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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:
Tuesday, July 31, 2001
TOP STORY:
* The Digital-Music Politico
NET NOISE:
* NeilDiamond.com
BEATS:
* Crunching the Music-Rental Numbers; RIAA's Rosen Speaks
DOT DOT DOT:
* Royalty-Arbitration Hearings Begin ... Alanis Redux ... MusicNet
Hooks Up with Zomba
SOUND OFF:
* This week's question: Will people pay to 'rent' music
online?
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TOP STORY
~~~~~~~~~
The Digital-Music Politico
Rep. Rick Boucher speaks out on the Digital Millennium Copyright Act
and other political minefields.
By Julene Snyder (julene@well.com)
When it comes to the politicians who truly "get" digital music, Rep.
Rick Boucher is way out in front of the pack. Although the Virginia
Democrat hasn't grabbed as much of the spotlight as Sen. Orrin Hatch,
the Utah Republican who fancies himself a down-in-the-trenches
musician on occasion, Boucher has gained geek credibility with his
outspoken views on issues near and dear to the hearts of
digital-music
aficionados.
Boucher is currently drafting legislation that would amend a section
of the 1998 Digital Millennium Copyright Act, which makes it a crime
to traffic in tools designed primarily to circumvent
copyright-control
measures. Given the advent of MusicNet and Pressplay, the two big
digital-music subscription services slated for launch later this
year,
Boucher also believes it's necessary to modify current laws to create
a way for digital-music delivery services to legally make and sell
copies of a copyrighted work, and to level the playing field for
smaller independent sites when they compete with the big guys.
The fight to reaffirm rights of fair use - the ability to make
limited
copies of copyrighted works without paying fees or getting prior
approval - is a familiar one to the gentleman from Virginia. He's
been
speaking out on the need for a change to the DMCA since it passed in
1998, and he's not alone: Many, including the grassroots Electronic
Frontier Foundation, think the law's ostensible purpose of preventing
copyright piracy has trampled traditional fair-use rights.
We caught up with Boucher via phone from his Washington, D.C.,
office,
where he talked about the changes he'd like to make to the DMCA. He
also pointed out that the public is getting a crash course in what he
views as the act's flaws, with the FBI's July 16 arrest of Russian
programmer Dmitry Sklyarov on accusations that he built software that
circumvented e-book security. Boucher believes that because the
software had multiple uses - it wasn't designed solely to circumvent
e-books' copyright controls - Sklyarov's prosecution under the DMCA
is
unconstitutional.
Beyond that case, Boucher believes that many segments of society have
a vested interest in seeing the DMCA amended: "Libraries,
universities
and the scholastic community are announcing in a rising chorus of
concern their belief that fair-use rights will be undermined" through
the DMCA, he says.
For an example of the potential chilling effect, look no further than
a recent fair-use flap over the act's Section 1201 (which
specifically
criminalizes circumvention of technologies that protect copyrighted
work). In the ongoing saga, Princeton University Professor Edward
Felten was threatened with a DMCA lawsuit by the Secure Digital Music
Initiative when he announced plans to publish a paper outlining how
to
break SDMI's proposed watermarking technology. Felten has since
brought suit against the SDMI and the Recording Industry Association
of America, asking that he be allowed to publish the research.
Boucher says he believed from the beginning that the language of the
DMCA was flawed and tried back in 1998 to narrow its scope of crime
to
instances where the sole intent was to infringe copyright.
In spite of certain opposition from the entertainment industry,
Boucher is ready to get back in the trenches with his draft
legislation, and he thinks he has a real chance to amend the DMCA,
given the current focus on the Sklyarov case. "Everyone agrees that
we
should protect copyrights, but a law that effectively cedes total
control of copyrighted material to the copyright owners goes beyond
what is necessary to ensure fair compensation to the owner of the
copyright," he says.
It's an ambitious plan, and Boucher isn't sure when he'll introduce
the new proposed legislation, tentatively called the Digital Music
Bill, though he thinks it most likely will be in the fall. Still, he
doesn't rule out moving faster. "It could come as soon as this month.
It could come later this week," he says. "We're still looking at
timing."
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NET NOISE
~~~~~~~~~
NeilDiamond.com
Long-time fans might already know all there is to know about Neil
Diamond, but those of us who feel shame when we sing along to
"Crackling Rosie" on the FM dial can play catch-up here. The official
site - which launched last week in conjunction with the release of
the
troubadour's latest album, "Three Chord Opera" - has the requisite
bells and whistles, including a recorded message from the man
himself.
The site purportedly provides an "all-access backstage pass," where
you can listen to music and find album, tour and biographical
information. For me, the latter provided the most unexpected joy,
with
crystalline nuggets like this: "Neil attends New York University as a
pre-med student on a fencing scholarship (1959)." That sentence alone
provides the outline for a rip-roaring novel (heck, a movie of the
week!), but there's more: "Neil sets up an office to work on his
music
in a small storeroom above the famous 'Birdland' jazz club (1964). It
was in this space, with just enough room for an old upright piano, a
table and a chair, that Neil was able to grow and develop his talents
as a popular songwriter." (Man, this screenplay is going to write
itself!) Ahem. Anyway, before you know it, it's 1972 and Neil's named
"Entertainer of the Year" by the American Guild of Variety Artists;
aficionados, of course, already recognize 1972 as the year that the
immortal soundtrack to "Jonathan Livingston Seagull" was certified
gold. The accolades came fast and furious during that decade,
culminating in 1980, when Neil "stars in 'The Jazz Singer' opposite
Sir Lawrence Olivier and subsequently got a Golden Globe nomination
for his performance." The timeline that reads 2001-2009 thus far
refers only to the release of the new album, but if Diamond's
prolific
past is any guide, there's plenty more to come. Whether that gives
you
goose bumps or the heebie-jeebies depends on your affinity for the
"Solitary Man."
----------------------------------------------------------------------
BEATS
~~~~~
Crunching the Music Rental Numbers; RIAA's Rosen Speaks
>From the winning-the-battle-only-to-lose-the-war department comes
a
dispatch from the Industry Standard's very own Michael Learmonth and
Ronna Abramson that states, "The industry's plan to deliver music
online is a disaster waiting to happen." Crunching some numbers, the
writers point out that the recording industry's scheme to let
consumers rent music by the month will charge customers more money to
wind up with less stuff: "The average consumer spends about $90 a
year
for six CDs and gets to keep them forever, says Gartner Group analyst
P.J. McNealy. The new subscription services will ask consumers to pay
about $120 a year - and come away with nothing."
Read the full story:
Meanwhile, SonicNet reports that the Recording Industry Association
of
America's Hilary Rosen said last week that she's open to settling
with
Napster and that a trial is unnecessary. Rosen wouldn't confirm
whether the RIAA was actually in negotiations with Napster to reach a
settlement, but an unidentified Napster spokesperson reportedly
confirmed that the firm "welcomed Rosen's comments." Ever the busy
bee, Rosen also found time to take part in Joseph Lieberman's Senate
Governmental Affairs Committee entertainment-industry hearing on
Wednesday, and she defended efforts to keep parents informed about
the
kind of music their kids are consuming via the newly revamped
Parental
Advisory Program. HitsDailydouble.com provided the somewhat surreal
news that Rosen said the campaign will include "plans to have
telemarketers call during dinner."
----------------------------------------------------------------------
DOT DOT DOT
~~~~~~~~~~~
Royalty Arbitration Hearings Begin ... Alanis Redux ... MusicNet
Hooks
Up with Zomba
Testimony was slotted to begin Monday in the six-month process of
setting royalty rates for music broadcast over the Internet,
according
to a press release put out last week by three arbitrators, dubbed the
Copyright Arbitration Royalty Panel (CARP). The arbitrators, selected
by the U.S. Copyright Office, will hear testimony from 60 witnesses,
including the ubiquitous Alanis Morrissette and spokesfolk from the
RIAA and the broadcasting and Webcasting industries. A final ruling
is
required by Jan. 28, 2002 ... Speaking of Alanis, the singer
reportedly told participants at last week's Plug.In conference in New
York City that the digital-music industry has been "litigated,
vilified and consolidated" and that "the opportunity has been
lessened" for up-and-comers. Morrissette, of course, has long since
hit the big time. Given her public stance against the big
conglomerates, it's somewhat ironic that the singer recently
re-signed
with her record label, Maverick ... Early last week, MusicNet - the
soon-to-launch-no-really-we-mean-it subscription music service of
BMG,
EMI and Warner Music - announced that it has signed a deal with
independent music label Zomba Music Group. Under the deal, Zomba will
license its digital-music library to MusicNet and ponied up some
cash;
in return, it will become a "minority shareholder" in MusicNet.
Artists on the Zomba label include Britney Spears and N'Sync.
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Nominate your favorite company for The Industry Standard's
Business Transformation Awards, to be announced in October.
Click on the url below for more information.
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SOUND OFF
~~~~~~~~~
This week's question: Will people pay to rent music online?
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: So, what's right with the music business these
days?
Bruce Springsteen.
- Jeff Morgen
Chief Operating Officer
Friskit
There is plenty right with the music business these days. Technology
has facilitated the inexpensive creation of more high-quality music
than ever before. The Internet gives us the ability to target very
specific groups of consumers. Those two factors allow small to
medium-sized independent companies to profitably release records that
would have done nothing but lose money a few years ago.
Granted, there are not many success stories, but the factors that
create the opportunities are just beginning to gel. The Internet
industry shakeout ultimately will be a positive step as it will bring
clarity to digital-marketing strategies and, eventually, digital
distribution strategies. Accordingly, I think that smart, innovative
music professionals will have tremendous success over the next
decade.
Now, if you're one of the five majors, these are challenging times.
It
is always difficult to defend a position of strength during times of
great change. The big labels have huge overheads and well-entrenched
systems, and they are simply not nimble enough to take advantage of
emerging opportunities. (I think they proved that with their
"litigate
now, strategize later" approach to Napster.) But for the rest of us
who make a living in the music biz, I think we are at the dawn of a
golden age.
- Roger Goff
STAFF
~~~~~
Written by Julene Snyder (julene@well.com).
Edited by Michele Keller (mkeller@thestandard.com).
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