iLounge

“The problem with the industry view, Professors Oberholzer-Gee and Strumpf say, is that it is not supported by solid evidence. Previous studies have failed because they tend to depend on surveys, and the authors contend that surveys of illegal activity are not trustworthy. “Those who agree to have their Internet behavior discussed or monitored are unlikely to be representative of all Internet users,” the authors wrote.

Instead, they analyzed the direct data of music downloaders over a 17-week period in the fall of 2002, and compared that activity with actual music purchases during that time. Using complex mathematical formulas, they determined that spikes in downloading had almost no discernible effect on sales. Even under their worst-case example, “it would take 5,000 downloads to reduce the sales of an album by one copy,” they wrote. “After annualizing, this would imply a yearly sales loss of two million albums, which is virtually rounding error” given that 803 million records were sold in 2002. Sales dropped by 139 million albums from 2000 to 2002.”

“Sharing copyrighted works on peer-to-peer networks is legal in Canada, a federal judge ruled on Wednesday, handing the record industry a sharp setback in its international fight against file swappers.

Canadian record labels had asked the court for authorization to identify 29 alleged file swappers in that country, in preparation for suing them for copyright infringement, much as the Recording Industry Association of America (RIAA) has sued more than 1500 people in America.

But the judge denied that request. In a far-ranging decision, the court further found that both downloading music and putting it in a shared folder available to other people online appeared to be legal in Canada.”

“The recording industry filed lawsuits Tuesday against 89 people suspected of illegally sharing songs using the computer networks of 21 major universities, including Stanford University and UC Berkeley.

The Recording Industry Association of America filed 532 new lawsuits in the trade group’s battle against individuals who share songs for free using programs like Kazaa. The new round of suits includes 13 people identified as John Doe defendants in three lawsuits filed in U.S. District Court in San Francisco.”

“Soon your MP3 files could be sounding even better. The Fraunhofer Institute has found a way to reproduce surround sound in a way that works with small MP3 files.

Using a small amount of additional information added to an MP3 encoding stream the technology catches information about where sounds are supposed to be coming from.

Fraunhofer said that the system it developed would work with existing MP3 software and music players.”

“Here’s a deal: Sip on a mocha latte while using headphones to listen to any of 250,000 songs you call up on a computer. Then order the ones you like—burned on your own CD—to go. Who’s the dealer? Starbucks (SBUX ).

BusinessWeek has learned that on Mar. 16, the Seattle coffee giant will unveil an in-store music service allowing customers to do just that, using Hewlett-Packard (HPQ ) tablet computers to make their choices. The first musical Starbucks opens in Santa Monica, Calif., and the service will expand into 2,500 stores over the next two years. “This is not a test,” says Starbucks Chairman Howard Schultz. ‘We’re going for it.’”

“The five largest music companies and three of the USA’s largest music retailers agreed Monday to pay $67.4 million and distribute $75.7 million in CDs to public and non-profit groups to settle a lawsuit led by New York and Florida over alleged price-fixing in the late 1990s.

Attorneys general in the two states, who were joined in the lawsuit by 39 other states, said that the industry kept consumer CD prices artificially high between 1995 and 2000 with a practice known as “minimum-advertised pricing” (MAP).

The settlement will go to all 50 states, based on population. Consumers may be able to seek compensation.”

“Music, software, video-game and DVD packages shortly will carry the famous FBI stamp and warnings about piracy, in a move to hammer home the message that stealing copyright materials is a serious crime, industry officials said Thursday.

The new antipiracy seal, which was announced at a press conference at the FBI’s Los Angeles office, will look much like the warnings already seen at the beginning of movies on DVDs or video tapes. Individual companies will decide where to place the seal and if they want to use it at all. The seal might be printed on a CD itself, on the packaging, or might pop up on screens when a customer downloads and purchases a digital music file.”

“Because ultimately it’s not about the player. It’s about the music you put on the player.

The iTunes Music Store sells music only in the AAC audio-encoding format and the iPod is the only portable music player that supports this format. The rest of the online music world has settled on a different audio standard—Microsoft’s .wma format.

The same people who buy inexpensive players are also purchasing music online from sources other than the iTunes Music Store and thereby amassing collections of music that are incompatible with the iPod. What are the odds that these people will become iPod owners if their music collections won’t play on it?”

“After immersing myself in audio codecs (as research for a future article) and re-ripping most of my own collection, I’ve come to the conclusion that I really like WMA—and I really don’t like the whole iTunes/iPod thing.

AAC is a perfectly fine audio format. It sounds good. I don’t really want the music I pay money for to be encoded at 128k, but none of iTunes’ competitors are offering a higher bitrate, so I don’t have much choice there. The problem with AAC is that it doesn’t really have digital rights management, so songs you buy through the iTunes Music Store have an Apple-specific proprietary digital rights management scheme called FairPlay attached to them. AAC may be a format that many desktop applications (like Winamp) can understand, and it’s certainly possible for non-iPod portable players to build in support for it, but iTunes and iPods understand FairPlay. If I buy music through the iTunes store, it will only play on iTunes or an iPod. That’s it, until the end of time.”

“Figures from the Official Chart Company in the UK have revealed that for the first time ever online music sales have eclipsed the sales of traditional music formats such as CD, cassettes and vinyl.

During the month of January it has been revealed that over 150,000 songs were downloaded from sites such as MyCokeMusic. This will be good news for all those companies who are offering downloadable music content, and bad news for traditional music outlets such as Virgin and HMV, who will most likely have to start looking for alternative ways to offer their music over and above the traditional high street record store format.”

“The television ad, to debut during Sunday night’s Grammy broadcast, depicts a teenager downloading a song from the Internet while a crowd dances inside a nightclub.

When the teen completes transferring the song file to her computer, the music and the lights at the club suddenly turn off, leaving clubgoers confused over who pulled the plug on their fun. The ad closes on the Web address for the organization’s information site.”

“Investigators working for the Australian Recording Industry Association raided the offices of Sharman Networks, makers of Kazaa peer-to-peer file-sharing software, Friday searching for evidence linking the company to copyright infringement, the company says.

The company was served with a “search and seize” order issued by a judge at the Federal Court of Australia. The homes of two Sharman executives were also searched, according to Sharman.”

“The music industry is pushing bitter technology rivals—most notably Microsoft and Apple—to shake hands in the interest of promoting digital downloads, Billboard has learned.

Hardware makers and digital format developers, including many traditional adversaries, are engaged in private talks aimed at meeting the music industry’s goal of compatibility among competing digital music devices by 2005.”