"I hate to say it, but it could also be that your friend isn't very good at his job. It's not a flame or anything, it's just that I run my own business too and I've seen as many people go bust because they aren't any good as I've seen people become millionaires and not have a clue what they're doing."
Could be... I don't know, either. But the point I'm making is that your average indie label is likely a lot smaller than the typical Slashdotter imagines. Five or ten-person labels are quite common, and pay in the record industry is not high. It has its millionares, sure, but so does the software industry and pretty much every other industry of significant size.
"This isn't about pirates putting independant record labels out of business. Hell, indie labels are least affected by this sort of thing and in some cases have used the technology themselves to help generate interest in their artists."
When Napster really exploded, my friend had to lay off some of his employees. People were using Napster to get his bands' stuff for free. Not "free but they ended up buying it" or "free but they bought a t-shirt." Free as in "I don't have to pay the band or record company in any way, shape or form." If he'd been a larger company, he might have been a bit more resilient, but because he was pretty small and paying his bands much higher than the contract rate of the big record labels, P2P hit him hard.
That was several years ago. Nowadays, the reality is that indie labels without big bank accounts must be able to cope with the force of P2P; or better yet, use it to their advantage. It's economic darwinism. But I've no doubt that the P2P explosion caused many indie labels to go extinct, as it were.
"Since they were busted for *indirectly* being responsible, lets also go after microsoft. If it wasnt for them being an enabler, then ed2k wouldnt exist. Oh, dont forget the internet backbone carriers for providing the bandwidth, dell for the computer, seagate for the drives that allow them to store the illegal content.
"
If you're confused about why P2P companies have been held liable, and backbone carriers, PC makers, OS makers, etc. aren't, you can read some of the court decisions (Napster tried an argument very similar to yours about five years ago). I know the court decisions can be long and boring, but they're the best way to learn, if you really want to learn. A shortcut is to google on "Substantial non-infringing uses" and learn what people have to say about the concept.
Or, you can look at it by imagining you're Jed McCaleb several years ago when he launched eDonkey. My guess is that his mission statement (not that he had one) would be something like this:
"Capitalize on the explosion of P2P and the huge demand for pirated material by providing easy to use software that enables people to trade MP3 files quickly and easily."
To your point, broadband providers do capitalize on the explosion of P2P (although the whole BT throttling issue is another story), but they are protected by the "substantial non-infringing uses" thing. People use their broadband connections for a lot of things besides copyright infringement. By comparison, the vast majority of P2P traffic is unauthorized by the copyright holders.
Again, if you're really confused by this, read the court decisions. The EFF site has some links.
"The Napster case - wasn't their defense destroyed because Fanning basically admitted to his intent in an interview?"
My understanding is that it was due to some internal emails, but yeah, your understanding is correct. There was hard evidence that they knew what they were doing.
The record labels are going after the P2P companies based not on the Napster ruling, but on a later case, known as the Morpheus ruling, or MGM vs. Grokster. You can read about it on the EFF site. It gave the record companies the momentum they needed to go after the rest. It was eDonkey's turn sooner or later.
"That'll be because Copyright infringement is a Civil, not a Crimminal offence in most of the western world. Governments can't prosecute it."
FYI, here in the USA, it falls under both civil and criminal law, depending on the volume. If you would like the specifics, see Title 17, Chapter 5, Section 506. In a nutshell, you're allowed to pirate up to $1,000 worth of stuff in 180 days before you run afoul of the feds.
"Funny, that, because they do prosecute people who sell pirated DVDs.. anyone care to explain the difference for me? Damned if I can spot it.."
It's not the media; pirate enough of anything and you'll go to the clink. Remember the guy in the news lately who just got seven years for software piracy?
"Where does all this money come from? Weren't they distributing a free program to allow the free swapping of digital files? Where does the $30M show up from?"
Giving something away for free, which helps people get free music, does not necessarily mean that you are a philanthropist. Sam and Jed were very much in it for the money. And they did very well. They are millionaires. So are the principals of Sharman Networks, the folks behind Kazaa.
It's ironic, because many people justify their piracy because they believe that artists and/or record companies are "greedy." Sam and Jed likely did better, financially speaking, than 90% of the record labels and 99% of recording artists.
"I don't know if they should go away, but for crying out loud adapt to the Internet. This is the new format. They all need to work together and remarket their products. They still expect people to buy their CD's by the billions as if CD's are still new technology. They still think they can put out 1-2 songs and then throw in 8 other songs to fill up a disc. The market is changing, so they need to change with it."
Check out the iTunes Music Store sometime. Most of the major record labels are on board, and in most cases you can buy individual tracks, so you can pick the music you want and not buy an album full of fillers. The iTMS has been a rollicking success by any measure, and online music sales are experiencing amazing growth, while CD sales are declining.
Five years ago, it was a different story. Only a few major record labels saw the light, and tracks cost $3.00 or more each -- no kidding! Your advice would have been right on the money back then. But, as I mentioned, that was five years ago. The record companies have adapted. Take a look at the iTMS and I think you'll see what I mean.
"Customer motivations have nothing to do with sales intent, otherwise gun and knife makers would be civilly liable for every murder committed with their products. Come to think of it, that's a pretty good parallel (and a reason why most lawsuits against gun makers have failed utterly on such premises...)"
Napster tried that argument what, five years ago? They were laughed out of court.
Make no mistake: Sam and Jed know damn well that their software is used primarily for piracy. Jed told me so himself, when I happened to run into him at a party in San Francisco years ago. The P2P business was already booming when he launched eDonkey, and he wanted a piece of it, because he knew there was money to be had.
This is the important thing: we all know that vendors of P2P software have to lie when they say things like "you shouldn't use this for piracy" or "we don't know what our customers are using our network for," et al. They have a financial motivation to lie -- they want to stay in business and avoid prosecution. This is the very same reason that head shop owners will tell you that their stuff is intended for tobacco smoking, or cable descrambler dealers will tell you it's "for testing purposes only." This is all par for the course. A little nudge nudge wink wink, and life goes on.
But we don't need to buy the lie, nor do we need to lie on their behalf.
"Where did eDonkey GET $30M to pay RIAA? Or is this a hyped-up announcement of a "settlement" that is never really collected?"
From advertising.
Many people mistakenly see the big players in the P2P game as "white knights" because they make it so easy to get so much music for free. But, make no mistake: they are not in it because "information wants to be free." They are not in it to "stick it to the man." They do it to make money. They are in the business of helping people pirate music, and business is goooood.
It's funny that many of us justify our P2P usage by imagining some record executive in a $3,000 suit. The reality is usually different. The only record company owner I've met ran a ten-person label and paid himself $25K a year. Sam and Jed, the folks who brought you eDonkey so countless teens can "stick it to the man," likely made about $25K every week. The executives at Sharman are also multi-millionaires.
So why are Sam and Jed rich, while my friend the indie record label owner could only afford to pay himself $25K a year? Because my friend paid artists, paid employees, and paid for the production of the music.
Thanks! I hope my theory is correct that those absurdly short sentences are rare.
To add another data point, the fellow who raped my ex-wife got something north of 50 years in prison. A disinterested third party might say that 50 years for one rape is too much. However, me and the ex-wife disagree.
"If I compare it with the pirates here at our country, the rule of the thumb for them is usually the price of the media/disc * 15 which usually falls on around $2.0 - $2.25 per software/disc. So for every $30 "average" retail price software out there, he makes $2 which would amount to only around $1.2 million."
These were his prices:
PhotoShop CS: $99
Acrobat 6 Professional: $99
PhotoShop 7: $79
Acrobat 6 Standard: $69
Sounds like he was making more than $2 per sale.
I've been enjoying the heck out of the posts from the "he was just selling backups!" crowd. Here's a quote from his site:
eTrust EZ Armor Security Suite from Computer Associates, the world's #1 supplier of Internet security software** combines award-winning Antivirus with industrial-strength Firewall protection. Built specifically for today's Internet-intensive computer user, eTrust EZ Armor leverages the core technology CA has developed for the world's most demanding users including over 99% of the Fortune 500. EZ to install and a snap to use, eTrust EZ Armor provides automatic virus updates, advanced email attachment protection, EZ to use firewall settings, activity control to stop website monitoring, ad blocking and cookie control features for a more enjoyable Internet experience.
This raises the question of why he would need to do the whole sales pitch if he was just selling backups to people who already owned the software. If this were truly the case, then the customer would already know how great the product is.
"If you own the music on the CD what is the economic incentive for the artist to share it in the first place?"
I'll save you some time and run down the standard Slashdot responses to this one:
Perhaps I'll buy a t-shirt.
Perhaps I'll go see them play live.
Artists should not be so focused on money.
Mozart didn't worry about selling CDs.
If you're doing it for a profit, you're a businessperson, not an artist.
"address the balance that needs to be sought between the creators rights to profit from their intellectual effort and the public interest in disseminating, sharing and building on that work."
I know you were probably just typing hastily, but one small correction. Creators do not have a right to profit from their work. They have the right to say how their work is copied. This is an important distinction, because many P2P advocates use the "artists don't have the right to profit" straw man.
"The business model, presumably, was made to fill the very real service gap in commercial software for people who manage to lose their original distribution media."
"Unlike MP3.com, it was not possible to check if the customer had a copy by asking them to insert it though he could have asked for product activation keys. In any case, this guy was not simply pressing CDs and selling them, he depended on the honesty of his customers."
When head shops tell you that their stuff is for smoking tobacco, they are lying. When hydroponics stores tell you that their gear is for growing, say, tomatoes indoors, they are lying. When cable box outfits tell you that they sell their stuff simply so you can avoid "monthly rental fees for cable boxes" or that they are for "testing purposes only," they are lying. And, when vendors of pirated software tell you that they are selling it as "backups," they, too, are lying.
"While I hate thieves more than most, it is quite maddening and ironic that we put software pirates away for longer than we do child rapists."
Can somebody please provide an example of somebody who was convicted of raping a child and who received less than seven years? I'm sure there are examples out there, but my guess is that they are quite rare. By comparison, the seven year sentence for software piracy was the largest such ever. So, seven year sentences for software piracy are also exceedingly rare.
"I'm sure that this man had sold this software at prices far below what any legitimate retailer could afford."
"If anything, the pirated software he did sell made for great PR to those software companies. The people who would've not otherwise purchased the software at regular or semi-discounted prices are probably pleased with their purchase, and will now be far more likely to buy the new improved releases of that product later on."
This is the broken window fallacy. It's also used quite often by fans of P2P and Russian music download sites, although they usually add "plus, I might buy a t-shirt or go to a concert because that's where the real money is."
I don't use BitTorrent and I have no problem downloading game demos, software patches, and videos. For this type of content, BitTorrent is a solution for a problem that doesn't exist for most people. Companies were releasing software patches on the Internet for years before BitTorrent came around (and will continue to do so), and the iTMS manages to sell TV shows just fine.
When you visit a head shop or a hydroponics shop, the proprietor will happily tell you about all the legitimate uses for his wares. He is being disingenuous, but he has to for legal reasons. We're smart enough to understand why he is doing this. Likewise, I think we're smart enough to see through arguments that BitTorrent provides significant value beyond providing access to pirated films and music, which can't easily be placed on a single web site (as legitimate software updates are) for legal reasons.
"Of course if record companies are getting paid, but artists still getting screwed [slashdot.org], it's "OK" to use iTunes too?"
Slippery slope. Getting $0.10 a track is infinitely better than getting zero. Even income of a couple of hundred bucks a month from online sales can make a difference when it's time to pay the rent.
Perhaps a couple of hundred bucks a month might not make a difference to you. Or, perhaps you are of the belief that your favorite artists are wealthy enough that they don't need the extra couple of hundred bucks. But those are dangerous assumptions to make, particularly in regard to somebody else's livelihood.
Pirate if you want -- but don't assume that the artist won't miss the money.
"Here's a possible solution, assuming that allofmp3.com is found to be legal in your jurisdiction (it's currently awaiting the outcome of the BPI's lawsuit in the UK to determine this here):"
FWIW, I believe that the Russian sites will be found to be legal in the UK under existing law. However, the BPI et al. will lobby to have the law changed.
"Buy your tracks from allofmp3.com. This gives you a legal copy of the music, and satisfies the first condition. Next, send a cheque to the artists in question, with a covering letter thanking them for producing the music."
I would not assume that all musicians would be happy with this arrangement. Here's why:
Several people get paid royalties for each sale. In addition to contractual royalties that the "name" performers get, there are statuatory royalties, called mechanicals, that go to composers, lyricists and the like. You are putting the burden on the "name" performer to take your check and divvy it up among everybody who would otherwise get the royalty. This puts the "name" performer in a tough situation: do they waste their time doing busywork cashing your $5.00 check and writing out a bunch of smaller checks, or do they keep all the money and short the composers and lyricists out of their share? Not all musicians want to be accountants and, in fact, that's one of the benefits of having a recording contract -- there are accountants to handle all of that busywork for you, so you can just worry about performing.
When they get your check and they know you have pirated the music, they will know that they are (likely) one less step away from their record being profitable and (even more likely) one less step away from their record company renewing their contract for another album. While I am sure that there are some artists who desparately want out of their contracts and desparately hope that their record will fail so they can proceed to, say, sell their next record on Magnatune or CDBaby, I think it's best if we assume that your average musician of whom you're a fan is an autonomous person with at least as much as intelligence as you, and that they have a recording contract because they want one. The "by pirating I am actually helping the artist by freeing them of the shackle of an old-model recording contract" is a perfect example of the broken window fallacy.
"In the long term, I would rather pay a small fixed-rate every month to be distributed amongst artists in exchange for being legally able to acquire music from any source."
At least one "authorized" P2P service startup is trying out that model. I agree, it may work. We'll see. There are lots of as-untested models out there for selling music that allows everybody involved in the creation of the music to be paid fairly.
This is the approach I use:
If I like a piece of music, I buy it.
If I don't like it, I don't. I don't pirate it, either.
Like you, it just so happens that the majority of the music I like is put out by smaller indie labels, so I'm not primarily funding the media conglomerates.
"Feeding the troll, but don't you just have to apply for the money you're owed from either Allofmp3 or the Russian government's copyright ministry (I don't remember exactly which one)? Not that I think Allofmp3 is legal, but I was under the impression that the argument that no artists are being paid is unfair, since the RIAA labels refuse to apply for their cut to avoid giving the impression of legitimacy."
These are webcasting licenses. Record labels get a cut of webcasting royalties (as opposed to 0% of royalties from terrestrial broadcasting licenses), but artists get the big chunk of the pie.
It's been estimated that allofmp3 pays ROMS about $200 a month for the webcasting licensing. If they sell 50K tracks a month, that is four hundredths of a cent per track.
So, in short, even if I were an artist I would not bother trying to get the money to avoid giving them a sense of legitmacy. And, even if my guess was that they sold a thousand copies of my track, I would be owed forty cents (vs. perhaps $100 that I would make on 1,000 sales on the iTMS). I would likely pay more than forty cents on the postage for the paperwork.
Additionally, unlike every other online music store in the world, allofmp3.com does not tell artists or record companies how much of each track they've sold. Artists have tried, and been denied. And, frankly, why would allofmp3.com tell them if they're not legally obligated to? If you're a signed artist it's hard enough to get sales figures from your own record company.
So, if you guesstimated that you'd sold 1,000 tracks on the site and figured you were owed $0.40, getting that money would pretty much be contingent on the honor system. "You just have to apply" is simplifying it too much.
I know we like to tell musicians "suck it up and face the future" and "nobody guarantees you success" etc., but expecting them to apply to a Russian agency to get $0.004 per track may be a bit much. Use allofmp3.com if you think it's a good deal. Nothing wrong with trying to get the best deal for your dollar. But don't make the mistake that assuming that artists will see any of that money, even if they apply directly.
"Nope just plain wrong about the money filtering through the labels. Still I imagine radio is pretty good about paying, jukeboxes kind of iffy, those quarters are just too easy to hide, and DJ's like in bars and weddings seldom pay and I'd be surprised if more than a few know that they are even supposed to."
FYI, ASCAP and BMI simplify things by requiring the venue to acquire the license, not the individual performers. And, jukebox royalties are pretty simple: $400 per year per jukebox. I believe that royalties are apportioned based on radio airplay, with the assumption that what DJs and jukeboxes play will roughly follow radio airplay, so you can see the flaws in that system. It ain't perfect, but it's probably fairer to musicians/songwriters than requiring bar owners to note exactly which songs are played -- which, as you pointed out, probably would result in unreported plays.
You can tell if a bar/restaurant/etc. has a license by looking on the window as you walk in for an ASCAP or BMI sticker... I usually see them low on the window, almost near the ground. The ASCAP sticker is triangular, IIRC. I agree with you that a lot of places probably don't buy licenses. ASCAP and BMI go on license violation rampages every once in a while; when this is reported on Slashdot, ASCAP and BMI don't get much sympathy, despite the fact that they are run by/for artists and the record companies don't see the dough.
"The incremental damage done to a record company (since that's the focus of the article) is quite correctly thought of as insignificant by the individual performing the copying."
What do you mean by "quite correctly" ? The only head of a record company I've known ran an indie label with ten employees. At around the start of the P2P explosion he was paying himself about $25K a year. When people started sharing his music in lieu of buying, he had to lay off of his friends.
Naturally, that was his problem to deal with, and not anybody else's, and it was his sole responsibility to deal with the "people want something for nothing" maxim combined with the explosion of P2P. But nonetheless, he indeed had to cut costs and fire some of his friends. This was not insignificant to him, nor his friends whom he had to lay off. The fact that more people got to listen to his music was not enough.
Pirate or don't pirate -- I don't care what people do. But we should not make the mistake of assuming that the economic impact is "insignificant" if we opt to P2P in lieu of buying.
At any rate, I have another question for you. If piracy is economically insignificant to record companies, then why are they doomed to go out of business?
"The buggy^H^H^H^H^Hrecord companies should close down, liquidate their assets before it's all blown on futile attempts to control digital information."
Trouble is, P2P fans have been proclaiming that "the recording industry is doomed" since the days of the original Napster. Now, close to ten years later, the recording industry has gone a long way in adapting (compare the dismal selection of online music then vs. the iTMS' white-hot success). 100% of the Billboard Top 100 tracks are released by record labels, and the record industry is still making money -- pretty crappy money, but that's always been the record industry's lot in life, whatever the latest boogeyman is.
The fact is that capitalism abhors a vacuum. If you were to wave a wand and make all the record companies go away tomorrow, somebody else would simply step in and provide the services that the record companies do. Although it does not fit in with our utopian vision of a future where artists self-produce their music and subsist on donations and coffee house gigs, the reality is that many artists do aspire for success beyond something approaching the poverty level, and many artists don't want to be their own recording engineers, producers, marketers and distributors. While many Slashdotters might call these folks "greedy" or "not really artists," there are a lot more of them than there are of us.
You're not likely to agree with me, so I'll pose a question: how long do you believe the recording industry has left? A year? Five? Ten? No right or wrong answers, of course -- I'm simply interested in your best educated guess.
"The problem is, labels and artists are accustomed to making absurd amounts of money since Americans generally value entertainment above all else (which is why they'll find anything, anything else on TV when the President is giving a speech)."
Can you qualify "absurd?" How much do you believe the average recording artist makes in a year, and what net margin do you think the average record company makes? Seriously: what's your best guess, and what do you think the proper average income or average net margin should be?
"The anonymous poster previous has outlined the ideal public good strategy: instead of paying the artists for their completed work, the public should hire the artist to create a work for them to enjoy. Then the work, being work-for-hire by the public, becomes a public good for all to enjoy. Money really wouldn't be much of an issue, there are 300 million people in the United States alone (suddenly giving a few bucks adds up)."
Music is a buck a track, or $14 a CD. This is hardly a crisis warranting that we socialize the music industry.
One can judge a society by how they value their teachers, artists, and so on. When we are trying to portray artists as making an "absurd" amount of money and devising new ways to take away what little rights and income they already have, it's a very sad day indeed.
"No, artists are supposed to recieve a royalty every time there song is played on the radio, jukebox or DJ, but you can imagine how often the lables are forgotten to be paid for the above, and how often the artists are forgotten even when the labels are paid."
I'm guessing you're talking about Europe? Here in the USA, licenses for airplay go through a couple of artists' societies called ASCAP and BMI. They are run by and for artists and the labels see none of the airplay licensing money.
Bummer for your countries' artists and songwriters if performance royalties are filtered through the labels. That's the wrong way to do it. Publishing and performing rights should remain with the songwriters.
I am not being a smartass at all. I am simply pointing out that with the huge demand for pirated material, finding a way to monetize the act of facilitating piracy looks to be a good business model for the 21st century. Distributing my music for free so I can make money on my coffeehouse gigs is fine, but if I want to be a millionaire, moving to a company with lax IP laws and starting a tracker seems to be a more reliable path.
The message of many file-sharing advocates seems to be this:
"Whether you like it or not, technology marches on. You no longer have the priveledge of demanding that people compensate you for your work. You will have to work harder to your money, and set your expectations lower. Find other revenue streams, put your head down, and accept your new place in the economy."
Of course, this is nothing new. History shows us time and time again that you just can't win if you're faced with a horde of people who have (a) some great technology on their hands, and (b) a great set of rationalizations for ignoring your so-called rights. To use just one example, take a look at the American Indians. The settlers had better technology, and soon enough, there were more of them. The Indian's so-called "rights" did not bother the settlers any more than many Slashdotters are bothered by the so-called rights of filmmakers or artists whose work they acquire with BitTorrent.
Just as people presently in the "sell your creative work at retail in an effort to recoup costs of production and make a living" business model will have to adapt if P2P advocates have their way, the American Indians adapted. Today, they sell trinkets to people driving through the Arizona wilderness, and run casinos. Perhaps P2P advocates will convince artists that they, too, must move along, and aim more toward the "sell t-shirts at coffeehouse gigs" way of life.
No rights or wrongs here -- just human nature.
Re:Steal This Film fails to persuade...
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Steal This Film
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· Score: 1
"Another remarked that he felt by supporting TPB and facilitating the theft of over 150,000 copyrighted materials he was committing 'civil disobedience'."
Can somebody who's seen the film explain whether this fellow is truly practicing civil disobedience, by (for example) informing the authorities (if appropriate) and the media companies that he is pirating their stuff? That is civil disobedience: breaking the law in a spectacularly obvious fashion, getting busted, and drawing attention to yourself. Yes, I know he showed up in the documentary, but was he mentioned by name?
If he's taking these steps, then good for him. If he resides in a country where this is illegal and he gets caught, then he's fulfilled his mission as a social protestor and perhaps he'll change the system.
Unfortunately, too many pirates fly the "social disobedience" flag without understanding what it means. Pirating stuff and hoping you don't get caught is not social disobedience. That's simply being cheap.
Not that there's anything wrong with being cheap. Many rich people got to where they are today by being cheap. It's not a dirty word. But if you call it social disobedience, those who are familiar with the efforts of Ghandi, Nelson Mandela, Rosa Parks et al. would like to have a word with you.
Slashdot Mirror
"I hate to say it, but it could also be that your friend isn't very good at his job. It's not a flame or anything, it's just that I run my own business too and I've seen as many people go bust because they aren't any good as I've seen people become millionaires and not have a clue what they're doing."
Could be... I don't know, either. But the point I'm making is that your average indie label is likely a lot smaller than the typical Slashdotter imagines. Five or ten-person labels are quite common, and pay in the record industry is not high. It has its millionares, sure, but so does the software industry and pretty much every other industry of significant size.
"This isn't about pirates putting independant record labels out of business. Hell, indie labels are least affected by this sort of thing and in some cases have used the technology themselves to help generate interest in their artists."
When Napster really exploded, my friend had to lay off some of his employees. People were using Napster to get his bands' stuff for free. Not "free but they ended up buying it" or "free but they bought a t-shirt." Free as in "I don't have to pay the band or record company in any way, shape or form." If he'd been a larger company, he might have been a bit more resilient, but because he was pretty small and paying his bands much higher than the contract rate of the big record labels, P2P hit him hard.
That was several years ago. Nowadays, the reality is that indie labels without big bank accounts must be able to cope with the force of P2P; or better yet, use it to their advantage. It's economic darwinism. But I've no doubt that the P2P explosion caused many indie labels to go extinct, as it were.
"Since they were busted for *indirectly* being responsible, lets also go after microsoft. If it wasnt for them being an enabler, then ed2k wouldnt exist. Oh, dont forget the internet backbone carriers for providing the bandwidth, dell for the computer, seagate for the drives that allow them to store the illegal content.
"If you're confused about why P2P companies have been held liable, and backbone carriers, PC makers, OS makers, etc. aren't, you can read some of the court decisions (Napster tried an argument very similar to yours about five years ago). I know the court decisions can be long and boring, but they're the best way to learn, if you really want to learn. A shortcut is to google on "Substantial non-infringing uses" and learn what people have to say about the concept.
Or, you can look at it by imagining you're Jed McCaleb several years ago when he launched eDonkey. My guess is that his mission statement (not that he had one) would be something like this:
"Capitalize on the explosion of P2P and the huge demand for pirated material by providing easy to use software that enables people to trade MP3 files quickly and easily."
To your point, broadband providers do capitalize on the explosion of P2P (although the whole BT throttling issue is another story), but they are protected by the "substantial non-infringing uses" thing. People use their broadband connections for a lot of things besides copyright infringement. By comparison, the vast majority of P2P traffic is unauthorized by the copyright holders.
Again, if you're really confused by this, read the court decisions. The EFF site has some links.
"The Napster case - wasn't their defense destroyed because Fanning basically admitted to his intent in an interview?"
My understanding is that it was due to some internal emails, but yeah, your understanding is correct. There was hard evidence that they knew what they were doing.
The record labels are going after the P2P companies based not on the Napster ruling, but on a later case, known as the Morpheus ruling, or MGM vs. Grokster. You can read about it on the EFF site. It gave the record companies the momentum they needed to go after the rest. It was eDonkey's turn sooner or later.
"That'll be because Copyright infringement is a Civil, not a Crimminal offence in most of the western world. Governments can't prosecute it."
FYI, here in the USA, it falls under both civil and criminal law, depending on the volume. If you would like the specifics, see Title 17, Chapter 5, Section 506. In a nutshell, you're allowed to pirate up to $1,000 worth of stuff in 180 days before you run afoul of the feds.
"Funny, that, because they do prosecute people who sell pirated DVDs.. anyone care to explain the difference for me? Damned if I can spot it.."
It's not the media; pirate enough of anything and you'll go to the clink. Remember the guy in the news lately who just got seven years for software piracy?
"Where does all this money come from? Weren't they distributing a free program to allow the free swapping of digital files? Where does the $30M show up from?"
Giving something away for free, which helps people get free music, does not necessarily mean that you are a philanthropist. Sam and Jed were very much in it for the money. And they did very well. They are millionaires. So are the principals of Sharman Networks, the folks behind Kazaa.
It's ironic, because many people justify their piracy because they believe that artists and/or record companies are "greedy." Sam and Jed likely did better, financially speaking, than 90% of the record labels and 99% of recording artists.
"I don't know if they should go away, but for crying out loud adapt to the Internet. This is the new format. They all need to work together and remarket their products. They still expect people to buy their CD's by the billions as if CD's are still new technology. They still think they can put out 1-2 songs and then throw in 8 other songs to fill up a disc. The market is changing, so they need to change with it."
Check out the iTunes Music Store sometime. Most of the major record labels are on board, and in most cases you can buy individual tracks, so you can pick the music you want and not buy an album full of fillers. The iTMS has been a rollicking success by any measure, and online music sales are experiencing amazing growth, while CD sales are declining.
Five years ago, it was a different story. Only a few major record labels saw the light, and tracks cost $3.00 or more each -- no kidding! Your advice would have been right on the money back then. But, as I mentioned, that was five years ago. The record companies have adapted. Take a look at the iTMS and I think you'll see what I mean.
"Customer motivations have nothing to do with sales intent, otherwise gun and knife makers would be civilly liable for every murder committed with their products. Come to think of it, that's a pretty good parallel (and a reason why most lawsuits against gun makers have failed utterly on such premises...)"
Napster tried that argument what, five years ago? They were laughed out of court.
Make no mistake: Sam and Jed know damn well that their software is used primarily for piracy. Jed told me so himself, when I happened to run into him at a party in San Francisco years ago. The P2P business was already booming when he launched eDonkey, and he wanted a piece of it, because he knew there was money to be had.
This is the important thing: we all know that vendors of P2P software have to lie when they say things like "you shouldn't use this for piracy" or "we don't know what our customers are using our network for," et al. They have a financial motivation to lie -- they want to stay in business and avoid prosecution. This is the very same reason that head shop owners will tell you that their stuff is intended for tobacco smoking, or cable descrambler dealers will tell you it's "for testing purposes only." This is all par for the course. A little nudge nudge wink wink, and life goes on.
But we don't need to buy the lie, nor do we need to lie on their behalf.
"Where did eDonkey GET $30M to pay RIAA? Or is this a hyped-up announcement of a "settlement" that is never really collected?"
From advertising.
Many people mistakenly see the big players in the P2P game as "white knights" because they make it so easy to get so much music for free. But, make no mistake: they are not in it because "information wants to be free." They are not in it to "stick it to the man." They do it to make money. They are in the business of helping people pirate music, and business is goooood.
It's funny that many of us justify our P2P usage by imagining some record executive in a $3,000 suit. The reality is usually different. The only record company owner I've met ran a ten-person label and paid himself $25K a year. Sam and Jed, the folks who brought you eDonkey so countless teens can "stick it to the man," likely made about $25K every week. The executives at Sharman are also multi-millionaires.
So why are Sam and Jed rich, while my friend the indie record label owner could only afford to pay himself $25K a year? Because my friend paid artists, paid employees, and paid for the production of the music.
Thanks! I hope my theory is correct that those absurdly short sentences are rare.
To add another data point, the fellow who raped my ex-wife got something north of 50 years in prison. A disinterested third party might say that 50 years for one rape is too much. However, me and the ex-wife disagree.
"If I compare it with the pirates here at our country, the rule of the thumb for them is usually the price of the media/disc * 15 which usually falls on around $2.0 - $2.25 per software/disc. So for every $30 "average" retail price software out there, he makes $2 which would amount to only around $1.2 million."
These were his prices:
Sounds like he was making more than $2 per sale.
I've been enjoying the heck out of the posts from the "he was just selling backups!" crowd. Here's a quote from his site:
This raises the question of why he would need to do the whole sales pitch if he was just selling backups to people who already owned the software. If this were truly the case, then the customer would already know how great the product is.
"If you own the music on the CD what is the economic incentive for the artist to share it in the first place?"
I'll save you some time and run down the standard Slashdot responses to this one:
"address the balance that needs to be sought between the creators rights to profit from their intellectual effort and the public interest in disseminating, sharing and building on that work."
I know you were probably just typing hastily, but one small correction. Creators do not have a right to profit from their work. They have the right to say how their work is copied. This is an important distinction, because many P2P advocates use the "artists don't have the right to profit" straw man.
"The business model, presumably, was made to fill the very real service gap in commercial software for people who manage to lose their original distribution media."
"Unlike MP3.com, it was not possible to check if the customer had a copy by asking them to insert it though he could have asked for product activation keys. In any case, this guy was not simply pressing CDs and selling them, he depended on the honesty of his customers."
When head shops tell you that their stuff is for smoking tobacco, they are lying. When hydroponics stores tell you that their gear is for growing, say, tomatoes indoors, they are lying. When cable box outfits tell you that they sell their stuff simply so you can avoid "monthly rental fees for cable boxes" or that they are for "testing purposes only," they are lying. And, when vendors of pirated software tell you that they are selling it as "backups," they, too, are lying.
"While I hate thieves more than most, it is quite maddening and ironic that we put software pirates away for longer than we do child rapists."
Can somebody please provide an example of somebody who was convicted of raping a child and who received less than seven years? I'm sure there are examples out there, but my guess is that they are quite rare. By comparison, the seven year sentence for software piracy was the largest such ever. So, seven year sentences for software piracy are also exceedingly rare.
"I'm sure that this man had sold this software at prices far below what any legitimate retailer could afford."
Correct. Here is a list of his prices.
"If anything, the pirated software he did sell made for great PR to those software companies. The people who would've not otherwise purchased the software at regular or semi-discounted prices are probably pleased with their purchase, and will now be far more likely to buy the new improved releases of that product later on."
This is the broken window fallacy. It's also used quite often by fans of P2P and Russian music download sites, although they usually add "plus, I might buy a t-shirt or go to a concert because that's where the real money is."
I don't use BitTorrent and I have no problem downloading game demos, software patches, and videos. For this type of content, BitTorrent is a solution for a problem that doesn't exist for most people. Companies were releasing software patches on the Internet for years before BitTorrent came around (and will continue to do so), and the iTMS manages to sell TV shows just fine.
When you visit a head shop or a hydroponics shop, the proprietor will happily tell you about all the legitimate uses for his wares. He is being disingenuous, but he has to for legal reasons. We're smart enough to understand why he is doing this. Likewise, I think we're smart enough to see through arguments that BitTorrent provides significant value beyond providing access to pirated films and music, which can't easily be placed on a single web site (as legitimate software updates are) for legal reasons.
"Why? What would be the reasoning behind this?"
The reasoning is explained pretty well in the article.
"Of course if record companies are getting paid, but artists still getting screwed [slashdot.org], it's "OK" to use iTunes too?"
Slippery slope. Getting $0.10 a track is infinitely better than getting zero. Even income of a couple of hundred bucks a month from online sales can make a difference when it's time to pay the rent.
Perhaps a couple of hundred bucks a month might not make a difference to you. Or, perhaps you are of the belief that your favorite artists are wealthy enough that they don't need the extra couple of hundred bucks. But those are dangerous assumptions to make, particularly in regard to somebody else's livelihood.
Pirate if you want -- but don't assume that the artist won't miss the money.
"Here's a possible solution, assuming that allofmp3.com is found to be legal in your jurisdiction (it's currently awaiting the outcome of the BPI's lawsuit in the UK to determine this here):"
FWIW, I believe that the Russian sites will be found to be legal in the UK under existing law. However, the BPI et al. will lobby to have the law changed.
"Buy your tracks from allofmp3.com. This gives you a legal copy of the music, and satisfies the first condition. Next, send a cheque to the artists in question, with a covering letter thanking them for producing the music."
I would not assume that all musicians would be happy with this arrangement. Here's why:
"In the long term, I would rather pay a small fixed-rate every month to be distributed amongst artists in exchange for being legally able to acquire music from any source."
At least one "authorized" P2P service startup is trying out that model. I agree, it may work. We'll see. There are lots of as-untested models out there for selling music that allows everybody involved in the creation of the music to be paid fairly.
This is the approach I use:
Like you, it just so happens that the majority of the music I like is put out by smaller indie labels, so I'm not primarily funding the media conglomerates.
"Feeding the troll, but don't you just have to apply for the money you're owed from either Allofmp3 or the Russian government's copyright ministry (I don't remember exactly which one)? Not that I think Allofmp3 is legal, but I was under the impression that the argument that no artists are being paid is unfair, since the RIAA labels refuse to apply for their cut to avoid giving the impression of legitimacy."
These are webcasting licenses. Record labels get a cut of webcasting royalties (as opposed to 0% of royalties from terrestrial broadcasting licenses), but artists get the big chunk of the pie.
It's been estimated that allofmp3 pays ROMS about $200 a month for the webcasting licensing. If they sell 50K tracks a month, that is four hundredths of a cent per track.
So, in short, even if I were an artist I would not bother trying to get the money to avoid giving them a sense of legitmacy. And, even if my guess was that they sold a thousand copies of my track, I would be owed forty cents (vs. perhaps $100 that I would make on 1,000 sales on the iTMS). I would likely pay more than forty cents on the postage for the paperwork.
Additionally, unlike every other online music store in the world, allofmp3.com does not tell artists or record companies how much of each track they've sold. Artists have tried, and been denied. And, frankly, why would allofmp3.com tell them if they're not legally obligated to? If you're a signed artist it's hard enough to get sales figures from your own record company.
So, if you guesstimated that you'd sold 1,000 tracks on the site and figured you were owed $0.40, getting that money would pretty much be contingent on the honor system. "You just have to apply" is simplifying it too much.
I know we like to tell musicians "suck it up and face the future" and "nobody guarantees you success" etc., but expecting them to apply to a Russian agency to get $0.004 per track may be a bit much. Use allofmp3.com if you think it's a good deal. Nothing wrong with trying to get the best deal for your dollar. But don't make the mistake that assuming that artists will see any of that money, even if they apply directly.
"Nope just plain wrong about the money filtering through the labels. Still I imagine radio is pretty good about paying, jukeboxes kind of iffy, those quarters are just too easy to hide, and DJ's like in bars and weddings seldom pay and I'd be surprised if more than a few know that they are even supposed to."
FYI, ASCAP and BMI simplify things by requiring the venue to acquire the license, not the individual performers. And, jukebox royalties are pretty simple: $400 per year per jukebox. I believe that royalties are apportioned based on radio airplay, with the assumption that what DJs and jukeboxes play will roughly follow radio airplay, so you can see the flaws in that system. It ain't perfect, but it's probably fairer to musicians/songwriters than requiring bar owners to note exactly which songs are played -- which, as you pointed out, probably would result in unreported plays.
You can tell if a bar/restaurant/etc. has a license by looking on the window as you walk in for an ASCAP or BMI sticker... I usually see them low on the window, almost near the ground. The ASCAP sticker is triangular, IIRC. I agree with you that a lot of places probably don't buy licenses. ASCAP and BMI go on license violation rampages every once in a while; when this is reported on Slashdot, ASCAP and BMI don't get much sympathy, despite the fact that they are run by/for artists and the record companies don't see the dough.
"The incremental damage done to a record company (since that's the focus of the article) is quite correctly thought of as insignificant by the individual performing the copying."
What do you mean by "quite correctly" ? The only head of a record company I've known ran an indie label with ten employees. At around the start of the P2P explosion he was paying himself about $25K a year. When people started sharing his music in lieu of buying, he had to lay off of his friends.
Naturally, that was his problem to deal with, and not anybody else's, and it was his sole responsibility to deal with the "people want something for nothing" maxim combined with the explosion of P2P. But nonetheless, he indeed had to cut costs and fire some of his friends. This was not insignificant to him, nor his friends whom he had to lay off. The fact that more people got to listen to his music was not enough.
Pirate or don't pirate -- I don't care what people do. But we should not make the mistake of assuming that the economic impact is "insignificant" if we opt to P2P in lieu of buying.
At any rate, I have another question for you. If piracy is economically insignificant to record companies, then why are they doomed to go out of business?
"The buggy^H^H^H^H^Hrecord companies should close down, liquidate their assets before it's all blown on futile attempts to control digital information."
Trouble is, P2P fans have been proclaiming that "the recording industry is doomed" since the days of the original Napster. Now, close to ten years later, the recording industry has gone a long way in adapting (compare the dismal selection of online music then vs. the iTMS' white-hot success). 100% of the Billboard Top 100 tracks are released by record labels, and the record industry is still making money -- pretty crappy money, but that's always been the record industry's lot in life, whatever the latest boogeyman is.
The fact is that capitalism abhors a vacuum. If you were to wave a wand and make all the record companies go away tomorrow, somebody else would simply step in and provide the services that the record companies do. Although it does not fit in with our utopian vision of a future where artists self-produce their music and subsist on donations and coffee house gigs, the reality is that many artists do aspire for success beyond something approaching the poverty level, and many artists don't want to be their own recording engineers, producers, marketers and distributors. While many Slashdotters might call these folks "greedy" or "not really artists," there are a lot more of them than there are of us.
You're not likely to agree with me, so I'll pose a question: how long do you believe the recording industry has left? A year? Five? Ten? No right or wrong answers, of course -- I'm simply interested in your best educated guess.
"The problem is, labels and artists are accustomed to making absurd amounts of money since Americans generally value entertainment above all else (which is why they'll find anything, anything else on TV when the President is giving a speech)."
Can you qualify "absurd?" How much do you believe the average recording artist makes in a year, and what net margin do you think the average record company makes? Seriously: what's your best guess, and what do you think the proper average income or average net margin should be?
"The anonymous poster previous has outlined the ideal public good strategy: instead of paying the artists for their completed work, the public should hire the artist to create a work for them to enjoy. Then the work, being work-for-hire by the public, becomes a public good for all to enjoy. Money really wouldn't be much of an issue, there are 300 million people in the United States alone (suddenly giving a few bucks adds up)."
Music is a buck a track, or $14 a CD. This is hardly a crisis warranting that we socialize the music industry.
One can judge a society by how they value their teachers, artists, and so on. When we are trying to portray artists as making an "absurd" amount of money and devising new ways to take away what little rights and income they already have, it's a very sad day indeed.
"No, artists are supposed to recieve a royalty every time there song is played on the radio, jukebox or DJ, but you can imagine how often the lables are forgotten to be paid for the above, and how often the artists are forgotten even when the labels are paid."
I'm guessing you're talking about Europe? Here in the USA, licenses for airplay go through a couple of artists' societies called ASCAP and BMI. They are run by and for artists and the labels see none of the airplay licensing money.
Here's how BMI pays royalties, and here's how ASCAP pays.
Bummer for your countries' artists and songwriters if performance royalties are filtered through the labels. That's the wrong way to do it. Publishing and performing rights should remain with the songwriters.
I am not being a smartass at all. I am simply pointing out that with the huge demand for pirated material, finding a way to monetize the act of facilitating piracy looks to be a good business model for the 21st century. Distributing my music for free so I can make money on my coffeehouse gigs is fine, but if I want to be a millionaire, moving to a company with lax IP laws and starting a tracker seems to be a more reliable path.
The message of many file-sharing advocates seems to be this:
Of course, this is nothing new. History shows us time and time again that you just can't win if you're faced with a horde of people who have (a) some great technology on their hands, and (b) a great set of rationalizations for ignoring your so-called rights. To use just one example, take a look at the American Indians. The settlers had better technology, and soon enough, there were more of them. The Indian's so-called "rights" did not bother the settlers any more than many Slashdotters are bothered by the so-called rights of filmmakers or artists whose work they acquire with BitTorrent.
Just as people presently in the "sell your creative work at retail in an effort to recoup costs of production and make a living" business model will have to adapt if P2P advocates have their way, the American Indians adapted. Today, they sell trinkets to people driving through the Arizona wilderness, and run casinos. Perhaps P2P advocates will convince artists that they, too, must move along, and aim more toward the "sell t-shirts at coffeehouse gigs" way of life.
No rights or wrongs here -- just human nature.
"Another remarked that he felt by supporting TPB and facilitating the theft of over 150,000 copyrighted materials he was committing 'civil disobedience'."
Can somebody who's seen the film explain whether this fellow is truly practicing civil disobedience, by (for example) informing the authorities (if appropriate) and the media companies that he is pirating their stuff? That is civil disobedience: breaking the law in a spectacularly obvious fashion, getting busted, and drawing attention to yourself. Yes, I know he showed up in the documentary, but was he mentioned by name?
If he's taking these steps, then good for him. If he resides in a country where this is illegal and he gets caught, then he's fulfilled his mission as a social protestor and perhaps he'll change the system.
Unfortunately, too many pirates fly the "social disobedience" flag without understanding what it means. Pirating stuff and hoping you don't get caught is not social disobedience. That's simply being cheap.
Not that there's anything wrong with being cheap. Many rich people got to where they are today by being cheap. It's not a dirty word. But if you call it social disobedience, those who are familiar with the efforts of Ghandi, Nelson Mandela, Rosa Parks et al. would like to have a word with you.