../ RIAA Targets Music Downloaders
On June 26th the RIAA began a new chapter in their campaign against illegal downloading. The group that represents the major record labels has started targeting the "most egregious" file sharers according to RIAA president Cary Sherman. "Any user who steals music will run the real risk of having to face the music," Sherman declared. He stated that the RIAA will file civil suits this summer against hundreds of individuals who distribute large quantities of music files to peer-to-peer (P2P) networks. This crusade follows recent suits against four college students accused of piracy. The students ended up settling the charges for between $12,000 to $17,000 after facing monetary damages of up to $150,000 per offense and possible criminal prosecution.
Has the RIAA's recent threat been a real deterrent to online file sharing? According to the most recent data by Nielsen/Netratings, in the week following the RIAA's announcement, Kazaa and Morpheus had 15% fewer users on their network who signed in from home. That amounts to about one million fewer users on Kazaa and 41,000 on Morpheus. Both P2P file trading concerns argued that major fluctuations in users on a weekly basis are common.
Immediately after the RIAA's search and destroy announcement, privacy advocates piped up with their fears. Most of them were concerned about the recent power afforded to the RIAA that allows them to obtain private user information from Internet Service Providers (See Verizon story below) without acquiring a warrant. This recent precedent, based on the 1998 Digital Millennium Copyright Act, permits the RIAA to obtain an individual's private information with a subpoena from any US District Court clerk's office, based on suspected copyright infringement. What's important here is that a judge's signature is not needed to force ISP's to hand over their users private information. They just need to simply request a subpoena. Almost 900 subpoenas have been granted with over 70 new subpoenas being approved every day. Utilizing the information in these subpoenas, the RIAA is expected to file several hundred lawsuits in the next two months.
The P2P networks also countered the RIAA by stating that they would implement technology to protect their users from identification. Unfortunately, being able to shield their users against the RIAA to hide their identity, opens another can of worms. By inhibiting the RIAA to identify users who illicitly trade copyrighted works, are they condoning illegal behavior?
Michael Weiss, CEO of Morpheus, answers this question with a customer service oriented approach. If our users "want privacy protection, we must answer their call." This cat and mouse game will also accelerate advancements in the security technology sector.
As the P2P networks counter with privacy enhancing technology to hide their users identities, the RIAA and its tech team will come up with ways to overcome their measures. How well the P2P networks can successfully protect their members will be a big mountain to climb. Most security experts agree that if you're logged in to a P2P network, you're wide open to invasion. The fascinating aspect of the technology issue is how the RIAA has become the hacker. Once security measures have been implemented by the P2P networks, the RIAA will then have to hack the software to obtain users ID's. Since willfully breaking into a network is a criminal offense, will this create an entirely new controversy?
The Future: The RIAA's strategy switch from going after the networks to the end users will turn out to be a pivotal point in the illegal file sharing battle. In the end, this scare tactic will not help them legally or politically, when users put pressure on elected officials. Its obvious, the P2P networks and privacy advocates now need to come together politically to create a scare campaign of their own.

../ Roland To Release Akai MPC Killer At Summer NAMM
Roland US is set to debut the MV-8000, a new MIDI/Audio Production studio that takes direct aim at Akai's famed MPC series. The MV-8000 looks very much like Akai's renowned sampling drum machine with 16 square pads and a large LCD screen. The very first Akai MPC-60, developed with famed drum machine visionary Roger Linn, first debuted in 1988 and quickly became a favorite "beat machine" with the hip-hop community. Akai's MPC went through several revisions over the years with the powerful MPC-4000 being the latest incarnation. A couple of other manufacturers over the years tried to compete with Akai by debuting their own sampling drum machines, but nothing could touch the MPC's wealth of features and heritage. Until now.
With a price tag close to $4000 dollars, Roland quickly recognized that the MPC was ready for a take down. However, the MPC-4000 is no push over. With 24 bit sample quality, as opposed to the MV's 16 bit, a larger hard drive, a more sophisticated sequencer and control over 64 MIDI channels, the MPC-4000 is a powerful, top-of-the-line, all-in-one production studio. In addition, the MPC's lineage has a distinct advantage over the new MV-8000. Many potential buyers come into stores and ask for the MPC by name, something that has hindered EMU and others from making a significant dent in this tight market. Roland realized that price alone will not be a factor. The MV has a maximum of 100 minutes of 16 bit mono sampling time, 16 velocity sensitive pads with aftertouch, realtime time stretching that can sync to the sequencer's BPM, 128 tracks of MIDI sequencer tracks plus 8 audio tracks, and comprehensive multi-effects including mastering. Both units sport CD-R drives for burning your tracks straight to CD. The MV will be able to import Roland, Akai, Acid, Wav and Aiff audio file formats. The new MV-8000 reportedly will have a street price of about $2300.
The Future: Akai who recently scuttled their US distribution office in Texas, has been hit hard in recent years by the computer audio revolution. Their wimpy new samplers are not selling and the MPC is one of their last strongholds in the music market. Roland's sleek new metallic MV will hit them hard while they're on their heels, but Akai will not go down easily. Expect a price cut of about $1000 on the MPC-4000's retail price in the next month.
Check out all the MV-8000 here!

../ Competition for Vivendi's Universal Unit Heats Up
After opening the sealed bids for Universal, Vivendi informed General Electric, Liberty Media, MGM, Viacom, Edgar Bronfman Jr. and Marvin Davis that they had each met the requirements for the next round of bidding in which the minimum offer would be $11.5 Billion dollars. The interested parties were also notified that Universal Music was no longer part of the offer. This means that the auction is only for Universal's Film studio, theme park and cable networks, a significant change in the tender. The French company also told Marvin Davis that unless he significantly increased his low ball offer, he was out of the race. Both Davis and Bronfman included the music unit in their bids and now will revise their offers for the next round.
Vivendi, strapped with a tremendous debt from former CEO Jean-Marie Messier's acquisition spree during the Internet's boom boom years, is looking to unload Universal as soon as possible. Under the thin veil of "convergence," Messier hoped to create a company that would leverage a complete vertical of content and distribution to the end user. Unfortunately, the technology was not up to the task and when the economy's pendulum swung into recession, Vivendi knew it had to unload its non core assets...including Messier.
The thinking is that Vivendi's board pulled Universal Music out of the equation so that it could auction it offer separately once the music industry recovers.
The Future: Vivendi needs cash. Badly. So don't expect to see a stock swap deal unless they can unload their shares immediately. Keeping Universal Music appears to be a wily manuveur since the unit generates a steady stream of revenue and will probably be able to fetch a nice price once the digital music arena develops a revenue stream. The wild card is the irrepressible Barry Diller who seems to be hovering over the prey, waiting for the perfect opportunity to make his move.

../ Vinyl Production Holds Steady Despite Downturn
Vinyl production in North America held their numbers despite a major drop in music sales. The RIAA reported that pressing were down from 2002's first quarter numbers, but that doesn't take into account promo vinyl from the major labels or independent output that doesn't register via scans at retail. Several of the major pressing plants across the continent reported that their presses have been running steadily and that 2003 looks to be a very good year.
The Future: Vinyl is just not going away...

../ Hello Kitty! - Napster's New Cartoon Series
Since the brain trust at Napster has failed to come out with a new legal service (next due date is Spring 2004), they've decided to develop their own Saturday Morning Cartoon. Starring the Napster Cat face logo (with newly regenerated body), the viral cartoon series strives to build up some much needed hype for the notorious music service, now on life support.
Based on the first two "episodes" - the cartoon is clearly an allegory for Napster's troubles with the RIAA and the Independent labels that have sued the former service successfully for copyright infringment. Developed by Napster's advertising agency, Venables, Bell and Partners, San Francisco, the well produced vignettes are clearly going to lead to the Kitty's resounding re-emmergence as a legal file trading super power. There's only one problem, by the end of the 28th episode is anybody going to care.
The Future: Every 4 to 6 months, Napster pushes back its release date. Almost clever cartoons are not going to hold our interest for long, and trading on the Napster brand name is starting to wear thin. Napster should have bowed this summer to get a head start on Apple's Windows version of iTunes, due in the fall. Napster is, more than ever, a money pit.

../ Vinyl Record Day
Gary Freiberg is attempting to create a holiday marking Thomas Edison's invention of the phonograph on August 12, 1877. He has set up a non-profit organization called Vinyl Record Day and a web site vinylrecordday.org. The Rock and Roll Hall of Fame has recognized the date and will have a rumpus on August 23rd to celebrate Edison's invention.
The Future: A dopey excuse for a holiday, but we'll drink a frosty beverage...or two.

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