News written by Petteri Pyyny (June, 2004)

The Supreme Court of Canada delivered today a yet another blow to music industry when it ruled unanimously that Canadian ISPs are not required to pay royalties to music companies because their users use the Net connections to download music.

Earlier this year, Canadian Federal Court ruled that downloading copyrighted material from P2P networks without copyright holder's permission is perfectly legal for personal use. The ruling is similar to several court decisions in other countries across the world that have so-called "blank media levy" in use to compensate copyright holders.

More interesting was the ruling back in March by Federal Court that found that sharing copyrighted music via P2P networks is legal in Canada as well. While "distributing" copyrighted material without a permission is illegal in Canada, court decided that simply sharing a folder full of copyrighted material, such as music, via P2P networks such as Kazaa doesn't count as "distribution".

However, record labels' Canadian organization, Canadian Recording Industry Association, has lobbied heavily to change the existing legislation in the country and in May this year, a committee recommended to Canadian government to tighten its copyright laws to outlaw distribution of music via P2P networks and to allow record labels to introduce DRM schemes to audio recordings.

Association of Independent Music, an organization that represents almost thousand British indie labels, has told to press that it has officially recommended for its members not to sign a deal with Apple to distribute the songs via iTunes service under the contract terms offered to indie labels.

Apparently Apple has offered a fixed income deal to indie labels that would last three years and as the online music industry is still in its infancy, indie labels fear that such deal could seriously hamper their ability to benefit from the booming trend.

Lack of indie labels isn't a small issue either in Europe, as small labels represent over a quarter of continent's record sales -- a percentage that is one of the highest anywhere in the world. Apple has plans to launch a European -wide iTunes service in October. AIM stated that "In a year or so, they may decide to increase their prices -- but all that extra markup would go to Apple (and not to the labels). We are not going to throw our music away. The terms are simply unviable."

Source: Wired

One of the world's largest mobile phone operators, German T-Mobile, announced today that it will launch its own legal online music store, aimed to mobile phone users. T-Mobile's service will launch on next week in five countries: the UK, Germany, Czech, Austria and the Netherlands. The nag? Service requires a specific phone that supports T-Mobile's "Ear Phones" technology and the company will start selling such handsets on next week's Monday.

It is not clear which company or companies have created the handsets -- and whether consumers are willing to change their Nokias and Samsungs to a handset that offers a possibility to pay for downloaded music. Also, the service currently only offers a catalog of 500 "mixes" that are limited to 90 or 120 seconds in length. However, T-Mobile promises that over 250,000 tracks will be available in "CD-quality" (I think we've heard that term before, haven't we?) format by Christmas. Also, the tracks will cost either €1.50 or £1.50 (obviously the higher price, £1.50, is only for British consumers..) and they can't be transferred to PCs or "real" digital audio players.

T-Mobile has licensing deals with three out of five major record labels; with Universal Music, Sony Music and Warner Music.

British equivalent of the RIAA, British Phonographic Industry (BPI), revealed this week more information about their plans to launch the official UK music download chart. The chart will go live on 1st of September this year and will feature the BBC's Radio One channel as its main broadcasting partner. The chart is compiled on weekly basis from the sales figures of the UK-based legal online music services.

BPI also released the first "semi-official" UK download chart that also includes the sales figures from Apple iTunes' UK version that launched 15th of June. The chart is for the week beginning at 13th of June and ending at 19th of June and shows quite well how iTunes managed to dominate the charts despite missing two days of the chart's timeline -- Pixie's track Bam Thwok took the number one place in the charts despite being an exclusive track to iTunes service.

Source: The Register

Apple's online music store, iTunes, has managed to repeat its American success story in Europe as well. Apple announced today that its store sold over 800,000 songs during the first week in Europe. The service was launched in the UK, Germany and France on 15th of June -- the European -wide service will launch October this year.

According to Apple's CEO, Steve Jobs, out of the 800,000 songs sold during the first week, more than 450,000 were sold in the UK. The figure is 16 times higher than what UK's strongest competitor, OD2, managed to sell during the same period via its distribution partners.

Source: Apple press release

I don't know whether this can be considered even a news topic anymore, but more of a regular death toll update for an on-going war. Anyway, Recording Industry Association of America has sued yet another 482 P2P users in the United States for illegally distributing copyrighted music over the P2P networks.

This time the cases were filed in St. Louis (total of 213 cases), Washington D.C. (206 cases), Denver (55 cases) and New Jersey (6 cases). As always since the appeals court order in December, RIAA was forced to sue the users as "John Does" as it can't obtain their identity details before it has sued them.

After these lawsuits, the RIAA jihad has so far dragged 3,429 P2P users to court in the United States.

Source: Forbes

One of the oldest online music companies still in the business, American Loudeye, has agreed to purchase British online music service OD2 for $38.6M (€31.9M, £21.2).

OD2 has a slightly different business model compared to its biggest rivals, Apple's iTunes and Napster as the company doesn't operate a music store itself, but rather provides music store solutions, audio file delivery services and licensing services to third party operators. Specially in the UK company has managed to gather rather impressive distribution partners, including Coca-Cola, HMV and Virgin.

Combined company hopes to fight head-to-head with the "big boys" in the rapidly growing legal online music business, especially in Europe where OD2 has a rather strong position because of its brand-name distribution partners.

Source: BBC

Leading European satellite operator Astra and 60 European broadcasters have agreed on a HDTV initiative that aims to create a standard HDTV platform across the Europe. Astra is the satellite provider that most large European satellite broadcasters, including British Sky Digital, use.

The group agreed to standardize on two broadcast resolutions, 720p50 and 1080i25. 720p50 means that the broadcast resolution would be 1280x720 pixels with 50 full frames per second (==progressive) and 1080i25 means a resolution of 1920x1080 pixels with 25 full frames per second (==interlaced). Both resolutions are the most commonly used HDTV broadcast resolutions in the United States (but American HDTV uses higher framerate). Both resolutions are natively in 16:9 aspect ratio.

Group also agreed to create a pan-European "HDTV" label that would be granted to devices, such as TVs and digital set-top boxes, that are ready to receive and decode HDTV material. Compression formats that the European HDTV will use are MPEG-2 and MPEG-4 AVC.

Our side-kick project, MP3Lizard.com, reached one major milestone today, when the 1,000,000th song was downloaded from the site.

MP3Lizard.com evolved into a service for indie artists back in January, 2001 when we transferred our artist promotion service there from AfterDawn.com (indie artists have been part of our service since the very beginning, from June 1999).

Currently MP3Lizard.com has almost 6,000 tracks from over 1,500 bands and all of those tracks can be downloaded freely and legally. Many users have expressed their satisfaction to the service by emailing to us and we're pleased that the service has managed to gather a loyal userbase that seeks alternatives to the everyday "Top 40" musical selection that mainstream media broadcasts.

We'd like to thank our users -- and specially the artists who distribute their music via MP3Lizard.com -- for making the service what it is today.

-Petteri Pyyny
AfterDawn.com

Last year, a big controversy surrounded the MPAA's decision to ban all so-called "screener" DVDs. Screeners are pre-release versions of movies, sent out to critics and to people who are allowed to vote in various movie industry events, most notably in Academy Awards a.k.a. Oscars.

This year, it seems that DVD screeners can be brought back to critics and other special interest groups, by encrypting the DVDs so that they can be only opened with a special DVD players that support such encryption scheme.

The technology is developed by Dolby's subsdiary called Cinea and according to the company, "discs are encrypted using the AES 128-bit encryption standard. It's a National Security Agency-level standard, a world-class, state-of-the-art encryption standard".

Academy of Motion Picture Arts and Sciences, the organization behind the Oscars, says that they're having talks with individual studios whether they would support the technology or not. After a court order in last December, MPAA can't force studios to adopt the technology, but it is left to individual studios to decide whether they support the scheme or not.

Basically the encrypted discs would mean that if (and cynics would say, when) screener copies leak to the Net again, the only option is that someone who received an authorized screener DVD must have leaked it as the discs can't be given to friends or relatives as they don't have the equipment to play the discs (or copy the discs).

Oh, did you recognize the name of the company behind the scheme? Yes, the same guys who developed the original DIVX DRM-equipped DVD format (not to be confused with the DivX video codec)..

Source: Reuters

DVD Forum, the organization that controls the development of official DVD standards, has approved a new format called DualDisc. The format is aimed to compete against the SACD audio disc format developed by Sony and Philips.

DualDisc is basically a disc that has a DVD-Audio content on the other side of the disc and regular audio CD on the other side of the disc. The aim is to create a format that would allow record labels to produce DVD-Audio compatible discs, that provide far better audio quality than regular CDs, while maintaining the backwards compatibility to traditional CD players.

Source: HighFidelityReview.com

Apple's iTunes has finally arrived to the old continent, even though the service is available only in three European countries at this stage. However, Apple announced also today that it will launch a European Union -wide version of its service in October, making the online music service available to users of all 25 EU member states.

As expected, iTunes pricing is higher in Europe compared to the original American version. In States, each song costs $0.99 (£0.54, €0.82), but in countries using the euro, each song costs €0.99 ($1.20, £0.66). Highest price is however in the UK, each song in iTunes UK costs £0.79 ($1.44, €1.19).

iTunes' European music library contains over 700,000 songs and carries an established brand name, which should make it much easier for Apple to emulate its American success also in Europe.

Source: Apple press release

British OD2 prepares for a long and, most likely, aggressive fight against the online music industry's golden child, Apple's iTunes. As iTunes is about to launch tomorrow in UK and various other European countries, OD2 has already hit its first punches in the fight by launching a streaming jukebox service that allows users to listen tracks from its 350,000 track library for a mere penny each.

The nag? You can't download the songs nor burn the songs for that price, obviously. The price applies only to a single listening experience, but at £0.01 each ($0.0181 or €0.0150), it sounds rather tempting offer. More permanent downloads, that can also be transferred to portable audio players that support Microsoft's Windows Media 9 specs, users have to pay £0.75 ($1.36, €1.13) per song.

As the online music industry is still very much in its infancy in the Europe, the stakes are high for the companies to gain the "critical mass" and the brand recognition across the continent before the market gets saturated with similar services.

Source: NewsFactor

Various organizations representing Australian music artists, music retailers, radio stations and other music industry groups have submitted a proposal to Australian Federal Government asking the government to introduce a blank media levy to Australia and to loosen the copyright legislation in the country to allow music copying for personal use.

The levy fee scheme is well-known in various countries, such as Canada and Finland, where consumers are allowed to make personal copies of CDs (in most countries, even without owning the CD) and to download tracks from P2P networks legally. Obviously distribution copyrighted material to large audiences without a permission, such as sharing files via P2P networks, would be still illegal.

Not surprisingly, the only large organization opposing the proposed amendment to the legilation is the Australian equivalent of the RIAA, the Australian Record Industry Association (ARIA).

Also, it should be noted that however nice the "copy freely as you pay it in blank media prices" system sounds, at least in Europe the basis of it has been destroyed already -- the levy remains on blank media, but circumventing technical copy protection mechanisms found on many current audio CDs is nowadays illegal (or will be soon, as the last remaining EU countries implement the EUCD to their own legislation), even for personal use. So, recording industry basically doubles the profits -- they collect levy on blank media, but also make it illegal to copy CDs..

Recording Industry Association of America has crafted a proposal to American regulator, Federal Communications Commission, that would add DRM functionality to the digital radio platform used in the United States. Organization plans to submit the proposal to FCC next week.

RIAA is concerned about the fact that terrestial digital radio stations deliver audio in "too good quality", typically bundled with meta data (such as artist name and song information) making it easy for listeners to make CD-quality digital copies of tracks played over the airwaves.

RIAA proposes restrictions to upcoming digital radio recorders that would make it possible for listeners to record digital broadcasts, but would not allow dividing the broadcasts into individual songs. RIAA also wants to add a "copyright flag" to the equation, making it possible for content owners to set up a flag that would tell the recording devices that the broadcast can't be recorded at all, not even in full form.

Over 300 American terrestial radio stations already do digital broadcasting, typically in addition to their analog broadcasting. RIAA's proposals wouldn't affect to the two satellite radio operators, XM and Sirius, as -- according to the RIAA -- they "...have an incentive to limit it [digital recording] ...".

Five years and a couple of months ago it was a yet another very boring working day in a Finnish new media company (one of those born in 1990s and already folded since that) -- and it was the coldest winter ever in Finnish capital, temperatures dropping to -40C. One web developer -- me -- with a serious addiction to MP3s felt very, very bored of creating yet another feedback form functionality for some furniture company's web site and felt that he needed "something". At that time there was a wave of great new sites appearing on daily basis, focusing on digital audio -- most notable ones for me were sites called MP3.com and Dimension Music. One provided indie artists a way to promote their music for free and the other was a niche site covering news that related to the MP3 revolution that had begun three years earlier.

Then I had a thought -- not a very original thought nor a very noble thought, but a thought anyway -- why not try to emulate those ideas, add couple of additional features to the equation, make it bilingual and see what happens. Obviously I couldn't do it alone -- not financially and not technically, so I needed help and started calling my friends. After a couple of phone calls, the team of eight guys was ready and we began discussing about our expectations for the site. The first steps in the history of the site were taken..

A new website, euro-copyrights.org, has been launched. The site aims to give a full picture of the EUCD's status in European Union member states and its implications across the Union.

The EUCD, European Union Copyright Directive, legislation is basically an European version of American DMCA legislation, allowing content owners to restrict consumers' ability to use, backup or modify content that they have purchased by making it illegal to circumvent technical copy protection measures.

Site is a joint operation between Elaborate Bytes (the makers of CloneDVD), RankOne Media Group, Free University of Amsterdam and several academic authors across the continent.

More information: Euro-Copyrights.org

Sony unveiled today its latest DVD burner model, DRU-540A. The drive allows 12x writing on 8x certified DVD+R discs.

Drive also supports 4x burning of DVD-RW and DVD+RW discs and 8x burning of DVD-R discs. The 12x DVD+R burning means that burning a single full disc will take appx. six minutes to complete. The drive is expected to hit the retail shelves in July and the price is set to $180 in the United States.

Source: Sony press release

According to the Britain's official record sales tracker, Official UK Chart Company, British consumers have bought already over 500,000 legal music downloads this year.

The download chart is due to launch officially later this summer, but has been functional for a while now. The chart includes all the major online music services available in the UK, apart from the recently launched Napster UK, which will be added to the system soon.

Official UK Chart Company is a joint venture between British Association of Record Dealers and the UK's own equivalent of RIAA, the BPI. BPI's chairman, Peter Jamieson, praised the latest download figures by stating "We have yet another milestone in the development of this exciting new market for music. Invesotrare are showing confidence in the future of music... This is shaping up to be a breakthrough year for the music industry."

The top seller in the UK download charts this year has been Coldplay's 2,000 miles.

Source: The Register

Biometric vendor Veritouch that also supplies materials to the U.S. government, has together with Swedish design company Thinking Materials developed a wireless media player that uses biometric security.

The concept is based on media files that can be only played by a user that is authenticated with his/her fingerprint scan, thus extending the current DRM capabilities beyong device-based authentication. According to Veritouch, they have shown the prototype, dubbed as iVue, to the representatives of RIAA and MPAA already.

The possibilities of restricting user access to media files that he/she owns even further by using biometric authentication are rather horrifying. Want to play your brother's CD? Get him to your car first to authenticate the playback with his fingerprint..

Source: The Register

Fast-food giant McDonald's has announced that they will start offering free music downloads from Sony's Sony Connect music service for American customers who purchase Big Mac Extra Value meals. The promotion is set to last between six and ten weeks in States. Company also plans to roll out the campaign in Europe later this year.

The annoucement comes after the deal was first rumoured back in March and confirms that McDonald's is taking seriously the latest trends in popular culture. More importantly, the move is, according to analysts, a clear sign that McDonald's is trying to break free from its "kids only" image that has been highlighted by the long strategic relationship McDonald's has had with Disney. McDonald's made its first ever loss last year and is trying to get slightly older consumers back to its restaurants and tapping into a trend that is popular with people in their late 20s and early 30s looks like a good start.

Bundling seems to be the key for music services to gather new users -- everybody knows about the disappointing deal that iTunes had with Pepsi. It is interesting to see what are the keys for online music services to try to gain ground in new market areas, such as Europe and Asia later this year.

French company has announced that they have developed the first competitor to the notorious EZ-D discs made by American company, Flexplay.

So far Disney has been the only major movie studio to run trials with disposable DVDs and so far the consumer interest to the format has been rather limited. Both discs, EZ-D and the new French competitor, dubbed as DVD-D, are aimed to the DVD rental market, removing the need for consumers to return the discs back to the rental store and allowing movie distributors to extend the DVD rentals outside traditional rental stores, like BlockBusters, as there's no need to have the infrastructure to handle the returns.

Just like EZ-D, the DVD-D is compatible with existing DVD players and uses a chemical coating on the discs that can be pre-set to make the disc unreadable after pre-selected time period, typically between 8 and 24 hours.

More information:

The Register
DVD-D.com