COPYCENSE

“Happy 2006, and welcome to WSJ.com’s law blog. Our mission: to scour the universe for compelling stories in two related areas: business and law, and the business of law.

“Law and business is a broad intersection, encompassing such current news as the Enron trial, the Merck litigation and the RIM patent dispute. The business of law is focused on law firms and in-house law departments.

“We’ll write about industry news and legal trends, with a sprinkle of good old-fashioned gossip.”

Law Blog. Welcome. Jan. 3, 2006.

OpenWyre™ Relevant News and Unique Perspective on Online Communication and Collaboration. A division of Seso Digital LLC.

“Even as the recording industry staggers through another year of declining sales over all, there are new signs that a democratization of music made possible by the Internet is shifting the industry’s balance of power. Exploiting online message boards, music blogs and social networks, independent music companies are making big advances at the expense of the four global music conglomerates, whose established business model of blockbuster hits promoted through radio airplay now looks increasingly outdated.

“CD and digital album sales so far this year are down 8 percent compared with the same period a year ago, according to Nielsen SoundScan data. Still, despite the slide, dozens of independent labels are faring well with steady-selling releases. Independent labels account for more than 18 percent of album sales this year – their biggest share of the market in at least five years, according to Nielsen SoundScan data.”

Jeff Leeds. The Net Is A Boon for Indie Labels. The New York Times. Dec. 27, 2005.

(Editor’s Note: The Times allows free access to their stories on the Web for seven days before sending the stories to the paper’s fee-based Archive.)

CopyCense™: K. Matthew Dames on the intersection of business, law and technology. A business venture of Seso Digital LLC.

“If digital-music veteran Rob Lord wanted to court controversy with his new open-source start-up, he probably couldn’t have done much better than to compare Apple Computer’s iTunes software to Microsoft’s Internet Explorer Web browser.

“Lord’s new five-person company, the ambitiously named Pioneers of the Inevitable, is building a piece of digital-music software called “Songbird,” based on much of the same underlying open-source technology as the Firefox Web browser. The programmers want to create music-playing software that will work naturally with the growing number of music sites and services on the Web, instead of being focused on songs on a computer’s hard drive.

John Borland. A Firefox for Music? News.com. Dec. 22, 2005.

See also:

News.com. Year In Review 2005: Music. No date.

CopyCense™: K. Matthew Dames on the intersection of business, law and technology. A business venture of Seso Digital LLC.

Once again, Apple’s iPod is expected to be the hottest gift of the holiday season. That should be great news for the recording industry, right? After all, many of the 10 million or so new iPod owners surely will rush to Apple Computer Inc.’s iTunes Music Store to load up on songs.

“Not necessarily. As has been true since the start, iPod owners mostly fill up their players from their own CD collections or swipe tunes from file-sharing sites. Now legal downloads may be losing their luster. According to Nielsen SoundScan, average weekly download sales as of Nov. 27 fell 0.44% vs. the third quarter.

“Which brings us to a grand irony: Apple, which launched the digital music revolution, may now be holding it back.”

Peter Burrows, et al. Apple May Be Holding Back The Music Biz. BusinessWeek Online. Dec. 19, 2005.

CopyCense™: K. Matthew Dames on the intersection of business, law and technology. A business venture of Seso Digital LLC.

Yes, you read that title correctly. Big Music has issued an apology to pearLyrics’ Walter Ritter, the Austrian programmer whose pearLyrics adds song lyrics to Apple’s iTunes environment. According to the Billboard story, pearLyrics had been downloaded about 15,000 times before Ritter removed the application from his Web site on December 6, just after he received a cease and desist letter from music publishing colossus Warner/Chappell Music.

Reporter Bill Werde makes several insightful comments that could serve as a business playbook for Big Music:

[Warner/Chappell’s letter], and the attendant press response, drove the application off of Ritter’s own site and into peer-to-peer land, where it will almost surely be downloaded at far greater rates than it had been pre-hubbub. W/C’s apology was the right move, but may have come as a result of a publicly posted argument from the Electronic Frontier Foundation. Not only was Ritter’s application probably legal in the United States, reasoned the EFF, but such threats against U.S. developers could open Warner Music Group to federal liability.

The music industry might want to think these actions through more thoroughly, and not just to avoid legal strife. Dyball’s letter to PearLyrics was copied to Kevin Saul, an Apple Computer lawyer, and links to similar applications quickly disappeared from the Apple Web site. … [By] taking the text from illegal lyrics sites, applications such as Ritter’s — which seek no revenue and are, at least arguably, legal — were taking eyeballs away from, and thus diminishing the ad revenue of the very illegal, very revenue-seeking sites that archive and distribute unlicensed lyrics.

In other words, Big Music again missed the forest for the trees, focusing on what minimal revenue may have been lost instead of focusing on the tremendous opportunities that could have arisen from partnering with technologists who dream up potentially lucrative applications that are beyond the narrow focus of Big Music’s businessmen. I am glad that pearLyrics is — or seems like it will be — back in business, and I applaud the Electronic Frontier Foundation for leveraging the power of the press and blogosphere into shaming Big Music into retreat.

But Big Content’s constant cycle of public relations dunning, hair trigger lawsuits (some of which are legally frivolous), and anticompetitive business activity is tiresome. Here’s a suggestion: eliminate some of the expensive executives that are running your businesses into the ground and begin hiring people that have some fresh ideas about working and making money in a digital environment.

Bill Werde. News Analysis: Publisher Apologizes To Online Lyrics Tool. Billboard. Dec. 15, 2005.

See also:

pearworks. Good News for Music/Lyrics Fans After All? Dec. 12, 2005.

CopyCense™: K. Matthew Dames on the intersection of business, law and technology. A business venture of Seso Digital LLC.

Commentary by K. Matthew Dames, executive editor.

As a former member of the “mainstream” and “alternative” press corps, I am aware of one of journalism’s secrets: much of the information presented as news is really a press release distributed by some attention-seeking party and rewritten slightly so that the plug isn’t so blatantly obvious. I don’t claim to be above this practice, for during my journalism days I did that as much as any other journalist. Sometimes circumstances prevented me from writing a full article or giving a story both of its requisite sides.

One could say that as the main contributor to (and editor of) CopyCense, OpenWyre, and Search & Text Mining Report, I remain part of the press to some degree — although I’ve yet to determine whether blogging qualifies as journalism. I write, edit and operate all these publications with journalistic standards in mind, and for a variety of reasons, I suspect my choice distinguishes me somewhat from other bloggers. I have been discussing the conflict between blogging and journalism intermittently for most of this year with Online editor Marydee Ojala, and we have discussed whether bloggers should adopt or be held to journalistic standards. (One could reasonably suggest, though, that the press’ reliance on unnamed sources diminishes any standards it purports to have.)

But, alas, I digress. Let me return to the “rehashed press release” theme. News.com released a 78-word story last Thursday under John Borland’s byline that reminded us that Big Music’s lobbying organization is suing music downloaders for alleged copyright infringement. Why is this a story worth reporting? Why is this considered news? Why waste the time and resources of John Borland, who (along with Declan McCullagh) is one of News.com’s finest writers? Time and again, we have heard the din of the Big Music public relations machinery as it tries to intimidate consumers by trying to equate downloading with infringement. We also have heard that despite the lawsuits, music downloading activity has not diminished.

The RIAA lawsuits were news when Big Music started this gambit in June 2003. Now that we have some evidence that the lawsuits have not curbed music downloading or file swapping, I am convinced further that Big Music started this campaign more for public relations reasons than for legal reasons. True, there is a new study says that the number of households that engage in downloading has decreased; the same study says the amount of music files being downloaded is about the same. The new study was released just after the U.S. Circuit Court of Appeals for the Seventh Circuit affirmed (.pdf) a federal trial court ruling that fined Cecilia Gonzalez $22,500 in copyright infringement damages. Gonzalez, a Chicago mother of five children, argued she downloaded the songs onto her computer in order to determine whether to buy the music at retail.

Big Music’s spin on the new study is that its lawsuit campaign is [finally] working. But Borland, who also wrote the News.com article about the study, takes a more holistic view:

Despite headline-grabbing lawsuits against individuals, the effects on file-swapping behavior often have been hard to see.

The months after the Recording Industry Association of America first said it would start suing individuals did see a substantial drop in music downloading through networks such as Kazaa and eDonkey. But the numbers had crept up consistently since then–until the Supreme Court’s ruling in June.

Now it appears that many casual swappers have turned to other means of downloading music. The number of music files that are still being traded, however, has remained fairly flat, and actually increased slightly, from an estimated 258 million in June to 266 million in October.

Another way to look at this new information is to conclude that Big Music has wasted its resources racking up speeding tickets, but has yet to find a way to stop a group that has pilfered several high-priced pieces of art from the National Gallery. Another reason file-swapping may have decreased is because people and entities outside Big Music have introduced viable alternatives. Apple Computer’s iTunes and iPod have revolutionized music, giving consumers affordable, accessible digital music options. ITunes, in particular, has allowed consumers to buy single songs once again. Big Music had abandoned releasing singles to the public partly because it wanted consumers to pay the higher price for a full album (the suggested retail price of which now is near $20) instead of buying only the songs they liked (at a suggested retail price of about $5).

From any perspective, the legal, business, and public relations utility of the lawsuits has waned. Big Music should move on to something worthwhile, as should the press corps that, up to now, continues covering stories that have little newsworthiness. I can assure you that absent some news value brought about by extraordinary circumstances, CopyCense will resist the urge to rehash Big Music’s press releases about its ill-conceived, embarrassingly unsuccessful strategy to sue music consumers.

John Borland. RIAA Sues 751 File-Swappers. News.com. Dec. 15, 2005.

See also:

John Borland. Number of Music File-Swappers Falls, Study Says. News.com. Dec. 14, 2005.

Jefferson Graham. Online File Swapping Endures. USA Today. July 12, 2004.

CopyCense™: K. Matthew Dames on the intersection of business, law and technology. A business venture of Seso Digital LLC. CopyCense™ and CommuniK.™ are trademarks of Seso Digital LLC.

“This summer, Hugh McGuire was searching for free audio books online from his home in Montreal. He didn’t find very much.

“So McGuire launched LibriVox by recruiting amateur readers to create audio files of works of literature. The project now includes almost two dozen complete works, including Joseph Conrad’s The Secret Agent, Jack London’s The Call of the Wild and other classic novels and poems.”

Cyrus Farivar. The Web Will Read You A Story. Wired News. Dec. 16, 2005.

CopyCense™: K. Matthew Dames on the intersection of business, law and technology. A business venture of Seso Digital LLC.