[IP] Net] AllofMp3 fights back
Begin forwarded message:
From: Dewayne Hendricks <dewayne@xxxxxxxxxxxxx>
Date: October 19, 2006 10:09:26 AM EDT
To: Dewayne-Net Technology List <dewayne-net@xxxxxxxxxxxxx>
Subject: [Dewayne-Net] AllofMp3 fights back
Reply-To: dewayne@xxxxxxxxxxxxx
[Note: This item comes from reader Steve Schear. DLH]
From: Steve Schear <s.schear@xxxxxxxxxxx>
Date: October 18, 2006 10:28:23 AM PDT
To: dewayne@xxxxxxxxxxxxx
Subject: AllofMp3 fights back
Mediaservices, which operates the popular and controversial
allofmp3.com music site, is convinced that its business model is
legitimate and that it maximizes demand for music and spurs
consumers to buy more music. The company believes that everyone
wins, record labels, artists and distribution companies when the
market is broader and deeper. Relying on a handful of artists for
the majority of sales is an outdated. One October 17th they held an
on-line Press conference to address issues related to on-line music
distribution and erroneous piracy characterization by U.S. Trade
Representative Susan Schwab.
Although the RIAA and IFPI, their international equivalent, have
tried to portray music purchases from allofmp3.com by U.S. and
Western consumers as illegal (in order to dampen demand) there is
no creditable evidence fort this (see Background, below)
[There are widespread rumors that there are Interpol warrants for
the arrest of Mediaservices executives.]
http://www.breitbart.com/news/2006/10/13/309-10132006.html
A transcript of the press conference.
http://www.musictowers.com/features/ViewArticle1813.aspx
Of note is the substantial alleged penetration of allofmp3 into
U.K. on-line music sales. Although it may be risky to extrapolate,
I estimate that allofmp3's U.S. music sales are easily several
times that U.K. and may be up to 5% of U.S. on-line music sales.
BACKGROUND
Since November 2003 the web music merchant www.allofmp3.com,
operated by the Russian company Media Services, has been openly
selling some of the most popular western music at a fraction of
the cost of widely touted American sites, such as Apple's hugely
successful iTunes, Rhapsody, MusicMatch, Napster, Sony Connect.
Clients can select from a wide variety of encoding options (e.g.,
AAC, MP3, OGG, WMA 9 Lossless, Monkey's Audio, OptimFROG and FLAC)
starting at rates of 128kbps all the way to full CD (.wav files).
Unlike its major competitors Allofmp3 sells the tracks by the
megabyte. Beginning in January rates were doubled to USD 0.02/
MB. Instead of paying USD 1.00 per track AllofMP3 users pay less
than USD 0.10 and less the USD 2.00 per album. Currently the site
boasts almost 30,000 albums from all genre and it all appears
legal for the moment.
The legal skinny
How does ALLofMP3 prevent being shut down? They do it the old
fashion way: legally. There is a loophole in the Russian copyright
legislation that makes services like Allofmp3 possible. Apparently
this loophole cannot be closed easily.
Allofmp3 has signed agreements for this with Russian Organization
for Multimedia & Digital Systems (<http://www.roms.ru>www.roms.ru).
According to their license <http://www.allofmp3.com/index2.shtml?
affiliate=nl13>allofmp3, has the right to use musical compositions
by providing downloads. Under the license agreement Allofmp3 pays
out fees to ROMS for downloaded materials that are subject to the
Russian Federation Copyright And Related Rights Law. ROMS is a
member of CISAC (<http://www.cisac.org>www.cisac.org) - the
International confederation of authors and composers societies.
ROMS manages intellectual rights in the Russian Federation. All
third party distributors licensed by ROMS are required to pay a
portion of the revenue to the ROMS. ROMS in turn, is obligated to
pay most of that money (aside from small portion it needs for
operating expenses) to artists. Both Russian and foreign.
This license is only supposed to allow content to be sold to
Russians. The site doesn't appear to do non-Russian advertising
and promotion, though they do have an English version of the site
available (they say its to address problems with Russian language-
encoding standards which existed they launched but that many
Russian nationals living outside of the country prefer to use the
English version for browsing). They claim its a site created for
Russians but those who come to their site from abroad are welcome
and are provided with full service. Sales to non-Russians are
said to be 'insignificant' but I rather think its because their
management has wisely chosen a Russian processor www.cyberplat.com
that does not offer AllofMP3 direct access the information from
user credit cards. They get only notifications about successful
transactions. Plausible deniability is as smart in business as
politics.
The Music Industry claims that Allofmp3 is illegal but their own
lawyers tell them "... the music industry doesn't have much chance
in succeeding (if they attack these companies who are using music
files on the Internet under current Russian laws)." Instead they
are pushing for changes in Russian copyright law but progress is
glacial.
Chances that the loophole will be closed on short term are low and
there is great resistance to changes.
As for the legality of non-Russian clients downloading from
allofmp3 this is country dependent. In countries with liberal
copyright protections, like the Netherlands, downloading is
legal. In countries with stricter copyright protections its less
clear.
MP3's, OGG's, etc are not illegal in the USA and therefore can be
imported. There is also no law against importing music from other
countries (including Russia). Because you are buying this legally
in Russia and then importing to the USA, this should be 100%
legit. The only applicable U.S. law appears to relate to the
"Infringing importation of copies or phonorecords". But even this
statute "...does not apply to importation, for the private use of
the importer and not for distribution..." If MP3's, OGG's etc are
in fact considered phonorecords, U.S. citizens can legally buy
these as long if they are for private use and not for
distribution. If MP3s, OGG's etc. are not considered phonorecords,
no import laws apply. The sections of digital audio recording and
sound recording have no mention of importation. Bottom line:
Downloading from Allofmp3 is legal for U.S. Citizens, as long as
the files are for private use and not for distribution.
More details of the legality can be found at http://
www.museekster.com/allofmp3faq.htm
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