News written by Jari Ketola (March, 2004)

A study made by researchers Harvard University and the University of North Carolina has shown that illegal music downloading doesn't translate to reduced CD sales. The study tracked music downloads over a period of 17 weeks in 2002, and even high levels of swapping appeared to have noeffect on album sales.

"We find that file sharing has only had a limited effect on record sales," the study's authors wrote. "While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing."

The study is the first ever to combine statistical data from a P2P network and actual record sales figures. Harvard Business School associate professor Felix Oberholzer and University of North Carolina, Chapel Hill associate professor Koleman Strumpf used statistics logs from two OpenNap servers in late 2002. The logs included about 1.75 million downloads over the 17 week period.

The music industry has been persistant in accusing P2P file sharing for the declining CD sales, while the fact remains that people are spending more money on, for instance, games and DVD-movies, as well as other types of entertainment.

The Recording Industry Association of America (RIAA) has filed lawsuits against 532 suspected pirates. Among those sued are, for example, 89 students from more than 20 different universities.

"There is an exciting array of legal music services where fans can get high-quality online music," said Cary Sherman, president of RIAA. "Lawsuits are an important part of the larger strategy to educate file sharers about the law, protect the rights of copyright owners and encourage music fans to turn to these legitimate services."

College students are generally considered to be the most active users of peer-to-peer networks. That's why it's not too surprising to see RIAA make a major move against them. Several universities have already signed deals with for instance Napster to allow their students access to legal music services at a reasonable price.

The rest of the sued individuals were users of commercial ISPs. Lawsuits were brought against them in California, Colorado, Missouri, Texas and Virginia.

Source: Reuters

Electronics and entertainment giant Sony and fast-food chain McDonald's are working out a deal to promote Sony's upcoming Sony Connect download music service.

The promotion would bring free downloads to McDonald's customers with the purchase of specified menu items. According to the Los Angeles Times, McDonald's will be commiting about $30 million in advertising to the partnership. In return Sony will offer McDonald's discount to license the songs for promotion.

It was reported earlier that McDonald's had made a deal with Apple to give away iTunes songs, but apparently the plans have changed. Both Sony and McDonald's have declined to comment on the rumors.

It seems that there's a trend of bundling food with music going on. We're all familiar with the Pepsi-iTunes -deal, and Starbucks and Hewlett-Packard announced a service that allows Starbucks customers to burn custom CDs while waiting for their order.

The Sony Connect service is expected to be launched this spring, and will be offering about half a million songs at 99 cents per tune.

Vodafone Germany has announced its new Vodafone live! Music download service. The service is based on MPEG-4 aacPlus audio codec created by Coding Technologies.

Vodafone uses Musicwave's Music On Demand Service (MODS), which allows full length, DRM protected downloads to mobile devices. The catalogue of available songs can be browsed using a mobile handset, and the selected items can be purchased using a one-click billing system. The streaming playback will begin after about 30 seconds of playback, and after playback the song will be stored in the device's memory for later use.

In addition to playing the purchased songs on the mobile device, consumers can also retrieve the songs on their PC. Vice versa songs purchased on PC can be sent to a mobile device. In essence the MODS system makes it easier to do impulse purchases on mobile devices, as the purchased song will also be available for storage on PC.

Source: Music Industry News Network

Fraunhofer IIS and Agere Systems have developed a multi-channel MP3 format that produces 5.1 sound at bitrates comparable to those used today to encode stereo sound in MP3 format. In addition to offering multi-channel sound at low bitrates, the MP3 Surround -format is also fully backwards compatible with all existing MP3 players.

MP3 Surround technology encodes multichannel sound by transmitting a stereo audio signal that carries a compatible stereo down mix of the multi-channel material. The multi-channel sound image is created by additional side information, that characterizes the spatial distribution and attributes of the sound. Since the channel information is not discrete, the format cannot be compared to, for instance, Dolby Digital multi-channel audio.

"Enjoying personal multi-channel audio has been on the wish list of the MP3 user community for quite some time. This is exactly what MP3 Surround has to offer -- and it does so at astoundingly low bit rates", says Jürgen Herre, Chief Executive Scientist of the Audio & Multimedia departments of Fraunhofer IIS, Erlangen.

The most obvious solution for multi-channel, low-bitrate MP3 audio is in network distributed movies. First software implementations are expected to be available by mid 2004. Until then we can only guess how well MP3 Surround can perform.

The Recording Industry Association of America (RIAA) has been exploring ways of limiting illegal P2P traffic, and has discovered a company called Audible Magic. Audible Magic has developed a software, that analyzes the content being transferred and is capable of blocking the transfer, if illegal content is detected.

According to Audible Magic the software works either on external network devices that monitor traffic, or it can be embedded in any P2P software.

P2P companies have always argued that illegal content cannot be blocked without blocking legal material, too, and invading their users' privacy. RIAA is not looking for a legal ruling to force P2P companies to adopt Audible Magic's (or similar) technology, but would like to see the technology added voluntarily.

Of course it is quite obvious that P2P companies are not willing to add any such component. First of all it would seriously hamper their position on the P2P market, and the lisence fees for the software would probably be a problem as well. RIAA is most likely just looking for another excuse to claim that P2P companies are not doing their best in blocking out illegal traffic from their networks.

Source: New York Times

Electronic Frontier Foundation (EFF) has released an update on the proceedings in the legal fight regarding the mass lawsuit against individuals accused of file sharing. EFF, Public Citizen, and the American Civil Liberties Union argue that an individual, detailed lawsuit must be filed against each defendant instead of joining all the "John Does" in a single lawsuit.

The following is the complete, unedited press release from EFF.

Here is a brief update on some of the cases in which Public Citizen, Electronic Frontier Foundation, and the American Civil Liberties Union and its local affiliates have filed amicus briefs arguing that persons accused of file sharing should be accorded minimal due process rights before subpoenas are authorized to identify them. We have just received rulings in two of the cases, one which accepts our argument that the record companies should have to file separate lawsuits against the individual filesharers rather than lump them all into a single case as they have done, and the other which found our arguments helpful, but premature.

In the case filed in Philadelphia against 203 Doe defendants whose Internet Service Provider is Comcast (BMG Music v Does 1-203), Judge Clarence Newcomer agreed with at least part of the legal arguments we raised. He agreed that it was improper to join all 203 defendants in a single lawsuit, and ordered the music companies to file separate complaints against each of the Doe defendants, paying a full filing fee for each case, for a total of about $30,000, and making individualized allegations against each defendant. Judge Newcomer retained the case against Doe #1, one of the three defendants about whom the music companies had provided detailed evidence (more than a hundred pages, each listing many songs made available for download), and authorized the issuance of a subpoena for that individual's identity only.

The Australian Federal court will give a ruling on whether or not the recent raids made at the office of Sharman Networks, the owner of Kazaa peer-to-peer application, were made based on valid reasons. Music Industry Piracy Investigations, the anti-piracy faction of Australian music industry raided the offices of Kazaa, and others in February.

Soon after the raid Kazaa questioned the raid, and said the judge who granted the search warrant was not presented with all the facts regarding the case.

The ruling will be given tomorrow morning EST.

Source: The Sydney Morning Herald