Sonny Lemaire's "Fall" climbing the charts to Top Ten

Clay Walker's "Fall" Video

Together with Clay Mills and Shane Minor, my new client Sonny Lemaire is one of three songwriters on Clay Walker's new single, Fall, featured in the video link above.  The song is currently climbing Billboard's Hot Country Songs chart and, after a 31-week run so far, is breaking well into the top ten!  Expect it to hit the top five very soon!

If you're as old as I, you may remember Sonny's old band from the Seventies, The Exiles, particularly their 1978 blockbuster hit Kiss You All Over, which was number one on the pop charts for over a month and had a chart life of 23 weeks.  The Exiles toured with many of the other greats of that glittery era, Boston, Heart, Aerosmith and Seals & Croft.  Sonny either wrote or co-wrote many of the band's greatest hits.

Since that time Sonny has spent his time in Nashville's songwriting community.  He was named BMI's Songwriter of the Year in 1986 has over 500 songs registered with the performance rights organization.  In 2002, he scored big with another number one song Beautiful Mess, recorded by Diamond Rio, which was also co-written by Sonny, Shane Minor and Clay Mills.  Sonny is no stranger to number one hits, however, since he has scored over ten in his illustrious career and has over 17 other BMI awards and honors.

My wish is that Sonny makes it to the top of the charts again!  Sonny now lives in middle Tennessee with his family and continues to crank out hit songs.

Technorati Tags: Songwriting , Nashville , Country Music , Billboard , Music Row , Music Publishing , Performance Rights Organizations , Songs

Courts taking a stricter look at evidence in RIAA downloading cases

There appears to be a slight ripple of a trend among courts to take a stricter look at the evidence being presented by the RIAA in its crusade against digital downloads, based primarily on the evidence of user names and IP addresses assembled by their expert consultants, MediaSentry. 

In the RIAA's case against Jeff Dangler, filed in the U. S. District Court for the Western District of New York in Rochester, Dangler failed to file a response to the Complaint, and the Clerk entered the default against him.  Pursuant to Federal Rule of Civil Procedure 55(b)(2), the Plaintiff can then apply to the judge for a judgment based on the default.  In addition, Fed.R.Civ.P 55(b)(2) gives the judge the option to conduct hearings and hear evidence in order to determine if the damages requested are justified.  This gives the judge the opportunity to evaluate the merits of the underlying claim and, if he finds it to be deficient, deny a judgment on the default.

On October 23, 2007, U.S. District Judge David G. Larimer denied a 55(b)(2) request by the RIAA for a default judgment of $6,420 in Atlantic v. Dangler.   Judge Larimer specifically ruled that there were "significant issues of fact" in the record "as to the identification of the defendant from his alleged 'online media distribution system' username" heavyjeffinc@KaZaA.  The court points out that there is no evidence presented that established a time period of the alleged distribution and/or infringement nor are there details sufficient to determine whether, in fact, the defendant is the user so identified. 

Because of these deficiencies, Judge Larimer determined that he would hold a hearing to allow the Plaintiffs to establish additional evidence that a copyright violation was committed by the defendant.  You can read the full text of the judge's order here.

Previously, in August 2007, a similar 55(b)(2) request was denied by Judge Rudi Brewster in Interscope v. Rodriguez in the U.S. District Court for the Southern District of California.  In that case, Judge Brewster held that "Plaintiffs . . . must present at least some facts to show the plausibility of the allegations of copyright infringement against on th[is specific] defendant," citing the recent U.S. Supreme Court decision in Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007) that more than a mere recitation of the elements of a claim are necessary to find relief.   Basing his decision on facts similar in nature to Dangler, Brewster concluded that the RIAA's complaint failed to state a claim upon which relief could be granted.

These decisions arise in districts where the judges are, generally speaking, more technically saavy than some other districts where these types of issues do not arise as often.  In a somewhat related case, the Ninth Circuit, the appeals court that has jurisdiction over the California district courts, one bankruptcy court has already established stricter standards of proof for establishing the veracity of computer records.  For more information, see the informative article entitled Admitting Computer Record Evidence after In Re Vinhnee:  A Stricter Standard for the Future?, by Cooper Offenbecher.  In short, this article discusses the interplay between Rules 901 and 803(6) of the Federal Rules of Evidence and their application to digital business records.  Essentially, without getting into the details, there is a hearsay exception for business records allowing their admission as evidence in a trial if they are maintained in the regular course of business and are relied upon by the business.   It is these sorts of dialogues that must inform the judges as they scrutinize the evidence presented by the RIAA in support of infringement claims, whether they be in the course of a default judgment or in the course of a trial.

 

Technorati Tags: Digital Downloads , RIAA , Entertainment Law , Copyright Infringement , Copyright Law , Music Law , Music Lawyer , Twombly

Porter Wagoner Dies at age 80

Perhaps Porter Wagoner should be remembered as the original "Rhinestone Cowboy" because of his penchant for sparkling two-piece rhinestone often adorned with wagon wheels and other cowboy themes -- at one point he owned over 60 suits. 

The longtime country music legend died at 8:25 p.m. CDT in a Nashville hospice Sunday night at the age of 80 from complications resulting from lung cancer.

Born in the Ozark Mountains of Mis souri, Wagoner was a regular on the radio show "Ozark Jubilee."  He signed his first record deal with RCA Records in 1955.  Two years later, he joined the Grand Old Opry, where he was a perennial favorite.  In 1960, he appeared on "The Porter Wagoner Show," one of the first syndicated shows to be produced in Nashville, which had a 21-year run.  He was elected to the Country Music Hall of Fame in 2002.

Not only was Wagoner a consummate performer, but he also wrote many great classic country songs, one of the most memorable of which was Green, Green Grass of Home. 

Wagoner is also credited with giving Dolly Parton her first big break.  He hired the then-fledgling young artist in 1967 to be his duet partner.  That relationship produced a string of hits, but finally ended in a lawsuit that was settled in 1980 for an undisclosed amount.

Wagoner had recently signed a new record deal and produced his last and final album, Wagonmaster, with Marty Stuart.  It was released in June to critical acclaim.

The loss of this great legend is felt throughout the Row today, but there is perhaps a new constellation in the sky, the Rhinestone Cowboy.

Technorati Tags: Music Row , Nashville , Porter Wagoner , Music Industry , Country Music

 

Sony BMG announces McBee promotion

Earlier this week, Tom Baldrica, vice president of marketing at Sony BMG, announced that Heather McBee has been promoted to vice president of digital business.  McBee, who has been with the label for 14 years, was formerly senior director of that department.

Baldrica said in a prepared statement:

"I'm so proud of this promotion.  Heather has demonstrated constant growth and leadership skills in building her new media band-of-one into a full-fledged digital business department.

Originally from Clarksburg, West Virginia, McBee interned with BNA Records while attending the music program at Belmont University and was employed as a sales assistant upon her graduation in 1993.  Through various mergers and acquisitions among the various labels, she ended up with Sony BMG.  In 1997 she was picked to head up a newly formed research department which eventually evolved into the Digital Business and New Media department.  She was appointed director of that department in 2003.

A part of Leadership Music's 2007 Digital Summit, McBee is quoted as saying

I had the fortitude to stick it out when everybody was saying "no."

McBee credits label group chairman, Joe Galante for allowing her flexibility to prove the viability of her ideas about the future of the industry:

He asks that things be quantified. He gave me freedom to experiment…as long as I tempered my excitement and made it fit our goals and what we were doing.

Among other things, McBee was influential in moving Sony BMG into the cellular ringtone business.

Technorati Tags: Digital Downloads , Nashville Business , Music Row , Major Labels , Record Labels

 

Amazon profits in the stratosphere

Propelled primarily by the sales of 2.5 million copies of the new Harry Potter book, Amazon's profits reach ed the stratosphere in the 3rd fiscal quarter of 2007.  The company announced its third-quarter earnings in an online conference call on Tuesday, announcing a profit of $80 million, three times the $19 million it earned in the third quarter of 2006.  Amazon reported sales of $3.26 billion, up 41% from $2.31 billion in the quarter last year.  The company expects its overall 2007 net profits to be up by 33-36%, or somewhere north of 14 billion dollars.  A replay of the webcast announcement can be heard on Amazon.

As you recall, my earlier interest in the announcement stemmed from the company's September release of the public beta of its DRM-Free music download store.  While generally overshadowed by the Harry Potter sales, Amazon's Chief Executive Office, Jeff Bezos, did comment on the digital downloads, saying in the conference call that the company was happy with early results from the store.

"We are getting terrific feedback from customers," he said,  Everybody loves the DRM-free format. Now the onus is on us to continue to convince music labels that this is a good way to sell their music."

Little more can be gained from the announcement with regard to the actual sales of MP3s.  Hopefully more data will be released in the 4th Quarter announcement.  The company intends to expand its digital offerings later this fall by introducing an electronic book reading device and offering downloadable e-books.

According to one research firm, Hitwise, Amazon is the leading benefactor of the web's double-digit increase in web commerce retail sales, garnering 11.5% of the increase in traffic, followed by Wal-Mart, which received 5.4%.

Amazon, a Fortune 500 company based in Seattle, Washington began operations in July 1995.

Technorati Tags: Digital Downloads , MP3 , Internet , Entertainment Industry , Amazon

New Talent Agency on the Row

Early in October, Joey Lee, former CEO at Buddy Lee Attractions , left that agency to form 360 Artist Agency, a full-service talent agency.  This ends a very long tenure for the namesake's son at the helm of the famous Nashville agency. 

Mr. Lee took several of his clients with him to the the new agency, including Lee Ann Womack, Miranda Lambert and Heartland, but 360's final roster has not been published.  In addition to these three artists, Lee was the responsible agent at Buddy Lee for Bo Bice, Mark Chesnutt, Jared Nieman, Rhett Akins, and Thomas Martinez.   Tony Conway remains as president of Buddy Lee Attractions.   You can check out his current  MySpace for more information.

Lee can be reached at 903 18th Ave. S., Nashville, Tennessee 37212, (615) 360-0911.  Email: jlee@360artistagency.com.

 

Technorati Tags: Nashville , Music Row , Booking Agency , Talent Agency

UT Student's Motion to Quash subpoena is denied in Virgin Records et al. v Does 1-3

On August 16, 2007, Doe No. 28 in the RIAA's action captioned Virgin Records America, Inc. et al. v. Does 1-33 filed a motion to squash the subpoena issued to the University of Tennessee on the grounds that, one, it was unreasonable on its face and, two, it violates his rights under the Family Educational Rights and Privacy Act ("FERPA").  The memorandum in support of this motion can be read Pike & Fisher's website, Internet Law & Regulation.  This was a case of first impression, i.e., this is the first time a court has issued a ruling based on this type of facts.

The Subpoena is Unreasonable on its Face

Does No. 28's primary argument in support of the proposition that the subpoena is unreasonable on its face was that plaintiffs could identify the name of the alleged infringer of the copyrighted sound recordings by being provided with the name and current campus address of Doe No. 28 and, therefore, does not need his permanent address, telephone numbers, e-mail address, and MAC Address, all of which would subject Doe No. 28 and his parents to unreasonable phone calls and mail. 

Plaintiffs countered that this information was necessary in order to uniquely identify Doe No. 28 to the exclusion of other defendants.

The court based its decision in this regard on Rule 45 of the Federal Rules of Civil Procedure, which state that a subpoena may be modified if it poses an "undue burden" on the defendant.  The Court held that providing plaintiffs with the requested information was not unduly burdensome since college students are transient by nature and move frequently during their tenure at college, thus making it difficult for plaintiffs to locate Doe No. 28 if only a name and campus address is provided.

The Subpoena violates the Family Educational Rights & Privacy Act

In examining this issue, the Court looked at both FERPA and at the University of Tennessee's FERPA policy, which is posted online here.   The Court found the following:

FERPA broadly defines “educational records” as “those records, files, documents, and other materials which (i) contain information directly related to a student; and (ii) are maintained by an educational agency or institution.”  United States v. Miami University, 294 F.3d 797, 812 (6th Cir. 2002) (citing 20 U.S.C. § 1232g(a)(4)(A)).  Directory information is defined in the statute as “the student’s name, address, telephone listing, date and place of birth...” 20 U.S.C. § 1232g(a)(5)(A).  According to the University’s FERPA policy,  directory information is “information not generally considered  harmful or an invasion of privacy if disclosed.  The University of Tennessee considers the following information to be ‘Directory Information’: Name, semester and permanent address, e-mail address, telephone listing, date and place of birth.”  Office of the University Registrar, What You Should Know About FERPA.  Furthermore, the University’s policy states that it is “not allowed to share  information (other than ‘Directory Information’) without a student’s written consent” and that a student may limit release of directory information by submitting a request for directory exclusion to the University’s registrar.

After summarizing its analysis of FERPA and UT's policy, the Court surmised that "most of the information [sought by the subpoena] falls within the category of Directory Information under FERPA," with the exception of the MAC address, which identifies the device used by Doe No. 28 to connect to the Internet, and therefore is not protect by FERPA.  With regard to the MAC address, the Court found that it was neither and "educational" record nor "personally identifiable information," and therefore was not protected by the act.

One note of interest in the Court's order was the revelation that Doe No. 28 had failed to argue that he had issued a "limiting request" as allowed in the University of Tennessee's FERPA policy.  The Court also made a particular note that the University's policy did not mention MAC addresses.  This seems to hint that the Court may have issued a slightly different opinion if these factors had been present, leading to the conclusion that students may want to write letters to their respective schools specifically requesting that no "directory information" be provided to third parties and asking that their schools not release MAC addresses as part of directory information and/or include such information in their FERPA policies.

The Court's full opinion is available online at the Knoxville News Sentinel.

Technorati Tags: Music Law , RIAA , Digital Downloads , Internet Law , Entertainment Law , Copyright Infringement , Subpoena

Country Music Association nominates Randy Goodman to serve as President of the Board

 

Last week, the Country Music Association announced that the next President of its Board of Directors would be Randy Goodman, president of Lyric Street Records.  Goodman, a native Nashvillian, received his bachelor of science in Political Science and Economics from David Lipscomb University.  He also attended Belmont University’s Music Business College. 

After graduation, Goodman spent 18 months working as a road manager.  In 1980 he was hired by Tandy Rice’s Top Billing as the agency’s publicist.  In 1981, he joined RCA Records as a publicist and spent five years living in Manhattan and Stamford, CT, while working for RCA in New York City. 

He was hired by Joe Galante, who became Goodman's mentor. Goodman quickly ascended through the company, working with such acts as Alabama, The Judds, Waylon Jennings, KT Oslin, Restless Heart, Clint Black, Martina McBride, and Kenny Chesney.

Goodman returned to Nashville in 1995 as General Manager of RCA Label Group.  In 1997, Goodman left RCA and launched Lyric Street Records, a Disney company.  The company is now celebrating its 10th anniversary with current artist roster Rascal Flatts, SHeDAISY, Bucky Covington, Josh Gracin, Trent Tomlinson, Sarah Buxton, and Marcel.

“There’s never been a time in my professional experience in Country Music that I wasn’t aware of CMA or didn’t understand its importance -- I approach this role with a great deal of humility and a great sense of honor," Goodman said.

Goodman's term will begin on November 8, the day after the famed CMA Awards Show.  Other well-known members of the CMA Board of Directors are Bob DiPiero, Bruce Allen, Pat Higdon, Mike Dungan and Ed Hardy.  A complete list of the directors, past and present, can be read here.

Goodman and his wife Jennifer live in Nashville with their two children, Ross, 13, and Rachel, 10.

Technorati Tags: Music Row , Music Industry , Music Business , Nashville , Country Music Association , Country Music , CMA

No more lines in the virtual sand - the Hew Griffiths case considered.

Hew Griffiths - Photo by Richard Gosling

Back in 1999, my law clerk, J. Eric Crupi and I considered the topic of personal jurisdiction as applied to the Internet. In the resulting Law on the Row article, entitled "Lines in the Virtual Sand." In the original article, Eric concluded that “the boundaries of personal jurisdiction in cyberspace have not been concretely defined, but rather represent unsettled lines drawn in the ‘virtual’ sand. . . .” In the intervening years, I would have to say that the lines in the virtual sand have been blown away by the winds of U.S. Court decisions, particularly after considering the three-year long case against Hew Griffiths from Australia.

The original article describe the process of personal jurisdiction as follows:

The traditional determination of whether a court has personal jurisdiction over a particular defendant involves a two-pronged analysis. The first prong of the analysis inquires into whether the state in which the lawsuit was filed (i.e. the “forum state”) has a “long-arm statute” permitting the assertion of personal jurisdiction. A long-arm statute is simply a legislative act that allows the courts of a state to assert jurisdiction over persons and corporations that, although not residents of that state, have voluntarily conducted some type of activity in that state. The second prong of the analysis, however, is more involved and inquires into whether the forum state’s assertion of personal jurisdiction complies with Constitutional due process standards. Due process requires that a non-resident defendant must have certain “minimum contacts” with the forum state such that maintaining the suit does not offend traditional notions of fair play and substantial justice. Essentially, this prong is satisfied if the defendant performs some act in the forum state through which it purposefully takes advantage of the benefits of doing business in that state and can thus reasonably anticipate being haled into that state’s courts.

It is the “minimum contacts” section of the long arm analysis that has received the most attention in the U.S. Department of Justice’s extradition of Australian Hew Raymond Griffiths. In one of the first ever extraditions for an intellectual property offense, Griffiths, 44, a British national living in Bateau Bay, Australia - a man who arguably had absolutely no physical contact with the United States - was extradited to the United States in February 2007 to face criminal charges in U.S. District Court in Alexandria, Va. On April 20, 2007, he pleaded guilty to one count of conspiracy to commit criminal copyright infringement and one count of criminal copyright infringement before U.S. District Court Judge Claude M. Hilton. He was sentenced to 51 months in prison and given credit for the three years he spent in Australian facilities awaiting extradition. He will serve out the remaining 15 months imprisonment in U.S. facilities.

Griffiths’ conviction was the latest action arising from the joint U.S. Customs/Department of Justice investigation known as Operation Buccaneer, the largest international online copyright piracy investigation ever conducted by federal law enforcement. To date, Operation Buccaneer has resulted in more than 30 felony convictions in the United States and 11 convictions of foreign nationals overseas.

In an article for the Australian Law Journal, NSW, Chief Judge in Equity, Peter Young summarized that “[Our] people are being extradited to the U.S. to face criminal charges when they have never been to the U.S. and the alleged act occurred wholly outside the US.” He concluded that while International copyright violations are a great and valid problem that must be remedied, “there is also the consideration that a country must protect its nationals from being removed from their homeland to a foreign country merely because the commercial interests of that foreign country are claimed to have been affected by the person’s behaviour in Australia and the foreign country can exercise influence over Australia.”

The DOJ Assistant Attorney General Alice S. Fisher of the Criminal Division stated the Department’s counter position, that “the Justice Department is committed to protecting intellectual property rights, and will pursue those who commit such crimes beyond the borders of the United States where necessary.” U.S. Attorney Chuck Rosenberg for the Eastern District of Virginia echoed her sentiment when he stated that “Whether committed with a gun or a keyboard -- theft is theft. And, for those inclined to steal intellectual property [in the United States], or from halfway around the world, they are on notice that we can and will reach them.”

So what did Griffiths do to raise the ire of the DOJ? Griffiths, known by the screen nickname "Bandido," was a longtime leader of an organized criminal group known as DrinkOrDie, which had a reputation as one of the oldest and most security-conscious piracy groups on the Internet. DrinkOrDie, an international organization founded in Russia in 1993 and known as the warez scene, was an underground Internet piracy community that specialized in cracking software codes and distributing the cracked versions over the Internet. Griffiths had boasted in interviews that even though he ran all of DrinkOrDie’s day-to-day operations and controlled access to more than 20 of the top warez servers worldwide, he would never be caught. Some of DOD’s most prominent victims were Microsoft, Adobe, Autodesk, Symantec and Novell, but they also affect smaller companies whose livelihood depended on the sales revenue generated by one or two products. Once cracked, these software versions could be copied, used and distributed without limitation. Members stockpiled the illegal software on huge Internet computer storage sites that were filled with tens of thousands of individual software, game, movie and music titles alleged to be worth over 50 millions dollars. The group used encryption and an array of other sophisticated technological security measures to hide their activities from law enforcement. Griffiths was certainly no farm boy and was well aware that his activities were criminal, even though many articles on the Internet about his activities point out that he allegedly made no profit from the pirated software.

Griffiths’ extradition was very controversial in Australia. The matter of U.S.A. v Griffiths has been cited as an example of how bilateral arrangements can lead to undesirable effects such as a loss of sovereignty and the introduction of draconian measures. On the other hand, increased enforcement internationally through heavy criminal sanctions is seen as an effective way of protecting legitimate distribution networks.

A common mistake made in many of the Internet discussions about the Griffiths case is that the extradition occurred pursuant to the Australia-United States Free Trade Agreement (“AUSFTA”). Griffiths’ indictment, however, occurred before amendments were enacted to harmonise the Australian Copyright Act with U.S. copyright laws, so AUSFTA had nothing to do with the extradition. There were multiple factors that motivated extradition, not the least of which was that the DOJ alleged conspiracy, claiming that most of the overt acts were based in the United States and that many DrinkorDie members were located in the U.S. This gives credence to the argument that, as the leader of DOD, Griffiths was subject to its jurisdiction. This analysis is no different than exercising jurisdiction over a criminal enterprise whose activities result in murder rather than theft - the analysis has nothing to do with the severity of the crime. That said, it is not wise to underestimate the impact that the lobbyist for the powerful technology industry may have had on the government’s interest in this case, nor the effect of the close relationship between Australia and the United States, both of which made extradition more likely.

The bottom line in all of this is that the traditional geographical boundaries which once severely restricted the reach of the long arm of the law are no longer an impediment. If a person’s criminal activities rise to a significant enough level as to garner the attention of a organization such as the DOJ, that person is going to find him or herself in unfamiliar territory being charged with violation of crimes in that territory. The lines in the virtual sand have disappeared.

Vanderbilt Students to receive a round of RIAA Letters

Fueled in part by its success in Virgin v. Thomas, the RIAA (on behalf of EMI Music, Sony BMG Music Entertainment, Universal Music Group and Warner Music Group) issued a new round of pre-litigation letters to college students across the country Thursday of last week. This is its ninth such round of letters since beginning the campaign against downloaders nearly two years ago. This round included letters to 32 students at Nashville’s prestigious Vanderbilt University. Vanderbilt received the third greatest quantity of letters in this round, behind University of Southern Florida, with 43 and Southern California with 37.

In addition to those three institutions, the RIAA also sent letters to these 16 schools (quantity in parentheses): Drexel University (17 pre-litigation settlement letters), Indiana University (23), Northern Illinois University (25), Occidental College (19), State University of New York at Morrisville (18), Texas Christian University (20), Tufts University (15), University of Alabama (14), University of California, Berkeley (19), University of Delaware (18), University of Georgia (13), University of Iowa (18), University of Michigan - Ann Arbor (20), University of Nebraska-Lincoln (13), University of New Hampshire (30), University of New Mexico (17).

As with the more than 3,500 letters previously sent to college students at other schools, the letters gives students the opportunity to resolve copyright infringement claims against them at a discounted settlement rate before the threatened lawsuit is filed against them. The letters are accompanied by instructions to the university administrators to forward the letter to the appropriate individuals the give them the opportunity to promptly resolve the matter and avoid a lawsuit.

Amazon to post third quarter earnings, including profits from MP3 Sales

Amazon.com, Inc. (Tickler Symbol: AMZN) will hold a conference call on October 23, 2007 at 5:00 p.m. ET to discuss its 2007 third quarter financial results. This announcement has tremendous relevance for those of us interested in the commercial viability of digital sales and downloads of DRM-free music -- since Amazon launched its online music store, Amazon MP3, which sells songs without copy protection in this fiscal quarter, the sales of said music will be a component of the report. Many financial analysts are expecting Amazon to announce earnings of around 18 cents per share on just over $3 billion in revenue for the quarter.

Most online reviewers agree that the Amazon experience of buying digital music is very favorable when compared to iTunes. My feeling about iTunes generally is that is an overbloated, unwieldy piece of software that doesn’t do the job it was designed to do very well at all, so this favorable comparison comes as no surprise to me. Although Amazon’s MP3 store is web-based, once you download a small companion program (on either Windows or the Mac) you get a better one-click experience than Apple's iTunes store, and the software automatically adds purchased files to iTunes, if you choose to use that software, or any of the myriad of better music players available on the Internet.

In addition to the favorable software experience, many users are impressed that Amazon offers over 2 million at an average of 10 cents less than the cost on iTunes. The offering, while only about 20% of Apple’s offerings on iTunes, is the largest collection of DRM-Free music anywhere.
Both UMG and EMI have signed up with Amazon, while Sony BMG and Warner Music Group still lurk in the Dark Ages when it comes to the digital spectrum. The only negative vibe about Amazon’s service is that UMG is slipping watermarks into the downloads to enable tracking.
According to some stock analysts, Amazon’s global site traffic rose 13 percent year-over-year in July and August.

The thing that attracts me to the Amazon model is the flexibility. The ala carte digital music can be used on any player, with any software and reproduced on as many devices as you want. It does not expire and you are not required to subscribe to any service or use any specialized players or software. This, in my opinion, is the business model of the future. As Amazon’s catalog expands, I expect that it will become increasingly more competitive than Apple. The Motley Fool described Amazon's chances for success in the digital music download business as follows:

Amazon sold $10.7 billion worth of merchandise last year -- $7.1 billion in
the form of media -- but at issue here is more than just respect for Amazon's
girth. Amazon is a trusted source in music. Now it also happens to offer the
better deal. If you have a choice of paying $0.89 on Amazon for a higher-quality
track with no DRM, or $0.99 for a lower-quality track with portability
restrictions, where will you turn?

I can only add that Amazon has an incredible database of customer preferences and cross-references. Amazon does an amazing job at suggesting impulse purchases.Most consumer already have an established account with Amazon that has established preferences. Amazon is the Wal-Mart of online merchandisers, the king of the Internet in sales. I believe it will succeed where others have failed.

The Future of the Music Industry - the continuing dialogue

There is a very well written blog entry by McQuinn on the blog MCQESQ entitled The Future of the Music Industry. You can read the article in its entirety here, and it is well worth the effort. It attempts with acute perception and finesse to dispel the rampant rumors that the music industry conglomerates are are a dying breed of dinosaurs. The essence of the authors opinion are as follows:

It’s popular to bash the labels (especially the majors) and to celebrate their apparently imminent demise. For me, there is no pleasure in seeing people get laid off and large companies go bankrupt in any industry. But I also dispute the idea that labels (in general) have been a bad thing for music. . . . Without record labels recording and promoting music, we would never have heard of most of the artists that we now recognize as music legends.

I wrote similar sentiments back in 2000 when Courtney Love bashed the very industry which gave her soap box any credibility at all. In the article by Mcquinn, the author is not attempting to defend all record labels nor the actions of all record industry professionals, but successfully points out that without the music industry moguls’ promotion and even love of music, there would be no “superstars” for us to download! There would only be garage bands. Ugh! (no disrespect to any particular garage band intended, but we must realize there is a reason why some bands “make it” and some don’t).

I tell my clients that they should consider the major label to be not only their marketing arm, but a bank! The fact is, a major label will customarily spends upward to 3–5 million dollars to record, advertise, market and promote ONE act. Granted, much of that investment is recoupable from the artists’ royalties (meaning that the artist must pay it back the money back of earned royalaties - the artist doesn’t pay it back if the label cans them), however, it still garners the artist a very valuable commodity: name recognition. How many superstars can you name off the top of your head? Madonna. McCartney. Garth. Prince. Dolly. The Eagles. Elvis. Elton John. I may be dating myself a bit here, but you get the idea – without the record labels, these artists would not have what they have today – the ability to annouce a concert date and sell it out a 200,000 seat venue within hours, for example. Is it totally fair to denounce the industry that helped these artists become the superstars that they are? Is it fair to expect that industry to take no profits from the product we so much enjoy?
So, what about the rumor that the major labels are heading for an imminent demise? A recent article in the September 2007 issue of Country Aircheck entitled Music Sales at a Crossroads – Labels Face the CD’s Swan Song gets a little more specific. The article cites RIAA-compiled data that illustrates that the gross sales of the CD format have diminished by almost one third since 1999, when it was over 14 billion, to 9 billion last year. In the country genre, where the CD format is still a popular one, total sales through September 2007 were 31 million units, whereas the genre tallied a total of 75 million units last year. Overall, total sales of CD for all genres is down 20% over the same time last year, a very significant drop. While I do not believe the music industry is going away, I do believe that the CD format will ultimately be gone. Tower’s demise was a forecast of this inevitability.

In the past, loss in profits from one format meant a rise in profits from another format, as, for example, when the CD format replaced records and cassettes, or when cassettes replaced 8–tracks (for those of you old enough to remember tape-based product). But in today’s market, the sell of digital downloads is not generating enough profilt to offset the loss of profits from the demise of CDs. Why, you might ask? I think all of us know that the reason for this is that the majority of songs being consumed today are either ripped from somone else’s CD or iPod, or they are obtained over the P2P networks. Those methods of obtaining music do not profit the artist, the songwriter, or, of course, the record labels.

McQuinn’s article points out that the label must find alternative methods of making profits, and mentions touring, merchandising and expanded licensing. This is not a new concept as, in fact, I have already started seeing contracts from labels taking an interest in more of the revenue streams than they have in the past. As Joel Galante, chairman of Sony BMG Nashville, points out in the Country Aircheck article, “you can’t have the label engine driving everything and being compensated the way it was before. We are taking most of the risk and there are a lot of revenue streams making money.” The trend in the music industry is for more independent-type deals with the artist in which the artist actually becomes a partner with the label. I also believe that we will see a resurgence of the “single” concept and/or the “mini-album” and a shift away from the 10–12 song album idea.

The music industry will also find reprive in the form of direct-to-retail marketing. The Eagles release through Wal-Mart is only one in a long chain of well-known artist who have found their own path to the retail market — Prince, McCartney, Radiohead, Nine Inch Nails — circumventing the Big Four: Song BMG, Warner, UMG and EMI. These artists are certainly blazing new trails and have been successful. The major labels, however, still maintain that they have the edge when it comes to developing and promoting artists and/or distributing their product. In view of the success of the aforementioned artists, however, this point is certainly not a given anymore.

We are, as I said in earlier articles and blogs, facing a new paradigm in the music industry. The major labels have yet, in my opinion, found the holy grail of digital downloads. What can the labels do to move into the 21st century? The answer cannot be yielding 90% of the market to iTunes. Labels have to take the lead of EMI and UMG and offer their music without any digital rights management — after all, the music on CDs is DRM-free! They must abandon the misplaced trust in “subscription-based” services which require monthly fees. As I have maintained in my ten years of analyzing and thinking about this issue, I believe that they must do what all good entrepreneurs have done: find a price point that will make it foolish for people to download music through a P2P and risk litigation. Sell the product at a reaonsable price. Most people, myself included, want to pay for their music — they just don’t want to overpay for their music. The first configuration of label and online distributor that finds that right combination of value and profit — i.e. the right price point — will be the significant winner in my opinion.

Jammie Thomas to appeal verdict in RIAA Litigation.

Imagine that you have a wireless network router in your home which you set up yourself. Also imagine that, because you are not computer saavy, you failed to establish a password for that router, or established a “weak” password consisting of only numbers, or your birthdate, or something of that nature. Consider now the proximity of homes, roads or pathways within around 100 feet of your home. How many people would have access to your unsecured wireless network? Your wireless router has an IP Address. Regardless of the the number of nodes using that IP Address, it appears the same to others in cyberspace. It does not matter if it your own computer or someone else with a laptop that has jumped onto your wireless network. Now, using the precedent established in the decision against Jammie Thomas, you could be liable for any copyright infringement committed by a scavenger utilizing your wireless network. Does that seem fair?

Something like this scenario is what Jammie Thomas still maintains happened to her. The latest news in this case is that she is appealing the $222,000 verdict against her. She still claims that her computer was spoofed, which generally refers to various techniques of using falsified data to obtain entree, services and/or goods using a “middle man” to obscure identification.

In order to appeal to the 8th U.S. Circuit Court of Appeals, the court with jurisdiction in this matter, Thomas must establish some clear error in the district court’s finding of facts. See Glover v. McDonnell Douglas Corp., 150 F.3d 908, 910 (8th Cir. 1998). On the other hand, the RIAA can defeat the argument by showing that any trial errors committed were harmless and had very little effect on the jury’s verdict See United States v. McCrady , 774 F.2d 868, 874 (8th Cir. 1985)

In this instance, Thomas’ primary argument will undoubtedly be that Jury Instruction No. 15 was not a correct statement of the law with regard to the Copyright Act, that the judge erred in submitting it to the jury, that the instruction significantly impacted the jury’s decision, and therefore there is reversible error in the instruction as provided. Jury Instruction 15 read as follows:

The act of making copyrighted sound recordings available for electronic
distribution on a peer-to-peer network, without license from the copyright
owners, violates the copyright owners' exclusive right of distribution,
regardless of whether actual distribution has been shown.

Thomas argues that this instruction made it too easy for the jurors to find liability if they found she made her Kazaa shared file folder available to others, regardless of whether anyone downloadied any of the music from the public folder.

For it’s part, the RIAA has argued this theory successfully in several cases prior to this one, including, for example, Electra v. Barker. The essence of the argument is that Section 106(3) of the Copyright Act gives the copyright owner the exclusive right to distribute copies of its work to the public and, while “distribute” is not defined, it is the equivalent of “publish” which is defined in the Copyright Act as follows: “the offerring to distribute copies or phonorecords to a group of persons for the purpose of further distribution . . . constitutes publication.” It is not an unsolid argument.

The question quickly becomes whether it is necessary that a tangible copy actually be distributed, or whether simply creating the possibility of that distribution is sufficient. One of the grandfathers of copyright law, Nimmer on Copyright, states that the “sine qua non of publication should be the acquisition by members of the public of a possessory interest in tangible copies of the work in question.” This seems to suggest a conclusion to the contrary.

That definition, in fact, seems to suggest that a tangible copy of the work must be acquired before publication can occur. A new line of cases, however, are interpreting this section differently when it is applied to making digital copies available for download on the Internet, including two U.S> Circuit Court cases, one in the 4th Circuit and one in the 9th Circuit.

The most apropros of these two is A & M v. Napster, 239 F.3d 1004 (9th Cir. 2001), which found that “Napster userse who upload file names to the search index for others to copy violate plaintiffs’ distribution rights.” Id. at 104.

Perhaps even more supportive of the “making available” theory is the international WIPO treaties to which the United States is a siganatory. Article 6 of the WIPO Copyright Treaty states that the “authors of literary and artistic works shall enjoy the exclusive right of authorizing the making available to the public of the original and copies of their works through sale or other transfer of ownership. Article 8 is even more specific, stating that “authors of literary and artistic works shall enjoy the exclusive rights of authorizing any communication to the public of their works, by wire or wireless means, including the making available to the public of their works.”

Finally, the Register of Copyrights, Marybeth Peters, weighed in on the discussion in a letter to Rep. Howard L. Berman dated September 25, 2002. Citing the Napster case, she opined that “making [a work] available for other users of a peer to peer network to download . . . constitutes an infringement of the exclusive distribution right, as well as the reproduction right.”

So, as these citations illustrate, the theorectical concept of “making available” as copyright infringement is not merely the construct of the RIAA lawyers’ imagination, as is concluded by The Recording Industry v. The People in Argument Over "Making Available" in Virgin v. Thomas. While the 9th Circuit case was, indeed, a brainchild of the RIAA, the concept of “making available” has its origns in the international community as reflected in the WIPO treaties.

It seems, therefore, that Thomas’ appeal will not be an easy battle to win. At the very least, the Judge’s decision to include the jury instruction was based on some pretty solid and well argued prior case law and supporting opinions. In order to prevail, Thomas’ attorney will have to convince the Eighth Circuit that merely making the files available does not constitute publication.

One case which might offer some support this theory is the 8th Circuit’s opinion in Nucor Corp. v. Tennessee Forging Steel Service, Inc., 476 F.2d 386. That opinion cites the Nimmer quote above in ruling that distributing brochures and photographs of architecture did not constitute general publication of the detailed plans. This case, however, involves common law copyright and is factually distinquishable from the Thomas fact pattern.

Thomas will also, no doubt, have tremendous support from various third parties, as evidenced by the Electronic Frontier Foundation’s announcement on Monday that they will be filing a friend of the court brief in support of Thomas’ appeal. A friend of the court brief is a procedure whereby an interested third party who are not a party to the litigation can file a document in support of a party’s position.

Wired’s THREAT LEVEL blog reports that one of EFF’s attorneys, Fred von Lohmann, will hinge their arguments, at least in part, on the “tangible” requirement as set forth in Nimmer. "Look into the Copyright Act — it narrowly defines distribution as distribution of a phonorecord or a copy. The definition says it has to be a physical object," von Lohmann is quoted as saying.
Whether there will be enough to overturn the trial court on appeal is, of course, yet to be seen.

I will attempt to keep you posted on the appeal as it develops.

Mens Rea & Digital Activity

For a very reasoned commetary on the potential impact of Virgin v. Thomas on other Internet activity, read John Mahoney’s article entitled Forget File Sharing: the Internet is on Trial at his blog, The Digital Edge.  Thanks for the insight John.

Mr. Mahoney correctly points out that in this age of wireless technologies and computer malware, many people are less in control of their devices than they may think.  The lines between computer actions and people’s intentions are more blurred than many realize.  This certainly has a great deal of impact on what we lawyers call the mens rea, i.e., the guilty mind.  If a jury wants to hold someone liable for an action, the law generally requires that their be mens rea, particularly in the criminal arena.  If that concept is applied to the copyright infringement that occurred in this case, the plaintiffs may have established the likely presence of a “mind,” but they have not established the presence of Ms. Thomas’ mind.

To be more precise, the plaintiffs were unable to establish the identity of the actual person, i.e., the guilty mind, if you will, behind the acts of infringement.  Mahoney correctly points out that the only thing the plaintiffs succesfully proved was that the infringing activity occurred through the use of a specific hardware address associated with Ms. Thomas’ internet account, using a username that was consistent with other online usernames associated with her in the past.  To use another legal term, the evidence was, at best, circumstantial.

This is more than just “smoke and mirrors,” a phrase plaintiffs’ counsel, Richard Gabriel, used in his closing to describe the defendant’s legal strategy.  Is is an important component in any copyright infringement action to establish that the defendant, in this case Ms. Thomas, actually committed the acts of infringement.  It is not enough to establish the the acts of infringement were committed using a computer owned by Ms. Thomas at a particular internet protocol.

We all await the verdict of the twelve.  It is my hope that the jurors will see the subtleties of this distinction between an actual person and their online “identity.”

 

Virgin v. Thomas: Sherman testimony not allowed; possible verdict today

In a blow to the Recording Industry Association of America, U.S. District Court judge Michael Davis ruled yesterday that the infamous president of the RIAA, Cary Sherman, could not testify in the trial of accused music-sharer Jammie Thomas because "nis testimony would not be relevant," despite the arguments of Plaintiff’s attorney, Richard Gabriel, that Sherman’s testimony would allow the jury to understand why the RIAA is targeting people like Thomas for the purpose of deterring other would-be downloaders.

"Lawsuits like this are not about making money," Gabriel told the judge. "It gets the word out ... We’re serious about this even if the damages are small."

Sherman confirmed to The Associated Press’ Josh Freed that his lobbying group will continue to go after persons downloading music illegally, despite the outcome of this week’s trial. ". . .[W]e’re in [this] for a long haul in terms of establishing that music has value, that music is property, and that property has to be respected," Sherman said. See Cary Sherman on CNN.

After both sides had their day in court, the RIAA had called over 11 witnesses, while the only evidence Ms. Thomas offered was her own testimony.

The apparent strategy of Thomas’ defense teams was to produce enough doubt that Thomas was not the actual “warm body” behind the IP address. Her attorney, Brian Tober, raised the specter of “zombies, crackers and drones” in order to conjure up doubt in the minds of the jury. He suggested that someone outside of Thomas’ apartment window could have accessed her wireless router and be responsible for the incident. Tober, however, never asked Thomas on direct, nor was she cross-examined, as to whether she owned a wireless router.

The RIAA, on the other hand, put on substantial evidence that a Kazaa user named Tereastarr shared some 1,700 digital audio files on Feb. 21, 2005. The evidence proved that the defendant use the Tereastarr monikor on e-mail accounts, online logins, including match.com, and as her username to access her own computer. The evidence produced also showed that an internet protocol address associated with that Kazaa share file in question was assigned to Thomas by Charter Communications on the night RIAA investigators captured her shared folder. The cable modem used to share the files was also leased to Thomas, according to testimony from a Charter Communications security official. Finally, Iowa State University professor and computer forensics specialists Doug Jacobson opined that no wireless router was used on the night in question (that fact is difficult, if not impoosible to ascertain, since printers, routers, and other devices are all assigned the same IP Address to the “eyes” of the ISP.

In one of the more important developments of the day, Judge Davis correctly instructed jurors that the mere "act of making [a copyrighted song] available for electronic distribution... violates the copyright owner’s exclusive copyright." This has been a topic of hot debate not only during the trial but in other RIAA cases as well. This ruling would arguably make it easier for the jury to find against Thomas if they believe that she was, indeed, the fact behind the IP.

The jury is expected to diliberate today. As in all trials, it will all come down to a matter of credibility — who does the jury believe and trust?

Reba named "Woman of the Year"

On Thursday, October 5^th, Billboard magazine will release its 2^nd Annual “Women in Music” issue which honors the top 20 women in music.  The list will be revealed at a special breakfast for the honorees at The Core Club in New York.  In conjunction with delivering the keynote speech at the breakfast, Music Row’s own superstar, Reba McEntire will be receiving the first-ever “Woman of the Year” award from Billboard. 

Billboard established the award “to recognize extraordinary women in the music industry who have made significant contributions to the business and who . . . inspire generations of women to take on increasing responsibilities within the field.”

“I am thrilled to be selected as Woman of the Year by Billboard,” said McEntire. “Although my career has taken me to TV, film, and Broadway, music is and always will be my first love. I am touched to be embraced in such a warm way by Billboard, and I look forward to celebrating with all the Women of the Year.”

McEntire’s most recent release, Reba Duets, released September 18, 2007, showcases her influences on a broad spectrum of genres.  The project pairs her with some of the music industry’s biggest names, including Don Henley, Carole King, Kenny Chesney, Justin Timberlake, Kelly Clarkson, Faith Hill, LeAnn Rimes and Trisha Yearwood.

Although her start came in country music, Reba has expanded the scope of her influence into a successful acting career with her portrayal of Reba Hart on the popular television sitcom that bears her name, as well as her performances on Broadway in Annie Get Your Gun and South Pacific.

“Reba’s all encompassing career in entertainment make her an obvious choice to be honored as Billboard’s first Woman of the Year,” said Billboard’s editorial director, Tamara Conniff.  “Reba is an inspiration to women everywhere and we are delighted to be presenting her with this award.”