Monday, November 07, 2005

Grokster file-sharing killed

Libraries, tape recorders next

From AP, via MSNBC:

WASHINGTON - Grokster Ltd., which lost a Supreme Court fight over file-sharing software used for stealing songs and movies online, agreed Monday to shut down and pay $50 million to settle piracy complaints by Hollywood and the music industry.

The surprise settlement permanently bans Grokster from participating, directly or indirectly, in the theft of copyrighted files and requires the company to stop giving away its software, according to court papers.

For the sake of avoiding redundancy in how I feel about file-sharing, I refer you to a column I wrote about file sharing in 2004, Ian pockets another $25. I even talk trash in it. But don't read with without sending me a quarter first. I won't stand for this commie-pinko idea of "reading for free."

"It is time for a new beginning,” Grokster said in a statement issued from its corporate headquarters in the West Indies.

See? Grokster is already on its way to being a competitive corporate criminal. No American company sets up their corporate offices in the West Indies unless they're looking to skirt a 1040 or two. (cough)

Grokster’s Web site was changed Monday to say its existing file-sharing service was illegal and no longer available. “There are legal services for downloading music and movies,” the message said. “This service is not one of them.”

I've never used Grokster, nor have I used any file-sharing service since about 2001, when the government began pressing down on Napster. Nor do I condone illegal activity. But I've always found the reaction to file-sharing somewhat suspicious. But then again, I'm rarely sympathetic to corporate behemoths when they try to play victim.

The head of the Recording Industry Association of America, Mitch Bainwol, described the settlement as “a chapter that ends on a high note for the recording industry, the tech community and music fans and consumers everywhere.”

When was the last time that anything good for the recording industry was even remotely good for music fans? The RIAA is a tapeworm in the intestine of the music industry. For example, note the use of the word "consumer," because that's all the average music fan is to the RIAA. Money in their pocket. A notch in Billboard.

It was unclear whether Grokster can afford to pay the $50 million in damages required under the agreement. The head of the Motion Picture Association of America, Dan Glickman, said the entertainment industry will demand full payment unless Grokster satisfies all its obligations under the settlement.

This isn't even about money for them. It's about power, and crushing anything that denies the sacred RIAA a buck or two. If only there were a way to pay the artists while bypassing the RIAA...hell, I'd pay twice as much for a CD.

Grokster’s decision was not expected to affect Internet users who already run the company’s file-sharing software to download music and movies online, nor was it expected to affect users of rival downloading services, such as eDonkey, Kazaa, BitTorrent and others.

Of course not. File-sharing, legal or illegal, is here to stay. You cannot declare war on technology that has existed for almost a decade; it's almost like, well, declaring war in terrorism. You might get a few, but ultimately not enough to justify the spent resources. Especially not if you're wasting so much time and money on a relatively trivial issue.

Glickman said Grokster will send anti-piracy messages to existing users, and the company is forbidden from maintaining its software or network. “Without those services, the system will degrade over time,” Glickman said.

Just like those big, ugly anti-piracy FBI seals that now come on new CDs? Those emblems look like the brainchild of a demented John Ashcroft. Fortunately, not a single CD I own is marred by that monstrosity. Why? Because I quit buying them years ago. I've bought one non-compilation CD since 2000, and that was Brian Wilson's "Smile," which didn't have the warning label. I see the logo mostly on albums targeted to younger audiences, a depressing symbol of the corporate-and-fear-based society we've turned into (and are pushing on our young people).

Grokster lost an important Supreme Court ruling in June. Justices ruled that the entertainment industry can file piracy lawsuits against technology companies caught encouraging customers to steal music and movies over the Internet.

--Consumer lawsuits against negligent corporations = "frivolous lawsuits"
--Corporate attacks on anything with the potential to deprive them of a buck = "the beauty of the free market"

The decision, which gave a green light for the federal case to advance in Los Angeles, significantly weakened lawsuit protections for companies that had blamed illegal behavior on their own customers rather than the technology that made such behavior possible. [...]

The Supreme Court noted as evidence of bad conduct that Grokster and Streamcast made no effort to block illegal downloads, which the companies maintained wasn’t possible.

Imagine what this means for gun companies! So much for, "Guns don't kill people; people kill people." Just when the NRA thought they'd conquered the planet...

It will be interesting to see the effect of this decision over time, as corporations realize they have stabbed themselves in the foot in their lust to prosecute teenagers. After all, this decision goes against the increased protection for businesses that was the centerpiece of the Bush "tort reform."

In the meantime, I'm going to continue taping songs off of the radio and borrowing CDs and books from the public library...while I still can!


Mikel said...

What's next, public libraries? They share their files with anyone holding a library card. Come in off of the street, sit down read a book, newspaper, magazine, etc. No charge. Screws the publishers, authors, distributers. Musicians should get a piece of the action when other bands perform their music in bars. Citizens that give rides to others should have to ante-up to taxi cab companies, bus lines and limo services because they are cheating them out of possible fares. Citizens that rent cds and video tapes and allow others to enter their home and watch for free should have to pay someone somewhere. Right?

Flamingo Jones said...

Well, I'm afraid I have to play devil's advocate on this one. It's really easy to attack the big bad record companies, I know. And they aren't really GOOD, per se. But they're not bad either. Granted, I have a personal bias. But not very many people realize how much record companies put into new artists. My uncle told me the numbers a while ago, so I'll do my best to get them right. When a new act gets signed to a label, the label usually invests anywhere between $500,000 and $1,000,000 in that act. Some of that cost is a loan that is recoupable from the artists' profits, like recording costs, but a lot of it is not...promotion, publicity, etc. This investment is made before anybody ever even hears the act. And of those new acts, only 1 in 4 is ever even mildly successful.
For every 20 cds produced, 19 fail to return on the investment.

Eventually, file-sharing will hobble the recording industry, make no doubt. Lots of labels have already gone under. So, lots of free music....BUT if there are no record labels willing to front the money to new acts to make recordings....who knows if there'll be anything new worth downloading, free or not.

A good way to keep that from happening, without going against liberal sensibilities is to support indie labels. Also, if you like an artist, buy their merchandise. That's where they make a much larger percentage of the profits. They only get 14% of any cd sale, but they get to negotiate their merchandise deals. Buy the t-shirts, folks.

Ian McGibboney said...

Well, if you know me, you know I don't put much stock in the sensibilities of major companies. They pump out shit like "American Idol" while much better artists do it the hard way. That doesn't mean the big congloms don't have more than their fair share of genuine talent; in fact, that's why I think they could make better arguments against file-sharing than "We stand to lose a fraction of our billions." Like the reason you said, Flamingo. Why don't they exploit that angle? I'm sure that would convince teenagers a lot more than being told they're criminals. A lot more.

Flamingo Jones said...

Well, if everybody let me run things it would be better. Of course.

But honestly, those ARE the sorts of arguments they tried making at the beginning of all this file-sharing hullabaloo. But nobody and adults alike latched onto the theory that "cds cost only pennies to produce, so the big evil record companies were gouging us with our $14.99 discs, so screw 'em and keep downloading!" (when in reality, considering all the costs involved instead of merely manufacturing costs, each cd costs a record company about $10-15 apiece).

I do think they went a little overboard dragging random 13 year old kids to court for a few thousand dollars. But I guess I don't mind their scared-straight label thingy. If you're going to steal music, you should at least know what you're doing and feel guilty about it, I think.

Also, I don't know that it's fair to compare this with borrowing books from the library....Unless you're photocopying the whole thing for your own collection or something. The way the publishing business is structured takes library usage into account already.

Ian McGibboney said...

In the old days of the recording industry, record companies subtracted something like five percent of artists' royalties on each album for "breakage fees." Breakage fees worked on the principle that roughly five percent of records shattered during shipping and thus couldn't be sold. While that conceivably made sense in the early days of rock-hard fragile 78s, labels charged these fees even into the 1960s, long after records became more pliable. The Beach Boys were one of the first bands to protest these costs, and they eventually got their way.

My point is that record companies are like any other business, looking to keep profits as fat as possible and using any measure to do it. Are they honestly worried about Madonna losing money (not to mention some indie band)? Hell no. If that were the case, these random teenagers would never have been targeted. Their motivation with attacking the kids was to terrorize, plain and simple. That's a lousy way to recoup costs, at least. Ultimately, their plan seems to be to touch all the right nerves so that the RIAA doesn't lose money. The artist and fans get screwed no matter what.

As for the library comparison, I think it works. Who is to say someone won't go into a library, check out CDs, go home and rip their tracks? Or that people photocopy books? Hell, my library has copy machines! But perhaps radio is a better example. Today's technology allows for digital-quality radio broadcasts, with the cassette/DAT technology to match. I have months' worth of tape, from my childhood on, of songs I taped off the radio. Are they going to cancel radio? Doubtful. Did I wind up buying the song legally? In most cases, yes. The problem with the RIAA is trust. Some of us still like our music on discs and in sleeves. What we don't like is their strategy.

Flamingo Jones said...

And if every consumer was like us, they wouldn't have this problem, Ian.

And I don't think they're wrong to target youth, for two reasons:

1) They are the demographic most likely to be pirating music. I mean, my parents couldn't figure out how to download a song to save their lives. But kids these days are so damn tech-savvy.
2) It's smart to try to break the habit early. If a 14 year old starts downloading and isn't deterred...think of the amount of music they'll have downloaded by the time they're 30.

"The artist and fans get screwed no matter what."
That's not a fair statement. The artist gets MORE screwed from music pirating than the labels do. The reason the record companies were so slow on the draw with the internet in the first place was because they couldn't figure out a way to use the internet to charge enough to honor the contracts with the artists and still make a profit.

As for taping off the radio, why would they mind that? Singles are released to radio to increase record sales. You like a song on the radio, you want to hear more by the artist, you go buy the cd. It's all about the Spins and Scans. But, if you hear a song you like on the radio, then jump on the computer,illegally download all the songs from the cd (sometimes before it's even available in stores), and that's a different story.

And can you honestly say you know ANYBODY who copies whole books from the library? I mean, at $.10 a page, by the time you're done, you might as well have gone to Borders and bought the damn thing. Yes, burning cds is an issue there, and I don't agree with that either.

Dammit. It is too fun playing devil's advocate. I promised myself I'd be snug in my bed a half an hour ago. You owe me.

Ian McGibboney said...

Well, I understand your view even if I don't entirely agree with it. Then again, I'm apparently the only person in America that isn't in, or hangs out with, a band.

I'm just frustrated with the RIAA more than any bands or labels. And, as I've written before, I don't get a royalty every time someone reads what I write, which is why I can't afford CDs in the first place. So I understand. But I don't entirely sympathize.

Flamingo Jones said...

Ian, you sound crabby and I don't know why. There's nothing wrong with debate. And it's not like I disagree with you about anything else. Differing opinions are OK.

What does "Then again, I'm apparently the only person in America that isn't in, or hangs out with, a band." mean? That's not the perspective I'm coming from.

And the things is, RIAA IS the labels. That's what it's made of.

"I don't get a royalty every time someone reads what I write... I know you didn't mean it that way, but that sounds kind of petty, Ian. And if, say, you had the syndicated column of your dreams, and each newspaper that ran it was supposed to pay you for it, but half of them didn't and just got hi-jacked it, you'd complain too.

Ian McGibboney said...

Flamingo, my beef is not with you in particular. What irritates me about the file-sharing debate is that I seem to be the only one nowadays (Mikel notwithstanding) who thinks file-sharing isn't completely evil, whereas five years ago everyone though it was a great idea. I recall U2, the Dave Matthews Band and the Rolling Stones (three bands you think would HATE the idea) using free downloads creatively to bolster sales.

But once the bizarre anti-sharing propaganda and the lawsuits started, suddenly everyone jumped on this anti-file-sharing bandwagon. I still don't get it. I mean, I could certainly understand people stopping the practice (as I did) as soon as they heard of its new perils. But many of the same people I knew who were some of the worst offenders suddenly became the biggest RIAA apologists. Why? I don't know. Fear, I guess.

As for my supposedly "petty" remark, let me explain it this way: when I wrote columns for the Vermilion, I earned $25 for each piece. With a 17,000 circulation and ample online presence, that's as many as 25,000 people reading my column every week. Assuming that extremely liberal estimate to be true, that's $1 I got for every thousand readers. Am I bitter? Not really; it would suck just as much the other way, where no one could clip the column or let their kid see it without paying me some change. Arists like Madonna and Metallica, on the other hand, speak out angrily against file sharing because it means they sell 11 million records instead of 11,050,000. Now who's the petty one?

Flamingo Jones said...

I don't think file-sharing is evil either. But I do think that illegal file-sharing is wrong.

I download music all the time. Lots of artists still allow you to download free tracks here and there through legal, legitimate, means if you know where to look. Specifically, a lot of newer artists go that avenue, and that's a good thing.

As for your column...Didn't they inform you of how you'd be paid up front? I'm assuming they did, and that you entered into that agreement willingly and knowingly (rather than someone stole your material, printed it secretly and distributed it for free without your permission....and if that's the case, I'm very sorry. You should seek legal action). You're comparing apples and oranges. No one stole your column, Ian.

As for Madonna and Metallica, I think you're oversimplifying the problem, but even as you state it, theft is theft.

Ian McGibboney said...

For my columns, there was no contract negotiation. I didn't haggle for the pittance I got; it was a flat policy that I took only because it was an avenue of exposure. I went to a dirt-poor school and got paid accordingly. But honestly, I would have done those columns for free, because I liked writing them. My point is that I understand the writing profit system, which supports the free flow of information while giving writers their just due.

In fact, I was invited into a class-action lawsuit recently because some unnamed database was archiving some newspaper articles I and others had written without compensation. I haven't participated, though, because the articles are brief things I can't even recall, and also because I don't feel like such a thing is good for the future of online resources.

And, as I said before, I don't share files. Nor do I condone it. I just don't see the justification for "going after goldfish with a cannon," as a friend of Ed Meese's once described the reagan-era Attorney General. I see the war on file-sharing like the war on drugs: well-intentioned, but a drain on the justice system and on personal lives of people who aren't criminals but who made abad decisions.

And while I'm not for stealing profits from anyone (well, maybe Wal-Mart...but still, I've never shoplifted in my life), I'm not one to feel sorry for multibillionaires for any reason that doesn't involve them getting hurt. Where is the indie band in this batch of deprived artists? I'm sure there are some, but they need to show their faces. Listening to Madonna or Lars Ulrich bitch has about the same effect on me as listening to Ken Lay's wife crying because they're down to their last 10 houses.

For the theft argument to hold water, then it should be illegal for anyone to borrow CDs from a friend or listen to them in a car. Hey, theft is theft, right?