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the cd writer

Michael Robertson, Trustbuster

Bob Starrett

August 2000 | The recent settlement with MP3.com of claims of copyright infringement by Warner Music Group Records and BMG Entertainment was a victory for music fans everywhere, even though MP3.com will probably pay a whopping $100 million to the RIAA by the time the other three plaintiffs have settled.

Three plaintiffs still remain in the suit: Sony Music Entertainment, Seagrams' Universal Music Group, and EMI Group, but it is unlikely they can hold their ground with $20 million plus a continuing royalty stream being waved in their face by MP3.com. The $100 million won't hurt MP3.com too much, since it has $365 million in cash and no debt.

The basis of the suit for copyright infringement was MP3.com's My.MP3 listening service, a rather cool and well implemented idea that resulted in little, if any, revenue loss to the record industry but was found by a court in New York to be a copyright infringement nonetheless. This ruling opened MP3.com up to statutory damages under the copyright act, giving it a total potential exposure of $6 billion or so. In return for the cash payment, the record companies agreed to license their catalogs to MP3.com for use in its My.MP3 streaming service.

As Jeff Partyka discussed in his June WAXING DIGITAL ("MP3's Bad Rap"), the folks at MP3.com went out and purchased 80,000 CDs of various popular music. They then ripped each and every song off these CDs to hard drives on their servers in MP3 format. Once registered, users download MP3.com's Beam-it software, fire up Beam-it, and insert a music CD. Beam-it goes out to the MP3.com servers and compares the disc to information it has about its copy of the disc. It is not disclosed just what information they use, but if it finds that your disc appears to be an original pressed copy of the same title, then the service assumes that you own a legitimate pressed copy of that disc, and it adds that disc to your playlist and gives you permission to stream any song from that disc from the MP3 copy residing on their server.

But how secure is it? What's to prevent your friend from bringing over his CD collection and allowing you to beam it up to your account at My.MP3? What's to prevent you from beaming CD-R copies of someone else's CDs to your accounts? What's to stop people from swapping usernames and passwords and thereby gaining access to music that they do not own? Not a thing. At this point, My.MP3 cannot distinguish between an original disc and a CD-R or RW copy. But in the world of music piracy, these are small transgressions and likely to be overlooked.

A similar service is Myplay.com. Like My.MP3, you set up an account, but you must then upload your music to your Myplay "Locker", which gives you 3GB of disk space on the Myplay servers. Once you upload your MP3 (or WMA) files, you can create playlists and stream your music back to yourself, from anywhere in the world, as long as you have an Internet connection. You can also publish your playlist to the world, for all to see and hear. Your songs become available to anyone for streaming. Myplay follows the rules for Webcasting, which is that you cannot play more than a certain number of songs by the same artist in a row, or in an hour; that you cannot publish what you are going to play, only what you have played; and finally, that a Webcast must be a minimum of five hours long. When you publish a playlist to the world, Myplay checks the playlist for conformity to the rules and then rearranges songs if necessary to comply. It also pads short playlists out to five hours with a variety of other music. It slipped Sinatra into mine, and I wasn't too happy with that.

And here some more interesting issues arise. What checks are there to make sure that the songs that you upload to your "locker" are owned by you and are not infringing downloads from some FTP site or a Napster or iMesh user? None. But, again, in the overall picture of piracy--these services being a new media equivalent of radio, essentially--this is not a major concern.

Two valid streaming services, totally legitimate. But how things have changed in just a short time. Not only do we now see Michael Robertson--CEO of MP3.com and perennial thorn in the record companies' side--filing an affidavit in support of the RIAA's recent motion for an immediate preliminary injunction to shut Napster down completely, but we see sniping within the online music industry itself. David Pakman, founder of Myplay.com, attacked rival Robertson for his unusual, yet successful, tactics in finally bringing the recording industry to its senses. According to Pakman, "If a criminal commits a crime, they go to jail. In this case, MP3.com committed a crime and not only do they get to stay in business, but they continue to operate the service under a license." Do we detect a hint of jealousy here? Are Myplay's licensing talks not going so well?

The fact is, Robertson's bold move might have been the only way to bring the record companies to their senses. So what does the new availability of large music catalogs mean to the CD-R and music aficionado? It means that there is a whole lot more music out there, and if we presume that the new licenses make the record companies happy, as far as income goes, that they won't mind a bit if we use our fast Internet connection to capture the content they stream from our sound card to a WAV file for recording to CD-R. Or will they? In any event, thanks, Michael.


Bob Starrett (bobs@cdpage.com) is a contributing editor for EMedia Magazine and co-columnist for The CD Writer, and an independent consultant based in Denver, Colorado. He is the co-author, with EMedia Magazine contributer Joshua McDaniel, of The Little CD Audio Recording Book, published by PeachPit Press.

Comments? Email us at letters@onlineinc.com.


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