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27 June 2005 7:25 by James "Dela" Delahunty
| 70 comments
In a major blow to technological innovation today, the U.S. Supreme Court ruled in favour of Metro-Goldwyn-Mayer in a huge P2P case. Since the case began in March, Justices showed concerns over holding the inventors liable for copyright infringement as they believed it could discourage new inventions, but obviously their minds were changed as the ruling was passed unanimously today. However, it't not all the entertainment industry hoped for and Grokster and Morpheus remain complete legal software.
The entertainment companies accused Grokster and StreamCast Networks (which owns the Morpheus P2P software) of promoting their products to be used for piracy and it seems it was enough to convince the court to partially set-aside an older appeals court ruling in favour of Grokster and StreamCast. "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." Justice David Souter wrote for the court.
Case History
Now we’ll take a look at how this P2P case ended up in the Supreme Court in the first place.
April 25th 2003, Los Angeles
A federal judge in Los Angeles ruled that StreamCast and Grokster were not liable for copyright infringement that took place on the P2P networks. "Defendants distribute and support software, the users of which can and do choose to employ it for both lawful and unlawful ends," Judge Stephen Wilson wrote in his opinion, "Grokster and StreamCast are not significantly different from companies that sell home video recorders or copy machines, both of which can be and are used to infringe copyrights." This ruling had shocked the entertainment companies whom in the past had victory in cases like this.
"This is a very serious setback for the record industry and other content industries, because they've uniformly won these cases in the U.S.," Mark Radcliffe, an intellectual property attorney at Gray Cary Ware & Freidenrich said. The MPAA were deeply disappointed with the decision and vowed to appeal it. "We feel strongly that those who encourage, facilitate and profit from piracy should be held accountable for actions," MPAA spokeswoman Marta Grutka said. "We're hoping that people aren't taking this as an invitation to continue along the path of what is clearly illegal activity." Of course the entertainment company’s did appeal the ruling.
See: http://www.afterdawn.com/news/archive/4022.cfm
August 19th 2004, Court of Appeals in Pasadena, California
The entertainment companies felt that the April 2003 decision was unfair and were confident that the appeals court would over-rule the decision. "The services are profiting to the tune of millions of dollars from music that is written by songwriters who are not getting a dime from the use of their music on these services," said Carey Ramos, a lawyer for the plaintiffs. "We believe that the (lower court's) conclusion is fundamentally unjust." However, Fred von Lohmann, senior staff attorney for the Electronic Frontier Foundation saw the case differently. "This is not just a case about peer-to-peer," he said, "It is a case that will determine whether technology companies are allowed to innovate or whether they have to ask permission from copyright owners before they build new products."
See: http://www.afterdawn.com/news/archive/4935.cfm
To the shock and dismay of the entertainment companies, the U.S. Court of Appeals for the Ninth Circuit found Grokster Ltd, Streamcast Networks Inc. and Sharman Networks Ltd fundamentally different from for example Napster in the sense that the services do not have a central server. According to Judge Sidney R. Thomas "The technology has numerous other uses, significantly reducing the distribution costs of public domain and permissively shared art and speech, as well as reducing the centralized control of that distribution." This left the entertainment companies the option of appealing to the U.S. Supreme Court. "We are carefully reviewing our next steps," said Jack Valenti, who was then president of the MPAA.
See: http://www.afterdawn.com/news/archive/5496.cfm
So how does this decision affect the common file sharer?
For now the question should be more along the lines of how does this affect common consumers. Many believe that the entertainment industry will take advantage of the ruling and use it in other cases besides P2P. While the entertainment industry takes the stance that it wouldn’t sue a company like Apple for example, over the iPod music player, the device can still be used to store stolen music, which was a fact pointed out in the Supreme Court.
However it seems like some other developers like the creator of BitTorrent, Bram Cohen, for example as he never promoted BitTorrent for use with piracy. The problem is that some P2P services would advertise their services with vague comments like "Find and download music files quickly and easily" - It seems this could be seen as encouraging piracy on the network?
Source:
News.com
Permalink to this article
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Related articles:
L.A. News service sues YouTube over riot video (17 July 2006)
Grokster dumps P2P service (7 November 2005)
Grokster to be acquired by Mashboxx? (19 September 2005)
Kazaa loses in court (5 September 2005)
More MPAA lawsuits filed (3 August 2005)
Opera adds BitTorrent support to browser (6 July 2005)
StreamCast CEO talks to p2pnet about Supreme Court ruling (28 June 2005)
StreamCast adds BitTorrent support to Morpheus 5.0 (23 June 2005)
MGM admits CD ripping is legal and OK (5 April 2005)
P2P case hits Supreme Court (30 March 2005)
Billionaire backs P2P firms (28 March 2005)
Intel wants high-court to protect file sharing (3 March 2005)
Artists rally support behind P2P (1 March 2005)
Hollywood claims P2P case is not about technology (25 January 2005)
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| nonoitall (Member) 29 June 2005 18:19 |
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Quote: Did you know that has nothing to do with anti-piracy or the suit against StreamCast Networks?
Nor does your comment.
Quote: RIAA and MPAA have no affiliation with the government and represent their own interest groups.
That doesn't mean they aren't all greedy. When I said they're the same, I meant they share the same qualities, not that they're part of the same exact organization.
Quote: "Hmmmm... so the govenment controls what movies i watch and what music i listen to???" No.
I never said they controlled what you listen to - the RIAA/MPAA have been using the government to try and control how much you pay for what you listen to/watch though.
Quote: If you are wondering why "the government" is so involved, i have three words for you. THE JUDICIAL SYSTEM! Yeah, it exists. If a member of the MPAA like lets say... MGM, wants to sue a file sharing network like StreamCast Networks for distributing their content without paying royalties, then they have to go through the courts which are run by the government. Man, that's a whole lot of ignorance.
Did I do or say something to indicate that I didn't know there was a judicial system? It's also quite corrupt, by the way.
Quote: btw, Thanks for using my quote out of context asshole.
I'm sorry that you feel I quoted your comment out of context - it didn't seem like it at the time (and still doesn't but what do I know?). It just seemed as though you were defending the government against accusations that actually hold up (they do take people's money). As you can see, I have quoted almost all of your previous comment in this one so as to avoid any more excerpts from being taken out of context.
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| nonoitall (Member) 29 June 2005 18:27 |
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@benjers:
You're right - it doesn't really affect P2P that much. They have only targeted a very narrow group:
Software developers who promote copyright infringement in their software
I think almost all the P2P software sites I go to at least have a disclaimer that explains that anyone using the software should be on guard against pirated files. But even if they outlawed the development of file-sharing software completely, it would still be kept alive by developers in other countries. Even if every country in the world outlawed it, private developers would keep developing new software and networking techniques, it would just be spread more descretely. P2P isn't going away.
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| max777 (Junior Member) 2 July 2005 8:33 |
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I don't think we're getting the full story here. It sounds like there was some specific issue with Grokster promoting piracy that has nothing to do with P2P really.
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| dufas (Member) 2 July 2005 8:46 |
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Let's see...This is the same Supreme Court that makes it legal for a movie studio by using eminent domain, to take away a group of private homes, pay either pennies on the dollar or nothing for the property so the studio can expand it's back lot, or put up bigger sound stages, or just make a bigger parking lot..in other words, the court would allow the studios to steal peoples homes for the studio's private use but allows the same studios to prosicute and sue the inventors of some technology that can possibly be used to share files...
This is sort of like a bank being able to repossess ones car because the bank can resell it somewhere else at a greater profit then suing the car's manufacturer because it was used in a hold-up of the same bank...
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| dufas (Member) 2 July 2005 12:01 |
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My wife just reminded me that there is a certain Hollywood hypocisy at work here....
Movie actor Cliff Robertson was charged by the IRS for not paying taxes on over $100,000 of earnings. He launched a private investigation that turned up a producer that was issuing checks in Robertson's and others names, co-signing the checks and cashing them for his own use. When this was brought out, the IRS dropped charges against Robertson and charged the producer with tax fraud. [ the producer's name was withheld at request of the Hollywood studios ] The studios delined to press charges for what amounted to grand larceny and embezzlement so there were never any arrests or charges against the producer. Meanwhile, the major studios blackballed Cliff Robertson for nearly ten years befor an independent studio decided to use him in a movie...
James Garner, who played a detective in the TV show ' The Rockford Files ', agreed to be paid through residuals instead of by episode. He signed a contract to do a set amount of shows. He was paid a pittance during the shows run. When the time came for the residuals to come in, creative bookkeeping kept Garner from collecting a cent, yet, The Rockford Files are still showing re-runs and making money for the studios.
The first Batman movie was one of the highest earning movies at the time it was released. Yet, according to reports and although the studios made a bundle, there was little or no profit in the movie. Creative book cooking again.
MPAA is a case of crooks screaming foul...
I just received an e-mail from a Canadian who says the FBI was roaming around up in his area arresting file traders. The regular citezins are getting a little ticked off suggesting that the Roal Mounted Police should be able to come down to California and issue traffic tickets or something. They feel that this is setting a dangerous president...
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| nonoitall (Member) 2 July 2005 13:56 |
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Very true, dufas. The RIAA and MPAA both get far more money selling songs and movies than the artists who actually created the content. For a while, this was a necessary evil, when artists couldn't afford to produce their content on a large scale for the number of people who wanted it. Now, with the internet, artists are perfectly capable of distribuing their content cheaply (or even for free) without a middleman.
This scares the h*ll out of the RIAA/MPAA, so they attack people who take advantage of this technology, calling them criminals. They're trying to shed a bad light on P2P so no one sees that there's a free way to distribute media, and in turn, so that no one sees that the RIAA/MPAA have become obsolete.
Do you think (reasonably well-paid) stevedores and factory workers were happy when machines came along and did their former jobs quicker, better and cheaper? Many such workers even sabotaged the machinery that was about to replace them, trying to make it appear faulty, unreliable and unattractive to the general public as a method of accomplishing work, and in turn, unfit to replace human labor. See any correlation here?
People who make a lot of money always feel threatened when something more efficient comes along. When the RIAA and MPAA say they are fighting piracy to protect peoples' jobs, just whose jobs do you think they're protecting? Their own! They don't want people to see that they are no longer necessary, so they do everything they can to make it look like they still are.
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| nohelpme (Senior Member) 3 July 2005 4:21 |
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Noitall is right. But I would also again like to say they are not keeping up with technology. The cd was first created in the early 1980's. Come on now...for 20 years no one sticks with a medium for that long. Even 8 tracks and cassestte tapes were not around that long lol. Basically, its time to give us our monies worth. I have not paid for a cd sense 1997.... and i won't until i get my monies worth. When you can fit like 1000 songs on a blank DVD-5...why pay 12.99 for 14 songs???? Sorry I am not dumb.
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| nonoitall (Member) 3 July 2005 10:42 |
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Quote: When you can fit like 1000 songs on a blank DVD-5...why pay 12.99 for 14 songs????
That's a good point too. Even if you ignore P2P and the internet, they're still not taking advantage of superior technology that could save space and production costs. On a single-layer DVD alone, you could fit at least 60 hours of music on there (assuming you compressed it to an ABR of 160 kbps) and nearly twice as much on a dual-layer DVD. The only problem is that the RIAA doesn't want to make any less money than it makes now.
Let's say the average CD is $15 and has one hour of music on it. Then, let's take about $3 off that for royalties for the artist(s) and cost of materials (it's probably less, but we'll be nice to the RIAA). So, they make a profit of $12 per hour of music sold on the average let's say. Now, let's say they start using DVDs and compression to cram way more music on a disc the same size. Assuming 60 hours per disc - that's about $150 for royalties and materials. Now, that seems like a lot of money, but you're getting a lot of music, so let's say consumers are willing to pay that since they won't have to pay it nearly as often.
In the above scenario, the RIAA is just breaking even. But they don't want to make any less money than they make now, so let's add on the $12 per hour that they made before. Now, that DVD which was barely affordable before costs $870! This seems insane, but it's the same proportion that's used with CDs - the numbers are just bigger. The average person would never spend that much money for one little 12cm round piece of plastic, which is why the RIAA is so afraid of technological progress.
Distribution costs of a great deal of information have become so small with DVDs, compression and the internet that the RIAA can no longer make it appear as though they are charging exactly what their product is worth. If the RIAA allows themselves to keep up with technology, they will either have to charge less for their product and lose money, or charge the same for their product and reveal that they are totally ripping people off and lose customers, which will also lose them money. See why they don't like the idea of modernizing?
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| p.monkey (Junior Member) 3 July 2005 15:52 |
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The p2p thing isnt really all bad it can be used as a promotional tool for new artists and film makers to get thier stuff seen by people who may never get the chance to purchase a copy or even see one. I feel like the music and movie industry have kind of been spending too much money to make things and charging way too much to the consumer in the first place,now people are sick of paying rediculous prices and feel they can download and copy things cheaper. I guess if i was a record/movie exec id be pissed and want more money too. but they already tax blank cds and still usually charge too much for original merch.So I dont really feel bad for them. they should sell mp3cds already made box sets.or sell movies to be downloaded and burned leagaly from a site on line.find ways of making things cheaper for the consumer so in the end it would be roughly abit more expensive than copying it, but a better more original product.What i mean is they shouldnt waste money on court battles just to prove a point,they should be looking for ways to use this technolegy to thier advantage and find other ways of making money to drive down costs to make it not worth the time to download and burn a cd. because this problem will never die only get bigger as more people figure out how to use it.
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| nohelpme (Senior Member) 4 July 2005 4:47 |
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Thanks nonoitall for expanding my comment a little more. Its no one's fault there economic model for making money is out of date. Its like suing people to keep their buisness alive. Stay tuned guys, go to cnnfn.com. There was a huge article on how dvd's are not selling as much as they use to now. They are going to blaime piracy I can see it now. No offense, no one downloads dvd's on the internet with the intention of not paying. They are such bad copies they are not even worth the 3 hours of so it takes if you have a good connection. However, don't let these industries fool you. Why does netflix and blockbuster exist??? Why do you think? Why does blockbuster in their stores sell blank dvd's??? Any gueses? Why are dual layer dvd's just now starting to get more popular???
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| ToxicFish (Member) 4 July 2005 8:05 |
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Quote: nonoitall
The RIAA and MPAA both get far more money selling songs and movies than the artists who actually created the content. For a while, this was a necessary evil, when artists couldn't afford to produce their content on a large scale for the number of people who wanted it. Now, with the internet, artists are perfectly capable of distribuing their content cheaply (or even for free) without a middleman.
You don't even know what you're talking about. The RIAA and MPAA are lobbying groups, not government factions.
All they've done is sue people who have been sharing illegal content. The RIAA/MPAA don't make any money off the artist, the recording companies do.
Quote: This scares the h*ll out of the RIAA/MPAA, so they attack people who take advantage of this technology, calling them criminals. They're trying to shed a bad light on P2P so no one sees that there's a free way to distribute media, and in turn, so that no one sees that the RIAA/MPAA have become obsolete.
People who are getting music and movies for free are criminals. How can you not see that? If P2P is being used for legitamate purposes, like bittorrent, then yes, it will be accepted.
Sony, a top 5 member of RIAA, already owns napster. They are going to create a service for movies to be downloaded much like napster as well.
Everything you have said is total BS. You haven't cited one source in your whiny rants.
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| nohelpme (Senior Member) 4 July 2005 8:19 |
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ToxicFish,
Do you believe people who download music and dvd's are criminals?? Is what they are doing good?? No I would agree it is not a good thing. I guess the way I look at is the government has bigger fish to fry. Like Iraq, terrorism, drug use in this country on a massive scale. The MPAA and RIAA are suing people in civil court and let them. They are just defending an old way of selling music. They need to sell their music online and cheaply. They are competing with free, so they need to come out with an outstanding product. Once they leave the mentality that they can sell a cd of 12 songs for 14.99 us, then they have made a turn in the right direction.
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| dufas (Member) 4 July 2005 8:30 |
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I do not buy music or movies or go to the theatre anymore. Since the RIAA and the MIAA likes to sue 12 year old girls, 85 year old women who don't even have computers, even dead people.. They are going to have to get their next Lamborgini without my help...
Before anyone says that not buying their products will hurt the little guy, remember that the entertainment industry loves to call for a boycott against any industry that doesn't fit their view of how the world should be and they do not care how many "little people" get ran over in the proccess.....
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| dufas (Member) 4 July 2005 8:51 |
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Make that the MPAA
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| nohelpme (Senior Member) 4 July 2005 9:08 |
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A little quote I would like to use is "money makes people funny." Suing an 85 year old grandma is not good. My opinion, I buy dvd's but I would never sit in a theatre or buy a dvd. I put my money into a nice sorround sound system.
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| ToxicFish (Member) 4 July 2005 9:12 |
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Quote: nonoitall
On a single-layer DVD alone, you could fit at least 60 hours of music on there (assuming you compressed it to an ABR of 160 kbps) and nearly twice as much on a dual-layer DVD. The only problem is that the RIAA doesn't want to make any less money than it makes now.
Again, recording studios are responsible for their artist's product, NOT THE RIAA. How many artists do you know of that release more than 15 tracks on their albums? Rarely will you see anyone fill an entire CD.
So why would they need to put out their album on a DVD? That wouldn't even make sense. You could fit 900 songs on your 60 hour DVD assuming each song is 4 minutes a piece. Yeay, i got one Beetle's DVD... Pretty much no one else can fill it.
People don't just buy cds for the music, but for the bonus material as well. One of the greatest parts of buying a cd is going through the cover art. I am not going to buy a genre DVD, and neither will anyone else.
As far as royalties... artists get less that 50 cents a cd. CDs are priced as they are because of production cost, marketing and promotion costs, studio fees, studio musicians, sound engineers, producers, etc. And all must be recovered by the cost of the CD. RIAA.com/news/marketingdata/cost.asp" class="korostus" target="_blank">http://www. RIAA.com/news/marketingdata/cost.asp
Stop spreading your BS.
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| nohelpme (Senior Member) 4 July 2005 9:21 |
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I don't think its bs. Coming to a dvd format could give them several options. You could hear alot more tracks like the b-sides and outtakes. You could hear a lot more unreleased tracks. You could get more of what the artists's original intent was. Think of it as a painter would, the artist would get a much bigger canvas to create on. A CD in my opinion, a medium developed in the late 1970's...does not cut it in 2005. Sorry, but it just dosen't. If that is the way you feel I respect your opinion. Then why not get a car from the late 1970's or never upgrade your house or anything else. There is one thing that is constant, and that is change.
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| ToxicFish (Member) 4 July 2005 9:27 |
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Quote: nohelpme
A little quote I would like to use is "money makes people funny." Suing an 85 year old grandma is not good.
I couldn't agree more. The thing is, how do you think that grandma was discovered. The suits are centered off of traffic. All they see is an IP adress and possibly what files are transfered. They needed to send a message that file sharing is not good. And it worked. When people found out that no one was exempt, alot of people were scared out of it.
I download "backups" all the time. By us doing this, we are driving services. iTunes and napster are a direct result to illegal file sharing. What i don't support is people who are ignorant to why these law suits are happening. Filesharing is illegal, plain and simple.
If i came into someones house and kept stealing food from the fridge, the homeowner would get pretty pissed and put up an alarm system or something. It might look ok if that fridge was the only source of food for miles around right, but it would still be stealing. If the homeowner were nice, he would make a restraunt for all the hungry people to eat...
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| nohelpme (Senior Member) 4 July 2005 9:36 |
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I agree that filesharing is not a good thing. No doubt. But just in basic economics I know that the way they are selling their product and ripping the average consumer off is not good either. I think we just need to get to a happy medium.
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| Mr_Taz_UK (Senior Member) 4 July 2005 10:08 |
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There is no happy medium, thats the problem. They wont cut their prices, and we wont be ripped off.
Stalemate.
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| dufas (Member) 4 July 2005 10:09 |
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I used to download movies to see if I liked them, I didn't care if it was a bad cam or not. if it was a good movie, {this is subjective..you may like movies I don't like and visa-versa), I would go to the theatre and if it was extra enjoyable, I would purchase a DVD when they came out.
I did this because I got tired of wasting money or time, The studios would put out a piece of crap and still make tons of money on it. One cannot beleive the adverts for a movie, the critics are mostly brain dead or hollier than thou types..or on the studios pay-roll.
There are music fans that I know personally that feel the same way. Buying a CD whose cover or adverts promise one thing but delivers another. It gets tiresome and a waste. Meanwhile, the entertainment industry laughs all the way to the bank.
The latest reports are that movie viewership is down but profits are up..Wonder why that is ????
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| nohelpme (Senior Member) 4 July 2005 10:19 |
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QUOTE:
There is no happy medium, thats the problem. They wont cut their prices, and we wont be ripped off.
Stalemate.
I don't agree. Just like anything they can improve the quality of their product and make it better and people would buy it again. They just can't expect us to buy the same old thing over and over.
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| Mr_Taz_UK (Senior Member) 4 July 2005 10:26 |
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Thats basicly what I meant, CD's havn't changed for 20 years!
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| nonoitall (Member) 4 July 2005 10:55 |
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Quote: You don't even know what you're talking about. The RIAA and MPAA are lobbying groups, not government factions.
Please stop putting words in my mouth. I never said the RIAA and MPAA are part of the government, only that they share similar traits.
Quote: All they've done is sue people who have been sharing illegal content. The RIAA/MPAA don't make any money off the artist, the recording companies do.
Do you know what the 'RI' in RIAA stands for? Believe me they don't make all their money off lawsuits. Even if not always directly, they make a ****load of money off music artists - they wouldn't exist if they didn't.
Quote: People who are getting music and movies for free are criminals. How can you not see that?
I do see that, but only because a law says they are. Not all laws make sense though. Many murderers and rapists get off easier than a kid who brings a camera into a theater would.
Quote: Everything you have said is total BS. You haven't cited one source in your whiny rants.
Exactly the same comment applies perfectly to you. My source of information is the same as yours - personal opinion. Cool your jets and stop attacking people for having a point of view.
Quote: As far as royalties... artists get less that 50 cents a cd. CDs are priced as they are because of production cost, marketing and promotion costs, studio fees, studio musicians, sound engineers, producers, etc. And all must be recovered by the cost of the CD.
As I said, I was generous. Actually, your statement supports my idea - CDs are ridiculously overpriced. A very small percentage of money made by them goes to artists who actually create the content; it goes to middlemen. Now, with better technology available, middlemen are no longer necessary and like I said before this scares them and makes them want to fight it.
Quote: Stop spreading your BS.
This is another off-topic remark about me and my opinions. In the future, please don't clutter a news forum with it, but use the PM feature if you wish to attack me personally.
This message has been edited since posting. Last time this message was edited on 4 July 2005 10:56
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| dufas (Member) 4 July 2005 11:36 |
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I have been following the comments here. There seems to be a mis-understanding among some. While the MPAA and the RIAA are not the studios per say, they represent the studios just as The American Medical Asc. represents doctors, The SAE [Society of Automotive Engineers] represents tha automobile industry, or your own lawyer represents you.
The MPAA and the RIAA handle public relations, do political lobbying, handle internal and external legal matters and is a general cushion between the public, unions, entertainers and the studios. They do things in the studio's name Just as your lawyer would do things in your name.
There is strength in numbers, so, many entities join together for 'THEIR' common good, not anyone elses.
As an example, in the 1950s,the government was trying to shut down automobile racing. Different groups of racing orginizations got together and formed several groups such as the NHRA and NASCAR to keep the different forms of racing together. While these groups were originally formed as lobbying tools, they migrated to being the heavy hammers in all situations for their interests. The same thing is in effect for the RIAA and the MPAA.......
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| nonoitall (Member) 4 July 2005 14:26 |
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Thanks for the clarification dufas.
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