In case you haven’t seen it, this is the big news in the music biz this morning:

Major Labels Settle With Kazaa For $115 Million

By Susan Butler, N.Y.

The major record companies and motion picture studios have reached an out-of-court settlement of international litigation, revealed today (July 27) by the RIAA and IFPI, with Sharman Networks and other operators of peer-to-peer network Kazaa.

I especially liked this quote, from Mitch Bainwol, the chairman/CEO of the RIAA:

This is welcome news for the music community and the legal online music marketplace. Steadily but surely, we are passing another important marker on the remarkable journey that is the continuing transformation and development of the digital marketplace. The winners are fans, artists and labels and everyone else involved in making music, and our partners in the technology community.

Hey, as a songwriter who hopes someday to make lots of money from the legitimate distribution of my work, I won’t lie: I’m pleased as punch with the outcome. But I think saying that the fans are winners in this ruling is going to take some convincing. But then it’s a little like the legalization and control of marijuana and other drugs: the people who are for it (myself included) are often convinced of the value of quality control measures and enforcement of safety and security, while for some people, the thrill and freedom may be tainted by legalization and limitations.

OK, maybe that’s where the comparison breaks down. But the point is, this is great news for music creators and everyone else whose livelihood depends on fair compensation for trade of music. It may not be such a party for people who’ve been building up an enormous MP3 collection without having to pay a cent for it.

What’s your take?

Big news on the Kazaa case

4 thoughts on “Big news on the Kazaa case

  • July 27, 2006 at 9:52 am

    I generally think this is a good thing, but I still think we’re a long way from a viable industry-wide online music policy. It troubles me a bit that the labels and the RIAA are spending so much time suing everyone and very little time figuring out how to offer legal alternatives that meet the needs of the consumers. Why do folks download illegally? I know that some folks do it out of convenience, but I know that I only do it when I can’t find the product any other way. All of the online services have limited catalogs (even iTunes), and the licensing issues cause such a slowdown in expanding these catalogs. The entire system needs to be overhauled, but no one seems to be willing to tackle that part of the problem.

    As for how it’s better for fans, well it’s a weak argument for sure. But if artists are getting paid for their work, they can continue to make new music, which in the long run benefits the fans. That’s a hard sell to a 14 year old kid though.

  • July 27, 2006 at 10:43 am

    It troubles me a bit that the labels and the RIAA are spending so much time suing everyone and very little time figuring out how to offer legal alternatives that meet the needs of the consumers.

    I agree, on one hand, but on the other hand I feel like the legal watchdog and government lobbyist roles are exactly what the RIAA does best, and how they can best serve the outcome. The burden of innovation probably will and probably should fall to businesses such as iTunes, Napster, and now Kazaa. As long as they have the support of the RIAA and major labels (and minor labels, for that matter) — and historically speaking, that’s a big if, though that situation may be improving based on iTunes’ new acquisitions of Metallica’s catalog and the new Thom Yorke, both of whom have been vocally opposed to the track-based distribution and/or the proprietary restrictions of services like iTunes — consumer-oriented businesses are most likely to figure out new models for meeting consumer demands legally and fairly. You know, with justice and profit for all. 😉

  • July 27, 2006 at 10:58 am

    You make a good point, but as I see it, the real hindrance right now is licensing, and that is definitely a legal issue that needs to be resolved. I’ve been working for a certain label helping with their digital releases and this is the biggest headache. Do we have digital rights? If we don’t, we have to get them. That means contacting every publisher involved waiting for a response, drawing up a contract, agreeing on terms, signing, etc. Meanwhile, everyone is downloading it for free somewhere else.

    There’s also the issue of drawing new legal lines regarding usage as well. For instance, the myriad .mp3 blogs out there have been largely left alone by the industry because they provide such great publicity for the bands they feature, but technically what they’re doing is illegal. I agree that artists must be paid for their work, but in this digital age, the legal lines of promotional use and personal use have to be re-evaluated. As of now, the industry is assuming that every download is a potential sale lost, and that’s just not true. I’ve listened to many bands on .mp3 blogs that I never would have bought, and I’ve also discovered some that I have purchased. So I think the promotional/personal use issue is a major one that needs to be revamped.

    I truly think there’s a happy medium out there somewhere, where folks can pay for the music they want and 14 year old kids won’t be sued by the industry. But unfortunately, much of this really does start with the legal system, not with private industry.

  • July 27, 2006 at 11:23 am

    True, the re-evaluation of promotional use as perhaps equivalent to or a subset of fair use is a worthwhile endeavor. I think some of the more common models that have emerged, such as streaming and freely-downloadable song excerpts, are probably inadequate in the post-Napster era, mostly because of the “stimulus struggle:” once people have become used to being able to download an entire song for free and listen to it without restriction before deciding whether or not to buy product from the artist, it will be very difficult to feel good about downloading a 30-second clip or to be satisfied with listening to a streamed version of the song.

    And the MP3 blogs (and similar outlets) you mention are a great example of sometimes-beneficial law-skirting that require a completely new way of thinking about rights, not to mention promotional distribution, press credentials, and so on. Getting into the labels’ marketing channels isn’t always that difficult, but what’s allowable once a blogger has a copy of a song in his/her hot little hands is another matter. And you’re right, of course, about the bureaucracy of the emerging rights paper chase — but perhaps the scope of that problem is decreasing as publishers and labels sign those deals going forward.

    I still think the innovation is going to come from the business side, but there will always be the struggle with how the legal people (many of whom are not music people) interpret the laws. The existing laws will need to be examined carefully or else weird and useless interpretations of what it means to create “derivative works” and what does or does not constitute “fair use” could be born into precedent. Which would suck mightily.


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