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Napster Calls MusicNet Monopolistic; Judge Agrees
MattW writes "Yahoo is carrying an article from the AP about a development in ongoing Napster litigation. Several major labels and RealNetworks formed MusicNet. Napster complained about an anti-competitive clause in the contract they signed with MusicNet, and Marilyn Hall Patel, best known to this community for her stern condemnation of Napster, agreed, stating that MusicNet had all the hallmarks of an anticompetitive business. The article goes on to state that, "If the recording industry was found to have misused its copyrighted material, it might not be able to successfully pursue an infringement claim on those works.""
Well it looks like we will never be able to download music on the internet. First it was because we weren't paying the artists, just shipping the music to each other, now it is because we have exclusive contracts with the artists to only use the one service that pays them...
I Want my Net-TV (to paraphrase Sting from a Dire Straights song)
From the article: "Napster's attorney argued to the court that an agreement reached earlier this year between MusicNet and Napster contained a provision unfairly giving MusicNet the right to terminate the contract if Napster sought agreements with other labels."
This seems like something that Napster should have dealt with or drawn attention to during negotiation of the contract. It makes one wonder why they would even sign a contract of this nature. If nothing else, calling attention to it earlier may have helped them in ealier litigation. The only plus for them in signing the stringent agreement is that they have rights to the music now, and may be able to strike this part of the contract to enable them to gain rights to other labels' music in the future.
If the recording industry was found to have misused its copyright material, it might not be able to successfully pursue an infringement claim on those works.
That seems a pretty heavy statement. I wonder how much of it was reporter/editorial speculation and how much of this was actually discussed by the judge.
Considering the "BMG, Warner and EMI" are probably over 50% of the commercial music world already, a finding that they can't pursure copyright infringement claims could be monumental.
sometime in the future....
me: Man, I just can't get than new Madona song out of my head.
BMG-Warner-EMI-Borg: You owe use $2.11
-- www.globaltics.net
Political discussion for a new world
I'd mention them, but I'm sure people know what they are. And I don't want them catching any flak by my account.
This sig isn't original enough, it's time to come up with something witty...
Exclusivity deals are quite the hot topic right now. Intel is taking heat from the EU for exclusivity provisions it has with computer distributors. my boss and I were wondering why someone like Coke or Pepsi is allowed to ensure exclusivity with its distributors (fast food chains, etc)? Whats the difference?
"Old man yells at systemd"
napster actually won a court battle?
If the recording industry was found to have misused its copyright material, it might not be able to successfully pursue an infringement claim on those works.
Could this be new life for Napster? Some of the public has noticed this, that the labels act in a form of cartel, especially since they are investigation for anti-trust violations. They have also been successfully sued for price-fixing in the past as well.
The judge should have noticed these types of actions sooner.
It seems Napster has figured out that when members of a market collude (act in concert) they are in fact an oligopoly. This in many cases is more powerful than a monopoly. The number of companies with the resources to promote and distribute music is very small. That means that by antitrust definitions they have the most influence over price as well as the ability to create unfair barriers to entering the market.
What this means is that someone finally has figured out that the way to fight the situation isn't to attack record companies for protecting their works but instead, attack their methods of controlling the market.
You and I can in turn support this effort by not buying music from those colluding in this market. Quit complaining about the record companies and the way they handle Napster and Morpheus--just quit buying their products. Buy independent label artists, listen to the radio, pick up an instrument and play it. Let the file trading companies fight the antitrust battle...
Of course we torture people, we need the information --Gen. Pinochet
You mean that ANTI-TRUST law applies to the music industry??? Howdidd 'at happen? Have to get that outrage corrected right away - "Senator Hollings!".
sPh
bear with me. napster by itself -- wrong. but napstering the products of a cartel -- at least it brought to light the cartel that is the RIAA. hope something is done about the cartel. until then i have boycotted 'em by not buying any music (yeah, yeah, what difference can i make? right? well, you're not getting my $16.) no i don't steal it either. i just play what's on radio (that's still legal right? even tho i don't pay for the content 'streamed' to me thru my radio...) in other words, i have done away with the concept of owning any CDs or tapes. we don't 'own' them anyways right?
my $.01. what can i say, the economy is shit and i can't afford $.02 for this crap.
I'm completely in favor of an examination of the whole beast, but how can a judge use one case to open up another entirely separate ball of wax? Without something like a class action suit against MusicNet or maybe Commerce or someone in enforcement beinging an action, isn't she pretty much hogtied to only rule on what Napster is doing?
I dunno, it would appear to me that Patel did actually say that.
All the potential users for such a service are already using MusicNet. Go ask Hillary Rosen and Lars Ulrich yourself if you don't believe me...
If nothing else, calling attention to it earlier may have helped them in ealier litigation
Only if they had a crystal ball. Napster DID counterclaim for misuse, by the way, albeit on other grounds.
But your facts are way off. The agreement did not exist at the time of the preliminary injunction hearing, so it couldn't have been raised at the time. Facts not on the record (that is, not adduced in the earlier injunction proceedings) are not relevant to the appeal, which is what we have been watching the past 18-24 months.
It couldn't have helped them on appeal. It can only help them going forward. They will use this, and already have.
And everybody (most-especially me, to get any self-interest out of the way) wants to be the middleman. The question artists and consumers should be asking themselves is, "what kind of middleman do I want?" The current middleman/men? is what I call a quintopoly (a five-way monopoly) which has survived up to now largely because of the difficulty artists have had in directly reaching their fans through traditional means. The quintopoly is top-heavy with management who are used to (as Courtney Love put it) lots of trips to Scores and other perks. Life for the artists (even when they "make it") is therefore not nearly as lucrative as many imagined before Courtney's rant, which appeared in Salon a while back.
s t-5.html
s t-6.html
The internet changes (or should change) all that (and yes, I hope that the change will benefit me). How can music consumers make sure that most* of the money that they spend on music goes to actual musicians instead of non-producers? Well, I have a few ideas, but
http://www.scottmccloud.com/comics/icst/icst-5/ic
and
http://www.scottmccloud.com/comics/icst/icst-6/ic
show some cartoons that explain things visually better than I ever could in this rant. Enjoy.
JMR
* - anyone promising artists "all" the money is probably lying.
Speaking ONLY for myself!!!
Try e-gold - (contact me). I'm NOT e-
You know, this all looks to me like a pretty clear violation of the Sherman Antitrust Act, which prohibits "agreements, combinations or conspiracies in restraint of trade." If RIAA and MusicNet aren't a combination in restraint of trade, I don't know what is!
sulli
RTFJ.
In DeLand, Florida, there is a Pizza Hut that serves Coke products - advertised on the fountains, etc. I always (as did other observant people) wondered about this abberation (most people never noticed). I wonder if that's to protect them, or if the owner just decided "damn the company line, I like Coke".
--
Evan
"$30 for the One True Ring. $10 each additional ring!" -- JRR "Bob" Tolkien
YACC - Yet Another Anonymous Coward
At the very end, the article says that the judge "said she may appoint a special master to examine all documentation, including artist contracts" (emphasis mine) before ruling.
Including artists contracts...
I find this very interesting. What's the latest on Courtney Love's suit against the record companies?
There is a Subway here in Gaithersburg, MD that has fountains for both coke and pepsi right next to each other. That's the only place I've ever seen it, and it was kind of freaky.
Adam Smith.
Female Prison Rape in NY
I used to work at a Pizza Hut, so I'll clear this up.
PH corporation is a subsidary of Pepsi Cola, along with several other big-name fast food chains like Taco Bell and KFC. Most of the PH's across the nation are maintained by several district offices and report directly to PH corporation, and therefore back to Pepsi Cola.
Pepsi considers this an expensive way to do business because, while they profit from those stores (Markup on a Pizza was close to 5000%) they still have to pay wages and administrative costs. I'm not sure of the math, but Pizza Hut beleives they ultimately make more off of Pizza Hut franchises thank they make off of wholly owned stores.
Thus, unlike Taco Bell, there are a great number of Pizza Hut Franchises across the the country. Those franchises are owned by individuals or other companies who pay PH and Pepsi a precentage for the right to use the Pizza Hut logo, recipies and to participate in speicial promotions. Since they are privately owned, the owner has the right to do anything he wants in the way of adding or subtracting things from the menu. Most PH franchises offer Coca-Cola products in addition to or instead of Pepsi products. They may also do things like add or subtract certain toppings that can be ordered on a pizza. Some Franchises opt to not sell Pizza Hut's 'Thin Crust' pizza, because automatic dough rollers are fairly notorious for crushing finger bones.
The next Slashdot story will be ready soon, but subscribers can beat the rush and slashdot the links early!
Aside from the (questionable) joy of explaining cryptography to suits and explaining licensing requirements to geeks (Harry Fox helps throw a real monkey wrench in there, administering rights for song-writers), one of the things that came up time and time again was anti-trust issues.
SMEI and WMG were well-aware that together they represented about 30% of the market (they split that up, flip-flopping every year over who has the most based on who had bigger hits). Their expectation was that a joint venture between them would attract BMG, Universal, EMI and whoever was number six at the time. Then independents would simply have to fish or cut bait and join up as well.
Everyone was very careful to avoid using words and phrases like "controlling", "domination", etc. at least in written materials. People would verbally joke that they needed to make sure those words weren't written down, in case they ever got subpoena'ed for anti-trust, but everyone knew that the objective was making the HBO of electronic music distribution. You see, they recognized that HBO had the movie companies by the short and curlies as far as cable distribution of films went, and didn't want the same to happen to them in a new media distribution - the film companies have been worrying about this for themselves for electronic distribution for a couple of years now.
Of course, Napster beat them to it, so they beat on Napster legally. One of the funniest things about the timing of these things for me was SDMI being announced just after MP3 hit the cover of Time Magazine, when I'd been working on it for years prior. And of course they got the DMCA passed in the meantime, making cracking even the stupidest of copy control schemes illegal. Of course, every crypto expert they talked to at the time (myself included) emphasized that no scheme was foolproof and you should be sure to design the system to minimize damage in the case of a crack. Being powerful executives with lobbyists on retainer, a legal solution was obvious.
So, all in all, I'm pleasantly amused that the music companies got just a bit too eager and slipped in one phrase too many.....
-----
Klactovedestene!
This was perfect timing - suddenly point out that the RIAA are in fact not the copyright owners and that they are a monopoly.
The same thing happened in the MP3.com case I believe.
The RIAA's members have been misrepresenting copyright ownership for years --- look at a cd does it say "© 2001 insert band name here"? - no it says "© 2001 insert really big record company name here".
Now go look at the copyright notice in a book - it shows the author as holding copyright doesn't it ?
In the same way the artist owns the music and the record industry licenses certain rights from the artist (unless they have an express agreement transferring the copyright to the record company - this may be the case with smaller newer artists but anybody who knows the business isn't going to assign their copyright to a corporation for life).
And don't tell me that the music is a "work made for hire" because neither the courts or congress believe in that fairy tale so the record companies can't claim ownership that way.
Oddly enough the RIAA don't even own the rights to publish the music that is owned by the music publishers. All the RIAA owns is the "mechanical rights" in the CD,tape or whatever. Or at least that's what the licenses I used to have for public performance of recordings say.
BTW IANAL
CDs list for $17.00.
Cassettes list for about $10.00.
CD media is one piece, no replication time because it's stamped. CDs are SOOOOO cheap that they're the AOL distribution method of choice.
Cassettes have between a half dozen and a dozen pieces that need assembly, and even though they're thermally dup'ed much faster than the 1 7/8 ips they're played at, there is still a duplication time. As soon as possible, software makers got out of the cassette business.
So cheap cost = expensive price, so much for this being anything but a marketing exercise. The cost appears to have NOTHING to do with the price.
CDs came out over a decade ago at about the same price, when they were a novelty. At the time, one figures these are computer-stuff, and prices will come down as technology gets better. They haven't.
Moreover, we have many recording labels producing CDs, but there doesn't appear to be ANY significant competitive pressure. Just about any other industry would get strung up for 'collusion' or something like that, in this situation.
Napster wasn't just people cheating because the technology became available. IMHO we all know we're getting ripped off. That doesn't make Napster right, but also IMHO this puts the current situation into a more Prohibition-like setting. The current situation allowed/required by the law is STUPID and WRONG.
IMHO whenever crime reaches the epidemic proportions of Napster (or Prohibition, or drugs) something needs to be done besides simply enforcing and stiffening the law. In the case of Prohibition, it was repealed. IMHO in the case of drugs, the collateral damage of drug financing and attempts at enforcement are worse than simply controlling drugs like alcohol and cigarettes. IMHO for Napster, serious examination of pricing and collusion are necessary, combined with a review of copyright provisions. (My kids are Beatles fans, and last I know Michael Jackson gets the revenue. How does this encourage the Beatles to produce more music this many years later?)
The living have better things to do than to continue hating the dead.
Like many other consumers I can't stand the idea of the large recording industry's strangle hold on the market because of inflated prices, exploitation of green artists, and copy protection (who else is dreading the advent of copyrighted CDs which are already here, SACDs, and DVD-As?). At first this disgust led me to use Napster like a maniac, thinking (like many others did) that it would be a good way to combat the industry. Instead, I fear that it has gained the big labels sympathy within the legal system.
So now I ask you. What other ways can we combat big labels and put the power back in the hands of the artist and the consumer, while still getting the music that we love? I'm very interested in hearing every suggestion possible. Currently I can think of the following.
Buy From Independant Labels
Buy used CDs (I love my local used CD shop :D)
Write a letter to 'the industry'???
Does anyone know of other avenues to these goals? Is there some sort of organization that people like myself can support to help remedy the situation?
Please if you know anything...let us know!
--I hate big sigs.
Pot calling the kettle black..
.com vs established monopoly.
no, napster was never in control.
Horse of a different color?
No,
Shoe's on the other foot?
Kinda.
The shoe's on the horse's other foot for calling the kettle black?
Yeah, uh-huh.
Remember kids, only you can prevent metafires.
score: +1 interesting, +1 funny +3 dumbass.
{laff...snort}
Moose.
Have you read the moderator guidelines? Well, have you, PUNK? (and I want a Karma: Gnarly option)
Napster complained about an anti-competitive clause in the contract they signed with MusicNet
Question: Why would they sign such a contract?
Because they didn't have any other viable options. It was either bend over for the RIAA or be forced into liquidation via legal fees/fines/reparations/etc...
Because that's the only contract that was offered to them? Because they were not in a position to negotiate different/better terms?
Why would any computer sign any of Microsoft's contracts just so they could put Windows on their computers? Why would they agree to Microsoft's terms?
Doesn't RICO also mean asset forfieture?
I'll see your senator, and I'll raise you two judges.
Many here on Slashdot have wondered why the RIAA and the collective labels aren't considered a racketeering organization, considering they have consistently engaged in racketeering like behavior. This may very well be the proverbial straw that broke the camel's back. I am not a lawyer, but if it's true that you lose your rights to copyright if you engage in racketeering behavior may have some serious ramifications -- especially since they've been lobbying to keep it pretty much in their control forever.
I wonder if this means that the songs have to go back to the artist or if they immediately slip into the public domain. I also wonder if they will pursue other legal action in light of this behavior. At the very least, it should be the first thing in a long time that should make the RIAA reconsider it's actions, as well as the MPAA and other organizations with a vested control in copyright.
Give 'em just enough rope to hang themselves, it's never been truer.
-------------------------------------------------
There's parts of the law that causes them to forfeit all rights to any "intellectual" property that they abuse in a monopolistic manner.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
Copyright and Patent can be revoked if used in an inappropriate manner by anything monopolistic. If they are in violation of the antitrust laws on this, they could lose rights to anything that was provided on the MusicNet service.
This is one of those things I've been wondering about for a while- why don't you go after RIAA and/or MPAA for being a cartel and thereby using an effective monopoly position to fix prices. If they're guilty of it, all the "properties" involved with the violations (which would be pretty much everything...) would cease to be the propery of their members.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
Independent ventures backed by the players doesn't hide the "trust" aspects of antitrust- they had such beasts out there when the laws were crafted, they were crafted for that very reason.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
A comment like that, by and of itself, wouldn't be enough. Jackson shot his mouth off to the press, etc. after the ruling.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
This Slashdot story from July 2000 lays it all out. This is exactly the strategy he described.
The idea that Judge Patel is going to blow the record companies out of the water is tantalizing. And her reference to "massive discovery" must make the record executive's blood run cold.
Well, colder.
Do any of the US readers here know the limits of her mandate to look into things like artist's contracts?
Many artists are not dependent on their craft for their livelyhood. They have jobs that may or may not be related. They work for wealthy patrons and institutions. They do all sorts of things and consider their crafts luxuries. Some people even make things for the people they like, without looking for a reward. Anyone can do this if they want, you don't have to be wealthy to water paint. People painted, sang and made cool things for each other before money was invented.
It is arrogant to think people like that can not develop their crafts as fully as those who have to hussle them. D'Vinci was mostly a military advisor and party planner. His society was as capitalist as they come. In fact, artists who are indepenent of their craft are the only ones who can produce the artwork without editorial constraint.
Friends don't help friends install M$ junk.
See, copyrights are not granted to "protect" or benefit "owners". They're granted to increase the amount of useful sciences and arts which are available to the public. Ultimately, to increase the public domain. That's the justification behind them. _Not_ classical property law. Now, if a copyright holder does certain things to restrict the availability of their products to the public (and this includes things like price-fixing), then they are undermining the reason why we (i.e. The Govt.) give them special monopolies. If a monopoly is found to be abusive, then the govt. has the right to rescind it, break it up, slap it on the wrist, whatever.
The monopolists (RIAA) have a right to complain that Napster (as a file sharing company) is violating their monopoly.
But Napster (the would be fee-paying download site) also has the right to complain that the RIAA is abusing their powers.
No contradiction here. Just two different legal violations.
(btw, if your sense of laughter was sparked by the fact that Napster was found guilty and so has no rights to sue the RIAA for _anything_, then perhaps you should also have been laughing when the RIAA, which was previously found guilty of abusing it's monopoly (i.e. MAPS) and yet had the gall to sue Napster afterwards. There is plenty of dirty laundry to go around.)
When in doubt, have a man come through a door with a gun in his hand.
Interesting comment. I'll try not to be arrogant.
I agree (and I think Scott would, but I'd best not try to speak for anyone but me) that many -- probably most -- artists aren't at all dependent for their livelihoods on their art, but I think what he's trying to say is "if you want more of this stuff, that means I'll have to cut back on the ol' day-job, but somehow I'll still need some scratch." There are also those who argue that artists like DaVinci, Van Gogh, Dali, Picasso, and others should benefit more from their art within their lifetimes, as opposed to estates seeing huge increases in value long after the artist dies.
That means money-to-artists, and money -- for better or worse -- attracts middlemen. I don't think I've implied that artists who make less can't develop their crafts fully, but clearly, if you have to work your art around a 9 to 5 job and someone else can concentrate solely on the art, that someone else is likely to have an advantage in quality & quantity over you. Money may not be the main goal, but it's a goal when you don't have any for a professional artist.
I'd also disagree with your idea that "People painted, sang and made cool things for each other before money was invented." Money's a pretty old concept, especially the yellow stuff. Collecting gold nuggets (nature's art) for a while has made me believe that money probably predates many things. People want them, because nuggets are amazingly beautiful (it's almost a shame mankind makes so many bullion coins and bars with the stuff).
When early man found a nugget, it's almost certain he/she kept it, and later use as trade/barter/art/money/adornment was a natural. It's almost certain that the yellow color and unusual appearance of a pure (mostly) metal in nature (often ocurring along with quartz, which can also be quite beautiful and pure-looking) reminded him/her of the sun, which he/she probably worshipped at the time. Some of the ideas in this paragraph come from conversations I've had with money-artist J.S.G. Boggs who -- like me -- has experienced having very little money.
JMR
Try e-gold - (contact me). I'm NOT e-
"People of the same trade seldom meet together, even for merriment or diversion, [without planning] a conspiracy against the public, or some contrivance to raise prices."
See http://www.sparc.bc.ca/sparc_news_archive/sn16_3_i nvisible_hand.htm
for more details. As Noam Chomsky pointed out in a hilarious essay, the defenders of modern capitalism frequently point to Adam Smith whilst ignoring what Adam Smith actually said, which was quite different to today's libertarian-style economic theories.
Female Prison Rape in NY
Basically, Edison's company invented the movie projector, and held the patent on the projector. Edison's company also made films.
In order to use the projectors, a theatre owner needed to get a patent license. (Remember, in order to use a patented article, you need a patent license? This is an example.) Edison, of course, happily licensed the projectors. However, a standard clause in the patent license was that the theatre owners sign an exclusive contract with Edison's film company.
The theatre owners protested. Edison's films were not that good. And they won: although I can't remember what the remedy was, I think it may have been just the striking out of that clause in the contract. The rationale was that Edison was trying to use the patent in a way that the legislation did not want him to. Also, the film contracts did not expire with the patents, which was seen (correctly) as an attempt to unlawfully extend the term of the patent."
Mod parent up. This is realy interesting.
I can here the Judges booming cynical voice now. "Objection sustained. So Miss Rosen, you didn't pay much attention to the courts insights into Edisons movie theater licencing. Can you explain how this is different than your DVD restrictions. Then you will please explain your relationship with the orginiztion that created the DVD standards...I'm waiting."
Along the same lines, does anyone know of cases where resale of printing press plates and acompinying licences to print their content were found to be fair to be resold?
How about a business on trial for using a printing press patent to licence(enforce cough *choke*) content restrictions?
How could I donate to fund such research? I think I might write the EFF on this.
Novel theory: Modern Man evolved from psychopath