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                        THE INDUSTRY STANDARD'S
                           B E A T  S H E E T
              The Latest Digital Music News - and It's Free
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For more on digital music, visit
The Standard's Media & Marketing page:
http://www.thestandard.com/subject/marketing

Tuesday, June 19, 2001

TOP STORY:
* Far From the Final Frontier

NET NOISE:
* Transom.org

BEATS:
* The Future Is Coming! The Future Is Coming!

DOT DOT DOT:
* The Eagles Lose But the Eagles Win ... Hip-Hop Summit Resolutions ...
MP3.com's Big Hoo-Ha

SOUND OFF:
* This week's question: Who's winning the digital music war?


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TOP STORY
~~~~~~~~~
Far From the Final Frontier

After 10 years of freedom fighting, the Electronic Frontier Foundation is
just warming up on digital music issues.

By Julene Snyder

There's no denying the blizzard of litigation in the digital music space
during the past year, but not all of the lawyers involved are working for
big corporations, major labels or the Recording Industry Association of
America.

For more than a decade, a busy band of intrepid attorneys has worked at the
nonprofit, nonpartisan Electronic Frontier Foundation "to protect
fundamental civil liberties, including privacy and freedom of expression in
the arena of computers and the Internet." Increasingly, those issues have to
do with digital music. Just a few weeks ago, the EFF asked a federal court
to rule that Edward Felten, a Princeton University computer science
professor, and his research team have the First Amendment right to present a
paper on digital music access-control technologies at a security conference
in Washington, D.C., in August.

Felten and his team cracked four music-copyright protection codes offered up
in a challenge by the Secure Digital Music Initiative Foundation last fall.
But after the contest's first phase, the professor and his team opted out
and announced that rather than claiming the contest's cash prize, Felten
would publish a paper for the computer-science community detailing how his
team had defeated the codes. Just before Felten was about to go public, he
received a letter from RIAA Senior VP Matthew Oppenheim that said if his
team published the results, Felten could face legal action, apparently for
violating the 1998 Digital Millennium Copyright Act, which essentially makes
it illegal to build or distribute tools for circumventing copyright
protection measures.

When Felten subsequently withdrew the paper, he was showered with media
attention, much of it critical of both the SDMI and the RIAA. Oppenheim
quickly issued a statement basically saying that it was all a big
misunderstanding and that nobody was under threat of a lawsuit. But EFF
staff attorney Robin Gross, who specializes in intellectual property with a
focus on digital music and copyright issues, says she believes First
Amendment issues are at play in the SDMI-Felten case. "Their statement that
they were never really going to sue doesn't pass the giggle test," Gross
says, speaking from her San Francisco office. With Felten's paper since
accepted for publication at the USENIX Security Conference in August, the
EFF is hoping that a New Jersey judge will rule in Felten's team's favor by
the time the event takes place.

The EFF has been openly critical of the DMCA for quite some time, and
increasingly interested in digital music hot-button issues such as
peer-to-peer systems and fair use during the past year. As early as 1998,
the organization said the DMCA contained an "overly broad prohibition"
against "circumventing technological measures that control access to a
copyrighted work." Basically, it all comes back to freedom of speech, Gross
says. "The way it's written now, it is illegal for journalists to link to
Web sites where something that could be a circumvention device could
reside."

As if that weren't scary enough, there's more. "All of the songs that were
going to be locked up by this SDMI watermarking technology are supposed to
fall into the public domain at some point," Gross explains. But currently,
she says there's no mechanism in place to unlock the songs, and the DMCA
makes it illegal to come up with tools to access works that rightfully
belong to the public.

So if this is a war, who's winning? It's too early to tell - the battles
over digital music have just started heating up, and it'll be years until
the dust clears and a clear victor emerges. In the meantime, expect to see
lots of litigation. "If history has taught us anything, it's that the
industry's first reaction is to freak out," Gross says. "They get really
nervous and fight against the technology by using lawsuits, litigation and
legislation to keep things the way they are. But as technology and society
moves forward, they'll find a way to profit from it."

But in the meantime, Felten's case wages on. We could see some headway as
early as this summer in the ongoing struggle over the future of digital
music when a ruling comes down.


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NET NOISE
~~~~~~~~~
Transom.org

While public radio has been an integral part of my life for years, I have to
wonder what, exactly, the programmers are thinking. While there is clearly a
multitude of compelling stories out there - witness the weekly brilliance of
NPR's "This American Life" and the consistent smarts of "All Things
Considered" - time and again, the airwaves are surrendered to roundtable
discussions of issues rendered dull by the same old groups of party-line
spouting pundits. But journalist and "devoted public radio listener" Bill
McKibben does more than kvetch, complain and lunge to change the channel
when he doesn't like what he hears. Wishing for "more interesting and
diverse stories on the air," McKibben decided to launch a site about public
radio, and won support from other public-radio aficionados like the
nonprofit public radio organization Atlantic Public Media (APM) to make his
brainstorm of channeling new voices to public radio a reality. Visitors are
encouraged to submit their work ("stories, essays, home recordings, sound
portraits, interviews, found sound, nonfiction pieces, audio art, whatever,
as long as it's good listening") to the site. If accepted, the producer gets
an acquisition fee and grants APM, which administers the site, the right to
put the piece up on Transom.org and air it on Martha's Vineyard and Cape Cod
public-radio stations WCAI and WNAN. From there, it could be picked up by
"This American Life," "All Things Considered" or other nationally syndicated
shows. Visitors can drop by and listen to accepted pieces, find out what
kind of tools they need to produce their own piece and be on their way to
fame and fortune. Oh, wait a minute, this is public radio. Make that
somewhat limited fame, and considerably less than a fortune. But still.


----------------------------------------------------------------------


BEATS
~~~~~
The Future Is Coming! The Future Is Coming!

FullAudio says its deal with BMG moves it a step closer to a download
subscription service

Last week's announcement from New York-based FullAudio that it had reached a
licensing agreement with Bertelsmann unit BMG Music Publishing was -
naturally - heralded as big news by the firm. But in this case, the hype
appears to be justified. You see, music service provider FullAudio has
managed to remain independent from the majors thus far, and the deal makes
it the first to actually lay its hands on a piece of the Holy Grail - a
catalog-wide license from one of the big boys for a service that promises
online music downloads. What's the catch? Glad you asked. "Much like the
subscription models of cable television, fans will have access to their
FullAudio music service only as long as their account is in good standing,"
explains the company's press release about the deal. (Hmm. Nice analogy, but
if I subscribe to HBO, I can record "Six Feet Under" and watch it for free
whenever I want, even if I cancel HBO.) Anyhoo, BMG Music Publishing
President Nick Firth, in a press release, says it's all good: "FullAudio's
service offers a secure solution that meets the needs of BMG and our
songwriters and ensures we are being paid properly for our copyrights. We
are excited about the exposure and accessibility our songwriters will have
through FullAudio." Now if FullAudio can just get licensing to the full
catalogs of the other four major record labels - which may be a bit tricky,
seeing how they've got their own plans for their artists' catalogs - they'll
be good to go.


----------------------------------------------------------------------


DOT DOT DOT
~~~~~~~~~~~
The Eagles Lose But the Eagles Win ... Hip-Hop Summit Resolutions ...
MP3.com's Big Hoo-Ha

 From the Silly Lawsuits Department comes word that the Eagles have not only
not landed, they've lost. Huh? Well, it seems that the rock group had
brought a trademark infringement lawsuit against the nonprofit American
Eagle Foundation in 1998, saying that the use of a Web site address
(Eagles.org), toll-free phone number (800-2EAGLES) and CD/video distribution
label (American Eagle Records) confused the public and competed unfairly
with their own Eagles paraphernalia. But judges in both the patent and
trademark office and in Knoxville, Tenn., ruled earlier this month that it's
all bunk, and the public is smart enough to know the difference between
aging rock stars and endangered birds. The foundation plans to file a
request to recover attorneys' fees and court costs later this week ... Last
week's Hip-Hop Summit in Washington, D.C., that was organized by Def Jam
records founder and rap impresario Russell Simmons resulted in a list of
"Hip-Hop Summit Results and Resolves." These include vows to follow the
newly revised voluntary guidelines that the RIAA issued for use of the
Parental Advisory Label, to fight the FCC's attempts to restrict radio
stations from playing hip-hop music and to work more closely with elected
officials to create awareness and education about hip-hop culture ... Ever
feel like you've been duped? Me too, especially after I fell for MP3.com's
hype last week about the oh-so-special announcement it was planning to make
last week. I assumed that it would be, you know, special. As you may recall,
the company had promised to deliver word of a "major company milestone"
featuring an "exclusive performance" by "a special MP3.com musical guest."
Sounds sort of like news, right? Well, only if your idea of quote-unquote
news is the word that the company now has a million songs available for
download, and the special musical guest is Lapdog, whose frontman, Todd
Nichols, is late of the now-defunct band Toad the Wet Sprocket. As for those
of you who get excited by former members of Toad the Wet Sprocket, what can
I say? You've simply got to get out more.


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SOUND OFF
~~~~~~~~~
This week's question: Who's winning the digital music war?

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.


STAFF
~~~~~
Written by Julene Snyder (julene@well.com).

Edited by Michele Keller (mkeller@thestandard.com).


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