The Internet helps RIAA squeeze profits

Internet technology has made it easier to track sharing of copyrighted content, and music labels and the powerful Recording Industry Association of America (RIAA) are making the most if it to clamp down, no drive to bankruptcy, individuals who are only following an age-old tradition of sharing.

Jammie Thomas, a Native American from Minnesota, has to pay whopping fine of US$220,000 to record companies for offering songs online through a Kazaa file-sharing network. The sum is equivalent to about five times her annual salary, and will surely drive her bankrupt, according to a report in The Times of London.

Jammie’s first mistake was that she thought that the world was still a place where people shared nice things, without monetary gain. Her other mistake was to take on RIAA and the powerful music labels, who get away with their usurious prices on music.

RIAA will certainly argue that you have to pay for the music whatever the rates, or compose your own music, because they have the copyright laws behind them. Besides, sharing is no longer fair use because RIAA and company can now track you down on the Internet, and make money from you.

If you buy a print magazine and pass it around to your office colleagues, and your neighbors, nobody can do anything about it. But once you go on the Internet and download a digital edition of the magazine, the company that manages the downloads, evidently in agreement with the publishers, allows you one download, and maybe even allows you to give a friend a free copy. But any distribution beyond the set limit attracts digital rights management (DRM) and the weight of copyright law.

By the same token, iTunes from Apple Inc. allows you to rip CDs and burn new ones, but digital music downloads from its online store attract a whole lot of restrictions, including what player you can use to play the music. Now that is double standards !

Technology has made it possible for music companies, publishing houses, and other content providers to put more restrictions on consumers, and make them enforceable.

If I buy a CD, I can rip it using iTunes or any other media player software, and burn scores of CDs from it. Ordinary people don’t usually do it. They may at the most pass the CD to a friend to listen or burn a copy to give to that friend. That is part of a culture of sharing and fair use.

Note that is not an argument against copyright. It is an argument to support a culture of sharing and fair use on copyright, that has been around for decades. We share recipes, we share an interesting poem, or a touching prayer as well. We sometimes record a nice song playing on the radio. Do you really want me to call up the radio station, and submit a lengthy form to take permission to record the song ?

Today if I download a file from audio books downloading site Audible.com, the file that is downloaded has my name on it. My use of the downloaded audio book can be tracked, as also my alleged misuse.

As the terms for purchase of music, books, and content are far more liberal offline than online, maybe many of us will now go back to hassle-free consumption of offline content like CDs, print books and newspapers, and even DVDs. The controls on the Internet are just too many.

Or maybe I will buy at online stores that sell non-DRM content. They are offering non-DRM content because they see the writing on the wall, because they recognize that many like me are decent folks, because they recognize that sharing is social glue which the money-grabbing barbarians can never understand.

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New Zune players to compete with iPod

Microsoft Corp. unveiled three new models of its Zune player, including two versions with flash, which will ship November for the holiday season.

The company has also launched an online music community called Zune Social. Taking a leaf from Apple Inc.’s iTunes and Amazon.com’s new digital music store, it is also offering more than 1 million songs on its Zune Marketplace that are not protected by DRM (digital rights management).

Microsoft however has an uphill task battling against the iPod. The company has reported sales of 1.2 million Zune devices since November last year. That is a lot less than a total of 100 million iPods sold from 2001 to April this year.

The company announced three new models of the Zune portable digital media players: a black Zune 80GB hard-drive model with an estimated retail price of US$249.99; an ultraportable Zune 4GB which is expected to retail at $149.99; and a Zune 8GB, costing $199.99. The last two models are flash models.

The new Zune devices feature the Zune Pad navigation button, with its touch-sensitive surface, Microsoft said in a statement late Tuesday.

Consumers can flick their thumbs over the pad to fly through lists of songs or albums or to fast-forward through picture slide shows or videos, it said. For those who need to pause, advance or adjust the volume on the device without looking, they can also navigate the Zune Pad using physical cues by pressing on the four sides or the center of the button to adjust the volume or choose the next track, according to Microsoft.

The new devices also offer wireless synchronization over the home wireless network, and new software that automatically imports broadcast content recorded on Microsoft Windows Media Center for Windows Vista Home Premium or Ultimate, so consumers can sync them onto their Zune media player and watch them on the bus, in their car or wherever they want when they’re out and about, Microsoft said.

Existing Zune owners will automatically receive new software features, the redesigned PC and device software and access to the new Zune Marketplace when the products and software are released to the public in mid-November.

The new Zune players have some nice new additions, but is not a dramatic makeover from the earlier Zune devices, according to analysts. Zune also does not have as strong a brand as the iPod.

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Amazon.com gets onto MP3 music bandwagon

Amazon.com Inc. has launched Public Beta of Amazon MP3, a digital music store, signaling competition for Apple Inc.’s iTunes, and eMusic, the two big players in the digital music downloads business.

While iTunes predominantly uses a proprietary DRM (digital rights management) for its music downloads, eMusic offers music downloads in the MP3 format, without DRM protection. Downloads without DRM come without copy restrictions and controls, and can be played on any audio device supporting the popular MP3 format.

Amazon MP3 has over 2 million songs from more than 180,000 artists represented by over 20,000 major and independent labels, the company said in a statement. The downloaded files can be played on any audio device, Amazon said on Tuesday.

Most songs are priced from 89 cents to 99 cents, with more than 1 million of the 2 million songs priced at 89 cents, the company said. Songs on Amazon MP3 are encoded at 256 kilobits per second, which gives customers high audio quality at a manageable file size, according to Amazon.com.

Most large music labels have shied away from MP3 downloads, which is the reason why eMusic sells mainly music from independent labels. To make headway in this market, Amazon.com will have to introduce music guides and expert reviews to help users choose good quality music. The term independent labels has often come to mean amateurish music generated by out-of-garage operations, a problem many users encounter currently on eMusic.

Only Universal Music Group and EMI Music Publishing, among the big labels, are currently offering music at the Amazon.com store.

Amazon.com announced in May that it would open an online digital music store later this year, and also said that the music would be free of DRM controls. The company also invested in August in a music download firm called Amie Street Inc.

The MP3 music can be downloaded from Amazon here.

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Apple iPhone will be available in the UK through O2

Apple Inc. ended weeks of speculation, by announcing Tuesday that it has selected O2, a leading wireless carrier in the UK, to exclusively offer the iPhone in the UK. The iPhone will debut in the UK on November 9, and comes bundled with unlimited free Wi-Fi access.

Apple sold its one millionth iPhone 74 days after it went on sale in the US on June 29, the company said. In the US, the company has an exclusive tie-up with AT&T for the iPhone.

By appointing exclusive carriers for each country for the much coveted iPhone, Apple is able to get better deals with the operator including better commercial terms, according to analysts.

AT&T, which in the past has demanded control over what software and applications go into end-user devices, had had to concede ground to Apple. In that sense Apple has shifted the balance of power in the mobile carrier market.

iPhone users in the UK will be able to activate their new iPhones using Apple's iTunes software running on a PC or Mac computer, without having to wait in a store while their phone is activated. Once iPhone is activated, users can then easily sync all of their phone numbers and other contact information, calendars, email accounts, web browser bookmarks, music, photos, podcasts and TV shows just like they do when they sync their iPods with iTunes, Apple said.

iPhone will be sold exclusively in the UK through Apple's retail and online stores, O2 and The Carphone Warehouse's retail and online stores. iPhone will be available in an 8GB model for 269 pounds sterling (inc VAT) and will work with either a PC or Mac. Three iPhone tariffs plans will be available from O2 starting at 35 pounds, which all include unlimited anytime, anywhere mobile data usage and free unlimited use of the Wi-Fi network, Apple said.

O2 UK is part of Telefonica O2 Europe which comprises mobile network operators in the UK, Ireland and Slovakia along with integrated fixed and mobile businesses in Germany and the Czech Republic. Telefonica O2 Europe also owns 50 percent of the Tesco Mobile and Tchibo Mobilfunk joint venture businesses in the UK and Germany respectively as well as having 100 percent ownership of Be, a leading UK fixed broadband provider. It is not clear at this point whether O2 will be the carrier as Apple expands in other European markets.

With the November 9 launch, Apple is in good time for Christmas shopping in the UK, where, if the experience in the US is any pointer, the iPhone will figure in a number of Santa's lists.

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eMusic’s foray into audiobooks may help aspiring writers

eMusic’s entry into the audiobooks market may help aspiring writers get an audience, though most of the top book publishing houses may stay away from the digital download site.

Starting September 18, audiobooks will be available from eMusic at a price of US$9.99, which is lower than the price for audiobooks at competitor Audible Inc. The music download site will likely try to further offer bargain prices on its audiobooks as it has done with its music downloads.

As eMusic uses the MP3 format and does not support DRM (digital rights management), it will very probably not have support from most of the big publishing companies, a problem that it faced with most of the large music labels, which shied away from offering their music on its site.

eMusic’s strategy around MP3 and DRM did not hurt the company. It is now the second largest vendor of online music downloads after Apple’s iTunes. That was because eMusic focused on small labels and aspiring musicians who were ready to trade DRM for an opportunity to feature on a popular site. Its low price also attracted a large number of users.

Apple Computer Inc. and Audible Inc., which is a large online site for downloading audiobooks, both use DRM technology. The DRM in downloads from iTunes blocks their use in devices other than the iPOD or iPhone.

Opposed for ideological reasons by a large section of Internet users, DRM is also found to be cumbersome by many who would like to rip CDs as often as they need to, and play the downloads on a variety of devices. Music companies, in particular, are seen to be using the online download route to curb the misuse of purchased music. Some of these restrictions are a far cry from the freedom still available to users to rip and mix, and copy to various devices tracks from traditional music CDs.

eMusic may hence be planning a re-run of its strategy with music. They are likely to aim at smaller publishers or aspiring authors some of whom may to start with just focus on audiobooks, rather than more expensive print editions of their books. eMusic has emerged as a filter for people looking for music, and now audiobooks, beyond what is sold by the big brands.

As I mentioned in an earlier blog post, while promoting lesser known artists, and now authors, eMusic will have to do a much better job than it is doing now in selecting talent, making its recommendations, and generally playing as a mentor to its customers.

eMusic will offer more than a thousand audiobooks from major audiobook publishers including Blackstone Audio, Hachette, Naxos Audiobooks, Penguin and Random House, with hundreds more to be added each week, it said in a statement. Subscribers will find regular reviews of the books by critics from top newspapers and magazines, it added.

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