October 2003 News
../ MIT Announces New On-Demand Music Service
You have to love Keith Winstein and Josh Mandel, two MIT Computer Science majors, who recently unveiled their LAMP (Library Access
to Music Project) initiative. The service provides on-demand access to the MIT library catalog of music, but more importantly it
showcases just how weedy the current copyright laws are.
The culmination of a two year research project, the imaginative plan was aimed to meet the challenge of coming up with a fully-licensed,
non copyright infringing program for campus-wide, on-demand listening. Employing the under utilized closed circuit television system
in place on campus, LAMP lets users select, play, pause, rewind, fast-forward songs in the catalog. The fidelity is said to be better
than FM Radio, but not quite the quality of CD's. In addition, the end user cannot directly made digital copies of the songs on the
system by downloading the songs or copying the CD's. This turns out to be a very important facet.
Winstein and Mandel, with financial assistance from Microsoft and iCampus, needed only $10,000 worth of off-the-shelf equipment to
create the LAMP system. They required an additional $25,000 to purchase 3500 CD's based on a student "wish-list" survey. MIT pays
public performance administers, ASCAP, SESAC and BMI, a special blanket license to play the songs. Now here's the kicker, since the
songs are delivered via an analog transmission, LAMP has circumvented all the limitations of the current crop of digital distribution
copyright laws.
Not to take away from their genius, but what's beautiful is that their driving motivation was that they don't like to schlep.
"Traditional music libraries are great, but you have to be willing to go to the campus library and check out a CD," said Winstein.
"We wanted to be as convenient as possible, and that means letting patrons listen to CD's easily and immediately."
Winstein and Mandel plan to make the LAMP system open-source, so that other universities will adopt their system and continue to
enhance the technology. BMI, SESAC, ASCAP and most importantly the RIAA had no comment on the announcement.
The Future: Sadly, it took two college students to show Music Choice, and the other cable music channels, exactly how to
make their pathetic offerings work in the digital age.
../ Backdoor Disables BMG's Copy Protection
SunnComm Technologies Copy Management technology featured on Anthony Hamilton's "Comin' From Where I'm From" album on Arista can be
easily bypassed by simply holding down the Shift key while the CD is initially loaded.
This "backdoor" - a programming term for bypassing login requirements or other security measures - was discovered by a John Halderman,
a Princeton student studying for his PHD. To BMG's credit, they responded that SunnComm's technology is copy "management" - not copy
protection and its only supposed to be a minor obstacle rather than a wall. BMG's press release states: "[BMG] found a way to not
only protect their content from piracy, but to recognize that some copying by consumers and retailers is legal and appropriate. Someone
who buys this CD, and wants to make a copy to play in the car, a copy for the office, and a copy with the songs in a different sequence,
which most consumer research shows us they want to be able to do-can do so. It's also notable that there is even a provision for limited
legal file-sharing."
We don't get it. Why institute any type of "management" or protection if its not going to work? And if its not going to work, why annoy
consumers who are actually buying CD's? Isn't the industry
having enough trouble selling CD's right now? Why create any type of obstacle for achieving maximum pleasure from the
listening experience. This makes absolutely no sense whatsoever. In addition, this "management" system doesn't even work on Apple's
Macintosh computers.
The Future: It's very difficult to have sympathy for the major labels when they throw money down the toilet with asinine schemes
like copy "management." What the industry should be investing in is better audio fidelity with copy protection at the core of its
technical foundation. Add-on schemes are never backwards compatible and never work 100% of the time. Look what CD's did for the music
industry 20 years ago. Look what DVD's are providing for the movie industry now. A new media and player/recorder format with copy
protection built in from its inception is the answer.
../ Sony Finally Begins Promoting SACD Format
After four years of planting seeds, Sony is ready to harvest its first Super Audio CD (SACD) crop by actually promoting the new exciting format in an
inspired promotion. At first, the format was strictly marketed to audiophiles who already owned high-end stereo systems. Now Sony is
teaming with Rolling Stone magazine and Circuit City in a nationwide promotion to educate the masses about its fidelity and backwards
compatibility with the user's current CD collection.
In November, Sony will include a SACD nine song sampler with a special Rolling Stone issue that commemorates the best 500 album's of all time.
The hybrid disc will feature tracks from Rolling Stone's top 500 list in both the SACD and CD formats. In addition, Sony is astutely wrapping a contest
feature into the sampler. By taking the sampler, embedded with a unique code in the SACD layer, to their local Circuit City retail store, a user can
determine if they've won one of 45,000 prizes while experiencing the rich SACD sound.
It's great to see that Sony is actually starting to put some marketing muscle behind their new format. Their wait-and-see approach has
hampered the public's awareness and adoption of SACD. There is about 100 different models of SACD players to choose from with
approximately 1000 titles currently available. New titles include the Bob Dylan remastered box set and Sting's latest, "Sacred Love."
Sony's inhibition to enter the market at full throttle may be due to getting into a format war with DVD-Audio. After the bad taste that was left
in their mouth after losing the Beta VS. VHS battle 25 years ago, coupled with the current economy woes, Sony may be much more tentative about
betting big on a new format for a hurting industry. DVD already has a base of several hundred million players, 5.1 sound and graphics capability.
Sony's format counters with backwards compatibility with current CD players and superior sound fidelity (however, superior quality didn't help them
against VHS).
The Future: Format wars are never fun for the competitors or end users, but this is a win-win for the music industry who desperately needs a
new format.
../ Music Industry Piles On iMesh
Eighteen music labels filed a joint copyright infringement suit against iMesh, the third most popular Peer-To-Peer (P2P)
file sharing service. The suit was filed by the Recording Industry Association of America (RIAA), which represents the
companies, in the US District Court of New York.
iMesh, based in Israel, has flown under the radar for some time since it has such a small fragment of the P2P market
that KaZaA and Morpheus dominate. But why so long for a formal copyright infringement suit?
The Future: iMesh has been around for some time, its fascinating that the RIAA has just initiated a major lawsuit
against the company. Like KaZaA, iMesh is not an American company. Wouldn't it have been more effective for the RIAA to have
sued concurrently them in Israel?
../ Cakewalk Absorbs Ultrafunk
The rollup continues as Cakewalk purchases Norway's Ultrafunk, a developer of Windows VST and DirectX plug-ins. Ultrafunk's
flagship product, Sonitus:fx, is a plug-in suite that consists of 10 meat-and-potatoes processors including a compressor,
noise gate, delay, reverb, and surround sound effects.
All registered users of Ultrafunk's plug-ins now become Cakewalk customers which will make them eligible for upgrades.
The Future: Consolidation in this sector continues as the major players proceed to shore up their borders. Waves,
the last of the independents, is definitely the belle of the plug-in ball, but who's going to be her prince? It certainly
could be Yamaha, who bought a minority position in the company in 2000 and utilizes Waves technology in their Y56K DSP
Processing Card, but only time will tell to see if she fits into their glass slipper.
../ Vocalists Reach Health Care Accord with Majors
AFTRA (American Federation of Television and Radio Artists), the union that represents vocal performers, has reached an agreement
with the five major labels to provide health care benefits to artists who weren't previously eligible.
Most of the artists now covered didn't earn enough royalties to be safeguarded in the previous pact. Its estimated that the new
threshold, and a special payment to the artists retirement and health plan, will assist approximately 2000 vocalists who didn't
previously qualify.
The Future: The majors actually caring for their talent?? Nahhhh...
Several high profile artists have recently stepped up to the plate and made an issue of how many former bread-winners for the
recording industry have died in poverty with no retirement fund or health benefits. Hopefully, this pact will set a high-water
mark in the industry so that other unions can gain additional coverage for their artists.
../ Numark Announces CD Turntable
Numark is about to enter into the "Digital Vinyl Turntable" fray with their brand new CDX1. Modeled after their popular TTX1
Turntable, the CDX1 looks just like a regular turntable with a full size 12" sitting on a high-torque, direct-drive, motorized
platter. Numark claims that this new product gives DJ's the ability to manipulate CD's and MP3's in exactly the same way they
can control their precious vinyl.
The CDX1 features a multitude of DJ functions including several different methods to scratch CD's just like vinyl. In addition,
the CDX1 has auto looping, beat matching, extensive cue functions, a large buffer and pitch up to +/- 100% with key lock.
Comprehensive beat-oriented effects include echo, filter, slide, chop and sonar. Like some of Numark's other CD players, the
CDX1 has the ability to play MP3's burnt on a CD-R.
The Future: Doom. As more and more products debut with the capability to DJ Audio and MP3 CD's like a regular vinyl
turntable, the dance music labels will become further marred by the consumer's capacity to easily obtain the latest tracks
on P2P networks for free. And these products are only going to get better and better. With the stigmata of DJing CD's fading,
its only a matter of time before the vinyl market begins to severely feel the effects of these new offerings.
../ KaZaA Sues Entertainment Industry
Sharman Networks, owners of the KaZaA peer-to-peer, file-sharing technology, have filed suit against dozens of US based
entertainment companies for copyright infringement. KaZaA, currently the most popular P2P service, is claiming that the
companies utilized unauthorized versions of its software to distribute bogus movie and music files on its network. KaZaA
alleges the companies used a pirated version to access their network, dubbed "KaZaA Lite," that doesn't contain its
advertising and violates their Terms Of Use.
Clearly, KaZaA hasn't learned anything from the idiotic strategies that Johnny Deep of Aimster fame employed during his
battle with the music industry. Although their claim could be legitimate, the Public Relations spin that KaZaA is
utilizing for this litigation smells almost as bad as Madonna's performance in "Swept Away."
The Future: Thus far, KaZaA has adroitly maneuvered just beyond the reach of the RIAA and other industry groups.
However, this campaign tarnishes their past strategies and was poorly executed. This will certainly not help them
politically in the US courts.
../ RIAA Faces More Obstacles In Suits
The Recording Industry Association of America (RIAA) has settled 52 of the 261 copyright infringement suits it filed on
September 8, 2003. One of the suits was dropped. The suits were initiated against individuals who were sharing more than
1000 songs online.
The most important aspect of this development is that one of the suits was dropped against a 66 year old Massachusetts
woman. The RIAA stated in its suit against the aging sculptor that she was sharing over 2000 songs on KaZaA. However,
the only computer this woman owned was a Apple Macintosh which cannot normally run the PC only KaZaA. In addition, the woman was
described as a computer "neophyte" by her lawyer who contended that she doesn't possess the computer skill-set needed
to operate the file-sharing software. Why is this important? Because it demonstrates that the RIAA's technology for
pinpointing copyright-infringing individuals is faulty.
In another setback, Charter Communications filed a federal lawsuit in St. Louis to disallow the RIAA from acquiring the
names of its customers who allegedly shared copyrighted music online. The RIAA has subpoenaed Charter for the identities
of 150 customers.
The Future: The cracks in the RIAA's wall are starting to appear as they fight an uphill battle against file
sharers. The dropped lawsuit is the biggest problem as the alleged evil doers who decide not to settle, now have significant
ammunition against the methods that the RIAA utilized to hunt them down. Other ISP's may not serve up their customers
to the RIAA on a silver platter, now that there is obviously flaws in their technology.
../ Bands Experiment with New Ticket Models
As less revenue is being derived from CD sales, bands are looking for new ways to maximize their concert ticket sales.
For a recent charity concert at New York City's Hammerstein ballroom, Sting experimented with Ticketmaster to sell all
the tickets at auction. Ticket auctions have been suggested as a means to set the true market value for an artist at a
particular venue and also to thwart scalpers who profit at inflated ticket prices without the artist receiving any of
the additional monies. The auction's starting price for the tickets was $50.00 and were quickly bidded up to about $80.00
near the auction's close. The General Admission tickets will all sell for the same final auction price and be sent to the
winning bidders via UPS a couple of days before the show. There's a limit of 2 tickets per winning bid.
Another model that being tested is a VIP Ticket package. The VIP ticket package usually consists of a premium seat location,
concert t-shirt, a limited band meet-and-greet, and some other premiums to round out the offer. Offers range from a $1000
Kiss package to a $200 Sammy Hagar bundle which includes a photo op with the man who can't drive 55, an exclusive concert
t-shirt, coupons for Hagar merch on his web site, and a large frosty margarita with Hagar's own Cabo Wabo tequila. Clearly
this model is for "classic" acts with an aging audience who can easily cough up the extra dough for the privilege of suffering
from a massive hangover the next day - and I'm not just talking about the tequila.
The Future: The clear winner in the auction scenario is not necessarily the artist or the fan. Ticketmaster charged
a whopping $19.50 per order for shipping and handling. That's right, $19.50! That's just plain robbery and it's amazing that
Sting, Mr. Politically Sensitive, would allow fans to be gouged for a charity cause.
The VIP package has definite legs, and works on many levels. In fact, the same profitable model behind the luxury box at an
arena or stadium can be easily be seen in the VIP offering. In addition, this memorable added-value experience has
incredible buzz potential. Look for a VIP package to be incorporated into many established act's concert offerings in the
coming years.
../ Atlantic Records Begins Free Videogame Strategy
Based on the success of packaging DVD's with specific releases, Atlantic Records has taken the value-add-on to the
next level by teaming with Sony to give buyers of then new P.O.D. album a free version of the PlayStation 2 title, Amplitude.
The first million copies of "Payable on Death," the fifth album by hard rock bangers P.O.D., will come bundled with a
feature-reduced version of Amplitude, a music based game that enables the player to remix songs by a multitude of high
profile artists.
Atlantic Co-President Ron Shapiro states, "(Atlantic) has explored every opportunity to offer added value and content
to music consumers." However, the P.O.D. bundle will carry a $19.98 price tag, a dollar higher than their typical superstar
artist release. This means that the consumer is taking on the burden of the "added-value." This "one-step-forward,
two-steps-back" approach is typical of how the majors do busines. The bundle strategy is a forward thinking promotion,
but making the consumer pay extra is short sighted. In addition, the PS2 title, "Amplitude," is really geared towards
the Hip-Hop, light rock and dance music market, not hard rockers like P.O.D.
The Future: This will be a nice bundle test for Atlantic, but isn't groundbreaking in any way. The truly cutting-edge
labels will release band-theme, game bundles in the future that will feature the band's music incorporated into the game,
as well as the band members as the game stars. First person shooters are the obvious choice for this specialty package
since the developers could leverage their existing engine and simply insert the band's branding for visual continuity
between the CD packaging, the first music video and the bundled game. Look for a prominent Indie to start this trend.
../ Groovetech Ceases Operations
Groovetech, one of the best Internet broadcasters of electronic music and a comprehensive online record store, has
suddenly shuttered its doors. Founded in Seattle in 1996 by Brian Pember, Jon Cunningham, and Zach Jenkins, Groovetech
began as an Internet radio station specializing in live DJ mixes. As an alternative to the misguided Pseudo Networks,
Groovetech thrived with their in-the-know attitude and multitude of superstar DJ talent that delivered delicious hour
long sets in their cozy studio.
After receiving significant investment during the Internet Boom-Boom years from high-profile, deep-pocketed investors
such as Ron Wood, Groovetech decided it actually needed a revenue stream to stay in business and launched an impressive
record store. The story goes that even with the store generating sizable income, the initial investment in technology
and poor money management was too much for the Groovetech locomotive to continue to pull up the poor economy hill.
Futuremusic loved Groovetech and we will sincerely miss their rewarding web site. [Not to mention their favorable reviews
of our releases -ED.]
The Future: This is very disturbing news for the Dance Music Industry. Even though we don't know all the specifics
of Groovetech's finances, it is still a good indication of how bad the retail sector is right now for vinyl. The writing
is on the wall. Look for the smart online retailers to leverage their existing brands and move into digital distribution.
../ Hooj Choons, RIP
Futuremusic regrets to report that after 13 years, UK House music label, Hooj Choons, has ceased operations. While there
has been rumors for some time about Hooj's dire financial situation, many in the industry hoped Hooj would
be able to pull through and avoid the obituary column.
Although always amusing, Hooj's motto, "Occasional providers of half decent house," revealed their sense of humor, but didn't
fairly reflect their label's run of 136 releases. Many of us have at least a couple of memorable Hooj releases in our crates
and DJ's the world over will mourn the passing of this fine label.
Hooj Choons may carry on solely as an online music store, but that has not been confirmed.
The Future: Dance music takes another hit as another prominent label bites the dust. Is Ministry of Sound next?
Copyright 2003 Futuremusic. All Rights Reserved.
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