A DRMerry New Year

Written by Brett Thomas

December 31, 2007 | 08:57

Tags: #drm #hd-dvd #mpaa

Companies: #blu-ray #riaa

Wow, we made it. It's been another wild year full of technology battles, format wars, and even some good old go-for-the-throat company fights. And yet, the world goes on, the beat of technology thumping at its usual pace. Intel and AMD, Nvidia and ATI/AMD, Blu-ray and HD-DVD.

With the holiday seasons over and no major operating system release on the immediate horizon, the companies can go lick their wounds and ready their teams for 2008. Minus a few dollars or people that traded hands, they will be relatively unchanged - the new year will be as the last, with a couple big launches, some good ideas and bad ones, and a bunch of marketing BS and drivel for our entertainment.

But one thing HAS changed - one war has actually seen lines move, ground shift. It is a war where each skirmish is close to all of our hearts, and we're on the losing side. It's the RIAA vs. the People - and, for 2007 at least, I think we came out behind.

Let's tally the scorecard on five of the major battles this year for musical freedoms and sensible listening rights. And when we're done, we'll take a look at a couple that will decide major fronts in 2008.

1. RIAA vs. Internet Radio
Many of you are familiar with the RIAA's wonderful antics against Internet radio stations - in fact, I even wrote a column on the topic, which received some pretty good responses.

For those of you who didn't pay attention in class that day, the RIAA decided in April of this year that it would increase royalty fees by tremendous amounts (AOL estimated over 39 percent for its more popular sites, and more for the less popular), hitting small and large stations alike. Effective 15th May 2007, the fees would actually go retroactive to the beginning of 2006 - an act that was upheld by the RIAA's front-end, the Copyright Royalty Board.

Why would I say "front-end" for the RIAA about an "independent" board? Because a little digging showed an interesting pattern - it seems the CRB has a little history of siding with the recording companies against artists wanting more royalties (citing an unfair increase in cost that would need passed to the consumer), but siding with the recording company again when it comes to stations and third parties making use of the music, citing a need for artists to get their fair due.

"If the RIAA decides to stick with its current structure, the only thing that could happen is that Congress might then decide it actually needs to intervene."

Fortunately for us (har-har), Congress stepped in to "save" the day. The US political body created a bill that said the royalties were "steep" and that the RIAA needed to reach a better "compromise" on its increase. It's given the RIAA an indefinite timespan to reach this compromise, though, which is not binding - if the RIAA decides to stick with its current structure, the only thing that could happen is that Congress might then decide it actually needs to intervene.

In the meantime, SoundExchange (the company that collects the royalties) isn't taking collection action against the radio stations - but it is still accruing the fees. And companies that can do the maths are reading the writing on the wall - Yahoo! and AOL have both said that they are looking to step out of the business in 2008 as recently as the end of November.

Chalk one up for the RIAA. People, nada.

2. RIAA vs. AllOfMP3
Many of us know of (or probably have used) AllOfMP3. It was a great site, where you could buy tracks for well under the $0.99 per track that iTunes charges and have no DRM, a selectable bitrate and a universally accepted file. The best part was, it was perfectly legal.

Yep, that's right - due to the way that Russian copyright law operates, AllOfMP3 was perfectly on the up-and-up. See, in Russia, copyrights are based on a percentage of sale - a fairly steep 10 percent of gross proceeds. This money is treated as a tax, and the government puts it aside as credit for the different copyright holding companies to collect. From the word of Russian authorities, AllOfMP3 complied with these laws to the tee, even itemising every song sale (as it's supposed to) so the individual artists could be compensated.

Of course, that didn't stop the RIAA from suing the site for a whopping $1.6 trillion USD, and getting the government involved when the site's owner laughed at the ludicrous over-reaching of the organisation and the US Judicial System. For the first time, the US and Russia actually had meetings at the ambassador level regarding the copyright law - and AllOfMP3 disappeared soon after.

The RIAA never got its money, but that was never the point - it got one of the biggest "off-books" sales sites shut down. Copyright law in Russia is still unchanged to my knowledge, and as of the end of October, no RIAA affiliate has applied to the Russian government to receive the royalties that have already been collected. The artists have never been given their share of that money, either - at one point, the RIAA felt that it was "unfair" that the organisation needed to ask for funds.

Scorecard: RIAA - 2, People - 0.

3. Lenz vs. Universal
Stephanie Lenz, mother of hot-rodding baby, now has her hands full for another reason. Back in the early part of this year, she put a video up on YouTube that showed her toddler running around and bouncing while a song by Prince played in the background.

In June, she received a letter from YouTube explaining that her video had been taken down for copyright infringement per a request from the copyright holder, Universal Records. Apparently the company had stumbled on the video and felt that she needed to pay for the song being on in the background. The video was 29 seconds long and watched by almost as many people - 28 to be exact.

Lenz fought the absurd charge, and YouTube has since re-posted the video - which has now been featured on several news stations, blogs, and other mass-media outlets, much to the chagrin of Universal. To add insult to injury, Lenz (with the help of the EFF) has sued the company for its blatant abuse of power, seeking both damages and an injunctive relief (meaning that Universal cannot try to sue her again for the video, and also provides precedent). We'll have to see how this one goes...but for the YouTube victory, I think Lenz has given us a point.

Score: RIAA - 2, People - 1.

4. Apple vs. NBC Universal
Ah, Steve-o Jobs - megalomaniac, magician, and mogul. Apple has been at the forefront of the digitalisation of our entertainment with iTunes, proving digital distribution as a business concept, a platform, and an all-around great idea. This year, though, he ruffled a lot of feathers with a bomb-dropping open letter to the media industries, arguing that DRM was an ineffective annoyance and needed to be re-thought. Granted, the RIAA misconstrued the message, saying that he was right - he should tighten his DRM up and make it more restrictive.
The fight spilled on through the year, where suddenly everyone on the RIAA's payroll started suing iTunes - Eminem, Prince...the list just went on and on. The RIAA even jointly argued that the $0.99 per song was not enough money, with several companies threatening to not renew contracts as they expired in 2007.

Finally, the fight reached a climax as NBC Universal tried to press Jobs to raise the prices of its TV shows like The Office, citing that more popular shows should cost more. Jobs once again refused, and NBC Universal pulled its entire TV and music catalogue from the service. I'd have to call this one a tie - it's great that Jobs and Apple held to the pricing conventions previously adopted, but it's a loss that Universal chose to walk, which has hurt the iTunes library and makes digital distribution as a whole just that much less viable.

Score: RIAA - 2.5, People - 1.5.

5: Thomas vs. RIAA
This year saw the first ever court case from the RIAA's threatening letters. The suit was against Jammie Thomas, who reportedly downloaded and subsequently shared 24 songs over the Kazaa P2P network. Because Kazaa required a login (which was tracked and associated to an IP address), Jammie did not share the same benefits as Paul Wilkes did last year when the RIAA dropped its case against him.

The court case didn't take very long before the verdict was handed down - Thomas was guilty of file sharing, and she was to pay damages of $9,250 USD per song. According to part of the instructions provided by the judge to the jury before deliberation, "making a song available for infringement is sufficient" to find her guilty of infringing. Her final tally ended up at $220,000.

She did not appeal the verdict, but she did appeal the payment, arguing that there was no way that the companies lost $9,000 per song directly by her actions. Because her damages were based on total losses that could possibly be attributed to her, but could not be assuredly attributed to her individual participation, she felt the final award was unconstitutional. Unfortunately, the appeal was denied.

So there's the top five battles of 2007. A final score: RIAA - 3.5, People - 1.5.

"It's a loss that Universal chose to walk, which has hurt the iTunes library and makes digital distribution as a whole just that much less viable. "

Of course, if you think that those concluded battles are enough, let's take a look at a couple more wonders that are still being hashed out in court:

Back in 2006, the RIAA sued satellite radio provider XM for copyright infringement. The satellite broadcaster provided a "timeshift" function on certain units, which functioned very much like TiVo - you could "pause" live radio and resume later. This was done by making a digital copy of the stream from the pause point forward, allowing a listener to play back the recording and skip ahead or rewind until caught up.

Of course, the RIAA viewed this ability as a second digital recording, and demanded that XM either discontinue the feature immediately or pay a second set of royalties for each song that hit the digital memory buffers. XM argued against this, citing what we today consider the "Fair Use" rule - that an individual can make a private home recording of a streaming broadcast for personal use, so long as it is not permanent or subsequently distributed.

XM sought to have the case dismissed under this law - but a judge made the determination at the start of 2007 that XM could not use this rule for its protection, even if the music was not ever accessible to the end user in any form but temporary storage on the XM device. The same rule had been used to successfully defend TiVo in the past.

The court case is now pending, so we'll hear the results in 2008.

Howell vs, RIAA
One of the RIAA's happy letter recipients that challenged his ruling is going to find himself in a media whirlwind for next year. Jeffrey Howell from Scottsdale Arizona was sued not for distributing his music, but for having 2,000 songs on his hard drive that he legally copied from CDs.

The RIAA argues that the copies from the CDs are not in fact legal copies - they are actually "unauthorised reproductions," and that the personal use intent was irrelevant. We've talked before about the RIAA arguing the point that format conversions (such as from CD to MP3 or from protected file formats to non-DRM formats) were actually illegal, but this is the first time the organisation has attempted to actually stand behind that threat.

It seems that the door to this suit was opened at the Thomas trial, where Sony BMG's chief litigator said, "...When an individual makes a copy of a song for himself, I suppose we can say he stole a song...[Copying a song you bought is] a nice way of saying 'steals just one copy.'"

At the $9,250 per song that Jammie Thomas had to pay, our music collections just got a lot more pricey. I wonder if we can insure that amount, and then if we lose our hard drives we'd be able to get the money? That way, if we (or our grandparents, or our estates) get sued, we can have it at the ready.

Well, it's a good thought, at least. After all, since we're getting it stuck to us in our listening rights, our pocketbooks, and even our freedom to back up our music, I think someone should pay us. Right? I mean, we may drive the insurance companies into bankruptcy, and then they're not there for us when we need them...but short-term profits are where it's at, and if we have enough money, we don't need them!

After all, that's certainly been the lesson that I've picked up from the RIAA over 2007 - bite the hand that feeds you until there's no more blood to get. Then, laugh all the way to the bank, and enjoy a DRMerry New Year as each affiliate sells its music under a different protection scheme, with the only common tie being that a listener can be locked up for backing them up or putting them all on the same listening device.

Happy 2008, music fans.
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