THE MUSIC BIZ WINS FOR ONCE
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Lime Wire Users Beware;
The Sheriff Just Got a Brand New Cannon And It's Aimed At YOU!!!
By Moses Avalon
Some of you may have heard that the other day the RIAA won a major victory in court. Although over 20,000 lawsuits have been filed by the RIAA against people who "file share" music, only one, so far, has made it to a court room. Everyone else had the good sense to settle out of court for a few grand.
But, Jammie Thomas, 30, a single mother from Brainerd, says she was wrongfully targeted by SafeNet, the RIAA's net detective who patrols the internet for illegal file sharing. She found herself a lawyer who thought he could help her beat the rap, Brian Toder. Maybe Toder thought that the public's sense of disgust with the RIAA would help fuel an acquittal for Jammie. But it didn't. He should have relied on something far more predictable in determining his client's chances--basic copyright law.
A jury took less than 5 hours to decide her fate. Result: the single mother will pay about $9000 per song for 24 out of about 1700 songs in question. Not to mention the $60,000 she owes Mr. Toder.
But while the Mom is suffering, only a month ago Toder's Google factor was only about 2000 links. As of today it's over 9,000. So there is a happy ending on the defendant's side of the table after all.
Naturally, the Tech trades have spun this into a mass conspiracy by the record labels to disenfranchise the public, but we know their agenda. (If you don't know what I'm referring to, go here: http://www.mosesavalon.com/mosessupposes/may07.html )
What still gets me scratching my head are the many, many morons, like the ones that can be found on chat rooms like this one, http://www.absolutepunk.net/showthread.php?t=270193 who think that this is bad news for the music industry. They are wrong. A public relations black eye is the least of our industry's worries. Staying alive is the real concern.
Keep in mind something that these people are missing: while technically even downloading one song is illegal, the RIAA doesn't really care about a song or two. Or even a few dozen. Their radar is designed to catch people who SHARE (read: distribute) many, many songs. (They have a secret threshold that I can not reprint here.) So it's kind of like that old urban legend about Pot: you can buy it and possess under an ounce, but you can't sell it--that's illegal.
Unfortunately, one can not exist without the other. Just as there can be no buyers without a seller, there can be no downloaders without uploaders. And uploaders just took a big pie in the face.
Activity on services like Lime Wire will surely be affected, and I'll be curious to see what Big Champaign (a company that monitors internet activity) says about all this in six months. My money is that sharing will be down, but only by a small tick.
Now I know there are few tech-savvy people out there saying, "But wait... what about Bittorrent? This will make it impossible to determine who is doing what."
Bittorrent is a system that takes one song-file and divides it up into many little parts and places each part on a different computer in the network. When you download a song from a sharing service (like Lime Wire) the service is actually connecting many computers and orchestrating each part to you for reassembly. This makes it very hard to trace who is responsible, right?
Wrong! And here's the bad news.
The RIAA will likely take the position that this makes EVERYONE on a network equally culpable.
If proven a sound legal theory, the RIAA can charge every single person on a sharing network and claim all of them equally liable for each other's activity. So instead of a single source getting nailed for say, 1000 infringements (which the P2P Hydra can easily survive), they could try to charge everyone with 100s of 1000s of infringements. And that would be a class filled with anyone who has ever participated in an illegal, Bittorrented, P2P model even ONCE. That of course means just about everyone involved with music production.
For ripping free music, the price of poker just went way up.
Moses Avalon
For more on the story: http://arstechnica.com/news.ars/post/20071004-verdict-is-in.html
More on Bittorrent: http://en.wikipedia.org/wiki/BitTorrent
STEVE'S SCREWY DECISION
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Apple POs 500,000 iPhone Buyers
WARNING: This article contains information that may be too realistic and therefore offensive to Apple Loyalists.
By Moses Avalon
Did Steve Jobs have to spit in the eye of all his early adopter customers?
For those who missed all the drama, it's basically this: Apple hypes the iPhone as the greatest thing since sliced bread; making the public believe that it's worth every bit of the $600 price tag. Then less than two months after hundreds of thousands of people wait in line to buy one, as if they were Stones' tickets, Steve drops the price $200. What a douche bag.
But did he have a choice?
In the next year, several companies will be launching an iPhone-like device for about $100 (with mail-in rebates). It's the natural Darwinism of technology. But didn't Steve know this? He said in his recent "explanation" that he's been in technology for 30+ years and seems to know what's best for his cult-like computer company. So why didn't he see this one coming?
[http://www.apple.com/hotnews/openiphoneletter/]
Well, he did of course that that's why everyone's pissed. Who will trust him when he hypes the next big Apple widget? Far less than those who bought iPhones.
Think this is no biggie? It is.
Apple's computer market share slipped by half a point last year despite selling more computers. That means that even though they are increasing sales, they are not retaining any traction as the computer market grows. iPods have reduced the company to little more than a gadget factory. Nothing wrong with that, but a gadget factory needs one thing to be the best—credibility.
Your entire market is early adaptors who buy the latest widget because we want to be the first to have it. We want the attention at parties and the leverage to negotiate when something goes wrong. (Time Warner dreads customer service calls from me. I subscribe to every imaginable Cable TV up-sell they have.)
But the one thing you can do to destroy your cred with people like us is to drop your pants too soon. We all know that the price will eventually go down, but TWO MONTHS!!! Jesus, what was Steve thinking?
Well, for starters he's thinking that the Holidays are coming up and I have the biggest Albatross product in the market; an over-priced phone that everyone renewing their phone plans can get the equivalent of for about $50. Oh yeah, and I didn't meet my sales projections of 1 million units by even half. My board of directors is wondering if I'm a total loser because I've alienated the biggest record companies in the world. What the F am I gonna do?
Well, pissing off his loyal following was the wrong move. Offering them a $100 credit at an Apple store isn't going to smooth them over either. I'm no CEO of a publicly traded company, but I'm pretty sure I'm right about this one. It would be as if President Bush told the country that he was only kidding about WMDs in Iraq but that that they can still get a $100 tax credit if they vote Republican in the upcoming election.
Gambling that the public has a short memory, Steve is hoping that the next time Apple launches a "groundbreaking product," that we'll all forget that it's just his pathological enthusiasm talking.
Steve, you need a vacation.
Watch for dipping price in Apple stock and a zingiest of bad reviews on future Apple products.
Mo OutDO I OWE MY LAWYER LUNCH?
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Labels Will Live Says Long Tail Author, Chris Anderson
By Moses Avalon
October 23rd 2007
At the beginning of this year I made my lawyer a bet. He's a tough litigator with one of the best track records for winning cases against bastard major labels. Some of you in LA know him from Beverly Hills Bar Association panels and the like. Anyway, just because I love him like a big brother who is always right does mean that he's actually right all the time. So I bet him lunch that CD sales would not drop more than 20% this year (he thought 50%) and that this drop would be more than offset by other revenue in the music space. He laughed. He eats very expensive lunches and was already making the reservation at Chez Second Mortgage on my dime.
He subscribes to the Bob Lefstez/ultra technocratic viewpoint that CD sales being down and P2P is the death knell of the majors and that technology (mostly net-based) will provide answers for artists that will obsoletize the need for large labels and their ridiculous deals.
I have been saying something a bit different for some time: it's possible that labels could get completely absorbed into technology companies. If it happens it would be another decade or so. But the most likely scenario is that labels will eventually (albeit it slowly) embrace digital distribution and provide the same services (and ridiculous contracts) they always have to artists: marketing, promotion and security in distribution. They will grow bigger and more powerful via the Long Tail philosophy and the business will be making more money than ever. So will artists.
But it seems that we have some very pathologically pessimistic people in our space; people who want to believe that everything is going to hell in a Hummer. They jump on this "the business sucks" bandwagon as if it's taking the scenic route to Graceland. I've covered the reasons why we have these misanthropes in other articles, so I won't bore you here with a reprise.
I have always maintained that a drop in CD sales is not really an indicator of anything much except a changing business model. For this I have been ridiculed at public events and in chat rooms. It's okay. Being right tastes even sweeter when it seems the world is against you at first. Of course no one ever remembers that you were the first to say it—or admits they were wrong. Not unless you put it in a press release and shove it in people's faces. (Not my style, but we'll see.)
No matter. Yesterday, I won my bet: someone else agreed with me. Someone who matters.
Yesterday, Chris Anderson, author of one of one of the most talked about new theories of commerce and economics, The Long Tail, posted a bit of good news for those out there still mourning the death of the business and whining over the dip in CD sales.
In a nut shell he says this, "Believe it or not the Music Business is Growing." Actually that's not even a nutshell. It's exactly what opens his thesis which can be viewed here:
http://archive.mediaor.com/post/16622264
Now, I know my lawyer, he's a very good arguer. He'll come up with some contorted logic about how this is irrelevant. He'll say, "But labels are still firing tons of people." He'll ignore the fact that they are hiring far more than are being fired-- in the marketing and licensing departments.
Yes, it's true, the firings at labels are mostly in the A&R department. How can this be a bad thing? Wasn't it just a few years ago that label haters were saying that they SHOULD fire most of these good-for-nothings? Now it's happening and tech-lovin spin-masters have turned this in to bad news.
Which is it?
Many big firm lawyers argue that they know the business is falling because their billable hours are down. In other words, they are making less money, so therefore things must be bad. They often forget that a $600 an hour lawyer is something of a luxury. One of the first things that any industry will look to do when it's in transition (notice I didn't say "decline") is cut back on overhead and that often means legal bills. Cutting back to $300 an hour attorneys is not the end of the world fellas.
We're heading into the fourth quarter of 2007. The worst is behind us and the holiday season is in front of us. An 18% dip is as bad as it will get for now. It brings our total "downturn" adjustment to about a 38% drop in CD sales over the last four years. This is almost the same as 1991 sales levels for CDs—a very good year for the music business even without all the new digital revenue. Think this is bad? Talk to the cougars on Wall Street. Last week the Dow Jones dropped about 300 points, almost a 3% loss in a single day. You don't see them saying it's dooms day. They know that things are cyclical and will rebound. We could learn a thing or two from them.
So, who owes whom lunch? I'm making my reservation at Chez Kiss-My-Ass right now. And I'm ordering two desserts. But I'm going to treat my buddy/lawyer to a great back rub with a happy ending.
Reporting from the front,
Moses Avalon
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