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THE INDUSTRY STANDARD'S
B E A T S H E E T
A Weekly Report on the Convergence of Music and the Net
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| http://www.thestandard.com |
Tuesday, May 2, 2000
TOP STORY:
* Hilary Rosen Interview:
A conversation with the RIAA's head honcho
NET NOISE:
*Betalounge.com
DOWNBEAT:
*And the loser is MP3.com
Three voices on the MP3.com decision
* Dot Dot Dot
ClickRadio ... Metallica chat ... The Webbys ... Chuck D ...
Atomic Pop
SOUND OFF:
*Did MP3.com get their just desserts?
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TOP STORY
~~~~~~~~~
* Hilary Rosen Interview:
A conversation with the RIAA's head honcho
By Julene Snyder
In the wake of the Recording Industry Association of America's
decisive legal victory over MP3.com, President Hilary Rosen spent
Monday working from home to avoid the incessant ringing of office
phones. But despite U.S. District Judge Jed Rakoff's ruling that
MP3.com's music database violated industry copyrights, Rosen was in no
mood to gloat.
"There's certainly no glee for me in winning cases like this," Rosen
said. "MP3.com has pushed the envelope too far in terms of doing a
business that was unlicensed. But I think that actually the idea of
finding new alternative ways to promote sales and promote music is
exactly where everybody is heading."
Despite the ongoing legal machinations, Rosen confirmed that
behind-the-scenes negotiations between MP3.com and the major record
labels continue, and that a settlement remains possible.
She defended the record industry's efforts to keep up with the
dizzying advance of technology. "This is obviously a community that is
used to operating in a world where they have more control over
licensing, they have more control over the marketing of their images,
and obviously the Internet has changed all of that dramatically. And
they are adapting. Some argue that they've been slow to adapt but
these are very complex businesses."
While a full opinion from the judge on the MP3.com case is due within
the next two weeks, another lawsuit that the RIAA brought against the
popular music-swapping software Napster hasn't been decided yet. Rosen
strikes a somewhat conciliatory tone when asked about that suit. "The
focus of all of RIAA's enforcement activities is really constantly and
solely geared toward facilitating the legitimate music market," she
said.
"The level of anti-piracy work that we do ... is really not geared
toward stopping progress but fostering a legitimate business and
allowing those entrepreneurs in the legitimate marketplace to have a
shot. So Napster is just one of those cases. We and many other people
think that they are knowingly and deliberately engaging in willful
infringement."
Rosen says that she's been in touch with members of the heavy metal
band Metallica, who recently brought their own copyright infringement
suit against Napster. "Metallica actually came to us and told us they
were going forward. They made that decision on their own. I was fully
supportive. "
Rosen is acutely aware that the music industry needs its fans as much
- if not more - than it needs to aggressively defend its copyrights. "
I never lose sight of the fact that the people who are the most
aggressive downloaders of free or unauthorized music are the biggest
music fans," she said. "Those are the people who support the
legitimate music market, who buy the records, buy the concert tickets,
buy the t-shirts. That's very important to the artists and to the
record companies."
In the end, Rosen sees this as an exhilarating time to be involved in
digital music issues. "We're in the midst of a very exciting
revolution that has energized people both from a business model
standpoint and a music standpoint that they haven't been before," she
said. "I feel really lucky to be here at this place, at this time."
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NET NOISE
~~~~~~~~~
Betalounge.com
Get an extra fix of dance music from the comfort of your own computer
at the Beta Lounge (www.betalounge.com), which promises a live
electronic music event every Thursday from 8 p.m. to midnight (PST).
The DJs are San Francisco stalwarts, and past musical guests have
included artists like Goldie, Freaky Chakra and Mixmaster Morris. The
shows are archived, so if you've just got to hear over seven hours of
trance music Right This Minute, you're in luck. You'll be luckier
still if you tune in during the broadcast; that's the time that you
can watch the proceedings in much-smaller-than-life video. The Beta
Lounge also picks a weekly top five-a handful of MP3s that you can
either download or stream. They also offer bit of merchandise to help
you in your never-ending quest for coolness and some totally
unreadable press clips that have inexplicably been scanned in at a
size a bit too wee to be read by humans. No matter, it's about the
music, man.
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DOWNBEAT
~~~~~~~~~
Three Voices, Three Questions
A trio responds in unison when asked about the MP3.com decision
Many were queried, but few in the digital music community responded to
Beat Sheet's questions about Friday's ruling against MP3.com. Perhaps
they were weary of reporters and their incessant demands for quotes.
But three valiant souls responded promptly - and it's hardly Beat
Sheet's fault that they all came down on the same side of the fence.
Loquacious attorney Lawrence Iser said that the ruling was not
surprising. "There can be no question that under existing copyright
law, the unauthorized uploading and/or downloading of copyrighted
sound recordings violates the exclusive right of the copyright owner
to reproduce, distribute and publicly perform the sound recording. It
is not even a close call. For the same reason, there can be no
question that Napster, likewise, will be found to be 'contributorily
liable' for multiple counts of copyright infringement when that ruling
comes down in the next few weeks." Frank Davis, new media director of
Astralwerks Records, was also expecting a ruling against MP3.com:
"From the beginning it appeared to be a clear case of copyright
infringement, and so the judge's ruling held little surprise." David
Pakman, MyPlay.com's senior vice president of business development,
was not surprised by the ruling either, but didn't elaborate.
"The RIAA and MP3.com will find a way to settle the case before the
damages phase," Iser said. Davis thinks that damages won't be the
maximum, but more likely will be "a moderate sum for the infringement
to date and discontinuation of the infringing titles until such a time
as proper licensing deals are in place." Pakman thought extensive
damages could be in the offing. "To discourage other companies from
similar massive copyright infringement, we expect that the damages
will be significant and punitive," he said.
When asked to extrapolate about the future of MP3.com, Iser said:
"Unless MP3.com can form a strategic alliance with the record
industry, the company's future is in grave doubt." Davis said he
doubts that even a legal defeat would mean the end for MP3.com. "This
is not going to wipe out MP3.com," he said. "That was never the
intention of the suit nor do I believe a court would allow a judgment
to happen which would destroy the company. They will simply have to
properly license MyMP3.com or only use those titles to which they have
a license. The rest of MP3.com's core business has not been and will
not be affected by this." Pakman agrees. "MP3.com by its own actions
has called into doubt its own future," he sas. "MP3, the technology,
however, still has a strong future and still symbolizes a consumer
phenomenon which demonstrates the consumer's massive appetite for
digital music."
Dot Dot Dot
ClickRadio ... Metallica chat ... The Webbys ... Chuck D ...
Atomic Pop
The New York Times reported yesterday that Internet radio service
ClickRadio has obtained a licensing agreement with BMG records, giving
ClickRadio the "rights to BMG's entire catalog of artists." This is a
pretty big slice of the pie. BMG has 21 percent of the domestic
recorded music market and counts luminaries like Whitney Houston,
Carlos Santana and Christina Aguilera among their stable of stars. ...
Metallica is doing a chat on ArtistDirect tonight at 5 p.m. PST
expressly to talk about the Napster lawsuit. "We recognize that this
is a very complicated issue with larger implications that our fans may
not completely understand," the band said in a statement. "We've
always valued and respected our fans and wanted to discuss with them
directly why we have brought this suit and answer their questions and
address their concerns directly." Presumably at least a few of the
300,000 plus fans that have been identified by the heavy metal band as
illegally downloading their songs will drop by to trade bon mots. ...
Next week's Webby Awards will be Webcast live by USA Video
Interactive and can be accessed via Yahoo! This year the ceremony will
be hosted by actor Alan Cumming. Presenters include Talk magazine's
Tina Brown, performance artist Laurie Anderson and actress/comedian
Sandra Bernhard. ... Public Enemy frontman Chuck D. is joining
forces with Napster through his Rapstation.com site to sponsor a
songwriting contest. Entrants are urged to "reflect their support of
freely shared music" in their lyrics. ... Atomic Pop announced
today that they've reached a deal with Microsoft to "supply daily
music and original entertainment content to WindowsMedia.com." Look
for live performances from acts like Yo La Tengo, Kristin Hersh and
Robyn Hitchcock in future weeks.
SOUND OFF
~~~~~~~~~
This week's question: Did MP3.com get their just desserts?
E-mail your opinions to julene@well.com with "sound off" in the
subject line, and we'll print a selection of the responses in next
week's newsletter. Letters may be edited for clarity and length, so
keep them short and include your name and affiliation, if any.
Last week's question: Do MP3s help or hurt music sales?
"MP3s clearly help smaller artists to sell more and maybe bigger
artists sell less. I think that's right because the record labels, who
usually market bigger artists, have destroyed their customer base by
(their) incredibly expensive prices with no relation to value. I know
no one that has enough money to buy CD's anymore. Let the big record
labels sink! No new artists will need them anyway."
- Magnus Karlsson
"MP3s ultimately help quality bands that have built a good fan base
with hard work and a good mix of recordings and live shows (Phish,
Widespread Panic) as an inexpensive marketing tool. They hurt bands
that try to support their millionaire lifestyles with a few singles
and an album here and there supported by a scant few tour dates
(Metallica, Red Hot Chili Peppers). Technology is starting to expose
the monopolistic-like controls that the RIAA has over record prices.
If the prices were fair, nobody would need Napster."
- Chris VanKula
Chicago North Superstars
"Napster, to me, is no different than going into a music store that
allows you to listen to CDs before you buy them. I have been a music
fan all my life; just because I have Napster does not mean that I will
not continue to buy albums. In fact, I have bought even more since I
found Napster because it has allowed me to find more bands that I
like. As far as Metallica, Smashing Pumpkins, and the Goo Goo Dolls
are concerned...who cares? They are just trying to get some extra cash
out of this (look for other washed out acts to hop on the bandwagon
soon) because no one buys their albums anymore. But if they do beat
Napster in court, I suggest they spend their money wisely. Taking away
something from the only people in the world that care that they exist,
their fans, won't be good for business."
- Gil Harris
Music junkie
"Pain is a part of change. The record companies are hurting because
they are slowly losing their stranglehold on music, where they cram
their tastes down the throats of unsuspecting youths and unscrupulous
adults. I have no sympathy for the clueless record company executive
cowering in the corner holding tightly to his/her heart the latest
'Nsync Album. MP3 has become a banner, waving proudly as the capitol
is being overrun, for those who believe in the indie music spirit.
Technology is democratizing the music industry. Amen."
- Randy Jensen
"I think MP3s hurt music sales, but with no empirical evidence, it's
only my personal experience I draw on for that opinion. I've
downloaded gigabytes of free MP3s, but I can count on my fingers the
digital songs I've shelled out $$ for - and still have a thumb left
over! And my personal experience is also been that only one or two
MP3s have led me to go buy the CD. The bigger issue is that there are
millions of music fans that now believe that music is free on the
Internet. And don't get me started on the whole 'you get what you pay
for' vibe that has diluted the quality of available music on the
Internet."
- Jody Lentz, VP of Buzz
eConception
"The bottom line is this: The music industry is going to grow, big
time. I'm seeing first hand the Internet's effect on major labels, the
bedroom DJ, and garage bands. What MP3s are doing is allowing music to
be discovered, discussed, and shared. The value of MP3s will continue
to outweigh the feared decrease in record company revenues. New
artists will be discovered, and big labels WILL take a hit from
Gnutella and the like, but the industry will grow. Thank you, MP3."
- Rick Dickow, Music Sales Development Associate
DoDots Inc.
"It certainly hasn't hurt them from my point of view - I've bought
quite a few albums after hearing them on Live365 or MP3.com. I
wouldn't have been exposed to them or bought them otherwise."
- Rowan Fairgrove
STAFF
~~~~~
Written by Julene Snyder. Send newstips and press releases to
julene@well.com.
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