Mercora’s Expansion, Hype, Legal Qs, Etc.

Via Postplay comes this article
from News.com about Mercora’s new web-based music search tool. 
Let me counter a bit of the hype: in terms of Mercora’s core features,
this is unremarkable. It is merely a web-based version of the existing
Mercora software.  The ability to search for and instantaneously
play particular artists or songs is already available through the
Mercora client. As in the software client, you can only access content
that is at that very moment being streamed by one of Mercora’s
users.  All this does is allow you to do so through a web
browser after you’ve already installed the Mercora software.

Though SoundExchange’s John Simson states that they’re evaluating the
legality of the new web-based service, the legal questions appear no
different than for the software client. Mercora can provide these
on-demand streams in a lawful way by ensuring that each individual
user is following the DMCA guidelines
for non-interactive webcasting. So far as I can tell, Mercora violates
no law regarding on-demand streaming because they are not actually the
ones streaming. They’re just providing a search engine for songs
currently being streamed by the myriad individual Mercora users. 

This feature is fairly cool, at least for popular content.  Even
though there are plenty of Mercora users with rarer tracks, the rarer
the content the more unlikely it is to be webcast at the moment you
want it.  Also, streams through Mercora can sometimes be slow and
of unreliable quality.

 News.com suggests that Yahoo! or other music stores might enter this
arena, and that makes some sense. Rather than streaming mere 30 second
clips, music stores could allow customers to try out whole songs before
they buy them.  Mercora currently provides links to Amazon if you
want to purchase a song you’re currently listening; such a feature
would be much more powerful if folded directly into a music
store.  Of course, this assumes that most consumers remain purely
in a pay-per-download mode.  The more consumers shift over to
on-demand services like Yahoo!’s and Rhapsody, the more these on-demand
Mercora webcasts become irrelevant; in terms of quality and reliablity,
Mercora’s on-demand streams are certainly inferior. You might sometimes
be able to find a
stream on Mercora that you can’t find in Yahoo!’s music store catalog,
but that only makes this a worse fit for the music stores, because then
the streams can’t drive people to purchases  Then again, Rhapsody
and Yahoo! both have radio stations with content that can’t be found in
their on-demand streaming and downloads catalog, so, in that light,
including a feature like Mercora might still be worthwhile.

Seems a Little Fishy

Is this NPD Group survey consistent
with any other similar research?  WinMX on top seems a little odd;
has there been an upward trend for them in any other studies?  As
Paul Resnikoff points out,
the survey excluded eDonkey, eMule, and BitTorrent, so on that level
alone the study seems fishy.  Plus, NPD’s conclusion is rather
overstated. Yes, more and more people are trying out iTunes, but are
they becoming long-term customers? How do the total number of
transactions on iTunes compare to the swaps made on the P2P networks?
Through that lens, there’s still no comparison.

Rhapsody’s Incredible Shrinking Catalog

So I was quite pleased to see that Rhapsody had added M.I.A’s Arular
recently released by Universal.  They had previously released the
version available from Beggar’s Banquet, but the tracklistings are a
little different.  I had been listening to the album for a few
weeks, when, today, I noticed that I can no longer play “URAQT”
off the Universal release, and that the single version is only
available for sale and not for streaming.  Same goes for “Bucky
Done Gone”, though I can play it off the Beggar’s Banquet
release.  What gives?

This is not entirely uncommon in Rhapsody.  For instance, The Streets’ A Grand Don’t Come for Free was previously available for streaming as was Garbage’s new Bleed Like Me.  Both are now for sale only. 

It’s bad enough that the catalog lacks many albums that I
want.  It’s bad enough when particular tracks on albums
cannot be streamed.  It’s far worse to pull those
songs once I’ve already become accustomed to having access. 
Rhapsody says I get access to over one million songs and growing, but
apparently they can’t even guarantee me that the catalog won’t shrink
in the future.

Understanding Wheaton v. Peters

As part of a history class I took this semester (with KC Johnson, who you may know from Cliopatria), I decided to do a little research on Wheaton v. Peters,
the Supreme Court’s first copyright decision, which rejected a
copyright claim under common law and ruled that obtaining a copyright
was dependent on strictly following the federal statute’s
requirements.  In so doing, it essentially rejected a natural
rights view of copyright.  While scholars have often treated the
case as embodying anti-monopolistic sentiments about copyright at that
time, it has not been entirely clear to me why the Court  followed
this view. 

One way of attempting to answer why the majority in Wheaton reached its result is to focus on the opinion’s author,
Justice McLean, and how he treated monopolies in other cases. A
biographer of McLean does not devote a word to Wheaton, but at least
one scholar has deemed Justice McLean’s opinion in Wheaton “Jacksonian” in its handling of monopolies. Just three years after Wheaton in Charles River Bridge v. Warren River Bridge,
the Court ruled that monopoly charter grants must be strictly construed
in the public’s interest. This case would come to define the way the
Court limited monopolies in various arenas over the next several
decades.

To explore what drove Wheaton, I drafted a short paper on the subject comparing Justice John McLean’s concurring opinion in Charles River Bridge and his opinion in Wheaton. This
draft is pretty rough, but it reaches some interesting, though
admittedly tentative, conclusions – so, I figured I’d put it out
here. Ultimately, I think the comparison demonstrates that
McLean’s anti-monopoly stance was not related to the broader
anti-monopoly issues at stake in Charles River Bridge; deeming it Jacksonian in that sense is improper.  What’s more, McLean’s views in Wheaton may have in part been connected to his views on federalism and separation of powers.   All comments are most welcome.

[updated 10:13]

Ernest on Lawsuits and Leakage

Ernest’s blogstorm continues, which means this post
is already buried on the page.  It raises an interesting issue,
one I hope to say more about in the future once I’ve thought a bit more, but I feel like talking it out a bit now.

Ernest first repeats a point he has made many times: “I oppose
copyright infringement via filesharing services and council against
it.”  The lawsuits are a legitimate piece of any voluntary
licensing, market-based system, and penalties must be higher than the
actual harm in order to act as a deterrent.

But he then states that the music industry is in part responsible for
file-sharing: “The RIAA is partially at fault for making the original
Napster so
attractive because there were no real legitimate avenues to meet
customer’s wants…. [A]nyone could have predicted that without
legitimate avenues to download
music, more people would use illegitimate avenues. This is not
rationalization, not justification, merely acknowledging the facts.”

There’s a deeper point there, beyond allocating fault. 
Undeniably, Napster and file-sharing generally have put pressure on the
music industry to license legitimate online services, driving the
competition and improvements in services we’re only starting to see
now.  In pushing along this competition and in particular by pushing
prices lower, one could argue that this leakage in the copyright system
has helped check the deadweight loss caused by the monopoly
grant.  One cannot prove the counterfactual – who knows what would
have happened without Napster.  Regardless, we can recognize the
constructive role file-sharing has played.

With respect to this constructive role, it’s also worth setting it
within the context of a broader viewpoint about copyright: a leaky
copyright can be a good copyright.  That’s not just the case in
file-sharing.  It’s a crucial aspect of fair use.
Allowing copying and copying technologies ultimately can help create
new markets for copyrighted works, provide people with greater access,
more flexibility and more enjoyment in how they use copyrighted works,
and in total improve social welfare.  If the screws of copyright were
tighter, if it did not leak in this way, we wouldn’t realize this
flood of benefits from various copying technologies.

But turning back to file-sharing specifically: can we reconcile the
constructive role its played with Ernest’s first point?  That
is, can we a) acknowledge this constructive role while b) opposing
widespread infringing file-sharing.  A reconciliation could start
by noting that the (a) is descriptive of the entire system, while (b)
relates to the message we project to individual file-sharers.  It
may be a good thing that their activity is leading to more features and
lower prices in legitimate services, but they cannot use that as a
basis for justifying their own behavior.  Justifying it in this
way would form a seemingly boundless basis for infringement, leaving no
clear legitimacy for lawsuits in any context – at what point do prices
and features become good enough that infringement would no longer be
justifiable? and how would that point be determined in a non-arbitrary
way? (Ernest made this argument in a different way many months ago.)

This separation between (a) and (b) is imperfect.  Underlying (B)
is an assessment that the constructive role played by
file-sharing is ultimately countered by many ill-effects.  Perhaps
a part of the reconcilition is a sense that, whatever may have been the
meritorious effects of file-sharing during Napster’s birth, now
competition in legitimate services can become good enough that it’s
time to call off the dogs.

As Usual

You’ve probably noticed that posting has slowed, as usual for this time of year. As I noted, I’m
wrapping up finals, then it’s time for an insanely fun but somewhat
anti-climactic senior week and Commencement (I don’t graduate until
next January), and then it’s immediately off to SF and EFF for the
summer.  I have a couple posts brewing related to the engaging
discussion we started
about file-sharing; I’m also starting a project that hopefully
I’ll post about a bit.  Not sure how soon I’ll get to all that
though, but hopefully soon.

In the meantime, the usual suspects have everything you need.  Whenever Ernest resurfaces,
he does so with a veritable explosion of posts, and this recent barrage
is not to be missed.  Mike Madison has also been doing some quite
interesting thinking.

Speaking of graduation, btw: many congratulations to Joe and James (and any other cap-and-gown wearing copyfighters I’m forgetting).

File-Sharer Insurance? Huh?

Found this press release
in my mailbox.  Vague info about a P2P-based music subscription
service with a licensed catalog comparable to Napster, Yahoo!, et al.
This caught my eye: “The music subscription service includes copyright
infringement
insurance. The RIAA (Recording Industry Association of America) may
continue to target non-subscribing P2P users with lawsuits, and
inadvertently sue RazorPop’s paying customers. The insurance will be
capped at $5,000 per subscriber, which is above typical RIAA settlement
amounts to date.”

Huh?  I’m in the midst of finals right now, but if anyone cares to do some research on this, do fill me in.

Update: Ernest is, of course, on the case.

WNYC’s On The Media Covers Internet Governance and More

Check out this week’s episode of WNYC’s On The Media. They do an interesting bit on Sealand followed by an interview with JPStream it, or get the podcast. (via my dad).

Lessig on Glenn

In this post,
Lessig lauds the great achievements of Glenn Otis Brown as executive director of
Creative Commons. As Lessig suggests, Glenn deserves a gigantic thank you from all of us.  See also: my post last month noting Glenn’s leaving CC and describing what he meant to them (and me). 

(In other news, CC just announced the creation of Creative Commons Internetional and addition of some new personnel.  Exciting stuff.)

More on Yahoo!’s Pricing and Use of XSPF

In its desperate rant,
Napster said that Yahoo! would lard the new Yahoo! Unlimited music service
with advertising in order to keep the cost so low.  Both Napster
and Real said that Yahoo! would not be profitable at those prices and predicted that they would eventually have to raise them.

Maybe so, but maybe not.  Mike McGuire, a GartnerG2 analyst and Berkman Center Digital Media Project collaborator, explains
how Yahoo!’s model might be viable without relying on advertising:
“What Yahoo! brings to the branded online music market is obvious: 25
million unique visitors a month to the Yahoo! Music site, according to
Comscore/MediaMetrix’s latest data…. The company is counting on scale
and customer-acquisition costs.
Yahoo!’s huge user base means it has much lower customer acquisition
costs than subscription-service competitors.”  Even so, he
cautions that “Whether the portable version of the subscription service
will remain at
$6.99 a month beyond the beta period is doubtful, especially given the
cost of maintaining a top-flight music service.”

Meanwhile, Yahoo! Music Engine’s plug-ins feature is already having some interesting consequences – check out this plug-ins page via Brad Hill
Brad writes, “It’s nearly unbelievable. A major media company releasing
an open-platform product in a high-stakes indsutry, developed
by a team that seems to be operating with an eye-popping degree of
autonomy and personality.”

A key component of this open platform is Yahoo!’s reliance on the XSPF playlist format   Want a sense of what an open platform for playlist sharing can help bring?  See the MusicBlogs Publisher PlugIn for the Yahoo! Music Engine, that brings RSS and XSPF together.  Webjay also uses XSPF.  This is just the beginning.

More on Yahoo! Unlimited, Napster Responds, and Peer Impact Launches

Paidcontent and Postplay have been all over Yahoo! Unlimited’s launch. All Yahoo! coverage here, and summary of launch coverage here and here.  Staci Kramer also interviewed Yahoo! Music’s Dave Goldberg.

Ian Rodgers, one of Yahoo!’s programmers, highlights the service’s new features on his blog.  One particularly interesting aspect to me, pointed out by Lucas Gonze on pho: support for the open playlist sharing format, XSPF (pronounced “spiff”).

PostPlay also covered and excerpted a bit of Napster’s Q1 conference call.  Rafat calls it like it is – Napster sounds desperate.

Finally, PostPlay reports that Peer Impact’s beta
is now available to the public.  Peer Impact is advertised as a
closed P2P network in which one can share licensed content. In exchange
for serving files to others, users get Peer Cash that can count towards
future purchases. Certainly, that’s a good incentive for users, and a
good way for Peer Impact to cut down on bandwidth costs.  At the
same time, Peer Impact’s design doesn’t really feel like sharing on a
P2P network – it’s basically iTunes with a slightly different
GUI.  When you search for a song, you’re not taken to a list of
people who are sharing the file; you go to a page devoted to that song,
album, or artist just like you would in iTunes.  I don’t expect
many consumers will perceive a significant
difference between other digital music services and this one.

Yet More on File-Sharing: FvL’s Comment

In response to my previous post, Fred von Lohmann wrote the following:

“Derek — I think wide-open, unhindered file sharing is a great
thing. Any music fan who used Napster in 2000 will immediately
recognize the viceral truth of this statement. And I think we need to
emphasize the many virtues of fan-driven, wide-open file sharing. We
ought not abandon the fans and join the chorus telling them to hang
their heads in shame for building the greatest music library in the
history of the world.

The problem, of course, was the lack of compensation to artists and
owners. On this point, I agree with you — file-sharing without
compensation is not realistically sustainable, nor good in the long run
for those who care about music or the Internet. But recognizing that,
and working on a solution for that problem, is not the same thing as
saying that file-sharing is wrong. All the instincts that made file
sharing so successful are exactly the right instincts for a vibrant
creative, cultural and innovation environement.”

I’d like to unpack this in more depth later.  For now, just a brief response and some questions.

We do share the premise that  “file-sharing without
compensation is not realistically sustainable, nor good in the long run
for those who care about music or the Internet.” We also agree that we
should be working on figuring out how to match that activity with
compensation and that a scheme that does so would be an optimal result.

However, I disagree that recognizing that entails encouraging and
excusing file-sharing without compensation.  I’m not talking about
shaming people, but how can we simply ignore the harm that activity can
do if that’s our premise?  Sure, generally speaking, file-sharing
isn’t wrong; however, if file-sharing without compensation is harmful,
how do we not say that, at some level, it is wrong? 

Furthermore, how is doing so incompatible with supporting what is
great about file-sharing?  Can’t we disaggregate those benefits
and talk about how we might go about achieving those without at the
same time supporting widespread infringing file-sharing?

More Broadcast Flag Fallout

Susan Crawford points out the broader implications of the broadcast flag ruling.  One immediate effect: it seems the digital radio mandate proceedings won’t go forward, right?

Bye Bye Broadcast Flag, For Now

Jason Schultz reports that the D.C. Circuit has ruled 3-0 that the FCC does not have jurisdiction to mandate the broadcast flag.  Haven’t read the opinion
yet, but what catches my eye is the 3-0 – that means even Judge Sentelle, who was
convinced that the ALA et al had no standing, was swayed by the
supplementary briefing.

And back to Congress we go.

What the i2hub Lawsuits are About

So we speculated before on why the RIAA was going after i2hub users in particular.  Cary Sherman published this piece in the Pittburgh Post-Gazette.  Here’s a snippet:

“And while the music industry can sue to help arrest the growth of
this illegal activity, the universities themselves can be the most
powerful leaders in curbing theft of copyright materials on campus.

Through filtering and other technical means, universities can prevent
this mass piracy. Proactively, they can partner with legal music
services to offer students legitimate music downloads — as have 44
other universities (including Penn State).”

And if universities should filter, why not all ISPs? 

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