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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, July 25, 2000
TOP STORY:
* File-Sharing: You Ain't Seen Nothing Yet
NET NOISE:
* PlayJ.com
BEATS:
* Law, Order and Napster
* Bertelsmann Buys CDnow
DOT DOT DOT:
EMusic still in L.A. ... Scour suit ... Boycott-RIAA site launches ...
Smithereen announces Senate candidacy
SOUND OFF:
* Is the concept of copyright obsolete?
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TOP STORY
~~~~~~~~~
File-Sharing: You Ain't Seen Nothing Yet
By Julene Snyder
Don't look now, but there's a revolution underway. Lawyers can't stop
it. Congress can't legislate it. Superman might have a hard time
outrunning it. And it has nothing to do with Napster.
The movement has to do with the exchange of information on sites like
Freenet, which allow for file-sharing with the help of no central
servers whatsoever. "The RIAA can win court cases and put companies
like MP3.com in check through licensing agreements and compensation,"
says Simon Foust, who runs the digital audio news site AudioSpeak
(formerly Layer3news.org). "But the people and the technology will no
longer bow to the monopoly of the music industry."
Freenet is a peer-to-peer network that lets people trade information
with total anonymity. Each computer is established as a "node," and
there's no way to tell who's providing and receiving files. Unlike
Napster, there is no central directory of information and no central
servers.
Of course, the lack of servers is a feature that's shared by Gnutella,
which also allows users to distribute software, video and text
documents. But Gnutella still depends on static IP addresses, which
leaves a traceable path. Freenet cranks it up a notch by providing
complete anonymity for users, encrypting each file, scrambling the
numerical "key" needed to find files and keeping files moving among
users' computers. The end result is to make it nigh-on impossible to
remove files or determine exactly where they're coming from.
A program that 23-year-old Ian Clarke designed as a class project
while a senior at the University of Edinburgh, Freenet - which can be
found at http://freenet.sourceforge.net - has drawn 100,000 downloads
since it went up in March. Currently, the main drawback for users is
the lack of a search function, which makes finding specific
information a bit of a gamble. (A consortium of volunteer programmers
is working on that feature.)
"Anarchy describes Freenet perfectly," says Clarke from his London
home. "The word means without leaders or rules. Freenet has no ruler,
it has no government, it has no centralized control. From an
architectural point of view, Freenet is an anarchy."
RIAA senior VP and general counsel Cary Sherman says the issue of
copyright infringement remains the same with sites like Freenet and
Gnutella as it does with Napster and Scour. But he also says there
might be a certain amount of acceptable piracy, especially when it's
unclear just how you would go about trying to stop a decentralized
file-sharing service. "All of the creative industries have had to
suffer from some level of piracy," allows Sherman. "If piracy can be
confined to the 'undernet' and the mass market can be preserved, then
the opportunity remains for maintaining a successful music business."
Clarke and Foust, of course, think more drastic changes are needed.
"If downloading MP3s means violating current copyright law, change
what copyright is," Foust says emphatically. "If downloading MP3s
means going outside the boundaries of fair use, change what fair use
is." Clarke is putting his money where his ideas are: He's already
left London and relocated to Los Angeles, where he and "some guys in
the music industry" will start a company called Upriser that will
address "how artists can make money without relying on copyright."
As for the differences between Freenet and Napster, Clarke says an
RIAA victory will send a chilling message. "If Napster gets shut down,
it will be a disaster for free speech in America." But he also sees
such a development as an opportunity for him and his message. "It will
point out in very stark terms why something like Freenet is needed.
It's never smart to fight technology."
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NET NOISE
~~~~~~~~~
PlayJ.com
It's a difficult balance, giving consumers what they want (free
music), while making sure artists get what's coming to them
(royalties), especially if you also need to watch the bottom line.
EverAd's PlayJ offers up one solution to the conundrum with its
service that lets you download songs legally for free. The catch here
is that the music isn't really free, it's paid for by advertising.
Thankfully, these aren't audio ads inserted into the songs themselves:
When you download the PlayJ player - a relatively painless process -
you can then choose a song from the somewhat meager offerings and play
it immediately. An embedded small banner ad is part of the package.
While you're welcome to ignore it, you can't close it unless you close
the song you're listening to as well. Not a perfect solution, perhaps,
but it may be one of the prevailing models. What's most entertaining
here (beside the FAQ's claim that users get automatic "good karma") is
the schizophrenic collection of songs; among the top downloads are
offerings from Jefferson Starship, Tom Jones and the Dead Kennedys.
PlayJ swears that they've got 50,000 tracks from over 70 labels and
promises that new content will be added frequently. As Asia might say,
only time will tell.
----------------------------------------------------------------------
BEATS
~~~~~~
Law, Order and Napster: Wednesday's hearing may prove illuminating
Pull up your lawn chairs, because tomorrow at 2 p.m., U.S. District
Judge Marilyn Hall Patel is scheduled to hear oral arguments from both
sides in the Napster lawsuit. It's bound to be an entertaining
spectacle for those lucky enough to be in the San Francisco courtroom;
on the one side, Recording Industry Association of America lawyers
doubtless will be painting Napster in diabolical hues, and, on the
other, Napster attorneys will be tap-dancing adroitly and pointing to
recent studies showing that the file-swapping service actually
facilitates music sales. A variety of things might happen. We could
see high drama if Judge Patel grants the RIAA's request for a
preliminary injunction to shut down Napster until the court rules on
whether it's guilty of copyright infringement. That scenario is widely
seen as a long-shot by industry followers, but if the pundits are
proven wrong, expect anguished howls of protest to reverberate from
sea to shining sea. A less climactic development would be for the
judge to postpone her ruling. She could also decide to grant Napster's
request for an evidentiary hearing, in which the company would present
arguments in support of its contention that the major labels are in
collusion together in trying to shut down the company. Will Napster
get voted off the island? Or will the RIAA be forced to eat grubs?
Read more on Napster's stats at
http://www.thestandard.com/article/display/0,1151,17057,00.html?nl=bts
Bertelsmann Buys CDnow
Bargain basement price still adds up to a pretty penny for founders.
Papers filed with the Securities and Exchange Commission last week
detailing the terms of Bertelsmann's purchase of CDnow for $3 per
share for a total of $117 million are the usual dry reading
interspersed with hyperbolic buzzwords. Still, news that co-founders
Jason and Matthew Olim will be splitting a $17.4 million pot for their
share of the proceeds is vicariously juicy for those of us who've thus
far missed the gravy train. Sure, had the company managed to keep its
stock price near the $16 a share that they went public with in 1998,
the Olims would have walked away with nearly a hundred million
dollars. But one imagines that after all these weeks of watching their
stock plummet, the brothers Olim are happy enough with this payday.
Not bad, really, when you consider that the company has lost $242
million since it was founded in 1994. (Of course, those who bought the
stock when it was at its 52-week peak of $22.63 are hardly jumping up
and down with glee, but no matter.) CDnow will become a wholly-owned
subsidiary of Bertelsmann's e-commerce group, which was established
earlier this year and includes a 40 percent stake in
Barnesandnoble.com.
Read more about the deal at
http://www.thestandard.com/article/display/0,1151,17039,00.html?nl=bts
DOT DOT DOT
~~~~~~~~~~~
EMusic's new service ... Scour hit with lawsuit ... Boycott-RIAA
site launches ... Smithereen announces Senate candidacy
EMusic.com has launched its "EMusic Unlimited" subscription service,
which offers users access to all songs on the site for a monthly fee
that ranges from $9.99 per month to $19.99. ... There's lots of job
security in being a lawyer for the RIAA. Last week, in conjunction
with the Motion Picture Association of America, a lawsuit was filed
against Scour (you know, the one partly owned by Mike Ovitz) citing
that Scour is a "for-profit enterprise that is in the business of
copyright infringement." Scour President Dan Rodrigues responded with
a somewhat plaintive statement that said the company was "very
surprised" by the action since productive conversations have occurred
and meetings have been scheduled with entities like Sony, Miramax,
Warner and BMG. ... A call for an August boycott of "RIAA supported
recordings and bands" is being proposed by the founder of
www.boycott-RIAA.com, 51-year-old Bill Evans. He created the site
because he's "tired of being ripped off by the music industry." ...
Today Pat DiNizio - founder and frontman of pop rock group the
Smithereens - will announce his candidacy for the U.S. Senate for New
Jersey under the Reform Party ticket. Don't expect groundbreaking
ideas, his platform is to "support the American family and give power
back to people." Hey, if it's good enough for Jesse Ventura ...
SOUND OFF
~~~~~~~~~
This week's question: Is the concept of copyright obsolete?
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.
FEEDBACK:
Last week's question: What's the funniest song lyric you've ever
misheard?
When we were little, our friend's father walked into the room in a
huff, exclaiming, "Who does this guy think he is? Santa Claus?" He had
mistaken BTO's "Takin' care of business" for "Takin' care of
Christmas." We died laughing ...
- Roland Goity
VP of marketing
OnlineRock
Instead of "I wanna be sedated," I heard, "I want a piece of Emily."
- Megan Frampton
Panels and publications director
CMJ Network
My girlfriend had for years mistaken PM Dawn's chorus in "I'd die
without you" as really being "I'd die without shoes."
- Kelli Pietrantonio
You know the song "Storms of Africa"? (I could even be wrong about the
name!) Anyway, the song goes: "There's nothing that a hundred men or
more could ever do." Well, when I was a kid I always thought he sang:
"There's nothing that a hundred men on Mars could ever do."
- Sarah Bensimon
Flock of Seagulls: "And Iran, Iran so far away, couldn't get away."
Pertinent to the time it was released (1980s hostage crisis and all
that).
- Steven Bishop
AC/DC's "Dirty deeds done dirt cheap" ... "Dirty deeds done with sheep."
- Lisa Iles
In Jody Watley's "I'm Looking for a New Love", when she said "Hasta la
vista, baby" I thought she was saying "I stole your Visa, baby," until
I was corrected while singing it in a car full of friends.
- Nicole Wright
"We'll make great pets" - the chorus line from "Pets" by Porno for
Pyros; what I heard was: "We'll eat grape Pez."
- Tanya Radosevic
Director, online communities
MP3.com
My favorite misheard lyric is one that my wife insisted was so, from
"Lucy in the Sky with Diamonds": Real lyric: "The girl with
kaleidoscope eyes." Misheard lyric: "The girl with colitis goes by."
- Mark Rifkin
(Editor's note: We received a startlingly huge number of responses to
this question. Thanks to all who replied.)
STAFF
~~~~~
Written by Julene Snyder. Send news tips and press releases to
julene@well.com.
Edited by Steven Zeitchik (szeitchik@thestandard.com).
Copyedited by Elese Veeh (eveeh@thestandard.com).
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