I had been through two airports, a nap and pretty much the entire Wall Street Journal by the time I noticed the article on the RIAA's move away from consumer lawsuits (existing lawsuits will move forward). A key excerpt:

After years of suing thousands of people for allegedly stealing music via the Internet, the recording industry is set to drop its legal assault as it searches for more effective ways to combat online music piracy. ...

Instead, the Recording Industry Association of America said it plans to try an approach that relies on the cooperation of Internet-service providers. The trade group said it has hashed out preliminary agreements with major ISPs under which it will send an email to the provider when it finds a provider's customers making music available online for others to take.

This is big news for all sorts of reasons. It marks a move away from the RIAA's fruitless war against file sharers that has harmed the industry's image while doing little -- just how much impact is up for debate -- to keep people from using P2P networks to illegally acquire music.

By using ISPs to help prevent piracy, the RIAA is shifting much of the burden to parties that can have a great impact on consumer behavior. Good for the RIAA, possibly bad for consumers. This brings up questions of whether or not ISPs should be given such a role in oversight and enforcement, especially since US companies have not had the sort of government encouragement and overall discourse that has sparked similar coopoeration in other countries. In this case, New York Attorney General Andrew Cuomo brought together the deal between ISPs and record labels.

I never got the feeling that private industry was moving toward self-regulation in order to stave off a less desirable government intervention. I never got the feeling ISPs felt so threatened by potential record label lawsuits they would be compelled to cooperate rather than litigate. Without the help of Cuomo's office, it seems unlikely that labels could have brokered this deal. Going to Plan B makes sense when Plan A ran its course years ago, but time will tell how this will work out. (It could be a short honeymoon if ISPs tire of playing Music Cop and push back.)

Working with ISPs in this manner seems like a natural precursor to ISP-based music services, or possibly (though I think it's a long shot) a blanket download license offered to broadband customers.

Read about a similar deal between UK lables and ISPs that took place over the summer.

For additional reading, check out Fred von Lohman's post at the EFF blog ("But the news today is not all good," he writes) or any of the 40 or so posts currently listed at the top of Techmeme.

Posted by Glenn at 5:53 PM | Link
|P2P||RIAA|

The Washington Post article I posted about yesterday is getting more attention. Journalist Marc Fisher and the RIAA's Cary Sherman were guests on NPR's Talk of the Nation. You can stream the show here.

I still don't agree with Fisher's argument. Regardless of the merits of the RIAA's position, Sherman did a fine job refuting Fisher. Fisher, on the other hand, did nothing more than show he has a bone to pick and is frustrated with how the RIAA has used the courts. Sherman easily picked apart Fisher's thesis and shed a light on his shabby journalism.

Posted by Glenn at 5:49 PM | Link
|P2P||RIAA|

In case you didn't see the news that hit about 20 minutes ago, the RIAA won its lawsuit against a Minnesota file-sharer. The jury awarded the RIAA $220,000 in damages, well below the maximum but still a considerable sum of money for an individual.

Read more at Billboard.biz and Wired News.

Posted by Glenn at 5:04 PM | Link
|RIAA|

• The Rick Rubin era at Columbia Records is upon us. Kyambo Joshua, formerly the SVP of A&R at Warner Music Group, has been named president of the urban department. Joshua recruited Chicago producer Dion Wilson to head urban's A&R department. (Billboard.biz)

• "So far, the RIAA is batting 1.000 when it comes to the 'making available' argument." (Ars Technica)

• CD Baby is now selling MP3 album downloads at its website. Each album download is priced the same as the CD and comes in a zip file with album art and liner notes. (Digital Audio Insider, via Listening Post)

• Verizon Wireless customers will get the chance to buy exclusive Bob Marley ringtones. Twenty-eight ringtones, all from songs from the greatest hits album Legend, are available for on Get It Now-capable phones. (Press release)

• How good is Starbucks at selling music? Almost half of the 511,000 units sold of Paul McCartney's Memory Almost Full has come from Starbucks stores. The chain can also help develop new artists. The article offers Ceu as an example, and it's a good example. The Brazilian singer's Six Degrees album has scanned 77,000 units. Just over 64,000 of those are CDs (83%) and about 56,000 of those come from non-traditional retailers (which covers Startbucks as well as online retailers like Amazon.com). (Financial Times)

• The always interviewable David Pakman of eMusic talks with the Hollywood Reporter. "The number of people in our focus and demographic is at least 5-10 million right now. ... (But a current study of baby boomers who retailers don’t really cater to) shows that 33% of boomers spend $50 on music a year. That’s 25 million people, and they are becoming increasingly tech savvy. If you are focused on selling music to a teen audience, that market is shrinking. For 2007 so far, people 25 and younger represents only 27% of music sales. We’re focused on the other 73%." (Hollywood Reporter)

• Ecast has signed an agreement with The Orchard to offer the latter's catalog to Ecast's multitude of broadband-connected, touchscreen jukeboxes. (Press release)

• Groan. MTV will produce a series of hourlong shows called "Celebrity Rap Superstars" in which B-list celebrities will receive mentoring and tutoring in an eight-week series of rap showdowns. Isn't it enough seeing them play during the NBA All-Star weekend? (Variety)

Posted by Glenn at 8:47 AM | Link
|Digital Distribution||Online Stores/Services||RIAA||Ringtones||Sony BMG||Starbucks|

Home Theater magazine's interview with the RIAA's Cary Sherman is worth a read. On one hand, the email format gave Sherman a prime opportunity to lay out his well crafted company line. On the other hand, even a carefully scripted response offers insights into the trade group's thinking. Topics covered include the RIAA's legislative agenda, 5.1 and DVD Audio, DRM (of course) and the future of mobile.

Here's an excerpt from Sherman's response to a question about what formats will provide future sales. Note Sherman's reference to a possible model that includes ISPs.

"Mobile will be huge. We are at just the tip of the iceberg with mobile—videos, streaming music and subscription services, Internet radio, you name it—will be available on mobile. The licensing of music will be increasingly important (for TV shows, movies, etc). Performance royalties from digital radio services like satellite and Internet radio will grow and be a bigger piece of the pie. Music companies will branch out and no longer just be record companies, but all-purpose entertainment firms. Lastly, legal subscription services—those now on the scene like Rhapsody and Napster—but other models as well (perhaps by an ISP?) in the future will play a bigger part. It's a different model than what people are used to, so it will take some time, but the subscription service model—all you can eat a month for basically the price of a CD—makes real economic sense and will likely grow as consumers become more comfortable with this new way of acquiring music.

The future is bright. We are in a tough transition now, but the good news is that the appetite for music is greater than ever. All those iPods have made music even more a part of everyone's daily life than before. But while the consumption of music is increasing, people are paying for less and less of it. We just need to steer more attention toward legal models and continue to innovate and offer exciting additional ways to consume music."

Posted by Glenn at 5:08 PM | Link
|RIAA|

• Album sales rose 4% last week but were 10% lower than the same week last year. For the year, album sales are down 14%. Digital track sales rose 1% last week and were 42% higher than the same week last year. For the year, digital tracks are up 48%. Last week, digital albums comprised about 11% of all albums sold.

• For the first time since 1997, consumers spent less time with media in 2006 than they did in the prior year. Veronis Suhler Stevenson, a private equity firm that specializes in media and communications, found that media usage per person declined 0.5% to 3,530 hours "due to changing consumer behaviors and digital media efficiencies." Part of the drop is explained by a shift toward digital alternatives for news and entertainment (online clips are shorter than broadcast shows). In addition, consumers are migrating toward consumer-supported platforms (like video games and cable TV) and away from ad-supported platforms (like broadcast TV and newspapers). (Radio Ink)

• Yowza. The first leg of The Police tour grossed $107 million. That number does not include Bonnaroo or last weekend's V Fest. (Billboard.biz)

• 1720 Entertainment inked an exclusive physical and digital distribution agreement with Koch Entertainment. (Music Row)

• The EFF is backing an eBay seller who has been sued by Universal Music Group for selling promo CDs. UMG, as do all labels that send out promos, claims the CD is for promotional use only and remains the property of UMG. With CD sales plunging, I assume labels are more worried than ever that sales of promo CDs are cannibalizing sales of new CDs. The practice of selling promo CDs -- and promo cassettes back in the day -- is very common, though, and has been for years. Rare is the used bin without some kind of promo CD. (EFF, via Digital Music News)

• MyLifeBrand, a social networking site, has partnered with Delicious Vinyl to create artist-specific communities. (Press release)

• The RIAA spent $685,000 lobbying the federal government in the first half of 2007. That might sound like a lot of money -- probably part of the reason it was reported in the first place -- but the insurance lobby spent $893 million last year, according to OpenSecrets.org. Check out the dollars spent by the Internet and telecom industries in 2006. eBay went in for almost $2 million and Cingular spent $4.7 million. Time Warner spent nearly $3.8 million in 2006. (AP)

• David at Digital Audio Insider has a post on sending out promo CDs, shipping costs and the value of online alternatives. "I don't -- in any way -- want to disparage the influence of college radio or the DJs and music directors ... But I'm starting to wonder if a blurb and a link on a well-read mp3 blog is more valuable to small indie band than modest airplay on a small- or mid-size college station. Ideally, you'd want both, but these new postal rates make me slightly less inclined to send out 400 copies of our next album to college radio." (Digital Audio Insider)

• Thank you to all who have donated during Coolfer's August pledge drive. We might just make the goal of 100 donations by the end of the month. Here's more information on what difference levels of donations will get you.

Posted by Glenn at 10:34 PM | Link
|Legal||RIAA||Universal Music Group|

At his blog, Jupiter's Mark Mulligan gave a thumbs up to the music industry's strategy of targeting Internet Service Providers (ISPs).

"A few years ago P2P was a key driver of broadband uptake. (By way of example BT had a TV broadband advert that suggested consumers sign up to download music even though they didn’t have a music service of their own.)

The game has changed now. The early adopter file sharers are on board and remaining growth is from mass market consumers e.g. families. Added to that ISPs are looking at extra ways to drive revenue as margins in the access business face continuing downward pressure. Running their own content offerings is one part of that solution. The net result is that ISPs are actually now concerned about trying to control and limit the impact of bandwidth hungry file sharing activity. So now is as good a time as ever for the music industry to reach out to the ISPs, as their goals are no longer so far apart."

At TorrentFreak (via ZDNet) reaction to the court's decision brought discussion and doubt as to whether ISPs could effectively monitor P2P activity and correctly identify infringing content.

Posted by Glenn at 11:49 AM | Link
|RIAA|

• BusinessWeek.com's Olga Kharif has a good overview of the recorded music industry's attempt to get terrestrial radio to pay royalties. "Aside from the occasional royalty scuffle across those decades, the music industry has always been happy to let radio stations play songs for free, treating it as a necessary marketing expense for the songs and albums they wanted listeners to buy. ... But with more music lovers consuming their passion over the Internet and through satellite broadcasters XM Satellite Radio (XMSR) and Sirius Satellite Radio (SIRI), the free exposure offered by FM and AM radio is no longer quite so valuable." (BusinessWeek.com)

• iTunes is sale pricing albums at $5.99 to $6.99 under the "Next Big Thing" banner. (Digital Music News)

• The Economist has an article on the new approaches of old music companies. "Record labels have come up with a remedy: the '360° contract'. Instead of settling for a cut of CD sales, they increasingly offer artists broader contracts that encompass live music, merchandise and endorsement deals. Such deals, also known as multiple-rights or all-rights contracts, are particularly important in regions with rampant CD piracy, such as Africa, Asia and Latin America." (The Economist)

• U.K. marketing firm MAMA Group has put it a bid to acquire six London concert venues from Mean Fiddler. (Billboard.biz)

• AllofMP3.com and MP3Sparks.com are out of business, but now there's word that customers of those two download stores can purchased music at Alltunes.com. (Slashdot)

• Nashville might be looking at country's 29.6% slide in album sales at 2007's midpoint. That drop is certainly larger than the overall album drop of 15%, but it was bound to happen in a year that followed smashes by Rascal Flatts and Carrie Underwood. MusicRow.com has a graph that compares the big country debuts of 2007 with the first-week sales of those artists' previous releases. (Music Row)

• Lala.com's online streaming service, which debuted to much fanfare a few weeks ago, is down for the count. Said Lala's John Kuch, "Many of our unique, forward-looking features have generated significant consumer excitement but have also generated an overwhelming load on our systems. To avoid falling short of consumer expectations, we're holding off on upgrading and returning some aspects of our offering until we can provide a fuller catalog that meets the demand of consumers and includes music from a broader cross section of the industry." (Ars Technica)

• Any implications on selling music online? Jupiter Research says social networking sites have little impact on where people shop online. (Silicon.com)

• iLike.com has a fun "name that tune" game called Challenge. I played once, got 17 out of 20 and made the rank of Music Intern. My advice is not to rush the songs you're not sure about. (iLike Challenge)

Posted by Glenn at 7:46 AM | Link
|Online Stores/Services||RIAA||iTunes|

• EMI has opened its books to Warner Music Group, according to a report. WMG will decide to revise its $4.2 billion/£2.1 billion bid that was rejected by EMI earlier this year. (The Business Online)

• IAC/InterActive Corp has increased its stake in management firm Front Line. The company will remain independent and continue to grow, according to a source. (Billboard.biz)

• MSN actually has something to talk about: An exclusive Madonna download, "Hey You." It's free of charge and related to the MSN page on the Live Earth concert. (MSN)

• Indie trade group AIM inked a deal with UK podcasters that will give them preferential access to licenses from AIM's 200-plus members. (

• The RIAA announced some certifications a few days ago. Among them, Lloyd's Street Love went gold, Beyonce's B'Day crossed triple-platinum and Billy Currington's Doin' Somethin' Right went platinum. (Press release)

• Edel has acquired a minority stake in Eagle Rock Entertainment Group and will place its CEO on Eagle Rock's board of directors. (Press release)

• The Copyright Alliance, a new special interest organization, will be unveiled today at a ceremony at the Reserve Officers Building on Capitol Hill. Members include the RIAA, American Society of Composers, Authors and Publishers, Disney, National Association of Broadcasters, Recording Artists' Coalition and Broadcast Music Inc. (Hollywood Reporter)

Posted by Glenn at 9:07 AM | Link
|RIAA|

• Capita>ol Music Group has started laying off workers says a Billboard report. I heard it had started last week, but no difference. Pink slips are pink slips. Seven promotions employees got the axe at Capita>ol. (Yes, I know I spell the label wrong on occasion. After writing about net working capital and capital structure all day, I guess it's a hard habit to break.) (Billboard.biz)

• Ticketmaster hooks up with iTunes to offer a free song with every ticket purchased at Ticketmaster.com. (Hollywood Reporter)

• Now this is PR: An entire article on EMI's scant MP3 experiments. Such experiments are unlikely to offer an indication of potential results on a broader scale, though EMI spokesperson Adam Grossberg called them "very positive" (without giving any numbers). (MarketWatch)

• Steve Machin has joined Ultrastar as Vice President of International Business Development. Machin was previously head of Ticketmaster's European strategy and business development. (Press release)

• A directory of RIAA lawsuits. (Recording Industry vs The People)

Posted by Glenn at 10:03 AM | Link
|EMI||RIAA||iTunes|

• Sony BMG settled its rootkit lawsuits brought by attorneys general in California and Texas. The company will pay $1.5 million in penalties, which really is a light slap on the wrist compared to expenses related to the various class action lawsuits around the country. (Read article at PC World)

• Changes at Blue Note Records, and oddly enough for this time of year there are no layoffs. Meg Harkins was named VP of Marketing at Blue Note. Josh Zieman is in as VP of Marketing for the Manhattan group of labels (Manhattan, Back Porch, Higher Octave and Real World). Two received internal promotions. Saul Shapiro was upped to SVP of Sales at the Blue Note Label Group, and J.R. Rich was upped to senior VP of publicity for Blue Note. (Read article at Variety)

• The RIAA has dropped its case against Patricia Santangelo and will instead focus on her children. (Read post at Fox News)

• A federal court in Australia upheld a ruling that the operator of www.mp3s4free.net and the ISP hosting the site are guilty of authorizing copyright infringement because the site provided links to other sites at which people could illegally download music. (Read article at Smarthouse)

• EMI is consolidating its operations in Los Angeles. The company signed a ten-year lease for 1800 Highland. The 50,000 square foot office space will house staffs from EMI Music Marketing, EMI Televisa, Caroline Distribution and the west coast office of Virgin Records. (Read press release)

• The Associated Press profiles Koch Records and the financial benefits it offers rappers with an established audience. A good quote came from Miss Info of New York radio station Hot 97. On the financial aspects of signing with Koch she said, "It's like, do I want to look like I have money or do I actually want to have money? (Koch) is not like a graveyard, but more like a retirement pension." Layzie Bone of Bone Thugs-N-Harmony has a good strategy: Sign with Interscope for the group albums, which will lead to better sales for his more profitable solo albums on Koch. Last year, Koch Records's rap revenue was $40 million. Rap accounts for 80% of the label's revenues. (Read AP article)

• Music recommendation is fast becoming a hot investment. Ticketmaster bought music discovery site iLike.com for $13.3 million and will introduce it to its millions of customers. iLike.com, which was formerly Garageband.com, helps users organize, share and discover music. (Read article at Red Herring)

Posted by Glenn at 11:44 AM | Link
|EMI||Indies||RIAA||Sony BMG|

• EMI boss David Munns hinted that the Beatles catalog may go digital soon. (Read article at Times Online)

• Jeff Leeds has an article on the grants that indie rock bands are getting from their governments. Groups from Canada, Sweden, New Zealand, Australia, Scotland, Finland and Denmark are mentioned in the article. It's good money, and because they're grants they don't have to be paid back. The Figurines, from Denmark, have received more than $18,000 in 2006. Canada's Broken Social Scene has received over $140,000 over the years. (Read article at New York Times)

• A judge ruled that a defendent could challenge the RIAA's $750-per-song claim to statutory damages. (Read post at Slashdot)

• After the nightclub fire at a Great White concert in Rhode Island, music venues around the country are seeing the repurcussions. In some states, clubs are mandated to install sprinkler systems. (Read article at Pollstar)

• An explanation of Microsoft Points, which is the currency used at the Zune Marketplace. (Read post at Medialoper)

Posted by Glenn at 7:27 AM | Link
|EMI||Live Music||RIAA||Zune|

• After news got out that Warner Music Group's Edgar Bronfman has been targeting EMI investors, shares of EMI rose 7%. At the same time, Bloomberg data indicates the perceived risk of holding EMI's bonds rose 3%, which shows an decrease in perception of credit quality. (Read article at Bloomberg)

• Network Live is gone and has parted with AOL, but its production team is going to start a new live music distribution deal with MSN called Control Room. (Read the details at paidContent)

• The RIAA's Cary Sherman testified to Congress that universities "resist taking action, or do as little as possible in order to brush off further responsibility" when it comes to P2P on their networks. (Read post at Digital Music News)

• A truce was called without as much as a press conference: Victory Records titles finally make an appearance at the iTunes Music Store. (Read post and comments at Punknews, via Idolator)

• Def Jam attempts to squash rumors that the label dropped rapper Method Man due to less-than-stellar sales. "Method Man is still part of the Def Jam family and he is currently on tour promoting his new CD," said a spokesperson in a statement. (Read article at SOHH)

• Rapper Beanie Sigel, on the other hand, says he is no longer signed to Def Jam or Roc-A-Fella Records. (Read article at SOHH)

• Study: HD radio still confusing listeners. (Read article at Radio and Records)

Posted by Glenn at 8:56 AM | Link
|EMI||EMI WMG Merger Talk||RIAA||Radio||Research||iTunes|

The campaign continues: Labels that are part of the four majors have sued Lime Group LLC, the company behind P2P application LimeWire.

According to the AP article by Alex Veiga, the labels are seeking compensatory and punitive damages totalling $150,000 per infringement. The complaint states that Lime Group "not only have known of the infringement, but have promoted and relied upon it to build their business," which is the argument that has been used in lawsuits against other file trading companies.

Last week Kazaa settled its lawsuit with the industry. For thoughts on the RIAA's strategy and how it has done not stopped piracy but has encouraged investment, read this post from earlier this week.

Posted by Glenn at 3:50 PM | Link
|Legal||P2P||RIAA|

• Painful: Tower has been put on credit hold by all its major distributors. (Hits Rumor Mill)

• Barney Wragg, formerly SVP at Universal Music Group's eLabs, has been appointed EMI's worldwide head of digital. (Macworld UK)

• The RIAA decided to drop a lawsuit against a file trader (here called a "massive setback") because the defendent's unprotected WiFi network may have been used to download the files in question. (Bit-Tech.net)

• Surprisingly, I didn't read about this at Stereogum: Lindsday Lohan was dropped by her UK label, Island Records. Said an insider to The Sun, "A single was a huge flop over here because Lindsay couldn’t be bothered to get off her bum and promote it." (The Bosh)

• Universal Music Enterprises acquired 11 early Elvis Costello albums and plans to reissue them through box sets, reissues, deluxe editions and the usual ways labels milk their investments. The albums were previously reissued and expanded by Rykodisc, so UME says its reissues will be "definitive reissues." (Billboard.com)

• Here are two albums that have been in dire need of digital remastering: Rhino will reissue the first two Pretenders albums on October 3rd. Finally! (Billboard.com)

• Apple's European iTunes music stores have sold 200 million tracks since launching two years ago. (Playlist)

Posted by Glenn at 1:11 PM | Link
|Brick-And-Mortor Retail||EMI||RIAA||Universal Music Group|

Last week peer-to-peer company Kazaa agreed to settle its lawsuit with the recording industry and will pay $115 million to the four majors and also an amount to motion picture companies. The development started the usual debate about the industry's legal strategies. Most agree that lawsuits will not stop file sharing. It's just too uncontrolable. But the industry has used to lawsuits for another reason: To help nuture legitimate digital stores.

Kazaa has agreed to make changes to its software, such as incorporating filters and develop a legal distirbution model. Those changes would effectively mean Kazaa is no longer in the P2P business. (And as Ray Beckerman pointed out at his blog at Digital Music News, the settlement does not let Kazaa users off the hook if they've been sued by the RIAA.)

Some quickly pointed out that P2P traffic has risen over the years and since the Grokster decision. "It's a battle you can't win," they say, "so just accept P2P." Many, including the EFF, have continuously called for an end to the lawsuits and have proposed models that would legalize P2P and compensate labels and artists. Music industry commentator Bob Lefsetz wants to see an across-the-board ISP tax to pay for legal P2P.

But the industry still has no plans to embrace P2P, and the fight against piracy continues. The IFPI's John Kennedy savored the victory but admitted the Kazaa settlement is not a cure all. "We are under no illusion that this solves everything. But this is very encouraging."

Why is this seen as encouraging?

Continue reading "Kazaa Settles With Recording Industry. What Does It Mean?" »

Posted by Glenn at 2:36 PM | Link
|Legal||P2P||RIAA|

Yesterday the Consumer Electronics Association filed an amacus brief in support of XM in its fight against record labels. Labels and XM are in a dispute over the Inno, a device that can store a digital copy of a song played in an XM broadcast.

In the statement, CEA president and CEO Gary Shapiro decried the "brazen effort by the labels to strong-arm more money from a successful technology industry startup" and argued the Inno is legal under Section 1008 of the Audio Home Recordings Act. That section states that copying for non-commercial use is not considered to be copyright infringement.

The RIAA contends XM does not have the proper license to grant its customers the ability to create a digital copy. XM's license covers only the broadcast of songs. "We believe that this is a case of direct infringement where they are offering a distribution service without a distribution license," the RIAA's Mitch Glazer told BusinessWeek.

Read a PDF of the amacus brief here.

Posted by Glenn at 12:10 PM | Link
|RIAA||XM|

• Entertainment lawyer Chris Castle has as thorough post on the RIAA's lawsuit against XM over its Inno receiver/player. He thinks the Consumer Electronics Association believes that if Pioneer, which manufactures the Inno, pays the Audio Home Recording Act levy then that qualifies as a kind of content license. "Sorry guys," he writes, "but that is an absurd position." It's a long post but absolutely worth reading in its entirity. A little blog mention can't do it justice. (Music•Technology•Policy)

• The Guillemots' Through The Windowpane (Fantastic Plastic) has a Metacritic average score of 79 through five reviews. Stylus gave it an A rating ("one of the most creative, musical and genuinely moving records to come from these shores in an age") while The Guardian , from the band's home turf, gave it a mediocre three out of five stars ("A microcosm of a debut that, frustratingly, juggles promise and excess.") (Metacritic)

• Folks at The Velvet Rope are thinking Ryko Distribution will get folded into ADA. Makes sense. Given its parent company, Warner Music Group, is on the cost efficiencies warpath, there seems to be too much overlap to not combine to two distributors. (The Velvet Rope)

Posted by Glenn at 10:00 PM | Link
|Distribution||Legal||RIAA||Satellite Radio|

For a good recap of the developments in the RIAA's lawsuit against XM, and the public relations campaign XM has undertaken as a result, read Carlos Bergfield's article at BusinessWeek Online titled "XM vs. The Industry -- And Congress."

Here's the heart of the matter:

"What the recording industry doesn't like is the fact that subscribers can go back to a block of recorded programming and chop it up into different songs with the help of the players, which label songs individually. The PERFORM Act would make this illegal, but the RIAA says XM is already breaking the law."

XM is attempting to motivate its subscribers, which is far cheaper than defending itself in court. Gadgetall has an email that XM sent out to its subscribers. An excerpt:

"They don’t get it. These devices are clearly legal. Consumers have enjoyed the right to tape off the air for their personal use for decades, from reel-to-reel and the cassette to the VCR and TiVo. ... Satellite radio subscribers like you are law-abiding music consumers; a portion of your subscriber fee pays royalties directly to artists. Instead of going after pirates who don’t pay a cent, the record labels are attacking the radios used for the enjoyment of music by consumers like you."

XM pays royalties directly to artists? That's a funny, feel-good PR thing to say. (I guess consumers don't need to know how artists get paid for radio airplay.) Anyway, the issue here is whether or not the XM portable device's creation of a digital file requires an additional license. Does anybody expect the RIAA to sit this one out because the songs can't be transfered off the device or because the sound quality is relatively poor? Me neither. Let's see how this one plays out.

Posted by Glenn at 2:40 PM | Link
|RIAA||Satellite Radio|

"Digital sales are rising at a value that is larger than the decline in physical sales" -- Mitch Bainwol, RIAA

That's just one of many thought-provoking quotes in Declan McCullagh's interview with the RIAA's Mitch Bainwol and Cary Sherman at News.com. McCullagh threw some tough topics at the two, and in a fairly obvious ploy to portray the conversation as consumer rights versus big business -- which always scores points with the tech crowd -- pointed out in his introduction that the two are among the highest paid lobbyists in Washington.

Other highlights: Their belief that the process of suing file sharers has been successful, their intent to leave Congress out of their disputes with satellite radios, and Sherman's belief that the fight over DRM will fade in the future.

Equal time: The Electronic Frontier Foundation's dislike of DRM is fading away. In fact, just this week the group has set up an page called The Battle for Your Digital Media Devices that details how various industries are using DRM to protect their content.

Posted by Glenn at 6:09 PM | Link
|RIAA|