July 4, 2005
Volume 9, Issue 8
Welcome Nettwerk Music Group
Please warmly welcome Nettwerk Music Group to the DCIA. We look forward to providing valuable services to this newest Member and supporting its contributions to the distributed computing industry.
Nettwerk, distinguished by its vision and passion, includes Nettwerk Management, Nettwerk Records, Nettwerk Songs Publishing, and NettRadio, with offices in Vancouver, New York, Los Angeles, London, and Boston. Nettwerk is active in the P2P arena with many agreements already in place.
Nettwerk represents such artists as Avril Lavigne, Barenaked Ladies, Billy Talent, Brand New, Butterfly Boucher, The Devlins, Dido, Susan Enan, The Format, Gob, Guster, Griffin House, Jars of Clay, Chantal Kreviazuk, Kristian Leontiou, Toby Lightman, Tara MacLean, MC Lars, Sarah McLachlan, Our Lady Peace, Steven Page, The Perishers, Adrienne Pierce, Robert Post, Stereophonics, and Sum 41.
On Nettwerk Records' new release "Smart Kid", The Clumsy Lovers take a major creative leap, expanding their sound to add splashes of reggae, rap, country, Cajun, doo-wop and a bit of New Orleans second-line funk to their already diverse musical palette.
Nettwerk's Barenaked Ladies, Dido, Our Lady Peace, Sarah McLachlan, and Stereophonics joined with other stars, from Alicia Keys to the Zutons, in Live 8 on July 2nd, kick-starting "The Long Walk to Justice" that calls on leaders of the world's richest countries to act against global poverty when they meet in Gleneagles, Scotland July 6th-9th.
Nettwerk Songs Publishing provides hands on synchronization, co-writer, and other crucial publishing activities to help each participating artist/writer achieve success.
Jillian Ann Portrays Panther Cycles
The cover and internal illustrations of the "Compleat Panther Cycles", the new novel-length memoir of the consuming love-affair of poet William F. DeVault with his muse, feature DCIA Member Jillian Ann. Effusive in his praise for this new contributor to the legends, DeVault proclaims, "From the moment I first saw her pictures, I realized that she could perfectly represent both the real and imagined aspects of the love and passion I felt when I wrote these works."
Sharman Responds to Court Ruling
DCIA Member Sharman Networks said, "It views the decision announced last Monday by the US Supreme Court in the MGM v. Grokster case as a clear opportunity for the legal system to vindicate it, and is confident the legal process will affirm that it has never illegally sought to induce users of its file sharing software, Kazaa Media Desktop, to violate copyright law, and that it has taken numerous steps to discourage copyright infringement by its users. Sharman has never encouraged or assisted users of Kazaa software to share copyrighted material in violation of copyright law.
Its Kazaa web site and End User License Agreement (EULA) have always contained explicit direction to users to respect their national copyright laws. And, from day one, Sharman's alliance with fellow DCIA Member Altnet has offered copyright owners a means by which licensed and protected copyrighted content can be distributed in a lawful and compensated manner.
Sharman believes that further legal review of this case will also show that the company has been diligent and aggressive in its lawful efforts to distribute copyrighted music and movies."
Scooter Scudieri Speaks Out
DCIA Member Scooter Scudieri said, "As a soldier on the front lines of a music revolution, the Court ruling provided a much needed catalyst for those who are serious about the future of digital distribution. Now is the time to deploy new win-win business models to reflect a paradigm shift in the music business.
P2P is here to stay and ultimately will be embraced by opponents who wish to crush it now. In the meantime, artists like me will continue to blaze a trail into the future and pave the way for the major record companies to follow.
I work with P2P companies who promote legal and authorized digital rights management (DRM) technologies, micro-payments, and sponsorships to distribute non-infringing content. Without an agent, manager, record company, or marketing dollars, my video 'Mother of God' was downloaded 50,000 times in April on the P2P networks. It broke 100,000 downloads in June and is projected to break 250,000 by the end of July.
In the next few months I will implement a sweeping campaign designed to prove that technology has inexplicably leveled the playing field."
Report from CEO Marty Lafferty
 The DCIA welcomes the US Supreme Court's refusal to rework the Betamax decision, and is optimistic that the grounds for secondary liability that it announced last Monday will prove to be fair and workable.
As the case works its way back through the lower courts, we anticipate clarification of the rules of engagement between content providers and technology suppliers in the digital realm generally, and with respect to peer-to-peer (P2P) file sharing in particular.
We are confident that the Court's decision in the MGM v. Grokster case will ultimately lead to the continued expansion of our industry.
We should clarify that our vision for that expansion does not center on filtering copyrighted works out of the P2P environment, but rather on deploying commercial and technical solutions, which rights holders find attractive, for secure licensed redistribution of such works via file sharing.
We urge all affected parties to focus now on deploying new business models for content distribution that are non-infringing and expand the marketplace for digital content, and not to pursue legislative intervention, which would only be counter-productive. The private sector, with added clarity that will result from such lower court outcomes, should manage the process from here.
This ruling provides impetus for the P2P distribution channel to grow and flourish. P2P digital rights management (DRM) technologies and micro-payment services have been proven with computer games, software, and independent music and films. Major labels and studios can avail themselves of these tools to develop marketplace solutions – starting today.
To quote Justice Breyer: "The record reveals a significant future market for non-infringing uses of Grokster-type peer-to-peer software. Such software permits the exchange of any sort of digital file – whether that file does, or does not, contain copyrighted material...
Such legitimate non-infringing uses are coming to include the swapping of: research information (the initial purpose of many peer-to-peer networks); public domain films (e.g., those owned by the Prelinger Archives); historical recordings and digital educational materials (e.g., those stored on the Internet Archive); digital photos (OurPictures, for example, is starting a P2P photo-swapping service); "shareware" and "freeware" (e.g., Linux and certain Windows software); secure licensed music and movie files (INTENT MediaWorks, for example, protects licensed content sent across P2P networks); news broadcasts past and present (the BBC Creative Archive lets users "rip, mix and share the BBC"); user-created audio and video files (including "podcasts" that may be distributed through P2P software); and all manner of free "open content" works collected by Creative Commons (one can search for Creative Commons material on StreamCast)…
I can find nothing in the record that suggests that this course of events will not continue to flow naturally as a consequence of the character of the software taken together with the foreseeable development of the Internet and of information technology. There may be other now-unforeseen non-infringing uses that develop for peer-to-peer software, just as the home-video rental industry (unmentioned in Sony) developed for the VCR."
We hope the Court's decision will lead to a shift away from conflict and toward commerce, and we encourage everyone to come to the table and develop new business partnerships. The MPAA and RIAA and their powerful members control 90% of popular entertainment content distribution and can now move forward to license responsible P2P companies using this highly efficient and extremely popular channel for the distribution of their copyrighted works to create new markets and revenue opportunities.
P2P file-sharing technologies are part of the larger movement to an increasingly distributed computing environment. As the Court affirmed, this kind of technological progress is inevitable – embracing it to harness its capabilities will prove to be much more gainful than resisting or trying to stop it.
Representatives of DCIA Member companies and officials of the trade organization are available to comment on the Court decision. Please contact DCIA Communications leader Kelly Larabee at 602-258-1416 or kelly@dcia.info to arrange interviews.
These DCIA Member company representatives are available to comment: INTENT MediaWorks' Les Ottolenghi, Internet rock star Scooter Scudieri, RazorPop's Marc Freedman, Shared Media Licensing's John Beezer, Sharman Networks' Alan Morris, and SMARTguard Software's Jerald Block.
iMesh Unveils Authorized P2P Model
Excerpted from TMCnet Report
iMesh, the long established P2P music service that reached an early settlement agreement with the recording industry, announced a fully authorized P2P business model and the upcoming launch of the newly configured iMesh.
Following the Supreme Court ruling on MGM v. Grokster, the company is the first and only globally active P2P to offer a sanctioned model that will incorporate many user benefits common to the P2P file sharing experience, while assuring compensation to registered rights holders.
As a principle performance feature, the new iMesh, slated to roll out this year, will offer a deep selection of easily accessible content of all genres to be discovered, shared, and enjoyed within an active community.
iMesh founders Talmon Marco and Ofer Shabtai announced that they have appointed the former President of Sony Music International and President, RCA Records, Robert Summer, to the post of Executive Chairman. Summer will oversee all aspects of the operation and liaise regularly with music industry partners to assure the performance and integrity of this new digital music venture.
Sony BMG Inks Deal with P2P Mashboxx
Excerpted from Reuters Report
Music giant Sony BMG finalized its deal with file-sharing network Mashboxx, two days after the US Supreme Court dealt a blow to Mashboxx's unauthorized rivals such as Grokster. Mashboxx, headed by former Grokster President Wayne Rosso, is a peer-to-peer file-sharing network that requires users to pay for copyrighted songs.
The companies said on Wednesday that Sony BMG songs will cost $0.99 each, in line with the price charged by Apple's market-leading iTunes online music store. Unlike iTunes, users will be able to preview entire tracks for a limited number of plays for free.
Sony BMG Chief Executive Andy Lack told Reuters after the Grokster ruling that he had hopes that unauthorized peer-to-peer services would change their tune. "There's an opportunity to employ lots of different technologies that legitimize these file-sharing services," he said. "A lot of them didn't want to come to the table until this ruling."
AMOS Premiers New Professionals on P2P
DCIA Member A Matter of Substance (AMOS) today released the New Professionals debut album "Come Hell or High Drama" exclusively on P2P via its partnership with fellow DCIA Member INTENT MediaWorks in advance of its physical release date later this summer.
AMOS/INTENT also released the classical debut of Elijah Brossenbroek entitled "Harmony in Disarray."
"Prior to this week, we were receiving fifteen-to-twenty artist and film submissions a day for P2P distribution through AMOS/INTENT. That number has doubled since Monday, and on Friday our delivery man had to make three trips with full packages and press kits! We are very excited and have already signed several acts as well as started talks with many new bands," said Joey P, head of AMOS A&R.
AMOS also announced the recent signing of top acts: Clas (Canadian hip-hop artist whose first hit single was "Rapsheet"), the Kin (sponsored by Gibson), Mike Previti (veteran singer/songwriter), Shugar (from MTV), Smooth (UK band fronted by Gavin Ellis), and Sputnik Weasel (revolutionary folk/rock).
Grokster… Supremely Sane?
Excerpted from Online Spin by Shelly Palmer
"It's not about content versus technology, it's about what's right versus what's wrong," said Andy Lack, CEO of Sony BMG. He was referring to the Court decision which makes technology companies liable for how their technology is used. This is viewed as a big win for content creators and rights holders.
Then there's the other side: "The impact is clear," says Ray Beckerman of Beldock Levine & Hoffman LLP. "It will help the major media conglomerates. It will devastate small, up-and-coming innovators and entrepreneurs. It will harm consumers."
But then there's the interpretation from DCIA CEO Marty Lafferty: "This immediately removes an obstacle to commercial development of the P2P distribution channel – that obstacle having been uncertainty as to what the ruling would be. Major labels can stop suing consumers now and work with DCIA Members to license their works for authorized file sharing. Longer term, as the lower courts provide more clarity, this will help even more."
Who's right? Well, if you read the decision - and you should - you will find it extremely hard to argue against. I'm not a lawyer, but I think the decision is cogent, thoughtful, and absolutely right. There's only one problem... it's irrelevant.
You can't put the toothpaste back into the tube. What this decision does not take into consideration is that business rules and value chains that are based on archaic form factors perish. Technology has advanced more in the past 100 years than it has for the previous 3,500 years combined. To use the cliché, the world is now moving at Internet time, so how can we expect 50-year-old form factors and methodologies to stand? Why should content be exempt from having to adapt?
These questions are all rhetorical. It simply won't matter what I say here or even what you think. The simple truth is that the world of file sharing is an ecosystem that will continue to evolve on its own, completely out of anyone's control. The P2P ecosystem will find equilibrium in the redistribution of wealth (sad news for some, great news for others) and the revision of workable value chains and business models that allow the technology to be harnessed, not litigated or legislated against.
As if the situation were not complicated enough, companies who would most benefit from experimentation and testing are the very ones whose legal departments can't (or won't) let them get in the game. I wonder how the lawsuit business looks on paper? It doesn't sound like a sustainable business model to me. Maybe there's a better way?
Record Firm Slumps: Technology Not Blamed
Excerpted from Guardian Unlimited Report by Bobbie Johnson
Sanctuary, the world's biggest indie record company, is struggling. But it's not blaming file sharing. It's not blaming technology. In a shock decision, it's blaming... the management. As The Guardian reports: The world's largest independent record label, Sanctuary Group, has admitted its debt is uncomfortably high and blamed its troubled Urban music division, run by Beyoncé Knowles' father, for a 40% slump in earnings.
The Next Six Months
Excerpted from Digital Music News Reports by Paul Resnikoff
One big question is whether or not the Court's decision will ever trickle down to the average, casual file-sharer. File-sharing levels remained largely level this week, with most swappers unaware or simply unconcerned with the outcome. While Grokster slowly finds out its exact fate in a lower court, the status quo among peer-to-peer will remain. Certainly, the RIAA will haul other major US peer-to-peer firms into court, but that process could take time. That will leave things in the P2P space largely intact for the remainder of the year, and the impact of shutting down a few US peer-to-peer firms could also be negligible in the long-term.
What about sanctioned peer-to-peer services? We've seen a flurry of announcements following the Supreme Court decision. Most of these developments are still under development, but "coming soon". All of these services are taking on a very difficult task, attempting to recreate the limitless boundaries of free P2P services with a more structured, legal environment. And making things work technically is no small chore. Non-beta launch dates on all of these services are questionable for this year, also leaving the P2P space largely untouched. In the longer term, it is unclear whether these services will have a significant market impact, with a large crop of users simply addicted to free downloads.
How do paid download and streaming music stores make out? For the remainder of this year, the needle probably won't move at all.
Coming Events of Interest
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Marketing to Teens – Teenagers spend over $175 billion annually! If you want your share of this market, for which spending has doubled over the last 10 years, attend this conference July 12th at the Marriott Marquis, NYC. This VNU event gathers top-level global brand marketing executives in advertising and entertainment, and includes a cross section of youth culture experts and thought leaders.
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Cocktails with Jan Schakowsky – Flanagan Consulting will host cocktails with the Honorable Jan Schakowsky (D-IL), Member of the House Energy and Commerce Committee, Ranking Member of the House Subcommittee on Commerce, Trade and Consumer Protection, and Democratic Chief Deputy Whip on July 21st at 5:30 PM at Finemondo, 1319 F Street, NW, Washington, DC 20004. $500 individual contributors, $1,000 PACs. Please make checks payable to "Schakowsky for Congress."
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Scooter Scudieri Concert – Berkeley Springs State Park (WV) will host a free concert by DCIA Member Scooter Scudieri at 5:30 PM on July 23rd. Scooter is a self-taught guitarist who recently opened for Jewel on a national tour. He also has performed with Dave Mathews and Nils Lofgren. In April 2003, he was awarded Best of the New Writers and his song, "The Usual," was placed on Volume One: Best of the Songwriters Hall of Fame compilation CD.
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DRM Strategies Conference – Jupitermedia's comprehensive event on digital rights management business and technology issues will be held July 27th-28th at the Puck Building in NYC. This is a must-attend for those involved in content security in both consumer media distribution and information security. The conference will feature leading industry figures who will introduce the fundamentals of DRM, shed light on future DRM directions, and provide incendiary debate on today's controversial issues of online piracy and digital copyright.
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Kagan's Digital Media Summit – The theme of this year's conference, which will be held on September 12th-13th at the Four Seasons / Mandalay Bay in Las Vegas, NV will be "New Opportunities For Monetizing Content." The DCIA will participate in the panel entitled "MIXING MEDIA'S POTION: Content Security Plus E-Commerce Fulfillment and On-Demand Delivery." DCIA Members receive a 50% discount on registration. Please contact DCIA Member Services leader Karen Kaplowitz for more information at 888-890-4240 or karen@dcia.info.
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Digital Hollywood Fall – "Transforming the Entertainment Industry." Scheduled for September 19th-21st at Loews Santa Monica Beach Hotel in Los Angeles, CA. The preeminent digital media and entertainment conference in the country. This year featuring a series of special University Project workshops. The DCIA will moderate "Track I: Next Generation P2P Music and Film - DRM, Paid for Pass-Along and Other Legal Distributed Computing Models and the Entertainment Industries." DCIA Members are also planning to host entertainment.
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Technology Law Institute – A Digital Media Rights panel will be featured September 20th at the Headquarters of the State Bar of Georgia, in downtown Atlanta, GA. Kilpatrick & Stockton's James Trigg will moderate with speakers Miles O'Brien from CNN, Kevin Lapidus from YellowBrixx, and Marty Lafferty from the DCIA.
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