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On reasons music sales being down- from lawrencelessig blog

it actually showes how our courts destroyed the
grows of technology in us


The recording industry has been strongly opposed
to a statutory or compulsory license for digital
music (not the Internet radio kind, but a
reasonable kind that would enable the spread of
digital content). They object that "the market"
should set the rate for music, not a federal
statute. (Of course, they have no hesitation
appealing to the statutory rate for damages, as
opposed to the ordinary market measure for
damages, when it comes to a breach, but that's a
separate matter).

But the history here is fun. Here's a quote from
a 1967 House Judiciary Report, considering a
modification to the law as it existed then:

[T]he record producers argued vigorously that the

license system must be retained. They asserted
that the record industry is a half-billion-dollar
business of great economic importance in the
United States and throughout the world; records
today are the principal means of disseminating
music, and this creates special problems, since
performers need unhampered access to musical
material on nondiscriminatory terms.
Historically, the record producers pointed out,
there were no recording rights before 1909 and
the 1909 statute adopted the compulsory license
as a deliberate anti-monopoly condition on the
grant of these rights. They argue that the result
has been an outpouring of recorded music, with
the public being given lower prices, improved
quality, and a greater choice.

Copyright Law Revision, Committee on the
Judiciary, 90th Cong. 1st, Sess., Rep. No. 83 66
(March 8, 1967).

"The result has been an outpouring of recorded
music, with the public being given lower prices,
improved quality, and a greater choice."
and another one 

Kluger Krugman


Krugman is a favorite regular read. His latest is
a favorite among favorites.

Apparently, the FERC has now settled with "energy
companies accused of manipulating markets during
the California energy crisis." Through various
price manipulations, those companies cost
Californians $8.9 billion -- not including the
extraordinarily high prices we now face because
of long-term contracts signed at the height of
the crisis.

The FERC has now imposed a $1 million fine on the
energy companies. As Krugman calculates, though
they imposed costs of at least $250 on each
Californian by their games, they're required to
pay 3 cents.

$1 million for $9 billion in real harm.

Let's put this in some perspective.

Jesse Jordan (the RPI student who ran a search
engine and was sued by the RIAA) was, the RIAA
claims, liable for $15,000,000 in damages. When
you add up the damages claimed against all four
of these students (who again had built search
engines), the RIAA was asking, on some estimates,
for $100 billion dollars. That's because, under
our law as interpreted by the RIAA, downloading
one song makes you liable for $150,000. Or, on
the RIAA's view of the law, cheaper to defraud
Californian's of $9 billion than download 10
songs from a p2p server.

"Oh," you say, "but that's unfair. You're
comparing actual fines imposed to the maximum
fines that could be imposed."

Ok, so let's compare actual to actual.

In January, 2000, MP3.com launched a service
called my.mp3.com. Using software provided by
MP3.com, a user would sign into an account and
then insert into her computer a CD. The software
would identify the CD, and then give the user
access to that content. So, for example, if you
inserted a CD by Jill Sobule, then wherever you
were ? at work, or at home ? you could get access
to that music once you signed into your account.
The system was therefore a kind of music-

No doubt some could use this system to illegally
copy content. But that opportunity existed with
or without MP3.com. The aim of the my.mp3.com
service was to give users access to their own
content, and as a byproduct, by seeing the
content you already owned, discover the kind of
content the users liked.

To make this system function, however, MP3.COM
needed to copy 50,000 CDs to a server. (In
principle, it could have been the user who
uploaded the music, but that would have taken a
great deal of time, and would have produced a
product of question-able quality.) It therefore
purchased 50,000 CD from a store, and started the
process of making copies of those CDs. Again, it
would not serve the content from those copies to
anyone except those who authenticated that they
had a copy of the CD they wanted to access. So
while this was 50,000 copies, it was 50,000
copies directed at giving customers something
they had already bought.

Nine days after MP3.com launched its service, the
five major labels, headed by the RIAA, brought a
lawsuit against MP3.com. MP3.com settled with
four of the five. Nine months later, a federal
judge found MP3.com to have been guilty of
willful infringement with respect to the fifth.
The judge imposed a fine against MP3.com of
$118,000,000. MP3.com then settled with the
remaining plaintiff, Vivendi Universal, paying
over $54 million.

So defraud Californians of $9 billion, pay $1
million. But develop a new technology to make it
easier for people to get access to music that
they have presumptively purchased: pay more than
$54 million.

Such are the values of our time.

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