The SongBeat case

Posted on March 2, 2009 by wunderbarb

Warner Music has succeeded in its lawsuit against German Start-up SongBeat. SongBeat allowed to search for mp3 songs using integrated search tools from Seeqpod, Project Playlist, SpoolFM or iASK. SongBeat offered even the possibility to download the songs. Unfortunately, the downloads had not the blessing of majors.

This did not worry the start-up. According to its CEO

The downloading of music is not fundamentally illegal. However, it lies in the hands of the user to discern whether or not they have the right to download the particular music file at hand.

Well, the judge did not have the same understanding. veoh was smarter about this issue (see Veoh versus Universal Music Group) SongBeat will ask for an appeal. Nevertheless, the chances are weak.

When reading the last IFPI report 2009, we see that music industry will look for new revenues through digital music. The trend is also towards DRM free music. Nevertheless, DRM free does not mean without any control. Music industry is not ready to loose its control on who makes money and how much. Music industry will probably not tolerate uncontrolled distribution of its copyrighted songs.

Light sentence for French pirates

Posted on February 24, 2009 by wunderbarb

In February 2006, the French blockbuster “Les Bronzés 3” was released on P2P in DVD quality at the same time than the theatrical release. The audience still reached 10 millions of entries.

Unfortunately, forensics allowed to trace back the leakage. It incriminated three employees of French broadcaster (and the producer of the movie) TF1.

They were sued in court together with three persons, using pseudos Darkpingoo, H2o and Vb2n who posted the movie on Freenet, by the producers and some actors. They asked several millions € in damages. The main argument was that the sales of DVDs did not reach the million. Usually, such blockbuster is expected to reach 2 millions of sold DVDs.

The judge showed clemency. The infringers will have to pay 27,000€ in damages and have been given a one-month suspended prison sentence.

Veoh versus Universal Music Group (2)

Posted on February 18, 2009 by wunderbarb

Last month, a US court ruled that Veoh could not be sued by Universal Music Group (UMG) under DMCA safe harbor. This month, the same court ruled in favor of Veoh, more precisely in favor of its investors. In the Napster case, the investor Bertelsman was sued for copyright infringement. Thus, UMG attorneys expected to do the same to Veoh’s investors.

The Los Angeles judge, A. Howard Matz, reminded that Veoh was not (yet?) yet guilty. Thus, it was impossible to sue the investors for an infringement that is not qualified. In the case of Napster, Bertelsman continued to support Napster once it was condemned. This is not the case.

Some Venture Capitalists will feel better. In these hard time to find money to invest, this may be a good news for VCs. They may take some calculated risks when investing in the Grey area of copyright.

The story of Veoh versus UMG continues.

IFPI report 2009

Posted on February 4, 2009 by wunderbarb

The annual report of IFPI is always interesting. The 2009 edition has just been released. Its title is exciting: New business models for a changing environment. This year, IFPI put the focus on the new ways to monetize musics. They highlight mainly three main trends:
– Music access, through a subscription, or a package people have free access to a catalog. Nokia offered such service. French ISP Neuf Cegetel runs such service since 2007. For no additional cost, they offer legitimate access to a catalog of nine music genres. For a monthly fee of 5€ (7US$), they provide legitimate access to all universal Music tracks.
– Ad supported services, the deal of mySpace music is important. UGC sites are the new distribution channels of music. Half the most popular streams on YouTube are copyrighted music videos.
– Games, branding and merchandising. The huge success of Guitar Hero is an example. The report provides some example of combined launching of games featuring band music and corresponding release of album.

Thus, music industry is clearly exploring new business models. They have to. DRM free music puts the pressure.

Of course, there is a section on piracy. This year teh focus is on the role of ISP to thwart piracy. France is showcased for its graduated response (known as HADOPI). Our friend Olivier BOMSEL is interviewed. Olivier was member of the French “commission Olivennes” that suggested the graduated response (and many other things)

Nice to read document

How honest people cheat

Posted on January 15, 2009 by wunderbarb

One of the mottoes of the Copy Protection Technical Working Group (CPTWG) has always been “Keep honest people honest.” But do honest people stay honest?

I have read an old issue of Harvard Business Review (February 2008). There is an interesting paper from Dan Ariely. Its title is “How honest people cheat.” With his team, he experimented the capacity to cheat of thousands of “honest” people. They were paid for each successfully solved simple mathematical problems. There were 20 problems. The average number of solved problems was 4. In a second experiment, people had to report themselves the number of successful solutions. There was no way to verify the assertions (the paper with the answers had been shredded before). The average correct answers jumped to 6! Compared to the potential maximum of 20, an increase of 2 is really not large.

Other experiences showed that the risk of being caught did not affect the level of dishonesty. A more interesting observation, people were more dishonest when the reward was not directly monetary.

The rough conclusions were that most people when tempted are ready to be a little bit dishonest, but never will become fully dishonest. In front of non monetized cases, people are more ready to cheat because they can more easily “rationalize” or “justify” their cheatings. This last founding can partly explain why people may be ready to download an album through P2P and would not be ready to still it in a shop (even without risk). Probably we may have some similarity between demonetization and dematerialization.

Another conclusion. CPTWG was perhaps right when trying to Keep honest people honest.

Veoh versus Universal Music Group

Posted on January 14, 2009 by wunderbarb

The beginning of the 2009 has seen an interesting litigation being closed. Universal Music Group (UMG) was suing the video sharing Veoh for copyright infringement. But Veoh claimed to be protected by the DMCA safe harbor act. The safe harbor act does protect service providers against the illegal doing of its users.

UMG claimed that DMCA safe harbor act does only protect for storing bits, not when manipulating bits. Veoh is transcoding the uploaded content in the exchange format. The court decided otherwise. The main argument was that users “signed” term of contract before uploading content. The terms of contract specified that the user agreed not to upload copyright content.

This court decision sets an interesting legal precedent. Will it have any influence on the current battle Viacom versus YouTube?

DRM free music

Posted on January 9, 2009 by wunderbarb

The movement towards DRM free music continues. The biggest event is of course iTunes that announces that its complete catalog will be available as DRM free songs. iTunes announced also a new price list adding $0.69 songs (in addition to $0.99 and $1.29)

Warner France followed this movement. It announced that its two sites Fnac Music and Virgin Media will sell DRM free songs in 2009. Nevertheless, it is a trial and the final decision will be taken in 2010.

DRM free music is a trend that will not stop. Will it extend to other fields such as games or video? I am not sure. of course, customers would like it. DRM free distribution with a session watermark to detect eventual illegal distribution is promoted, for instance by the Digital Watermark Alliance.. Nevertheless, there are several differences with music. According to me, the biggest one is that the investments are far huger than music. In the case of video, the release windows strategy and commercial agreements are also problems.

We will continue to monitor this trend in 2009.

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