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THE 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, April 3, 2001
TOP STORY:
* And You Were There
NET NOISE:
* PeerProfits.com
BEATS:
* The Real Deal from RealNetworks
* Panja Does the Layoff Thang
DOT DOT DOT:
* Artists Against Piracy cuts ties with RIAA ... Interscope's Ted
Fields joins ArtistDirect ... Unreleased Dave Matthews tunes on
Napster ... "Rumor has it" targets SonicNet
SOUND OFF:
* This week's question: What was the highlight of today's Senate
hearing on digital entertainment?
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TOP STORY
~~~~~~~~~
And You Were There
Artists, politicians and music industry heavyweights gathered at
today's Senate Judiciary Committee hearing to ponder digital
entertainment and copyright issues.
By Julene Snyder
The ongoing struggle over digital entertainment copyright issues is
serious business, but Sen. Patrick Leahy (D-Vt.) provided an early
moment of levity this morning at the jam-packed Senate Judiciary
Committee hearing on digital music: "When you see a crowd this size,
you must be giving something away for free," he quipped. Much hilarity
ensued, presumably because Napster, uh, you know, gives stuff away for
free.
Chair Orrin Hatch (R-Utah) called this second round of Senate
Judiciary Committee talks back in mid-February, when the Ninth Circuit
Court rendered a decision in the Napster case. And while those who
spoke before the committee tended to keep to their prepared scripts,
the hearing - broadcast live on CSPAN - did serve as a crash course in
digital music issues. As a bonus, we got a close-up look at some of
the people at the top of the music industry food chain.
Among them were musicians (Don Henley, Alanis Morissette), major label
execs (AOL Time Warner's Richard Parsons, EMI's Ken Berry) and digital
music honchos (Napster's Hank Barry, Liquid Audio's Jerry Kirby). We
also saw indie label execs (TVT Records' Steve Gottlieb), movie
bigwigs (the Motion Picture Association's Jack Valenti) and, of
course, the ubiquitous Hilary Rosen of the Recording Industry
Association of America (RIAA). Personally, I was saddened to see that
rocker Ted Nugent was a no-show. Having interviewed the "Motor City
Madman" a few weeks ago for Beatsheet, I can guarantee that Nugent,
who has a hard time getting through a sentence without cursing like a
cranky stevedore, would have turned up the volume of the rhetoric by
several notches. (MP3.com's Michael Robertson also skipped the
hearing, but he has less of a problem controlling his emotions and
doesn't tend to use profanity, at least in public.)
Hatch began the proceedings by saying there are "three sides to every
story." And by the time CSPAN cut away from its coverage at the
two-and-a-half-hour mark, Hatch might have wanted to change his
estimate: There are at least nine sides, possibly more, to this saga.
Throughout the morning, we learned that the Senate's antiquated
computer system periodically crashes from the weight of too much
e-mail, that Leahy considers Don Henley a friend, and that Valenti is
apoplectic that "Gladiator" was available - for free, apparently -
over the Internet while it was still in the theaters. We also realized
that there's no love lost between Henley - who is co-founder of the
Recording Artists Coalition - and the RIAA. He reminded the committee
that "the RIAA does not speak on behalf of artists, although they have
given the impression that they do," and said that the RIAA cannot act
objectively on behalf of artists, and pointed out that the system is
set up so that a "typical artist could sell half a million records and
not see one penny."
Morissette, on the other hand, seemed to be there solely to represent
the "hip, young artist" side of the tracks. She made it clear - with
her boss, AOL Time Warner's Richard Parsons, sitting a few seats away
- that she wouldn't "speak in specifics against anyone." Way to stand
up and be counted, girl! Still, she does get props for pointing out
that "so-called piracy may be working in most artists' favor - free
Internet distribution isn't bad for everyone."
Napster CEO Hank Barry called for Congress to step in and change the
laws to "provide an industrywide license for the transmission of music
over the Internet." "I believe it will take an act of Congress - a
change to the laws to provide a compulsory license for the
transmission of music over the Internet." This was followed by TVT
Records' Gottlieb, who pointed out that "freedom is not free-ness," a
shot of an incredibly uncomfortable-looking Shawn Fanning in the
audience, and a stern lecture from the RIAA's Rosen, who pointed out
that there are now dozens of companies where people can legally
download music, and said she resents any implication that the major
labels have been slow to make their content available digitally.
"America's record labels are proud to be in the forefront at this
time," she said, seeming a bit weary. Rosen pointed out that even
Napster hasn't been able to build a viable business model, despite a
$50 million influx of cash from Bertelsmann. "Hank Barry hasn't been
able to get it done, either," she said. "And the only reason he has
all the music is because he doesn't license any of it." Ouch. This
followed by AOL TW's Parsons, who compared Napster to a criminal who
stands before a judge and promises to go to trade school and go
straight. "But in the meantime, he wants to continue to steal."
The fact that three of the Big Five record labels had just announced
the formation of MusicNet, an Internet-based subscription service, was
mentioned several times; clearly, most everyone involved realized
there are no accidents when it comes to public relations. At one
point, Hatch seemed almost plaintive about the complexities involved
in today's digital music scene. "Help the committees, because we don't
know what to do," he implored. No doubt the Senate committees will
receive lots of help in the coming weeks - in the form of statements
from everyone from Artists Against Piracy to Courtney Love to the
Future of Music Coalition to Ted Nugent. The question is, whose help
will address the concerns of everyone involved? If Nugent had
attended, he'd probably just tell them to kill them all and let God
sort it out.
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NET NOISE
~~~~~~~~~
PeerProfits.com
No bells, no whistles, no computer-crashing gimmicks in sight at this
site, which, frankly, comes as quite a relief. Those following the
peer-to-peer movement can hone in closer by checking in at PeerProfits
to scan headlines automatically gleaned from more than 1,500 sources
across the Internet. Updated every 15 minutes, the site keeps visitors
posted on every twitch and hiccup of peer-to-peer, MP3 and Divx news;
the links to various companies make it a snap to find what you need.
There's a democratic element at work here: The BBC gets equal billing
with PR Newswire, E! Online and daily newspapers, letting you decide
for yourself how much credence to give a particular bit of
information. I especially like the site's "company watch" section,
which lets you click on a particular company name - say, Aimster or
Gnutella - and get a list of articles pertinent to that company.
PeerProfits.com is the brainchild of Texas-based editor Chris Sherman,
who explains he was driven to create the site once he got bit by the
P2P bug: "I began tracking the increasing number of P2P startups and
built a personal site to automatically track the growing P2P news
across the Net." Although he says he welcomes advertising, apparently
there's no stampede to sign up, which is a good thing from a user's
point of view, though perhaps not so sweet from Sherman's perspective.
Oh, well, information wants to be free, right? Besides, if he gets
paid, shouldn't the writers who produced all of his content get a
slice of the pie? Hmm?
----------------------------------------------------------------------
BEATS
~~~~~
The Real Deal From RealNetworks
Three major labels band together to create MusicNet, an Internet-based
subscription service.
You've got to admit, it's interesting timing. Monday's announcement
that three major labels - Warner Music, BMI and EMI - are licensing
their catalogs to RealNetworks came the day before the Senate
Judiciary hearing on online entertainment and copyright law. One can't
help but wonder if the industry is sending a not-so-subtle message to
legislators along these lines: "We are too interested in getting
involved in digital distribution! We did it just the other day!" (As
you may recall, at the last hearing on the subject, volleys were
tossed regarding the molasses-in-January pace of the big boys' entry
into the digital music arena.) The new music subscription service,
dubbed MusicNet, will license music on a nonexclusive basis, and will
initially be available through RealNetworks and America Online. The
other two labels of the Big Five - Universal and Sony - are working on
their "Duet" project, a subscription service that promises on-demand
access to streamed music, with a possibility that encrypted downloads
might be made available in the future.
Read more at TheStandard.com:
http://www.thestandard.com/article/display/0,1151,23279,00.html?nl=bts
Panja Does the Layoff Thang
And perhaps a networking jaunt to MP3.com in sunny San Diego is in
order.
Texas-based Panja - hyped relentlessly at MP3.com's "Next Generation
of My.MP3" event early this year as the maker of the hardware devices
of the future - announced it would lay off 10 percent of its workforce
(47 positions) on Friday. It's all due to the now-familiar litany that
blames streamlining operations in the current economic environment for
the need to hand out pink slips. In a separate announcement that same
day, Panja said there'd been a slight shift at the top of the
management pyramid: Company chairman Joe Hardt resigned and will be
replaced by current CEO and president Scott Miller. Those who missed
MP3.com's last dog-and-pony show and have been wracked with regret
ever since are invited to attend MP3.com's upcoming "Development
Conference" in San Diego April 19-20 to "preview and perhaps help
shape the future of the digital music space by attending one of two
intense session sets, one for technical buffs and the other for those
who wish to learn effective Internet business-development secrets from
industry experts." Plus last time, they had free ice cream!
DOT DOT DOT
~~~~~~~~~~~
Artists Against Piracy cuts ties with RIAA ... Interscope's Ted
Field joins ArtistDirect ... Unreleased Dave Matthews tunes on
Napster ... "Rumor has it" targets SonicNet
According to the Hollywood Reporter, Artists Against Piracy - the
coalition formed to give recording artists and songwriters a voice in
how their music is distributed on the Net - cut the apron strings
recently with its main financial supporter, the Recording Industry
Association of America. Executive director Noah Stone reportedly told
the publication that it seemed counterintuitive to work together with
the RIAA given the hot-button issues like, oh, say, artists' rights.
"Artists Against Piracy is about protecting the artists' rights in a
digital space, but some of these rights are in conflict with the
record industry," Stone said without apparent irony. At press time,
the RIAA was still listed among the supporters on the Artists Against
Piracy Web site Š Hitsdailydouble.com reports that Interscope
Records founder Ted Field - who left the company a few months ago -
has been named CEO of beleaguered online music company ArtistDirect.
As part of the deal, ArtistDirect will become an equal partner in
Field's Radar Records venture. Credit also goes to Hitsdailydouble for
coming up with the following scooplet: Unreleased Dave Matthews Band
songs produced by producer Steve Lillywhite have reportedly hit
Napster, much to the delight of the group's avid fan base. The songs
are said to be "acoustic and darker," while the sanctioned songs from
the new album, "Everyday" - produced by pop songwriter/producer Glen
Ballard - are more on the "radio-friendly" tip Š A certain
much-maligned Web site with a profanity in its name reported rumblings
that today Viacom's MTVi group would "layoff [sic] the entire staff of
SonicNet.com, leaving the general manager as its sole employee (tho
word is he won't be around too long, either)." As it turned out, the
rumors were wrong: News.com reported by early afternoon that the site
would only lay off a "small number" of editorial employees in the
site's jazz and classical sections, which hadn't grown as quickly as
the company had predicted.
SOUND OFF
~~~~~~~~~
This Week's Question: What was the highlight of today's Senate hearing
on digital entertainment?
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: Should ISPs boot individuals who are accused of
illegally trading copyrighted material over their system?
As a legal matter, ISPs have not been held liable for contributory
infringement for good reason. ISPs run the highways, but they don't
set the speed limits or dictate what you should drive and what you
shouldn't. Nor are they the highway patrol. (My views do not
necessarily reflect those of my employer PSINet, the Internet Super
Carrier).
- Michael Chang
Corporate Counsel, PSINet Asia Pacific
I offer a resounding NO in response to this question. Not only would
that up the cost of access to cover the cost of additional personnel
and time, but it would bring in a fourth party that has no business in
my business. If the Internet is only about destroying one's sense of
privacy and removing the walls between you and the powers that be, we
might as well disassemble the thing while still have our Napster
accounts intact and our hard drives full of MP3s. To draw one obvious
parallel, the phone company doesn't listen in to your phone calls at 3
o'clock in the morning, does it? (Or does it? Hmm.)
- Chris Messina
Yes, with the exception of qualifying the word "accused." It must be
proven that you are, in fact, downloading or swapping unauthorized
MP3s (or other files). To do this, someone must know your IP address
to access your hard drive, and this is clearly an invasion of privacy.
Blocking at the other end is the best bet. Meanwhile, as a
songwriter/musician, if I put an MP3 file online and give it away for
free, I am making a conscious decision to do so. But if I put a price
on my MP3 and you refuse to pay it, then you have stolen from me.
Because technology opened a criminal door doesn't mean you have to
walk through it. Music is a product and a business like any other
product or business. Where do people get the idea music is free? Is it
because they can hear it through the walls or across the fence? Do
they hear it blasting from an anonymous radio and think, "Hey, that's
MY music!" I love sharing - music is sharing from the heart. I might
even someday like to put on a free concert and raise millions for the
"Save the Universe" fund. But I also need to pay the rent. No landlord
is going to let me live for free just because I'm a nice guy who gives
his music away for free.
- Jerry Flattum
SoulStar Galaxy
This issue stumbles on privacy before it even gets on its feet! How
would the ISP know that the individual was trading copyrighted
material? Would they pick up the bit streams and analyze them? As if
the post office could open my mail to check for copyright violations.
This one's got Stalin written all over it. But OK, suppose some
copyright watchdog told them the individual was trading copyrighted
material. Would it be OK to boot the individual? No, it is not the
ISP's business - they are the post office and should bring me my mail
until some court tells them otherwise. The ISP's role is/should be
much smaller than most people think. This is just another version of
the issue of booting individuals who access nazi porn or whatever
content is considered filth by the government.
- Johan Varland
Entrepreneur, Consultant of Swing and Free Agent
Stockholm, Sweden
STAFF
~~~~~
Written by Julene Snyder (julene@well.com).
Editor: Michele Keller (mkeller@thestandard.com).
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