News written by Petteri Pyyny (October, 2000)

Wow, big change in Napster's legal problems - Napster has inked a deal with Bertelsmann, who owns BMG, one of the five major record labels suing Napster.

BMG and Napster have announced that BMG will drop its lawsuit against Napster and will loan money for Napster to help it to build a subscription system for their application.

BMG has also right to buy a stake of Napster if they want to. No detailed information about Napster's future isn't availble yet -- such as, do the application still allow people to distribute music freely.

Also, the price of the subscription service is unknown, but analysts estimate it would be around $15 / month.

Two and half months ago I posted an article that we hit the "magical" number of 100,000 software downloads. It took almost a year to get that number.

Now, today, we reached the number of 200,000 software downloads and this time it only took appx. 75 days. OMG, you guys are nuts :-)

Let's see how long it takes to get to 300k, my guess is 45 days.

AOL 6.0 was recently launched. For those who don't know what the heck AOL x.0 is (then you're very probably European) - AOL is the world's biggest ISP and they have their own propietary software package that contains tons of stuff in it, including their own branded browser (based currently on MSIE).

AOL Media Player says on its window: "Powered by WinAMP". But it does lotsa more than WinAMP v2.x - it plays basically all available media formats, including video formats. And therefor it gives you very straight idea what you should expect from WinAMP 3.0, since this basically has core of that player in it.

With this player, AOL finally gets into the media game big time, starting a war against Microsoft, Real, Yahoo, Lycos, etc.. And yes, they have the media power behind them -- TimeWarner as a media provider and WinAMP as software provider.

We've picked Holochaust, Finnish metal band, as our artist of the month.

Holochaust's music has lot of heavy metal features, but it also has some other very beautiful, lighter elements in it.

Our recommended track is Valley of Misery.

See Holochaust pages in AfterDawn.com for more information and more tracks.

Heh, interesting - not so related, but anyway - news from Japan. Liquid Audio Japan's former director has been arrested for the kidnap and robbery of one of the company's executives in June 1999.

The former director and four other guys kidnapped the executive and held him for number of days back in June 1999, in order to stop him to fly to U.S. They also stole $370 and a ATM card from the executive.

None of these persons are no longer employed by the Liquid Audio, a company which has developed their own pretty popular secure digital music format. Company therefor refuses to comment.

News source: thetuckshop.com

LoudVideo.com has created a codec that combines MPEG4v.2 video format with Apple's QuickTime streaming technology. Company claims that this method allows it to stream VHS quality video over the Internet.

For more information, check out their website even though it doesn't have too much to say yet.

LoudVideo.com (currently down)

This week two research teams, one from Xerox's Palo Alto research center and one from Princeton and Rice universities, have claimed that they've cracked SDMI's watermark copy protection.

SDMI in other hand denies the claims and says that no one hasn't achieved to crack the protections totally.

The team of universities says that they've successfully cracked the SDMI's watermark technology, but they couldn't verify were they actually able to crack two other copy protection methods, not related to watermarking-technology. This was due SDMI's verification server for these two methods wasn't functioning correctly.

RealNetworks released their new audio format, RealAudio 8, today. New format replaces the Real's old G2 format. RealAudio 8 is jointly developed with Sony and it actually blends with Sony's own ATRAC3 format.

Real claims that RA8 files are half of the size of MP3s with the same quality. Real has one big advance compared to others who have tried to introduce new audio formats to replace MP3 -- they have millions and millions of existing users.

Under the terms of the Sony/Real deal, Sony will also include RealPlayer with their Vaio computers and its portable music players.

Internet Wire, the Internet-based distributor of company press releases and news, has teamed up with MP3.com, world's leading independent artist promotion site.

Now MP3.com's artists can use Internet Wire's global news reach for their press releases and news. Internet Wire syndicates their content to many leading news sites, including Yahoo!

Vitaminic, one of the biggest rivals of MP3.com in online music biz, has signed a deal with Live365, a web radio station provider.

Under the terms of the deal, Vitaminic's users can create their own radio stations based on the tracks found on Vitaminic's music catalog. Contract also adds access to Live365's radio stations directly from Vitaminic's website. Live365 has over 20,000 radio stations available.

Related links:
Vitaminic
Live365

RIAA will lose one of their key legal strategists on December 1st this year, when Steven Fabrizio takes a one year leave to get married and travel the globe.

He's been one of the key strategist in all Associations legal litigations since 1996, including MP3.com, Scour, MP3Board.com and Napster cases.

When all the fuzz is around Napster, please don't forget the others in this MP3 war. MP3Board.com, an MP3 search engine sued by RIAA and bunch of labels, is on the news again.

Nothing major this time -- MP3Board is sued by RIAA and separate labels in California and in New York. Now California court dismissed the lawsuit in California, because identical case in ongoing in New York state - California cases will be bundled to this case.

This order only effects to separate lawsuits filed by labels themselves - RIAA's case is still pending in California.

MP3Board's case actually might be even more important to the future of the Internet than Napster's -- if MP3Board loses, it might ultimately mean that we (people who run websites) would be responsible for all the content that we link to. And what happens to "legal" search engines such as AltaVista? If somebody finds child porn through AltaVista, is AltaVista reponsible of that content?

Even though our site is small compared to major players in the independent music scene (such as MP3.com and Vitaminic), we today reached the barrier of 10,000 downloaded MP3s from our independent artists.

Our site has grown dramatically over last couple of months, but it's still a very small site. However we're pleased to see that the users who like our site, visit us on regular basis.

Thank you, our users!

-Petteri Pyyny, webmaster

SDMI consortium, lead by RIAA members to find secure method for digital music distribution, denies the claims that all of their six encryption schemes were successfully hacked.

SDMI announced a contest in last month with $10,000 price for hackers to break the SDMI encryption schemes. Yesterday it was reported from various sources that now all the six different encryption methods were successfully hacked by contestants.

SDMI denies the claims and says that they haven't analyzed the contest results yet and can't tell if any of the security methods were successfully hacked.

Company called Webnoize, had made a analysis based on "packet sniffing" technology of Napster's usage in September 2000. Technology "sniffes" the files and users that are connected and shared through Napster's 114 servers. Note -- Napster's current technology splits users into several servers, so think about the capacity and the range of music available through all the servers if they would be connected to each other -- a feature that has been in top 3 wish-lists among Napster users.

Anyway, Webnoize estimates that in September there were 640,000 users connected to Napster in any given time -- of course the peaks represent a much higher numbers. By tracking the number of users and files shared on estimate, Webnoize estimates that people shared 1.39 billion files in September via Napster.

And funny issue -- also Webnoize recognizes the fact that CD sales among the college students are raising rapidly, giving a clear sign of the fact that has been announced also in other studies -- MP3s increase CD sales. So, now RIAA is trying to kill their big, maybe the biggest, promotion tool ever. Go figure..

Correction: Napster servers are already linked in such way that searches propagate across the entire Napster server network.

Recording industry's contest for hacking their SDMI music copy-protection scheme has got some nice results -- all of the watermark protections in SDMI were hacked.

Recording industry hasn't verified the results yet, but these reports have came from various sources and should be quite reliable.

SDMI hacking contest was widely protested by open source community which was saying that recording industry just wants to use open source community as cheap "slave labor" to find out the bugs and flaws in the SDMI.

The price of the contest was $10,000.

Now when Napster is a hot topic, once again, it's maybe a time to remind you guys about the very basic question behind this case and p2p technology overall.

Napster's legal case is not about proving that sharing copyrighted MP3s is legal. Not at all. You and me, the guys who actually use Napster and similiar services and allow people to download copyrighted music from our harddrives -- we definately violate copyright laws. No question about it -- letting people to download something from you that doesn't belogn to you, is illegal. End of period.

It's exactle the same thing when you set up your own home page and put some Metallica tracks available on your site. That's illegal and eventually you get into trouble.

But this case is not about that -- it's about determining the liability of the service which allows people to share music. The question is the same in case where you make the homepage and put those MP3s there -- is your ISP responsible for those tracks as well?

And that, my friends, that is the question what they're trying to find out in court. Because suing each and every person who distributes illegal music through Internet is impossible task -- record companies want to share users' responsibility with the service providers. And that is what this Napster's case is all about.

According to a survey, made by Magex (online security and payment company), users are expecting that they have to pay for MP3s -- and they expect this change to come within next 18 months.

Users expect to pay an average of $0.83 per sample, $3.05 per single title and $12.89 for a monthly subscription. Numbers are slightly higher than industry has predicted to be the subscription price -- even Napster is speaking about 4.95 a month service.

Most interesting point in the survey is still the fact what users say is limiting their online music purchases -- a fear of credit card frauds.

Monday's formal hearings didn't offer anything dramatic -- same old phrases and arguments were heard, maybe a little bit more sharpened format, but the core is still the same.

Appeals court judges seem to be more critical to RIAA's arguments than judge Patel was in July. They, for example, argued to RIAA's argument which claimed that Napster should take the responsibility because they know the material what users transfer -- judge Mary Schroeder answered "Napster doesn't have any idea what's being transmitted".

Judge Schroeder also appeared to question the "fairness" of a music industry which promotes the sale of albums over singles. "I can no longer go out and buy a 45 record. I have to buy an album," she said. "Napster's users are getting songs."

Anyway, the case continues and Napster can continue its operations at least until appeals court decision is ready -- its expected to be ready in no less than couple of weeks.

Tomorrow is yet another court date for Napster. It's time for appeals court hearings in case of Napster vs. RIAA.

In July, when judge Patel almost shut down the whole service, appeals court stayed that decision and now it's their time to hear opinions from both sides.

Napster will yet again use their same arguments -- Audio Home Recording Act and Sony Betamax case. Napster -- and even some copyright experts -- believe that these two legal arguments might be enough to keep Napster in the business. At least until the case goes to supreme court, where many expect it to be headed.

Napster's case is not just about Napster, tho. It's also about the whole peer-2-peer sharing ideology and also about Scour Inc. which is going to face similiar charges from MPAA and RIAA later this year.

So, again we're waiting for court to give their opinion. And boy, this process is going to take a while.