Three Lawsuits and a Funeral

By Richard Menta- 11/30/01

When someone asks me where MP3 Newswire stands with regards to file trading (or piracy as some try to call it) I tell them that we support the growth of this notion of an online music industry. One that uses technology to bring us more music, broadening our pallettes while leveraging the Net to reduce distribution costs. The music can be paid for like CDs and tape or it can be free to its audience and supported by advertising like radio and MTV are. Whatever the model, the point is online music easily can and does supplement what we already purchase in the stores.

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The problem is whole industries missed the boat on the potentials of Net music a few years back. That is because both the record and radio industries long found it more profitable to focus and corral public music consumption into tight genres marketed by race, sex, age, etc. What Net music offered was the opposite of the target marketing these industries so fervently developed over the last two decades, and so when presented with the potentials of the new technology their leaders dismissed it as counter to industry goals. They are now spending hundreds-of-millions of dollars to reverse that mistake.

The flaw of target marketing is that it assumes people are indifferent to variety. Suburban white boys won't listen to Rap because supposedly they can't relate to urban black youths hopping around to all beat and no melody. What we get is music segregation on the airwaves and the record racks.

As the industry moved us from singles to albums, instead of getting 60 tracks from 30 different artists on 30 singles, we got 60 tracks from 6 artists on 6 CDs. 6 CDs are how many albums the average person buys in a year. At $18.99 each, CDs are expensive and all of us are forced to be very selective when it comes time to choose which of our favorite artists we take home with us. Targeted genres limit the breadth of the music styles we can commit to, but less choices also make the final purchase decision simpler, which is why they are an effective tool for the industry.

But all this leaves a gaping hole between what music we want to buy and what we actually can afford to buy. This void is what Net music filled for consumers and music lovers when it came along. It opened up our horizons as we freely experimented with music that would never find its way to the radio playlists of our local stations and so could not be explored unless actually bought.

Napster brought back the record single and in doing so brought back variety. It also brought about a legal maelstrom as it woke up the record industry to their earlier mistake. When they realized how big an audience Napster addressed, the actions of the record industry were that of violent panic.

To regain control, the industry declared war on Net music, the consumer, the concept of fair use (which it has always been at war with) and any non-industry companies who want to be our online music stores. They even fought the radio stations and record stores who wanted to develop their own online innovations. The record industry doesn't own the radio stations or the traditional record stores, but it wished it did. They will be damned if they will let their previous lapse prevent them from owning Net music now that it has proved how powerful it can be.

So out came the lawyers.

A rough week for online music

The Net music industry was empowered by a win in the first major trial relating to digital music, the Record Industry v. Diamond Rio. It has been downlhill legally ever since. First there were the setbacks in the and Napster trials. Then services like Scour, unable to balance legal costs against a dried-up venture capital market, ceased to be all together. Now, in only the last two days have come these four events:

Lawsuit - In the DeCSS case, the court rejected an appeal by 2600 magazine publisher Eric Corley to overturn a decision that prevented him from distributing or linking to the DeCSS program that removes encryption from DVDs. The program was written by Scandanavian teenager not to pirate movies but to allow DVDs to simply be played on a computer running the Linux operating system. Corley said linking to such code is free speech and protected by the first ammendment. If this ruling stands, the simple act of linking to another site could be a crime if that site is deemed to hold "suspect" content and that includes music.

Lawsuit - A federal judge in New Jersey dismissed Dr. Edward Felten's case against the recording industry, deciding that the professor was under no threat of prosecution for presenting a paper on technology cracking. The Recording Industry Association of America (RIAA) threatened to have the doctor arrested if he presented his defeat of technology used to watermark digital music files. The RIAA backed off from that threat when public opinion turned against them, but because of the high cost of litigation, even an idle threat hampered the scholar as he retreated from his planned presentation. He later presented his paper, but sued to prevent future threats from becoming a continual tactic of the RIAA. Since in the end the threat did not prevent the Felton from presenting his research the court threw out the case.

Lawsuit - A Dutch court has given music trading software provider KaZaa 14 days to stop its users from illegally downloading copyrighted music, or face fines of about $45,000 a day. This is the first major decision placing the legal responsibility to monitor file trading on a Napster clone that uses no centralized server.

Funeral - Xolox, a P2P client for the Gnutella network will close its doors Dec 1 2001. The reason was the fear of future law suits spurred by the recent legal climate. The Xolox team posted these words on its web site, "Taking into account the latest lawsuits against p2p clients based on Fasttrack-technology (such as Kazaa), we have decided to discontinue XoloX".

These four incidents, separated by only a day, may have an eddifying effect on how the heads of present and future Net music enterprises handle their businesses. We were halfway through with our review on Xolox when they announced their news. That's a shame because Xolox, as the first P2P program to allow the user to do multiple file searches simultaneously, became one of our favorites. They came up with a nice innovation that by tomorrow no one will be able to use again. Hopefully, another service will decide to incorporate it in their program sometime in the future.

Present copyright laws are not suited to address the demands that technology and the Internet brought upon the world at the turn of this century. That chains court interpretation not only to the limitations of current law, but to the technical savvy - if any - of the presiding judge. These laws need to be revisited and revised to serve the consumer, not the conglomerate.

The three suits above stand as precedence that favors the hardball tactics of the well-funded RIAA, whose goal is to preserve their very profitable status quo. The closure of Xolox is the sad symptom of a world that may choose to not even try anymore because innovation is now doomed to be followed by litigation.

Reprecussions may go even farther as companies outside of Net music look to exploit these recent decisions for profit and control. As Webnoize astutely points out in their comments on the KaZaa decision: "There is a bigger picture. The Kazaa case foreshadows a messy scenario of political agendas, legal interpretations and limited jurisdictional enforcement that will have an impact on the entire digital media marketplace. Global regulation of intellectual property usage has never come easily. Now, the various political, economic and judicial stances held by individual countries and courts, intended to protect business interests, risk propagating liabilities and lawsuits instead".


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