07.11.02, 08:46 AM #1
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The record labels' new target--Joe Blow?
Wed Jul 3, 6:14 PM ET
Record labels hell-bent on strangling unauthorized music copying on the
Internet are considering widening their legal efforts to include lawsuits
against individuals, according to industry sources.
The move comes as the industry wrestles to contain the effects of
peer-to-peer software applications that allow consumers to link their PCs
into massive cooperatives where millions of music titles can be found and
copied for free. Despite legal rulings that have helped the labels shut down
some of the most popular providers of file-swapping services, such as
Napster ( news - web sites), such networks have grown unabated.
The labels have not yet decided to sue individuals, industry insiders said.
However, it's clear executives are seeking a way to make consumers think
twice before uploading or downloading music via the Net. They're also
discussing funding a larger education campaign. But some believe the most
prolific file-traders should be held legally accountable.
"The subject is on the table," said one industry executive who requested
anonymity. "The idea would be to discourage people. Clearly there have been
no consequences yet."
The move toward suing individuals, first reported in The Wall Street Journal
on Wednesday, would mark a substantial deviation from the path that record
labels and movie studios have previously taken in their battles against
In the past, labels and movie studios have targeted only companies that have
profited--or intended to profit--by the rise in online piracy. The Recording
Industry Association of America ( news - web sites) (RIAA) has successfully
sued Napster and Audiogalaxy; it is continuing lawsuits against Madster
(formerly known as Aimster), StreamCast Networks, Grokster and the company
that created Kazaa. The industry group has said it intends to add Sharman
Networks, which now operates the Kazaa network, to that list.
So far, the lawsuits have been filed for "contributory infringement," which
means the labels have charged that companies such as Napster were knowingly
aiding and abetting the real music-copiers. But for any of those suits to
fly, it means the labels and the judges have acknowledged that the actions
of individual file-swappers themselves were direct copyright infringement,
and therefore potentially illegal.
Industry insiders say any lawsuits would likely target people who were
offering large numbers of files for download by others. They cite a common
belief in the industry, initially sparked by a study of Gnutella ( news -
web sites) users conducted by Xerox's Palo Alto Research Center (PARC), that
only about 10 percent of file-swappers provide about 90 percent of the
content available through networks such as Kazaa.
Discouraging this 10 percent of "providers" would go a long way in reducing
the amount of content available through file-swapping networks, industry
Previously, record companies, movie studios and software companies have
pursued individuals though their Internet service providers. Connecting to
most peer-to-peer networks exposes a computer user's Internet address, which
can be traced back to an ISP. Copyright owners have sent thousands of
letters to ISPs complaining about subscribers' copyright infringement over
the past year, resulting in warning letters to the subscribers, and in some
cases cancellation of accounts.
The hard-rock band Metallica ( news - web sites) cited unnamed individuals
in its lawsuit against Napster, and the band's attorney said he would likely
add specific individuals later. That tack was later dropped, however.
All of this action has had only minimal effect on the total volume of file
According to recent estimates by The Yankee Group research firm, close to
7.9 billion audio files were traded in 2001 by computer users 14 years and
older. By 2004, they expect that number to rise to more than 11.4 billion.
Record industry insiders say there is no timetable for when potential suits
against individuals would be launched.
Music Labels Plant Online Decoys, Mull Lawsuits
Fri Jul 5,12:38 PM ET
By Sue Zeidler
LOS ANGELES (Reuters) - The music industry is adding more firepower to its
arsenal in the fight against online piracy, planting "decoys" on free
peer-to-peer services and considering lawsuits against individual
song-swappers, sources said on Wednesday.
Many large record labels have resorted to what is known as "spoofing," by
hiring companies to distribute "decoy" files that are empty or do not work
in order to frustrate would-be downloaders of movies and music.
"Spoofing is just one example of a lawful and appropriate self-help measure
available to the labels to respond to the growing problem of peer-to-peer
network piracy. It also happens to confirm the adage 'you get what you pay
for,"' said a spokesman for the Recording Industry Association of America
( news - web sites), the trade association for the big labels.
Overpeer, a New York-based software firm funded by South Korea ( news - web
sites)'s SK Group, is one firm helping the industry disguise online files to
thwart unauthorized swapping.
"Companies that provide heavily pirated music, films and software are making
a strong commitment to protect their content," said Marc Morgenstern,
Overpeer's chief executive, who said such activity was increasing "on all
Additionally, sources said the RIAA, which represents music giants like
Bertelsmann AG ( news - web sites) BMG, EMI Group Plc ( news - web sites) ,
AOL Time Warner Inc , Vivendi Universal and Sony Corp ( news - web sites) ,
is considering taking a new tack by suing individuals who use the services,
rather than the companies that host them.
Entrenched in its worst sales downturn in more than a decade, the music
industry blames such unauthorized sharing in part for the 5 percent decline
in global music sales in 2001 and a continuing slump in sales this year.
"They're talking about suing individual users. It's one of many options to
stop declining sales, but they haven't agreed yet whether to go forward or
not," said a record executive.
The RIAA declined comment, but industry sources said the idea has sparked a
debate among the record labels, who in the past have been loathe to sue
individual users for fear of losing customers.
"Launching a campaign of lawsuits against file swappers escalates the war
against those who want online music. It invites retaliation," said Phil
Leigh, analyst with Raymond James, who estimates cumulative downloads of
services like Morpheus and Kazaa total 90 million each.
Warner Music, for instance, has expressed concerns about the proposal, while
EMI and market-leader Universal Music were strong proponents, sources said.
Warner, Universal and EMI all declined to comment.
GENIE OUT OF THE BOTTLE
While the labels have scored legal victories against providers of services
like Napster ( news - web sites), Morpheus or Kazaa, users continue to find
new ways to get music for free on the Web.
The lawsuits, according to industry sources, would mostly target those
individuals, known as "supernodes," who collect the biggest amounts of music
and who in turn become a sort of centralized directory for online
Analysts said music labels would need the co-operation of Internet Service
Providers to identify offenders. The ISPs would also have to agree to send
"cease and desist" messages.
"All of this involves getting the ISP to take on added duties as a
'policeman' for which he receives no compensation," Leigh said, noting few
ISPs are keen on driving away users.
Analysts note further that any "legitimate" online market will remain
constrained until the industry comes up with alluring commercial
"If the labels fail to provide a viable licensed alternative, they're likely
to continue battling a vast army of computer-savvy youthful volunteers who
are passionate about music in a digital format," Leigh said.
The labels for their part are ramping up online services like MusicNet and
Pressplay and have also increasingly licensed music to independent services
like FullAudio and Listen.com.
While admitting the challenge in charging money for something that has been
available for free, officials often cite the cable industry's success
against similar dilemmas.
"If you offer a compelling alternative that's affordable and provides
features that people can't get from these free services, people will sign up
over time," said a spokesman for Listen.com, which provides a service called
07.11.02, 09:59 AM #2
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The more the record industry focuses on the symptom (file sharing) rather than the problem (inflated CD prices, shitty artists) then they will be fighting a losing battle. It is to laugh!"There's a Japanese term called wabi-sabi, not wasabi, but wabi-sabi. It means an appreciation for the imperfect, the less than precision. The cowboy boots that you never polish because it's bad luck. That is completely wabi-sabi. Van Halen is that." - DLR 2002<br /><br />"Look! I can see their parachutes! They're ok..." - Tenshinhan, DragonBall Z
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