Future Of Music

iMesh has recently released its paid peer-to-peer platform in beta form. So how does it run? The system download process was seamlessly handled through download.com. And once fired up, the application looks a like a typical peer-to-peer, only a tad cleaner. Like the average consumer, we skipped the instructions entirely, and just started searching for a few top artists. A search for Snoop Dogg produced an exhaustive list of tracks, along with neatly-placed album images and similar artist links at the top. Results were either well-labeled, "gold star" tracks, or rougher "gray star" tracks culled from the Gnutella and iMesh networks. Clicking on an album cover led to the nicer side of town, complete with a well organized catalog listing, biography information and images — all furnished by MusicNet on the backend. The result is a true hybrid, with neatly organized albums and "gold star" results living alongside a rougher "gray star" catalog.

Downloading a gold star track quickly yields a protected WMA track, which cannot be played in iTunes or transferred to an iPod. In the trial version, prices were not displayed, and it is not clear if a variable pricing system will be implemented. Meanwhile, a few attempts to download gray star tracks revealed some issues with the iMesh filtering system. One attempted download of a gray star, copy-protected Snoop Dogg track resulted in failure, with a red "COPYRIGHTED" reason cited. But other tracks, including several remixes of well-known hits, were easily downloaded in an open MP3 format. That included a remix of "Bling Bling" by rapper BG that included Snoop Dogg as a guest, as well as an instrumental version of the popular track "Oh No". According to the company, gray star tracks are reserved for “unclaimed, unregistered music”.

iMesh has not indicated how long the beta period will last, though a formal launch is expected by year end. For new users, a learning curve does exist, though experienced music downloaders will probably have little trouble adapting to the new environment. And iMesh offers a very clean interface and experience, always a plus for finicky and impatient users. Interestingly, iMesh may face an unexpected battle to prove itself as a genuinely legal option, especially with a rash of rogue imposter sites making similar claims. But that challenge aside, iMesh has succeeded in creating a relatively clean application that offers a nice start to the “sanctioned” P2P space.

Digital Music News

The Supreme Court decision in MGM v. Grokster to send the case back to the District Court was a directive to accept the concept of “inducement” and to hold the defendant responsible for copyright infringement.  As a defense, companies accused of “inducement” in the future will be required to show that their product is capable of “commercially significant non-infringing uses”.

Until a “commercially significant” standard is established, the law shall favor those with the largest legal war-chest who will be able to rain lawyers on the innovative start-ups like the Biblical plagues of Egypt, as currently evidenced by the RIAA’s renewed attacks on all the P2P networks.  Just recently E-Donkey admitted that it could not afford to fight the legal battle with the RIAA and would be closing down it’s P2P service.

These days P2P is synonymous with illegal filesharing. However, it is actually a network architecture that has proven to have commercially significant non-infringing uses. For example, Skype uses P2P software to facilitate Internet Telephony. It has been wildly successful and was recently sold to eBay in a (presumably) “commercially significant” transaction valued at $2.6 billion. The founders of Skype are the very same individuals who created – and later broke their connection with – the KaZaa software that ultimately became a popular P2P vehicle for trading copyrighted files. 

Thus, it is important to recognize that the first applications of a new technology may not ultimately become the dominant ones. To strangle in the cradle a newborn technology that may eventually have considerable legitimate applications merely because the first users have been “bad guys” is contrary to the public interest.

Paraphrased from Inside Digital Media - to listen to an interview with two respected copyright lawyers on this topic, visit Insidedigitalmedia.com and click on the October 19th Interview.  Good stuff.

The first half of 2005 was characterized by a large percentage increase in paid music download purchases. Specifically, paid download levels in the US increased by 170 percent when compared to the first half of 2004. But will that be enough to sustain an industry? Analysts at Fulcrum Global Partners LLC recently raised some concerns. "Despite the improvement in digital, the RIAA data indicates that the dollar value of manufacturer shipments (physical and digital units combined) declined about 3 percent," the analysts noted, pointing to a sagging pre-recorded CD sector. "We expect physical music sales to continue to decline as retailers - particularly big box retailers such as Best Buy and Circuit City - scale back floor space devoted to music and/or begin to pressure wholesale pricing, particularly as they are capturing less and less market share from music specialty stores."

Clearly CD sales are in trouble, though the larger question is whether digital revenues can eventually replace a declining physical market. The Fulcrum analysts remained bearish on the prospects. "While we are intrigued that consumers who felt music was too expensive or too hard to find are coming back into the music buying population, we are increasingly concerned that the ability to buy individual songs (vs. albums) combined with the ease of theft…will result in digital sales not offsetting physical declines."

Meanwhile, the analysis also pointed to softer-than-expected digital sales in the third quarter. The group noted that paid downloads for the most recent quarter are only 12 percent above Q1 sales, and 3 percent above Q2 returns. "We are surprised that weekly digital downloads have not increased rapidly throughout 2005, given how early the industry is within its digital migration," the report states. Currently, physical sales account for 94 percent of overall industry revenues, while rapidly expanding digital sales now account for 6 percent of the pie.

From Digital Music News

See also iTunes Scam

Fascinating reading in this month’s Stereophile.

"In the Supreme Court’s decision in MGM vs Grokster.
Justice David Souter wrote: "We hold that one who distributes a device
with the object of promoting its use to infringe copyright, as shown by
clear expression or other affirmative steps taken to foster
infringement, is liable for the resulting acts of infringement by third
parties."

I’m not a Constitutional scholar, so I can’t weigh in on
whether or not the Supremes were acting according to the Founding
Fathers’ intentions on this one, but it certainly seems to me that this
decision could have far-reaching effects on new inventions—not to
mention opening a whole can of worms for existing ones.

Apparently I’m not the only one troubled by this. "The
President believes that the manufacturer of a legal product should not
be held liable for the criminal misuse of that product by others," said
White House spokesman Scott McClellan. That seems clear enough—so that
makes it a bad decision, right?

Not so fast. President Bush wasn’t talking about digital copying, but about a different industry altogether. MGM vs Grokster is, apparently, a good decision when it keeps evil hackers from copying CDs or DVDs. It’s apparently a bad
decision when it can be used against the manufacturers of firearms,
legal products that are frequently used by third parties in "acts of
infringement." Just before the Senate slunk out of town for the August
recess, it voted 65–31 for S397, "The Protection of Lawful Commerce in
Arms Act," which shields firearms manufacturers and dealers from
lawsuits resulting from gun-related crimes.

I’m not arguing that Grokster is good and guns are bad.
I’m merely saying that I fail to see why one invention should be
treated differently from the other. I think everyone ought to play by
the same rules—or at least on the same field.

It would, I’m sure, be politically naïve of me to point out—as
many others have—that the gun lobby gave close to $2 million in
political donations in 2004, while the combined record and movie
industries ponied up a whopping $32 million ($32,016,389, to be
precise, according to the Center for Responsive Politics).

No, I don’t think all that money bought those decisions—I think
all that money bought access to the decision makers. Buying access is
something the recording industry knows more than a little bit about, as
Sony BMG Entertainment’s settlement in New York State Attorney General
Elliot Spitzer’s payola investigation
illustrates. In case you missed that, Sony BMG confessed to paying DJs
and radio-station programmers in exchange for their playing or
"charting" Sony records on their broadcasts. How does this hurt anyone?
Basically, it gives an advantage to the players who have the most
money."

Read the whole thing here.

If you work for a major record label, this kind of thinking is going to get you wacked.  Read how Sony/BMG’s Andy Lack and (former Grokster chief) Wayne Russo (and others) have been meeting for a couple of years to try and get a filtered P2P service up and running.  Now BMG wants Lack to take a hike.

CNet Article here.

"As broadband internet
access becomes ubiquitous - and wireless - this model suddenly becomes
feasible for music. At the moment, the only way we can have the stuff
we crave is to buy or steal the product. But if we could access
whatever we wanted, at any time, on payment of a levy, our need to own
the packages would diminish. We could just turn on the tap, as it were,
and get Beethoven or So Solid Crew on demand. Not to mention the
collected works of David Bowie. And then we could give him a Brit Award
for being so far ahead of the game."

Read more about Music Like Water here.

File-sharing companies will have to move offshore or change their models to become
similar to iTunes or the new Napster to avoid facing expensive legal battles with RIAA member companies.

Read more here.