing companies and figure out a way to fix this'.

You can't sue them all!

I guess, my North Dakotan notion of business is that if there's a problem fix it before it gets out of hand, however it seems RIAA wants to do the opposite. I guess lawsuits could conceivably be a nice addition to the bottom line and excuse for bad accounting...;)"

And One Last Plea, for Internet Radio...
If you are still interested in saving internet radio, there is one last chance, until the next one arrives next year. There is a bill in play right now that must be passed before October 20th if some of the more popular Internet Radio sites are to return. You can find out more information on this latest push from the Radio and Internet Newsletter and also from Soma FM.

Karl writes "The RIAA announced today their intention to appeal the royalty rates for internet radio decided on by the Librarian of Congress. Today was the very last day to file for an appeal." The webcasters put out of business by the royalties include SomaFM, Monkeyradio, KPIG, and many others. At least a few Congressional representatives support revising CARP to give small webcasters a chance to survive.

Karl writes "The RIAA announced today their intention to appeal the royalty rates for internet radio decided on by the Librarian of Congress. Today was the very last day to file for an appeal." The webcasters put out of business by the royalties include SomaFM, Monkeyradio, KPIG, and many others. At least a few Congressional representatives support revising CARP to give small webcasters a chance to survive.

nekid writes "ZDNet is reporting that the RIAA's website was hit by a denial-of-service (DoS) attack over the weekend, most likely in response to their endorsement of legislation that would give them permission to do the same to personal computers that are pirating music (see earlier article). Seems to me that they are killing themselves with bad public relations..." But it seems to me that they don't care, and are instead banking on the ignorance of the bulk of the world.

blanu writes: "Today AudioGalaxy reached an out-of-court settlement with the RIAA. To sum up the settlement, AudioGalaxy will pay the RIAA a lot of money and from now only provide songs for which the copyright holder has specifically given permission."

blanu writes: "Today AudioGalaxy reached an out-of-court settlement with the RIAA. To sum up the settlement, AudioGalaxy will pay the RIAA a lot of money and from now only provide songs for which the copyright holder has specifically given permission."

Frizzled writes "The RIAA has struck again, this time filing suit against Audiogalaxy's "Satellite" file sharing program. (Nevermind that Satellite is loaded with spy-ware ... good riddance)." News.com has a story. The RIAA's press release links to their complaint.

forehead writes "Lawmeme is running an interesting piece on piracy in the digital age. It covers a number of the logical fallacies often cited by the major media companies and certain lawmakers."

Anonymous Cowards rule writes: "RAIN is reporting that the fuss raised by save Internet radio, Save Our Streams and the recent webcaster's march on Washington has caught the attention of some in Congress. Specifically, the Senate Judiciary Committee has scheduled a hearing for Wednesday entitled, 'Copyright Royalties: Where is the Right Spot On The Dial For Webcasting.' The list of those who will testify (which is not yet complete) seems heavily weighted toward the RIAA and large content providers ... but it will still be interesting to see how this pans out. (Is Congress completely controlled by big business or just slightly?) Remember to mark your calendars for 21 May when the Librarian of Congress has to choose whether to accept, reject or ammend the current royalty rules (the NPRM which was a result of the CARP)."

Third time's the charm. Napster came out in 1999, and the Recording Industry Association of America had two great revenue statements for that year and the next. But now that CD sales finally are down year-to-year, at long last they get the chance to blame Napster for their woes. There's just one thing wrong...

...they don't have Napster to kick around anymore.

For yesterday's press release, the RIAA commissioned a survey by a research firm to prove that music-downloading is to blame, but all they tell us about it is that "23 percent of surveyed music consumers say they are not buying more music because they are downloading or copying their music for free." No more details provided, no link to the survey's raw numbers. So what does this mean? I guess 77 percent are buying more music because they're downloading it for free?

To put the new sales figures in perspective, a look at the big picture will be helpful. Free music-trading software had been in serious trouble since mid-2000. Despite indications that music-trading was helping sell CDs, the labels forced Napster to implement a name-blocking scheme. We ran a story in March 2001 pointing out that its traffic had fallen by 60%.

Then SF Gate ran a nice story last August, pointing out that declining RIAA sales seemed to mirror Napster downloads:

"At this point last year, with Napster in full swing, record sales were up 8 percent from the previous year. This year, sales of new albums -- not including established catalog titles -- are down 8 percent. That's quite a pendulum swing."

Sure, other file-trading software has taken Napster's place, but at this point it's fun just to watch the industry limp around after shooting itself in the foot.

Not that it's really hurting money-wise. All this week's numbers mean is that the RIAA's total revenue has declined almost to 1998 levels. In 1998 they made $13.71 billion; after peaking in the mid-$14-billions, last year they made $13.74 billion.

This probably is due party to the crummy economy, partly to their failure to find any new sound to co-opt and mainstream recently, and partly to lack of big artists releasing megahits like they did in 1999. You know music officially sucks when the labels have to pay someone $28million not to sing.

Oh, and partly due to the RIAA raising CD prices by $1.16, which is $0.25 over and above inflation (which has been higher than wage growth lately anyway). CDs are 94% of their revenue. Most industries, faced with declining sales, try lowering their prices. Not this one.

I've got two pieces of advice for the RIAA.

The first is to stop pissing off your own artists so much that they blow off the Grammys and throw their own party just to stick it to you. The musicians and singers are the ones making you rich. I know you think they're all interchangeable, but if you alienate them enough, when a new technology gives them an edge, they'll drop you like yesterday's sound.

The second is to reread Robert Heinlein's very first story Life-Line:

"There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back."

The Politech mailing list has a note and follow-up on new trade restrictions levied against Ukraine, since they haven't complied with the U.S.'s demand for 'an optical media licensing regime.' John Gilmore's response puts the issue in perspective. Update: 01/03 23:08 GMT by M : The RIAA has a press release about the trade penalties and response to Gilmore.

On Wednesday I attended a hearing in Felten vs. RIAA, the lawsuit filed by Professor Felten, other Princeton researchers, and USENIX against the RIAA, SDMI, Verance, and the Department of Justice. As you already know, the judge dismissed the case. But taking a look at the hearing might provide some insight into how the judicial system works.

An incredibly brief review of the case: SDMI created an open challenge to break various forms of technical restrictions they had designed to allow music publishers to control how people use legitimately purchased music. A team led by Felten participated and was mostly successful at breaking them. The team wrote a paper, intending to publish it at a scientific conference. The RIAA/SDMI sent a letter to Felten, his employer, and the conference threatening them with legal action. Private legal discussions and a very public flap broke out. Felten filed a pre-emptive lawsuit, seeking to have his right to publish vindicated without waiting for a suit from the RIAA or SDMI. Immediately afterward, the RIAA publicly and repeatedly withdrew their threat to sue. Eventually the paper was, in fact, published, but the suit has continued.

Or just read through the Slashdot stories.

On to yesterday's hearing. The judge has before him a request from the defense to dismiss the case - they state that there is no real issue since the threat has been withdrawn. The Plaintiffs oppose this - they feel the threat is real, even if the RIAA has now withdrawn it.

Each side is represented by a half-dozen attorneys. Felten and several of the other plaintiffs are present as well. There are four or five press representatives. Other than that, the courtroom is empty. The first thing the judge does is take care of some routine business - the plaintiffs have requested that a C program, tinywarp.c, be filed under judicial seal with the court. The judge accepts this. He then goes briefly over the case so far, saying that he feels fully briefed by the papers submitted by both sides. He invites the plaintiff's lawyer, Gino Scarselli, to speak and respond to the last set of papers filed by the defense, but cautions him to avoid repeating any of the arguments set forth already in the many papers filed.

Scarselli emphasizes that the plaintiffs are in court for more than just the single threatening letter - he notes that the threat of legal action was considered quite real by the universities, who assigned lawyers to deal with the threat. He notes that Felten's paper was described as a "recipe for circumvention" by the defendants. He says that Felten also fears criminal prosecution due to his desire to publish a paper on SDMI in Scientific American - since Scientific American pays for papers, unlike the conference, this makes publication of the paper a commercial enterprise which might be charged as a criminal violation of the DMCA.

The judge is rather skeptical. He states that the difference between Felten and Sklyarov is "night and day". Sklyarov's actions are clearly criminal to the judge - Felten's actions not at all.

Scarselli and the judge spar a bit over a possible amendment to the complaint, regarding what exactly the plaintiffs were seeking in the lawsuit, and Scarselli retires from battle. Next up is David Kendall for the RIAA, responding to Scarselli.

Kendall starts off by talking about a stipulation (an agreement on facts) that both parties were negotiating over. Apparently both sides had almost been able to reach an agreement, except that the RIAA wanted the agreement to include dismissing the lawsuit and the plaintiffs did not. Kendall moves on to emphasize the argument they are making - that the suit should be dismissed because there is no conflict between the RIAA/SDMI and Felten. There are three reasons why a suit might be dismissed in this fashion - for mootness, because the plaintiffs lack standing to bring the suit, or because the issue isn't ripe. The judge asks Kendall which of the three would apply to this case - Kendall disclaims mootness (because that implies there once was an issue, but no longer), and states that this could be dismissed under either of the other reasons.

Richard Phillips is called to speak for the Department of Justice. Phillips states that his argument has been covered by the papers submitted and sits back down.

At this point only 40 minutes or so has elapsed. Normally, the judge might now take the case for decision, then some time later issue a written decision - instead, he decides (obviously he planned to do this in advance, since he has notes prepared) to render his decision in the case orally and immediately. He notes that he's doing so to save both parties further time and trouble, which indicates that he agrees with the defense that the case should be dismissed.

The judge starts off with the basics, which must have been rather boring to the lawyers involved. Under the Constitution, courts are limited to deciding cases where there is an actual case or controversy. He states flat-out that he sees no case or controversy here, in case anyone in the courtroom missed the hint he's already given.

He now takes a deep breath and begins going through his notes. He recaps the case from the beginning. I'll spare you that, read the documents if you wish.

Finally we get to his analysis. There are two separate issues - is there a case against the private entities? Is there a case against the Federal Government? The judge looks at the private entities first.

Again he discusses the requirement that cases be limited to actual controversies, that judges can't rule on abstract, theoretical, or speculative cases. He uses the word "speculative" approximately 20 times during his opinion, always referring to the plaintiffs' case. He relates a rambling analogy about bank fraud, essentially saying that the plaintiffs were asking for blanket immunity against ever being sued or prosecuted, which was impossible. He covers in great detail the RIAA's retraction of their threatening letter, how they've plainly denied any desire to sue Felten or anyone else over Felten's original paper.

The judge now looks at the First Amendment considerations relating to the suit against the RIAA/SDMI. He notes that the courts are required to avoid Constitutional questions if at all possible. He also notes that according to case law on the subject, there must be a real and immediate threat, that must remain throughout litigation, in order for the courts to consider the Constitutional questions around a non-criminal law (that is, the part of the DMCA that doesn't involve criminal penalties, only the possibility of civil lawsuits). Since the threat has not remained throughout litigation, he sees no Constitutional questions relating to the non-criminal part of the DMCA. He also notes that Plaintiffs do not allege they intend to violate the statute [ed. note: I'm not sure which part of the DMCA the judge was talking about right now - he may have been getting ahead of himself and talking about the criminal penalties.] and thus proceeding further would be "pre-enforcement review", which is not permitted. He closes this section by saying that he finds the Step-Saver and Salvation Army cases (referred to in the briefs submitted by both parties) instructive.

Somewhere during this speech, one of the attorneys for SDMI starts grinning, hugely, as if his team has just won the Super Bowl. He continues grinning and looking over at the attorneys for the plaintiffs until the hearing is over. None of the other attorneys for either side show any particular reaction.

The judge now continues with the suit against the Federal Government for Constitutional violations. He notes that the plaintiffs have not been directly threatened by the Government, nor prosecuted. He contrasts Felten's situation with that of Dmitry Sklyarov - the plaintiffs don't sell their program to the public, they do it for scientific purposes. Again he mentions the Step-Saver case. He quotes from the DMCA extensively. He states that the Government and plaintiffs have no adverse legal interests - that is, there is no possible criminal threat to Felten for doing what he's doing, in the judge's opinion. He notes that in the Sklyarov case there is such an adverse legal interest - obviously, Sklyarov was imprisoned! - and suggests that the Sklyarov case is a better way to get any First Amendment consequences of the DMCA adjudicated by the courts. The plaintiffs are not "manufacturing", according to the judge; nor are they offering their code for sale. The judge segues to what he sees as deficiencies in the plaintiff's legal complaint - they did not assert they planned to fully violate the criminal sections of the DMCA, mainly their assertions were that the Act is unclear and vague. Finally he closes - the plaintiffs must have an "objectively reasonable fear" of prosecution in order for the required legal conflict to exist, and the judge sees no such objectively reasonable fear.

A few more sentences and he's done. He reminds everyone that he may revise his written/final opinion from what he just dictated. He doesn't provide a time-frame for when the written opinion might be expected.

And that's it. My impression is that the most important phrase in the decision is "night and day". Judge Brown saw Sklyarov as a pirate, well-deserving of a long imprisonment term, and Felten as a goodie-two-shoes scientist who didn't have a care in the world. The very factors that made Felten a "good" subject for a civil liberties case allowed the judge to rule that there wasn't a case at all. Both the Justice Department and the RIAA prefer to have their test cases with suitably unsavory defendants - Russian pirates and shady hacker magazines are much preferred over all-American Princeton professors. The RIAA won't make the mistake of sending threat letters to professors again - not until the DMCA issues have been well-settled in the courts, anyway. Some people have criticized the EFF for over-reaching - trying to make a case out of nothing. But to a great extent the civil liberties groups have to play with the hand they're dealt. Felten was legitimately threatened, and even if the RIAA saw their mistake and starting trying to weasel out of it, I can't fault the civil liberties groups for trying to pursue this. They plan to appeal, of course.

Matthew Skala writes: "The Recording Artists' Coalition, which includes such luminaries as Bruce Springsteen, Don Henley, and Sheryl Crow, is still annoyed about the "Work for Hire" legislation we heard about in August 2000. They've filed a brief in the Napster cases, urging the court not to accept the RIAA's copyright registration documents as proof of ownership, because accepting the documents would allow the music cartel to sneakily destroy artists' claims to the music they recorded. They don't take a stand on other issues we might be interested in, but it's still worth thinking about. If the artists are against the RIAA, then whom exactly does the RIAA represent? Some quotes and info are on Siliconvalley.com."

baptiste writes "I came across a story in Wired News that on first glance had to be a joke. The scary part is, its not. The RIAA is looking to start their own MP3 streaming services, but they are also trying to stiff the song writers who hold copyrights on the lyrics. The RIAA doesn't want to pay the songwriters royalties on streamed copies of songs and has petitioned the U.S. Copyright Office to settle the matter. I highly recommend you read the petition - if you didn't know better, you'd think it was from Napster or MP3.com. The irony is almost too much."

One year ago, we ran a story about the effects of Napster on the RIAA's 1999 profits, which Michael gave the great title: "Pirates Steal Negative $1,400,000,000 from Music Industry." It's a year later, the new numbers are out, and the RIAA is lying through their pointy little teeth about them. The AP wire story's second paragraph says "Sales of music compact discs fell by 39% last year," which they would have quickly seen was a blatant lie if they'd bothered to look at the numbers. Fortunately, Slashdot is here to bust up the spin. Keep reading, if you aren't afraid of numbers.

(Update one hour later by J : The story was on the AP wire, e.g. here, so it's not the BBC's fault. It was unfair of me to single out the Beeb when they just happened to be the source the submittor submitted this morning.)

The RIAA's figures were released last week, but the AP story was delayed until Monday, when the story would get the most exposure.

CD sales plummeted last year in the U.S. and record industry officials say the figures prove that Napster, the Internet music-sharing service, has harmed their business.

Sales of music compact discs fell by 39% last year according to the Recording Industry Association of America (RIAA).

"Napster hurt record sales," said RIAA president Hilary Rosen.

This article reads like it might have been ghost-written by someone from the record industry. It isn't until paragraph ten that journalistic integrity kicks in enough for the AP to quietly mention what they're actually talking about:

Some experts say [sic] the drop of CD singles as being part of an industry-wide slump, due to economic factors and a weak year musically. (Emphasis mine.)

That's right, CD singles. Unit sales for the singles were down 39%, revenue down 36% (they raised prices, of course).

And CD singles account for how much of the RIAA's profits?

Not quite one percent.

Yes, that's right: they lost 36% of 1% of their profits.

And the news media is reporting it as a 39% loss.

The facts are that their "CD sales" are up this year, even over last year's stunning performance. The RIAA increased the average price of a full-length CD from $13.65 to $14.02, and still managed to sell 3,600,000 more of them.

Total profit increase on this, the core of their business, was 3.1%, or just shy of an extra $400,000,000.

But full-length CDs only account for 92% of the RIAA's revenue. They did have weak performance in the other 8%. CD singles, as already noted, dropped revenue by 36%. But the real casualty percentage-wise was cassingles, which lost over 90% of its revenue from last year.

Gee, why could that be? Maybe because nobody wants them?

In fact, the RIAA's only real money-losing format of any significance was cassettes, which, along with music videos, were the only format actually cut in price. Cassette revenue dropped $436 million.

Wait a minute, what am I saying? "Money-losing"? They aren't losing money on cassettes -- they're just not raking it in this year as fast as last year. And gee, why might that be? Again, because nobody wants them?

And it's not like the RIAA is struggling to get by on slim profits. The big picture is that, in the last nine years, they have tripled their annual income.

But they are desperate to spin this as a loss. The actual fact is that their total revenue is down 1.8% from 1999. Last year, they made $14,584,500,000. This year, they made $14,323,000,000.

But how could they blame Napster if they told the truth? What would they say? "Napster is killing us! Our income is down almost two whole percent! We are only pulling in $14,323,000,000 this year!"

That probably wouldn't fly.

Especially because in the three categories which Napster has precisely zero effect on -- cassettes, vinyl, and music videos -- their combined year-to-year loss was $579.5 million.

That's right. In the digital formats which Napster can trade, they are making more money: $318,500,000 more revenue. In the analog and video formats where Napster is irrelevant, they are making less money: $579,500,000 less revenue.

That's the real story here.

But don't trust the press to report this one fairly. Don't trust the RIAA's press release. Go read the RIAA's numbers yourself.

(Hell, don't even trust those numbers -- they don't add up. I was silly enough to type them into a spreadsheet, and someone over there has some problems doing simple arithmetic. Their 1998 total revenue includes the DVDs twice.)

The RIAA is desperately trying to spin this so that they won't look like greedy bastards for turning down Napster's offer of a billion dollars over the next five years.

If they just took that generous offer, then -- in a year that the AP wire suggests might be an "industry-wide slump, due to economic factors and a weak year musically," and in a year for which Bertlesmann admits "we didn't put that much good stuff out" -- their revenue would only be down $111,000,000 from last year. And that would have been $750,000,000 more than they made in 1998.

But that isn't enough for them.

Why would anyone think the RIAA is greedy? They just want what's coming to them.

(Update one hour later by J : Mea culpa. Three paragraphs up, I originally calculated the numbers as if the billion dollars was all applied in one year; that isn't so. The billion would have been applied equally over the next five years. Actually it probably wouldn't have been applied to year-2000 revenue at all, so it's more of a rhetorical point than anything. Thanks to dachshund for pointing out that it wasn't a lump-sum payment.)

(Update four hours later by J : The AP wire seems to have updated its story, now stating explicitly that it's CD singles, not "CDs," which dropped 39%. I see factually correct versions now at CNN, Salon, Yahoo, and wire.ap.org (search on Napster). The BBC version is still incorrect. In my opinion, the new versions are still misleading. Focusing on a large percentage drop within a subcategory which is a tiny percentage of the whole is a classic example of how to lie with statistics. But compare this to the RIAA's press release, claiming that CD singles had "flat growth in '98 and '99," though 1998 revenue actually dropped 22% -- that's just plain lying.)

An Anonymous Coward writes "As early as Wednesday, the RIAA has sent letters to the ISPs and operators of OpenNap servers in the U.S. which were listed on Napigator. Here's the story from ZDNET. The RIAA's letter refers to the U.S. Supreme Court decision against Napster. Given that nearly all the OpenNap servers are run by individuals who are never intending to charge for the service, this is an interesting assertion." And HyperbolicParabaloid points out this NYT story (free reg. req.) in which a lawyer says the decision "validates Gnutella" (ok, whatever, but there's also some interesting discussion about how the Sony VCR time- and space-shifting precedent fails to apply to Napster).

kchayer writes "JWZ ^[?] 's current obsession includes an audio webcast. Recently he added to the site a description of what it takes to broadcast music over the Internet. Makes for an interesting read, and a good summary of the DPRA, DMCA, their relationship with the RIAA, and other issues involving music copyright and the recording industry in general. His summary at the end says it best: "What's going on here is that the music industry establishment are absolutely terrified of the internet...and are trying to ^[?] force things to continue to be done as if turn-of-the-century technology was all we had to work with.""

d4 asks: "I've seen a list of RIAA members, but what I'd really like to know is: what record companies are not RIAA members? Many smaller labels are subsidiaries of larger companies, and it's not always easy to tell where affiliations lie. So if I'm going to boycott the RIAA, from whom can I still buy music?" If there are any of you out there preparing a protest for the RIAA's treatment of Napster, then you may want to read this one.