The RIAA owns the copyrights on recordings. Publishing companies own the rights to music and lyrics. If it's an "unauthorized public performance," it's ASCAP and BMI -- who represent the rights of composers and songwriters -- who get you. Not the record companies. Not the RIAA.
That's the ugly truth here -- sometimes it's the composers and the lyricists who are the bad guys. Not everybody who protects their rights (or, perhaps, overprotects in this case) is the RIAA.
This raises the question: did the submitter really think the RIAA was behind this, or was he having a joke at Slashdotters' expense? If the latter, it's worked -- there are already several posts from people who are just shocked that the RIAA would do such a thing.
If this pisses you off, you should be upset at ASCAP or BMI -- who, again, are run by and for composers and lyricists. The RIAA doesn't have a monopoly on evil.
"Ok, now what you are saying is that by us saving $13.50 we're probably only ripping off the record label by about $8.00 after the various markups are taken into consideration for middle-men we wouldn't be using."
Sort of. It's my understanding that sell-in to disti is about eight bucks. Everything beyond that goes to the distributor and retailer.
"Doesn't your version of reality justify piracy more than the Slashdot collective mind's model?"
I can't answer that question for you. If the idea of paying a retail markup bothers you to the point that you think piracy is an acceptable alternative, then by all means do whatever you think is right. If pirating your music fits within your moral code, then go for it; nobody else (particularly not me) can provide you with absolution or sanctity.
"Or it would, if the labels didn't hog the copyrights so the artists can't apply for their own money."
I don't follow. The record company typically owns the copyright on the recording; the composer and lyricist own the copyright on the words and music. Tons of artists make pretty good money via BMI and ASCAP through radio play and other public performances; it's a revenue stream that's wholly unrelated to CD sales, and -- more importantly -- money that the record company never sees.
Any rightsholder can try to get the money they believe that is owed to them by ROMS, provided that they can understand this page, provided ROMS answers their email (they've never answered mine), and provided AllofMP3 were to help out by reporting sales data (I've not heard of anybody who's been able to get it out of them). You certainly don't need a record company's permission, and the record label can't stop you. The issue is, as somebody has already pointed out, in that nobody has reported receiving a royalty check from AllofMP3 sales. This is not the fault of the record companies; it's the fault of AllofMP3 and ROMS not providing data, not responding to emails, and not mailing checks when asked.
"Because the labels have stopped them from doing so."
Do you have a citation for this claim? How on earth could a label prevent a lyricist or composer from collecting performance royalties? That's between the artist, the publisher and the performing rights organization; it's a wholly different revenue stream than CD sales. I think your statement is just one of those things that everybody just sort of "knows" to be true but which nobody can really confirm, but if you have evidence otherwise, please post it.
"But I think the music industry has known that for about 50 years."
And, the iTunes store sold their two billionth track in January. Sales of digital singles have been insanely huge for the past seven years or so.
I read the Ars Technica article a few times and I don't really see what its purpose is, other than to try to make the reader feel smarter than the record industry as a collective whole. In short, it's a huge straw man. To quote:
The industry should be paying closer attention to its meteoric rise and less attention to the dying, arcane album.
What is Ars Techica's evidence that the record industry isn't already paying close attention, or putting an undue amount of attention toward their CD business? Record companies are like any business: they'll sell what the customer wants as long as there's money in it. As long as an acceptable number of customers still want to buy CDs, they'll keep making them available, despite Ars Techica's protests. What specifically as Ars Technica asking? That record companies stop pressing CDs?
And:
It should absolutely drop the rhetoric about how piracy is destroying the business, because the sea change in sales patterns shows that something else is is afoot.
And this would benefit... whom? The record industry will milk the piracy issue as long as it's in their best interest to. Fry's Electronics sells stuff and they put efforts into controlling shoplifting. Auto makers keep building cars and improving anti-theft technology. Astophysicists may disagree, but walking and chewing gum can indeed be performed simultaneously.
In short... lame, pointless article, devoid of facts or true insight, and written only to make us feel better about pirating.
"You'd think the music industry would have smartened up by now and started offering custom albums with a customer's favorite songs burned onto them for a small fee over and above the fees for the songs themselves, making a fair profit from getting the customer keen on having a good-sized collection that *he/she* picked out on-line or at a kiosk, on a decent-quality DVD recordable delivered either at said kiosk or at a local shop which owns specialised equipmentfor that. Not everyone wants to have to do this stuff himself/herself with downloaded (and compressed, less than full-quality) songs."
Not sure if you were being ironic, but that's been tried several times; there were cassette-based kiosks in the 80s and CD-based kiosks in the 90s. They were located in record stores.
Not to say that there's no room for another chance to succeed, but given the highly speculative nature of the record industry and the fact that every attempt so far has failed, I wouldn't expect to see sometbody trying it again soon.
"That's all very true, but you missing some of the point as well: not every downloaded song / movie is missed income to the artist (and label/studio behind them). In fact, I'd wager over 90% of the downloaded content wouldn't otherwise be converted into an actual sell."
The question was "why buy instead of use allofmp3?". You are correct that many people state that piracy is not a substitute for sales.
"As far as I see it, there are only 2 viable solutions:"
Solutions for whom? The iTunes store is doing really well. That's the big picture... it may be the case that very few of your friends pay for music, but lots of people do. IMO it's not a problem that particularly needs to be solved. Piracy and the music industry is like shrinkage in the retail industry: they take steps to prevent it, but just as there will always be people who will shoplift, there'll always be people who pirate. Ten years ago the rationale was lack of online selection, then five years ago it was pricing, then last year it was DRM, and now it's email addresses in music files. Tomorrow it'll be something else; some folks will always pirate, and whatever reasoning works for you is cool. I know that it's common around here to state that the record industry will be going away Real Soon Now, but that's closer to wishful than truth.
"2) Give the public a real alternative, that's what AllOfMP3 did (many formats, low prices, drm-free) and why it was so popular even *after* everyone knew it wasn't legal. Give the public a legal version of AllOfMP3 and I'm sure the entertainment industry could be making more then before the time of P2P."
The record industry is like most other businesses, where the goal is not to move the most units, but to make the most profit. This involves a lot of complicated analysis involving pricing theory, consumer behavior theory, and so on, but ultimately you pick that point on the curve that represents the optimal trade-off between volume and net margin. Tracks have settled to about a buck each because that's the optimal point on the curve. This might boggle you, but if the iTunes store lowered their prices to $0.50 per track tomorrow, it would not increase my purchases... not one bit. Apple would be throwing money away. You see, I have a job that pays substantially more than minimum wage, and $1.00 a song really isn't a problem for me. And given Apple's huge success (they have many more customers than allofmp3's claimed 6MM), there are lots more people like me.
Another real problem is that setting your price below the costs of sale won't work for very long. The Russian sites are able to sell tracks for $0.10 each because they need not worry about paying the supplier. Mechanical royalties are $0.08 by law, with contractual rates on top of that, so if you were to try to sell songs legally in the US at $0.10 each, your costs would blow way past that just in royalties before you added the rest of the very real and inconvenient costs of sale.
"The labels don't get $14 a CD. That just shows an absurd ignorance of how the system works."
This is Slashdot, where the total cost of sale for a CD is $0.25, and distributors and retailers don't charge markup. In this version of reality, record labels make a net profit of $13.25; this ridiculous profitability allows us to rationalize piracy.
"Most often, buying music CDs doesn't pay the band, it pays the labels (unless you bought the CD from a band who recorded and produced the music themselves, in which case it's probably a burned disc anyway). If the band has been backed by a label, they've already been paid by the label to license their music and sell it."
That's a bit backward from how most record contracts work. Contracts typically use a "the artist gets paid last" scenario, where royalty payments are held back and applied to the costs of production until they've been met.
If, at the time that you buy the CD, the CD has not yet reached the point of profitability, two things happen:
You're helping the CD reach profitability, so the artist will be paid that much sooner as a result of your actions.
You are showing the record label that people want to buy the artist's music. Generally, artists who do well continue to have chances to make albums; artists who don't are dropped.
If the first point is confusing, consider the situation of making a donation to a local public TV or radio station. Say they need $100K to meet their budget and have collected $10K so far. An AllOfMP3 fan might state that donating $50 at this point would be useless, as the station will still not reach their goal, but the reality is that the $50 donation puts them $50 closer to reaching their goal.
The "pirate your music, but support the band by seeing the show" argument falls down when you do the math. If you pirate ten CDs a week, that's ten concerts you need to see a week -- that gets to be expensive, and a time sink. Then, of course, that there's the reality that not all the artists whose music you pirate are going to be able to play when and where you want them to. In most cases, when we pirate music, our actual contribution to the artists' livelihood is nil, despite our best intentions.
"Buying it used? Doesn't that defeat the purpose of trying to support the band? Say someone buys a CD for $14. They listen to it for a while, then it ends up at a used CD store once they're bored with it. I go in and buy the same CD for $6. The record label still only made that first $14. The only people that gain from used CD sales are used CD stores."
There are a couple of other benefits of buying a used CD vs. pirating it or downloading it from a Russian site. First, it's unquestionably legal, no matter how much the record companies would like to stop it. And, you support your local economy, vs. some Russian guy. I love having local record stores with ample selection of used CDs, but these establishments only stay in business with enough patronage.
Sounds like an over-complicated solution in search of a problem. There'll always be people who pirate because they want to save money, or they just get off on breaking the law.
As for the rest of us -- Netflix works great, in my experience. I pay a flat fee per month, and with a few clicks I can have practically any movie I like in my mailbox the next day, and my mailbox is about a far a walk from my projector as my PC is. The cost is quite low vs. the cost and inconvenience of sucking up my bandwidth with BT and burning the pirated copies to DVD.
And, for people who insist on downloading rather than wielding shiny plastic discs -- Netflix has begun testing a download service, too. Odds are that with their resources and their library, they'll be there much more quickly than your proposed system would be able to get traction.
If people want to pirate because it saves them money, or it's fun, or whatever -- then they should go ahead and do just that. But "cost" and "convenience" are quickly being eliminated as rationales.
"Considering that the MAFIAA act like the police, work with the police, even train some police forces and help write the laws. Then aren't they effectively the government? Entrapment would seem an accurate distinction to me."
"Entrapment" is not the same as a honeypot, or a sting operation.
Wikipedia has a pretty good article on entrapment. It you truly believe in your heart that this sort of honeypot is entrapment, you may want to change the Wikipedia article. You're not the first slashdotter by a long shot to consider this kind of thing to be entrapment; perhaps the wikipedia article could use a "Layman's Understanding" in addition to the correct definition.
"This is the basis of DRM, which circumvents hundreds of years of copyright law to put in the publisher's hands what you, as a purchaser, can do with the material."
Having the legal right to do something is not the same thing as having the guaranteed ability to do something.
For instance, it's legal to drive 75MPH in some parts of the USA. Manufacturing or owning a vehicle which cannot do 75MHP safely is not a circumvention of the vehicle code.
At any rate, products which cannot be copied to the full extent of copyright law have been around much longer than DRM as it's popularly known today. Software copy protection has been around since the 1970s, and copy-resistant documents came around shortly after the advent of xerography.
I believe that the Slashdot zeitgeist is that the word "stole" is used incorrectly here -- many Slashdotters believe that the term "to steal" should only be applied to an instance where a physical item is moved from one place to another, and should not be applied to instances of copyright infringement or unauthorized duplication -- although I presume that exceptions can be made for "theft of service," "identity theft," "you stole my thunder," "stolen kisses" and the like.
"Yes, "piracy" has its meaning that has been there for hundreds of years and no, "making a copy of a CD" is NOT it."
Sheesh. Who on earth modded this insightful?!
The word "piracy" is a homonym (or, if you prefer, a homophone), like the word "bark." Learning the various meanings is as easy as checking a dictionary. This is why The Pirate Bay's logo is a pirate ship with a cassette... they're referencing the play on words.
I'm curious: were you really not aware of this? I have a feeling that you're simply being disingenuous, but then again, some poor soul marked your post "insightful," so maybe there really is a knowledge gap here. Can you explain?
"The very attempt to equate such horrendous criminal activity with copying a CD is outrageous and should be prosecuted as slander."
That ship sailed three centuries ago. Again, it's hard to tell if you're trying to be serious.
"You seriously think that hundreds of years ago (say the 1800's) people said "Watch out for pirates!" and meant "People copying CDs"?!? That is the funniest thing I've ever heard."
Of course not. I am not sure how you came to that conclusion. Please explain. I think it may be a reading comprehension problem on your part, but I would like to understand what your thought process was that led you to this mistake.
"The word "piracy" is repeatedly used. I don't believe this is a standard legal term (outside of naval encounters). The word is not defined in the document. I think the intent is to equate the term "piracy" with "copyright infringement", but to spin it imply other things. One could probably attack this term successfully."
Not hardly. Everybody knows what it means. It's held that meaning for hundreds of years. You're a smart person, and if a buddy tells you that they have a pirated version of a DVD, you'll know exactly what they mean. The courts are full of smart people, too.
"One would first have to show that the vast majority of content falls under the record companies' copyrights."
Been shown many times, in many cases. UMG vs. Napster, whomever vs. Kazaa, etc. It's one of those prima facie things that the court need not waste time on. You, me, your little brother, and most other people on the planet know that most P2P content is infringing.
"The name of a file does not constitute anything more than circumstantial evidence that the file contains what they think it contains."
In many cases, circumstantial is good enough. If you were to try the "my client likes to share photos of his cats by naming them after MP3 files of top-selling artists" approach, it wouldn't even pass the laugh test. Courts are surprisingly good bullshit detectors. If an argument would seem contrived to you, it likely will to the court.
"Point 21 - This may actually be true, but they have done nothing to demonstrate it. In many cases copyright infringement may actually spur sales. Saying they are harmed with no supporting evidence is not a valid argument."
They don't need to demonstrate it -- prima facie, again -- and enforcing copyright law doesn't require proof of economic harm. Remember, the record labels are going for statutory damages here.
"Has [leaking of new CDs before they're released] occurred? This looks like a big non-sequitor to me."
"How exactly does Bittorrent "Capitolize" on anything? Its free software. No Ads, No fees, ect. Is the RIAA objection to pirates DONATING to open scource projects?"
This is the quote to which you refer:
Notwithstanding the court's decision enjoining Napster, similar
online media distribution systems emerged and attempted to capitalize on the growing illegal market that Napster fostered. These include KaZaA, eDonkey, iMesh, Ares, BitTorrent, DirectConnect, and Gnutella, among others.
If you're confused, it may be because you're reading it too literally. When you see "BitTorrent" in the above, mentally replace it with "BitTorrent tracker sites" (ie: The Pirate Bay). Many of them are commercial endeavors making thousands upon thousands of dollars in profit each month (just because they provide a free service does not mean that they don't have a profit motive). Facilitating piracy is a big business, and business is good.
HTH.
Re:And once they stop "robbing" RIAA, sales go up?
on
Allofmp3 Shut Down, Again
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· Score: 4, Interesting
"allofmp3 WAS legitimate in Russia. It paid royalties to ROMS, the Russian organization responsible for collecting copyright fees. The RIAA simply didn't like ROMS' rates and structures (even though Russia, as a sovereign nation, has every right to set its own royalties), and declared allofmp3 illegal."
Well, for what it's worth, ROMS isn't recognized by any of the world's performance licensing groups. Whether that's a badge of honor or a shame is, as the math texts state, an exercise left to the reader.
Contrary to popular belief, the cost of sale of a music download usually isn't zero. There are mechanical royalties to the composer and lyricist to deal with (the mechanical rate is set by law), and there are usually contractual royalties as well, paid to the performer. Record companies have tricks for minimizing these royalties, but it's a safe assumption that for a typical track sold on iTunes, mechanical and contractual royalties are being accrued.
Now, let's say you're a record company. For the sake of simplicity let's say you're one of the cool indie labels, and you pay your artists fairly. One track you sell has a mechanical of $0.08 each to the composer and lyricist, and you're throwing the rest of the band an additional $0.04, for a total of $0.20 that you owe to the artists for each track sold.
So this ROMS outfit tells you that you can have a portion of the licensing fee that they've collected, if you really want it. The web site sold your track for $0.20, for which they paid ROMS $0.02. ROMS takes their cut, so that penny is ready for you to take whenever you want it.
Trouble is, if you take that penny, you still owe the band $0.20. If you take it and don't pay them their $0.20 (for a net loss of $0.19 to you), the best case is that they'll be mightily (and rightfully) pissed. The worst case is that they'll find themselves a lawyer.
So, you eat the difference. ROMS says that they've collected royalties for 10,000 downloads and they owe you $100. You take the $100 and pay your band the $2,000 they're owed. You're out $1,900.
And then ROMS tells you that they have another $100 for you. And another. And another.
My story is hypothetical; mainly for the very big reason that artist who've tried to get sales info from allofmp3.com have failed in their quest. Yes, I am aware that AllofMP3 stated that they supported artists' rights, but they could have at least shared this basic sales data, just as iTunes and legitimate stores do. And, if you try surfing the ROMS site for information on how to collect royalties, it quickly becomes frustrating, even if you speak Russian. Compare this with the two US performance right societies, ASCAP and BMI -- they go out of their way to make it easy for artists to find out how much they are owed. I know that lots of people reading this see ROMS and allofmp3 as the good guys in this situation, but it's just not showing from their actions.
"Consider this carefully: there is no right to profit."
Straw man. Copyright holders -- whether they're individuals or corporations, painters, novelists, songwriters, you name it -- are not asking that you honor a so-called "right to profit" when they ask you not to copy their stuff. They are asking that you honor their rights under copyright law.
"So? You can only rob physical items, not opportunities and ideas If you own a diner, and I open a better one down the street, perhaps you won't be able to tell as many burgers. Does that mean that I've robbed you of sales in some metaphorical sense? You bet. Is the wrong? No. Is it legally actionable that I've caused the theft of your customers? Not in a million years."
My band releases an album. It kind of sucks, and your band releases a better album which sells better. Have you robbed me of sales? Not in a million years. Is it wrong? No. It's good old-fashioned competition.
My band releases an album which I am selling on iTunes. You put a copy on your popular web site and sell it for a tenth of the price without giving me a share of your income. Have you robbed me of sales? Yes, quite possibly. Is it wrong? Yes.
I think it's okay if we choose not to honor the rights of composers, songwriters, and so on. But we can do so without the straw men.
"Wait, is the RIAA going after UW students DOWNloading, or UPloading illegal files?"
Making the files available.
"And uploading, there is no way to statistically prove the statutory damages caused by uploading any one particular file (that I know of)."
And that's exactly why they're called statutory damages -- they're defined by law ("statute"); they don't have to line up with the damages suffered. You may be confusing these with compensatory damages (think "compensation") which are intended to have some sort of relation to the actual damages.
By the way, this is why statutory damages exist. In many instances, the actual amount of damage is difficult to calculate. Thus, we have the legal concept of statutory damages.
"Downloading music is a form of protest, and the school has given in to the enemy of the students' freedoms because it will save them some money on bandwidth, or so someone has convinced them."
Talk to some real protesters sometime. The people who marched against the Iraq War, or even the Viet Nam War. The brave people who participated in the Montgomery Freedom March. The people who defied orders and sat at the lunch counters in Selma. The ones who have had hoses, dogs, and rubber bullets unleashed at them.
There are two differences between them and you: first, they've chosen a real cause -- sorry, "I demand free music" does not even compare in the slightest. And, they took risks. They openly defied the law and welcomed prosecution. You, on the other hand, appear to be comfortable protesting only if your university helps protect you as you break the law. Take some responsibility for your own actions; don't expect a university or anybody else to do it for you.
"The fact remains that the Declaration of Independence and the Constitution openly declare that GOD and God alone gave you your freedoms, they are only protecting them. This is a violation of those God-given freedoms, for the sake of profit."
Oh, so you're a Christian? How do you reconcile piracy with the Golden Rule? If you want others to respect your rights, then you must do the same. Musicians, songwriters, composers, and -- yes, even record company owners -- aren't exempted from consideration simply because you want free music.
"In fact, I think the copying industry very much pre-dates copyright. People made a living copying paintings or books centuries before copyright came into existence."
You make a good point. Many people are boggled by the fact that copyright owners are upset that I can use BT to share a perfect copy of a CD with 100,000 of my closest friends. They cite the fact that we were trading analog copies of cassette tapes in the 70s and 80s. They do not see a significant difference.
Monks illuminating books one at a time::analog tape copying in the 70's as movable type::modern P2P networks.
Movable type got rolling with the Gutenberg Bible in 1455. Copyrights followed soon after; 1486, to be precise. This is no coincidence: new technology drove the creation of new laws, just as it does today. It took until 1709 for things to get sufficiently out of control (in the eyes of authors) for widescale copyright law to be adopted.
"This is why some stores say "prices too low to print/etc!" in their ads. There is some deal where if you put "acme label" then you have to charge their minimum price. Just like there are clever ways around this, I'm sure that acme label really enjoys the sales no matter how they are generated."
Yup; it's called a MAP program. When Apple and other companies we love do it, it's fine. When Universal does it with Tower Records, it's price fixing. Universal got nailed for this after Best Buy and Wal-Mart complained to the government. A win for Best Buy and Wal-Mart; a loss for Universal and Tower (who have since gone out of business, unable to compete with Best Buy and Wal-Mart). Whether it's a win for Slashdotters depends on whether you appreciated having Tower and other relatively cool alternatives to buying your music at Best Buy or Wal-Mart.
"Why can't the RIAA just enjoy sales as well? Oh yeah, because no one buys an entire record to listen to one track? How is that piracy's fault?"
That was the prevailing argument five years ago.
Then it was "online music selection sucks and is too expensive! I'll keep pirating, thank you.". And then online music stores got cheaper and better.
Then it was "online music stores have DRM! I'll keep pirating, thank you." And then emusic showed up, and EMI dropped their DRM.
Then it was "these DRM-free tracks from the iTunes Store have my email address embedded. I'll keep pirating, thank you."
You know how many P2P enthusiasts claim that if only the music industry would listen to them, they would stop pirating? Many people claiming this are simply full of shit; they'll keep pirating and keep coming up with a new moral justification to do so. Disposable income is the football, the record companies are Charlie Brown, and the pirates are Lucy.
Among the honorable people in my book are the pirates who simply acknowledge that they have no interest in purchasing music, and that they pirate to save money. No need to blame anybody else for having the basic and fundamental desire to save money. If the rights of others don't happen to matter to you, you're cerrtainly not alone.
"Or how about this, how much music would YOU buy if it cost 5 cents a song to download?"
Mechanicals alone (by law) can be up to $0.14 or so for the composer and lyricist; the performers typically get $0.15 or so. So, the cost of selling a track is often a minimum of $0.30. What is your recommendation for building a business model that involves selling a product for $0.05 at a cost of $0.30? The obvious solution would be to change the law so that you can pay composers and lyricists less, and asking the performers to get far less royalties, or do without. But, you seem to be pro-artist, so I'm not sure. How would you solve this problem?
"The cost would be so negligible that people would buy songs on a whim, constantly. Instead of buying 10 songs a month at $1 a song they might buy 100 songs a month. Sure that's only $5 vs $10, but how many MORE people would be doing it? Probably 10 times as many."
Here's the thing: I wouldn't buy any more music if tracks were $0.05 vs. $1.00. The elasticity just isn't there for me; I can buy as much as I want at $1.00. So, I'd buy an equal amount at $0.05, so the record companies' gross sales to me would drop by 95%.
You probably weren't aware of this, but finding the optimal price for a product is an actual science with a pretty well defined set of methods and principals. There are textbooks written about it, people go to school to learn how to do it, and so on. What often boggles lay people is that the lowest price isn't often the best price. The best price is that optimal point on the curve which generates the highest profits.
Virtually all enterprises do this sort of basic analysis; it's essential to their profitability. It's a safe assumption that the record companies do this, too. Given the amazing success of the iTunes store, a buck a track seems to be the right price.
"Now you have just increased profits 5 fold while making your customers very happy."
Are you sure you're not confusing net profits and gross sales? If you're not making any money on that $0.05 sale, volume doesn't make a difference.
Warner Music managed to scrape by with a 6% operating margin last year; this would appear to contradict your theory that the cost of sale is a small fraction of the sell-in price. However, I'm willing to accept the notion that you're smarter than virtually everybody in the record business. Assuming you agree, why not start your own record label? If the secret is to set your pricing at $0.05 per track, and you can actually make money and keep your artists happy, then this is a potentially huge opportunity for you.
I'll help you get started. I know a guy who's a *really* good musician. In the right hands, I think he could be really popular. Assuming we talk him in to making only $0.03 royalty per track, let's sign him up. If we can get his first album recorded, mixed, produced and marketed for $10K (a pretty low number, but we can be creative) then with your $0.02 profit per track, you'll only need to sell 50K albums -- half way to the equivalent of a gold record -- before you break even.
Slashdot Mirror
The RIAA owns the copyrights on recordings. Publishing companies own the rights to music and lyrics. If it's an "unauthorized public performance," it's ASCAP and BMI -- who represent the rights of composers and songwriters -- who get you. Not the record companies. Not the RIAA.
That's the ugly truth here -- sometimes it's the composers and the lyricists who are the bad guys. Not everybody who protects their rights (or, perhaps, overprotects in this case) is the RIAA.
This raises the question: did the submitter really think the RIAA was behind this, or was he having a joke at Slashdotters' expense? If the latter, it's worked -- there are already several posts from people who are just shocked that the RIAA would do such a thing.
If this pisses you off, you should be upset at ASCAP or BMI -- who, again, are run by and for composers and lyricists. The RIAA doesn't have a monopoly on evil.
"Ok, now what you are saying is that by us saving $13.50 we're probably only ripping off the record label by about $8.00 after the various markups are taken into consideration for middle-men we wouldn't be using."
Sort of. It's my understanding that sell-in to disti is about eight bucks. Everything beyond that goes to the distributor and retailer.
"Doesn't your version of reality justify piracy more than the Slashdot collective mind's model?"
I can't answer that question for you. If the idea of paying a retail markup bothers you to the point that you think piracy is an acceptable alternative, then by all means do whatever you think is right. If pirating your music fits within your moral code, then go for it; nobody else (particularly not me) can provide you with absolution or sanctity.
"Or it would, if the labels didn't hog the copyrights so the artists can't apply for their own money."
I don't follow. The record company typically owns the copyright on the recording; the composer and lyricist own the copyright on the words and music. Tons of artists make pretty good money via BMI and ASCAP through radio play and other public performances; it's a revenue stream that's wholly unrelated to CD sales, and -- more importantly -- money that the record company never sees.
Any rightsholder can try to get the money they believe that is owed to them by ROMS, provided that they can understand this page, provided ROMS answers their email (they've never answered mine), and provided AllofMP3 were to help out by reporting sales data (I've not heard of anybody who's been able to get it out of them). You certainly don't need a record company's permission, and the record label can't stop you. The issue is, as somebody has already pointed out, in that nobody has reported receiving a royalty check from AllofMP3 sales. This is not the fault of the record companies; it's the fault of AllofMP3 and ROMS not providing data, not responding to emails, and not mailing checks when asked.
"Because the labels have stopped them from doing so."
Do you have a citation for this claim? How on earth could a label prevent a lyricist or composer from collecting performance royalties? That's between the artist, the publisher and the performing rights organization; it's a wholly different revenue stream than CD sales. I think your statement is just one of those things that everybody just sort of "knows" to be true but which nobody can really confirm, but if you have evidence otherwise, please post it.
"But I think the music industry has known that for about 50 years."
And, the iTunes store sold their two billionth track in January. Sales of digital singles have been insanely huge for the past seven years or so.
I read the Ars Technica article a few times and I don't really see what its purpose is, other than to try to make the reader feel smarter than the record industry as a collective whole. In short, it's a huge straw man. To quote:
What is Ars Techica's evidence that the record industry isn't already paying close attention, or putting an undue amount of attention toward their CD business? Record companies are like any business: they'll sell what the customer wants as long as there's money in it. As long as an acceptable number of customers still want to buy CDs, they'll keep making them available, despite Ars Techica's protests. What specifically as Ars Technica asking? That record companies stop pressing CDs?
And:
And this would benefit... whom? The record industry will milk the piracy issue as long as it's in their best interest to. Fry's Electronics sells stuff and they put efforts into controlling shoplifting. Auto makers keep building cars and improving anti-theft technology. Astophysicists may disagree, but walking and chewing gum can indeed be performed simultaneously.
In short... lame, pointless article, devoid of facts or true insight, and written only to make us feel better about pirating.
"You'd think the music industry would have smartened up by now and started offering custom albums with a customer's favorite songs burned onto them for a small fee over and above the fees for the songs themselves, making a fair profit from getting the customer keen on having a good-sized collection that *he/she* picked out on-line or at a kiosk, on a decent-quality DVD recordable delivered either at said kiosk or at a local shop which owns specialised equipmentfor that. Not everyone wants to have to do this stuff himself/herself with downloaded (and compressed, less than full-quality) songs."
Not sure if you were being ironic, but that's been tried several times; there were cassette-based kiosks in the 80s and CD-based kiosks in the 90s. They were located in record stores.
Not to say that there's no room for another chance to succeed, but given the highly speculative nature of the record industry and the fact that every attempt so far has failed, I wouldn't expect to see sometbody trying it again soon.
"That's all very true, but you missing some of the point as well: not every downloaded song / movie is missed income to the artist (and label/studio behind them). In fact, I'd wager over 90% of the downloaded content wouldn't otherwise be converted into an actual sell."
The question was "why buy instead of use allofmp3?". You are correct that many people state that piracy is not a substitute for sales.
"As far as I see it, there are only 2 viable solutions:"
Solutions for whom? The iTunes store is doing really well. That's the big picture... it may be the case that very few of your friends pay for music, but lots of people do. IMO it's not a problem that particularly needs to be solved. Piracy and the music industry is like shrinkage in the retail industry: they take steps to prevent it, but just as there will always be people who will shoplift, there'll always be people who pirate. Ten years ago the rationale was lack of online selection, then five years ago it was pricing, then last year it was DRM, and now it's email addresses in music files. Tomorrow it'll be something else; some folks will always pirate, and whatever reasoning works for you is cool. I know that it's common around here to state that the record industry will be going away Real Soon Now, but that's closer to wishful than truth.
"2) Give the public a real alternative, that's what AllOfMP3 did (many formats, low prices, drm-free) and why it was so popular even *after* everyone knew it wasn't legal. Give the public a legal version of AllOfMP3 and I'm sure the entertainment industry could be making more then before the time of P2P."
The record industry is like most other businesses, where the goal is not to move the most units, but to make the most profit. This involves a lot of complicated analysis involving pricing theory, consumer behavior theory, and so on, but ultimately you pick that point on the curve that represents the optimal trade-off between volume and net margin. Tracks have settled to about a buck each because that's the optimal point on the curve. This might boggle you, but if the iTunes store lowered their prices to $0.50 per track tomorrow, it would not increase my purchases... not one bit. Apple would be throwing money away. You see, I have a job that pays substantially more than minimum wage, and $1.00 a song really isn't a problem for me. And given Apple's huge success (they have many more customers than allofmp3's claimed 6MM), there are lots more people like me.
Another real problem is that setting your price below the costs of sale won't work for very long. The Russian sites are able to sell tracks for $0.10 each because they need not worry about paying the supplier. Mechanical royalties are $0.08 by law, with contractual rates on top of that, so if you were to try to sell songs legally in the US at $0.10 each, your costs would blow way past that just in royalties before you added the rest of the very real and inconvenient costs of sale.
"The labels don't get $14 a CD. That just shows an absurd ignorance of how the system works."
This is Slashdot, where the total cost of sale for a CD is $0.25, and distributors and retailers don't charge markup. In this version of reality, record labels make a net profit of $13.25; this ridiculous profitability allows us to rationalize piracy.
"Most often, buying music CDs doesn't pay the band, it pays the labels (unless you bought the CD from a band who recorded and produced the music themselves, in which case it's probably a burned disc anyway). If the band has been backed by a label, they've already been paid by the label to license their music and sell it."
That's a bit backward from how most record contracts work. Contracts typically use a "the artist gets paid last" scenario, where royalty payments are held back and applied to the costs of production until they've been met.
If, at the time that you buy the CD, the CD has not yet reached the point of profitability, two things happen:
If the first point is confusing, consider the situation of making a donation to a local public TV or radio station. Say they need $100K to meet their budget and have collected $10K so far. An AllOfMP3 fan might state that donating $50 at this point would be useless, as the station will still not reach their goal, but the reality is that the $50 donation puts them $50 closer to reaching their goal.
The "pirate your music, but support the band by seeing the show" argument falls down when you do the math. If you pirate ten CDs a week, that's ten concerts you need to see a week -- that gets to be expensive, and a time sink. Then, of course, that there's the reality that not all the artists whose music you pirate are going to be able to play when and where you want them to. In most cases, when we pirate music, our actual contribution to the artists' livelihood is nil, despite our best intentions.
"Buying it used? Doesn't that defeat the purpose of trying to support the band? Say someone buys a CD for $14. They listen to it for a while, then it ends up at a used CD store once they're bored with it. I go in and buy the same CD for $6. The record label still only made that first $14. The only people that gain from used CD sales are used CD stores."
There are a couple of other benefits of buying a used CD vs. pirating it or downloading it from a Russian site. First, it's unquestionably legal, no matter how much the record companies would like to stop it. And, you support your local economy, vs. some Russian guy. I love having local record stores with ample selection of used CDs, but these establishments only stay in business with enough patronage.
Sounds like an over-complicated solution in search of a problem. There'll always be people who pirate because they want to save money, or they just get off on breaking the law.
As for the rest of us -- Netflix works great, in my experience. I pay a flat fee per month, and with a few clicks I can have practically any movie I like in my mailbox the next day, and my mailbox is about a far a walk from my projector as my PC is. The cost is quite low vs. the cost and inconvenience of sucking up my bandwidth with BT and burning the pirated copies to DVD.
And, for people who insist on downloading rather than wielding shiny plastic discs -- Netflix has begun testing a download service, too. Odds are that with their resources and their library, they'll be there much more quickly than your proposed system would be able to get traction.
If people want to pirate because it saves them money, or it's fun, or whatever -- then they should go ahead and do just that. But "cost" and "convenience" are quickly being eliminated as rationales.
"Considering that the MAFIAA act like the police, work with the police, even train some police forces and help write the laws. Then aren't they effectively the government? Entrapment would seem an accurate distinction to me."
"Entrapment" is not the same as a honeypot, or a sting operation.
Wikipedia has a pretty good article on entrapment. It you truly believe in your heart that this sort of honeypot is entrapment, you may want to change the Wikipedia article. You're not the first slashdotter by a long shot to consider this kind of thing to be entrapment; perhaps the wikipedia article could use a "Layman's Understanding" in addition to the correct definition.
"This is the basis of DRM, which circumvents hundreds of years of copyright law to put in the publisher's hands what you, as a purchaser, can do with the material."
Having the legal right to do something is not the same thing as having the guaranteed ability to do something.
For instance, it's legal to drive 75MPH in some parts of the USA. Manufacturing or owning a vehicle which cannot do 75MHP safely is not a circumvention of the vehicle code.
At any rate, products which cannot be copied to the full extent of copyright law have been around much longer than DRM as it's popularly known today. Software copy protection has been around since the 1970s, and copy-resistant documents came around shortly after the advent of xerography.
I believe that the Slashdot zeitgeist is that the word "stole" is used incorrectly here -- many Slashdotters believe that the term "to steal" should only be applied to an instance where a physical item is moved from one place to another, and should not be applied to instances of copyright infringement or unauthorized duplication -- although I presume that exceptions can be made for "theft of service," "identity theft," "you stole my thunder," "stolen kisses" and the like.
So -- was the code really stolen?
"Yes, "piracy" has its meaning that has been there for hundreds of years and no, "making a copy of a CD" is NOT it."
Sheesh. Who on earth modded this insightful?!
The word "piracy" is a homonym (or, if you prefer, a homophone), like the word "bark." Learning the various meanings is as easy as checking a dictionary. This is why The Pirate Bay's logo is a pirate ship with a cassette... they're referencing the play on words.
I'm curious: were you really not aware of this? I have a feeling that you're simply being disingenuous, but then again, some poor soul marked your post "insightful," so maybe there really is a knowledge gap here. Can you explain?
"The very attempt to equate such horrendous criminal activity with copying a CD is outrageous and should be prosecuted as slander."
That ship sailed three centuries ago. Again, it's hard to tell if you're trying to be serious.
"You seriously think that hundreds of years ago (say the 1800's) people said "Watch out for pirates!" and meant "People copying CDs"?!? That is the funniest thing I've ever heard."
Of course not. I am not sure how you came to that conclusion. Please explain. I think it may be a reading comprehension problem on your part, but I would like to understand what your thought process was that led you to this mistake.
"The word "piracy" is repeatedly used. I don't believe this is a standard legal term (outside of naval encounters). The word is not defined in the document. I think the intent is to equate the term "piracy" with "copyright infringement", but to spin it imply other things. One could probably attack this term successfully."
Not hardly. Everybody knows what it means. It's held that meaning for hundreds of years. You're a smart person, and if a buddy tells you that they have a pirated version of a DVD, you'll know exactly what they mean. The courts are full of smart people, too.
"One would first have to show that the vast majority of content falls under the record companies' copyrights."
Been shown many times, in many cases. UMG vs. Napster, whomever vs. Kazaa, etc. It's one of those prima facie things that the court need not waste time on. You, me, your little brother, and most other people on the planet know that most P2P content is infringing.
"The name of a file does not constitute anything more than circumstantial evidence that the file contains what they think it contains."
In many cases, circumstantial is good enough. If you were to try the "my client likes to share photos of his cats by naming them after MP3 files of top-selling artists" approach, it wouldn't even pass the laugh test. Courts are surprisingly good bullshit detectors. If an argument would seem contrived to you, it likely will to the court.
"Point 21 - This may actually be true, but they have done nothing to demonstrate it. In many cases copyright infringement may actually spur sales. Saying they are harmed with no supporting evidence is not a valid argument."
They don't need to demonstrate it -- prima facie, again -- and enforcing copyright law doesn't require proof of economic harm. Remember, the record labels are going for statutory damages here.
"Has [leaking of new CDs before they're released] occurred? This looks like a big non-sequitor to me."
All the time.
"How exactly does Bittorrent "Capitolize" on anything? Its free software. No Ads, No fees, ect. Is the RIAA objection to pirates DONATING to open scource projects?"
This is the quote to which you refer:
If you're confused, it may be because you're reading it too literally. When you see "BitTorrent" in the above, mentally replace it with "BitTorrent tracker sites" (ie: The Pirate Bay). Many of them are commercial endeavors making thousands upon thousands of dollars in profit each month (just because they provide a free service does not mean that they don't have a profit motive). Facilitating piracy is a big business, and business is good.
HTH.
"allofmp3 WAS legitimate in Russia. It paid royalties to ROMS, the Russian organization responsible for collecting copyright fees. The RIAA simply didn't like ROMS' rates and structures (even though Russia, as a sovereign nation, has every right to set its own royalties), and declared allofmp3 illegal."
Well, for what it's worth, ROMS isn't recognized by any of the world's performance licensing groups. Whether that's a badge of honor or a shame is, as the math texts state, an exercise left to the reader.
Contrary to popular belief, the cost of sale of a music download usually isn't zero. There are mechanical royalties to the composer and lyricist to deal with (the mechanical rate is set by law), and there are usually contractual royalties as well, paid to the performer. Record companies have tricks for minimizing these royalties, but it's a safe assumption that for a typical track sold on iTunes, mechanical and contractual royalties are being accrued.
Now, let's say you're a record company. For the sake of simplicity let's say you're one of the cool indie labels, and you pay your artists fairly. One track you sell has a mechanical of $0.08 each to the composer and lyricist, and you're throwing the rest of the band an additional $0.04, for a total of $0.20 that you owe to the artists for each track sold.
So this ROMS outfit tells you that you can have a portion of the licensing fee that they've collected, if you really want it. The web site sold your track for $0.20, for which they paid ROMS $0.02. ROMS takes their cut, so that penny is ready for you to take whenever you want it.
Trouble is, if you take that penny, you still owe the band $0.20. If you take it and don't pay them their $0.20 (for a net loss of $0.19 to you), the best case is that they'll be mightily (and rightfully) pissed. The worst case is that they'll find themselves a lawyer.
So, you eat the difference. ROMS says that they've collected royalties for 10,000 downloads and they owe you $100. You take the $100 and pay your band the $2,000 they're owed. You're out $1,900.
And then ROMS tells you that they have another $100 for you. And another. And another.
My story is hypothetical; mainly for the very big reason that artist who've tried to get sales info from allofmp3.com have failed in their quest. Yes, I am aware that AllofMP3 stated that they supported artists' rights, but they could have at least shared this basic sales data, just as iTunes and legitimate stores do. And, if you try surfing the ROMS site for information on how to collect royalties, it quickly becomes frustrating, even if you speak Russian. Compare this with the two US performance right societies, ASCAP and BMI -- they go out of their way to make it easy for artists to find out how much they are owed. I know that lots of people reading this see ROMS and allofmp3 as the good guys in this situation, but it's just not showing from their actions.
"Consider this carefully: there is no right to profit."
Straw man. Copyright holders -- whether they're individuals or corporations, painters, novelists, songwriters, you name it -- are not asking that you honor a so-called "right to profit" when they ask you not to copy their stuff. They are asking that you honor their rights under copyright law.
"So? You can only rob physical items, not opportunities and ideas If you own a diner, and I open a better one down the street, perhaps you won't be able to tell as many burgers. Does that mean that I've robbed you of sales in some metaphorical sense? You bet. Is the wrong? No. Is it legally actionable that I've caused the theft of your customers? Not in a million years."
My band releases an album. It kind of sucks, and your band releases a better album which sells better. Have you robbed me of sales? Not in a million years. Is it wrong? No. It's good old-fashioned competition.
My band releases an album which I am selling on iTunes. You put a copy on your popular web site and sell it for a tenth of the price without giving me a share of your income. Have you robbed me of sales? Yes, quite possibly. Is it wrong? Yes.
I think it's okay if we choose not to honor the rights of composers, songwriters, and so on. But we can do so without the straw men.
"Wait, is the RIAA going after UW students DOWNloading, or UPloading illegal files?"
Making the files available.
"And uploading, there is no way to statistically prove the statutory damages caused by uploading any one particular file (that I know of)."
And that's exactly why they're called statutory damages -- they're defined by law ("statute"); they don't have to line up with the damages suffered. You may be confusing these with compensatory damages (think "compensation") which are intended to have some sort of relation to the actual damages.
By the way, this is why statutory damages exist. In many instances, the actual amount of damage is difficult to calculate. Thus, we have the legal concept of statutory damages.
"Downloading music is a form of protest, and the school has given in to the enemy of the students' freedoms because it will save them some money on bandwidth, or so someone has convinced them."
Talk to some real protesters sometime. The people who marched against the Iraq War, or even the Viet Nam War. The brave people who participated in the Montgomery Freedom March. The people who defied orders and sat at the lunch counters in Selma. The ones who have had hoses, dogs, and rubber bullets unleashed at them.
There are two differences between them and you: first, they've chosen a real cause -- sorry, "I demand free music" does not even compare in the slightest. And, they took risks. They openly defied the law and welcomed prosecution. You, on the other hand, appear to be comfortable protesting only if your university helps protect you as you break the law. Take some responsibility for your own actions; don't expect a university or anybody else to do it for you.
"The fact remains that the Declaration of Independence and the Constitution openly declare that GOD and God alone gave you your freedoms, they are only protecting them. This is a violation of those God-given freedoms, for the sake of profit."
Oh, so you're a Christian? How do you reconcile piracy with the Golden Rule? If you want others to respect your rights, then you must do the same. Musicians, songwriters, composers, and -- yes, even record company owners -- aren't exempted from consideration simply because you want free music.
"In fact, I think the copying industry very much pre-dates copyright. People made a living copying paintings or books centuries before copyright came into existence."
You make a good point. Many people are boggled by the fact that copyright owners are upset that I can use BT to share a perfect copy of a CD with 100,000 of my closest friends. They cite the fact that we were trading analog copies of cassette tapes in the 70s and 80s. They do not see a significant difference.
Monks illuminating books one at a time::analog tape copying in the 70's as movable type::modern P2P networks.
Movable type got rolling with the Gutenberg Bible in 1455. Copyrights followed soon after; 1486, to be precise. This is no coincidence: new technology drove the creation of new laws, just as it does today. It took until 1709 for things to get sufficiently out of control (in the eyes of authors) for widescale copyright law to be adopted.
"This is why some stores say "prices too low to print/etc!" in their ads. There is some deal where if you put "acme label" then you have to charge their minimum price. Just like there are clever ways around this, I'm sure that acme label really enjoys the sales no matter how they are generated."
Yup; it's called a MAP program. When Apple and other companies we love do it, it's fine. When Universal does it with Tower Records, it's price fixing. Universal got nailed for this after Best Buy and Wal-Mart complained to the government. A win for Best Buy and Wal-Mart; a loss for Universal and Tower (who have since gone out of business, unable to compete with Best Buy and Wal-Mart). Whether it's a win for Slashdotters depends on whether you appreciated having Tower and other relatively cool alternatives to buying your music at Best Buy or Wal-Mart.
"Why can't the RIAA just enjoy sales as well? Oh yeah, because no one buys an entire record to listen to one track? How is that piracy's fault?"
That was the prevailing argument five years ago.
Then it was "online music selection sucks and is too expensive! I'll keep pirating, thank you.". And then online music stores got cheaper and better.
Then it was "online music stores have DRM! I'll keep pirating, thank you." And then emusic showed up, and EMI dropped their DRM.
Then it was "these DRM-free tracks from the iTunes Store have my email address embedded. I'll keep pirating, thank you."
You know how many P2P enthusiasts claim that if only the music industry would listen to them, they would stop pirating? Many people claiming this are simply full of shit; they'll keep pirating and keep coming up with a new moral justification to do so. Disposable income is the football, the record companies are Charlie Brown, and the pirates are Lucy.
Among the honorable people in my book are the pirates who simply acknowledge that they have no interest in purchasing music, and that they pirate to save money. No need to blame anybody else for having the basic and fundamental desire to save money. If the rights of others don't happen to matter to you, you're cerrtainly not alone.You had 1s? We had to use the letter "I".
"Or how about this, how much music would YOU buy if it cost 5 cents a song to download?"
Mechanicals alone (by law) can be up to $0.14 or so for the composer and lyricist; the performers typically get $0.15 or so. So, the cost of selling a track is often a minimum of $0.30. What is your recommendation for building a business model that involves selling a product for $0.05 at a cost of $0.30? The obvious solution would be to change the law so that you can pay composers and lyricists less, and asking the performers to get far less royalties, or do without. But, you seem to be pro-artist, so I'm not sure. How would you solve this problem?
"The cost would be so negligible that people would buy songs on a whim, constantly. Instead of buying 10 songs a month at $1 a song they might buy 100 songs a month. Sure that's only $5 vs $10, but how many MORE people would be doing it? Probably 10 times as many."
Here's the thing: I wouldn't buy any more music if tracks were $0.05 vs. $1.00. The elasticity just isn't there for me; I can buy as much as I want at $1.00. So, I'd buy an equal amount at $0.05, so the record companies' gross sales to me would drop by 95%.
You probably weren't aware of this, but finding the optimal price for a product is an actual science with a pretty well defined set of methods and principals. There are textbooks written about it, people go to school to learn how to do it, and so on. What often boggles lay people is that the lowest price isn't often the best price. The best price is that optimal point on the curve which generates the highest profits.
Virtually all enterprises do this sort of basic analysis; it's essential to their profitability. It's a safe assumption that the record companies do this, too. Given the amazing success of the iTunes store, a buck a track seems to be the right price.
"Now you have just increased profits 5 fold while making your customers very happy."
Are you sure you're not confusing net profits and gross sales? If you're not making any money on that $0.05 sale, volume doesn't make a difference.
Warner Music managed to scrape by with a 6% operating margin last year; this would appear to contradict your theory that the cost of sale is a small fraction of the sell-in price. However, I'm willing to accept the notion that you're smarter than virtually everybody in the record business. Assuming you agree, why not start your own record label? If the secret is to set your pricing at $0.05 per track, and you can actually make money and keep your artists happy, then this is a potentially huge opportunity for you.
I'll help you get started. I know a guy who's a *really* good musician. In the right hands, I think he could be really popular. Assuming we talk him in to making only $0.03 royalty per track, let's sign him up. If we can get his first album recorded, mixed, produced and marketed for $10K (a pretty low number, but we can be creative) then with your $0.02 profit per track, you'll only need to sell 50K albums -- half way to the equivalent of a gold record -- before you break even.
Think you can do it?