My gut feeling then was that the future of artist-fan relationships was in a personal subscription model. As part of my research, I joined Take This Oath, the Killswitch Engage fan club. There was no way to preview the content of the fan club site, but for $30/year I got a “free” tshirt and access to exclusive content. I was pretty disappointed to find 2 videos (not even all their videos available on their own main band site) and one blog post.

Recently, we have seen several new instances of labels letting Apple innovate for them, both in the space of artist subscriptions.

First was the self-release of the Presidents of the United States of America discography as an iphone app for $3.75CDN.

On the good side is the idea that The Presidents can send blog updates, exclusive content, concert dates, etc to their fans.

On the terrible side is the fact that you can only access the music on your iphone and only via that application! Nope, can’t get those tunes in iTunes. Add to that you can only stream the music, and we have a loser on your hands (especially if you are Canadian and don’t get all-you-can-eat data for your iPhone).

Even more recently is the launch of iTunes Pass. Basically, this a super-fancy podcast behind a transaction. Again, I think the idea of subscribing to a band is an excellent one, but this feels a bit too little, too late. Currently, there is only band, Depeche Mode (egads) offering this service, with surely more to follow if this does anything other than tank.

If I was still in a band, this is what I would do:

• Hire a very outgoing, super-fan friend to be your manager.
• Setup a decent, non-Flash site
• Sell fan club memberships for $10 per year
• Put everything ever recorded, shot on video or photo on the site
• In the case of KSE present a genealogy of all the bands the members have ever played in, post all media you have of these bands and links to their fan club sites
• Encourage fans at every show to upload their pictures and video to the fan site
• Have monthly contests for best fan media (club members only)
• Have a video contest where the winner becomes your documentarian for the next tour (club members only)
• Have that guy post a video once per day
• Use fan club data and tools like Demand to find out where you should tour
• Release a whole album of songs LAST.  Record one song every month or so, crowd-source feedback, post tracks to mix, post in-studio video.
• Pick the best 8 tracks, get them mixed by a pro and release in all formats.
• Package it with a cut DVD of all the stuff from the last year
• Make the regular content available via podcast
• Put the regular content on YouTube
• Don’t make a recording deal with a major
• If the major is LiveNation, disregard the last bullet and make a deal

After Googling this question a couple times, I thought I would make it easier to find the answer. The answer is yes, but not all songs. You can tell by the words “iTunes Plus” above the buy now button.

I found it particularly interesting that there was a button on the iTunes store homepage prompting me to “upgrade” to iTunes Plus. When I clicked it I was given the generous opportunity to buy the tracks AGAIN for a seemingly random price. For instance, I could upgrade the 12 tracks on A Perfect Circle’s Mer de Noms for $3.56, the 12 tracks on Audioslave’s Out of Exile for $3.00, and the 13 tracks on Matthew Good’s Avalanche for $2.40. At first, I assumed this was the new variable pricing model, but each track on each album was listed for $0.99 cents. So go figure.

I love the idea of DRM-free music. I just bought Mudvayne’s new album aptly titled The New Game, the first from iTunes since buying a vehicle with an MP3 player. However, it annoys me that I have to pay again to get the DRM taken off my existing purchases. Yes, I can strip the DRM myself, but that is a pain compared to just swiping the album via bittorrent.

I might go so far as to say it is a %110 free download, given the extremely open set of formats it which it is available:

• High-quality MP3s (87 mb) – encoded with LAME at V0, fully tagged.
• FLAC lossless (259 mb) – CD quality
• FLAC high definition 24/96 (942 mb) – better-than-CD-quality 24bit 96kHZ audio
• M4A apple lossless (263 mb) – CD quality – will play in itunes.
• High definition WAVE 24/96 (1.5 gb) – better-than-CD-quality 24bit 96kHz audio

To add to the modernity of this release, all the the bigger packages are distributed via torrents. Therefore, they only pay to transfer a tiny file from their servers. That’s hella-smart.

There is also the option to order the super-deluxe, collectors CD/DVD and vinyl editions. Now THAT is value.

Trent Reznor is the One-Man-Show (in the studio, at least) behind NIN and has consistently driven the crest of the wave for the music industry. They have released their last several albums as free downloads, and for the Year Zero publicity, placed easter eggs URLs around the Internet, each with clues about the album. Fans were encouraged to compile the whole story in the NIN wiki.

They have also made some of their singles available as Garageband projects and full 24/96 Pro-tools sessions for fans to remix. Being a pro-audio geek, that is insanely cool. Check out the remix of “Only” that I built with Pro Tools.

What about video you ask? What about UGC? What about mobile? How about the new fan content gallery, the iPhone game, and 400GB of HD concert footage to play with.

Perhaps they could use an online Mashup Tool for that?

So the Federal Court of Appeal made it clear that the area of downloading, hard drives and file sharing remains a very grey area. In future cases, which the CIRA will no doubt file in the coming months, these aspects of the Copyright Act will be tested. This foreboding was voiced in one of Sexton’s final comments: “[I] wish to make it clear that if this case proceeds further, it should be done on the basis that no findings to date on the issue of infringement have been made.” (Sexton, par.54)

This is the decision that has been seen as a victory for privacy rights in Canada, but essentially it describes in detail the legal standard that the CIRA must meet in the future. The CIRA will simply show that they have a bona fide claim for copyright infringement and be handed the names of alleged infringers. Although everyone involved seems to value the privacy rights of Kazaa users, the CIRA makes a compelling point that file sharing “is a blatantly public activity. It is carried on in full view of millions of people. There is no reasonable expectation of privacy here at all.” (Henderson, 2005) Why this was not mentioned during the motion for discovery is not clear, but it will surely make up a part of their future bona fide claim.

The Canadian Government is expected to implement new reforms to the copyright act including a making available right, legal protections for technological protection measures, a notice-and-notice system to address online infringement, protection for rights management information, the introduction of a reproduction right for performers of sound recordings, and an adjustment of the term of protection for sound recordings. (Canadian Heritage, 2005) This is after denying even more drastic changes proposed by a CIRA-lobbied committee tasked with drafting the proposals. (Bulte, 2005) It will no doubt open the floodgates for many RIAA-style lawsuits against Canadians that in the U.S. have shown little effect of the proliferation of P2P file sharing. Geist shares the opinion that “while [the CIRA] is legally entitled to file these suits, similar actions in other jurisdictions have had no discernable impact on file sharing and put the industry at odds with the growing concern for personal privacy. That makes for a risky strategy with few winners and many losers.”

Since this all appears to be legal, that does not justify ordering the ISPs to snitch on their clients. Therefore, the labels can’t sue us directly… yet.

The labels appeal…

Several months later in July 2004, the CIRA appealed the decision. Justice Edgar Sexton reviewed the case and the Federal Court of Appeal handed down its unanimous decision on May 19, 2005. The Appellant Judge dismissed the appeal, but “having regard to what must be considered as divided success on this appeal, there will be no order as to costs.” (Sexton, 2005 par. 56)

The dismissal was considered a divided success in that the judge upheld the Motion Judge’s decision to deny the court order to the CIRA, but disagreed with the ruling that the Copyright Act explicitly deemed that file sharing was legal. It also provided a methodology for the CIRA to utilize in future action against file sharers.

In the matter of the test for discovery, the Motions Judge claimed that the plaintiff required a prima facie case against the alleged infringers whereas the Appellant Judge found that they needed to provide a bona fide claim. The difference is in the burden of proof. The Appellant Judge cited Ontario Court of Appeal in Straka v. Humber River Regional Hospital (2000), 51 O.R. (3d) 1 (O.C.A) and The Prince Edward Island Court of Appeal in Re Johnston and Frank Johnston’s Restaurants Limited, [1980] P.E.I.J. No. 34. In those cases, the plaintiffs needed to show that they only wanted to know the identities of the alleged offenders for the reasons of suing those involved and not for any other reason. In this case, the CRIA only need show “that they really do intend to bring an action for infringement of copyright based upon the information they obtain, and that there is no other improper purpose for seeking the identity of these persons.” (Sexton, par. 34)

Sexton also cited Norwich Pharmacal Co. v. Customs and Excise Commissioners, [1974] A.C. 133 agreeing with Finckenstein that is was similar. He disagreed however, with the Motion Judge’s articulation of the test established by the 1974 case in that it was, in his opinion, a bona fide claim and not a prima facie case.

The Motions Judge Finckenstein had found the CIRA to be in an impossible situation. By arguing that they had a prima facie case, the CIRA had painted themselves into a corner at least for this round. The Appellant Judge said that it makes “little sense to require proof of a prima facie case at the stage of the present proceeding. The plaintiffs do not know the identity of the persons they wish to sue, let alone the details of precisely what was done by each of them such as to actually prove infringement. Such facts would only be established after examination for discovery and trial.” (Sexton, par. 34) If council for BMG et al had argued that there was no requirement to produce a prima facie case, they may have obtained disclosure.

Sexton was obliged to dismiss the appeal but expressed disapproval of the Motion Judge’s impetuous statements regarding infringement. This case was the first to test the legality of file sharing based upon the Copyright Act. The Appeals Judge found that the Motion Judge did not consider whether all the requirements for personal use had been met. If the music is transferred and stored on an “audio recording medium”, it is considered personal use, which is legal, though the media itself is taxable. The question is then, is a computer’s hard drive an “audio recording medium”? According to the Private Copying Amendment, hard drives are not and therefore the private copying defense was unavailable in this case. It is of interest to note though, that downloading directly to recordable CD or other “audio recording medium” would seem be legal at this point.

Justice Sexton continued by saying the private copying section of the Copyright Act is not the only applicable one in this case. With regard to distribution, the Motions Judge found that placing the files on to a shared folder did not constitute a positive act. He found that there was no evidence that the user had knowledge that the files would be downloaded illegally and was therefore not infringing, as in the case of the library. The Appellant Judge found that there was nothing in the copyright act that required a positive act. In this case of placing the files in the shared folder, the user “should have known” that he could be infringing and according to the Copyright Act constituted infringement. (Sexton, par. 52 & 53) The Motion Judges statements regarding section 80 of the Copyright Act was also questioned. Although subsection 80(1) seems to allow for downloading, subsection 80(2), which Finckenstein seemingly ignored, states that it will be considered infringement if the material is copied for the purpose of “communicating to the public by telecommunications”. (Sexton, par. 49)

Stay tuned next post for the stunning conclusion!!

Part 2 ended with the judge suggesting that file-sharing in this case, was not copyright infringement at all…

The Copyright Board of Canada in 2003 amended the Copyright Act’s section on private copying to include language for better definition of an “audio recording medium” and to define levies on the sale of these items. (CBOC, 2003) The point of the Private Copying amendment is to allow an individual to make copies of protected material strictly for their own use, while still paying artists for their work. This money is collected via a levy placed on blank media that is collected by the Canadian Private Copying Collective (CPCC) as royalties.

The CPCC then distributes the monies to copyright holders. The amendment did not discuss the source of the copied material but only the final media holding it, thereby making downloading appear legal under certain circumstances. The WPPT makes available the exclusive right to copy to the copyright holder. This is not a right granted by the Canadian Copyright Act and therefore nothing prevents a person from making as many personal copies as they wish. Based on this, the judge found that since the downloading was for personal use, there was no infringement.

The other important distinction is whether the users had distributed or authorized the reproduction of the materials. The Motions Judged cited a similar case as precedent in his statement. In the case of CCH Canada Ltd. v. Law Society of Canada, 2004, the court found that if a library places a photocopier in the middle of a room containing copyrighted works, the library is not expressly authorizing infringement. Since the users had only placed the files in a shared folder, the element of authorization was missing. Additionally, he found that “before it constitutes distribution, there must be a positive act by the owner of the shared directory, such as
sending out the copies or advertising that they are available for copying.” (Finckenstein, par. 28)

The judge also noted that under section 27 of the Copyright Act, the user must have knowledge that the copyrighted materials are being copied to constitute infringement. Furthermore, he added that under section 80(1) of the Copyright Act, “downloading a song for personal use does not amount to infringement”. (par. 25) Michael Geist, law professor at the University of Ottawa where he holds the Canada Research Chair in Internet and E-commerce Law said, “this appeared to make uploading itself legal as well, since a peer-to-peer user–like a
library–would be entitled to assume that the person on the other side of the connection was acting legally, since downloading was also legal in Canada.” (Borland quoted, 2004)

The decision was reported in the media as a triumph for Internet rights activists and privacy advocates. Canada was proclaimed a haven for piracy and the CRIA vowed to appeal the judge’s ruling.

Read part 4…

Fast-forward to tonight’s news. Rumour has it that the Apple is pitching the labels on a flat license that allows owners of the iPhone free iTunes downloads. The plan is dubbed “All You Can Eat”.

Sounds great at first: lots of choice for consumers, simple process to get music, labels get paid and artists get paid (even more these days).

And maybe it will be.

My main concern is the question of who controls the catalogue? Apple could buy the major labels and use them as a loss leader to sell iPods and iPhones, so payola is out of the question.  They may threaten to withhold catalogues, but that probably won’t work either.  Hopefully, they won’t figure out how to game the iTunes system.  Nude pictures of Steve-o?

My first reaction was that this was going to be a real crap deal for independent artists and labels. If you are on iTunes, great. Not on iTunes? You’ve got a problem.

For years, the labels have been competing with free. Why pay for a CD or download when you can fill your iPod with hot tunes for $0.00? (plus broadband charges – but that’s another story)

So now anyone not on iTunes is competing with free. (plus iPhone and data charges)

If this works out, then the next logical step is for the big ISPs to offer similar offers. Get Roadrunner and get free iTunes downloads! Get Rogers and get…. nevermind. I’ll save that rant for another post.

I do feel for the artist that simply must accept that people, probably their fans, are stealing their music. I would probably be pissed off too.

Some people within and without the music business argue that giving away your music for free is great publicity. I couldn’t agree more, but the fact is, artists have no choice. There is a big difference between giving and taking.

So I say “give it”. Give all the studio recordings away. It’s over. Let it go.

Stop trying to sell your marketing.

It used to be that the labels would spend a bundle on a recording, and then use music videos and tours to sell the song on disc.

Now, the reality is that the studio recording is the marketing of the band experience. “Listen to our music, share our music, visit our website, get addicted, then pay!”

• For high-quality versions of awesome video set to the band’s music. Serj Tankian is drip-feeding his fans super-cool videos for all his songs on his required-viewing-for-labels website. Who’s his label, anyway? Granted, he isn’t charging for it, but he could (read on)…
• Concert appearances. You have to be good, very good these days to be a successful musician. Good. It’s about time we went back to the pre-autotune days (sort of).
• Merch
• Fan club. Join for $30/year and get the album and tons of free content. With a shipping and handling fee, send them the CD and a t-shirt. A fan in a t-shirt is more marketing.
• Keep the content coming. Moblog from the road, shoot some back-stage video, twitter… Upload to the site daily. Let people send concert pics right to the fan site.
• Pollute the social networks with your music. It’s the new radio, and it listener-programmed. Free advocacy.
• Use Filemobile to do all this stuff (shameless)

Artists need to create long-lasting relationships with each and every fan. Who’s responsibility is this part of the business of artist development? I would think that the future role of the big labels would be as digital marketing agencies. If that’s the case, why don’t artists get a regular digital marketing agency to do this for them? I might think its because the labels are savvy of the public’s consumption of music and have the necessary technical acumen to provide a comprehensive digital strategy.

The last line of The Age article really sent my head shaking:

“[Missy Higgins' manager] believes that due to the lack of resources within labels, it is incumbent upon artists and managers to work on marketing and promotion independently and be more directly accountable for turning people on to new music” (Murfett, 2008)

Maybe next year.

Full hypocrisy disclosure: I have downloaded my share of music.

I have also just bought the Protest the Hero album from iTunes which included the special edition instrumental version. It was not special enough, however to include lyrics, etc and Canada does not get the HQ downloads yet. Good record, though. I also bought my Killswitch tickets for May 10th with Poison the Well and The End. I was notified that they were on pre-sale to fan club members.

On this motion, the CRIA provided an affidavit from Gary Millin, President of MediaSentry, a company that specializes in detecting the distribution of materials on P2P networks. The record labels supplied MediaSentry with the names of songs that were to be investigated. The company then searched for and downloaded the songs, matched the sources of the files to specific IP addresses and took screenshots of the users shared folders to show the volume of copyrighted material being made available for download.

Justice Konrad von Finckenstein (now chairman of the CRTC) cited Norwich Pharmacal Co. v. Customs and Excise Commissioners, [1974] A.C. 133, a case involving a pharmaceutical company that sought from Revenue Canada the names of alleged importers of a certain drug. By importing this drug, the importer had effectively infringed on Norwich Pharmacal’s intellectual property rights; in this case, it’s patent. Revenue Canada was ordered to disclose the identity of the importer. The judge determined that The Equitable Bill of Discovery Requirements, which is a list of rules that govern whether a third party can be forced to provide information, should be applied in the file sharing case. (Finckenstein, par. 13)

The first rule states that the applicant putting forth the motion must establish a prima facie case against the person they intend to sue. This means that the plaintiff must provide sufficient evidence to win the case barring any contest or additional evidence presented by the defendant. The respondents (the ISPs) argued that Mr. Millin did not collect the information provided personally and he did not reveal his sources. Therefore, they claimed the evidence was hearsay. Motions Judge Finckenstein agreed. This judgment that the prima facie test had not been met would be the turning point for this ongoing legal battle and would be addressed thoroughly at appeal.

Another requirement for discovery states that the person that is being ordered to provide information must be the only practical source of information available in order to justify a breach of privacy. The Motion Judge did not feel convinced that the identities could not be more easily sought directly from Kazaa.

The other major roadblock to the CRIA being granted access to the users’ identities was the fact that the discovery requirements state that the interests of intellectual property protection must outweigh the privacy concerns of the alleged infringers. The respondents argued that the time between the alleged infringement and when they could provide the information was too long to ensure the information was valid. The ISPs use dynamic addressing, that is they frequently change the address assigned to a particular user. Even then, “at best the ISPs will generate the name of the account holders; however, they can never generate the name of the actual computer users”. (Finckenstein, par. 34) This unreliable data could potentially breach the privacy of innocent users as well as unnecessarily name them as defendants.

The Motions Judge thereby decided that because the evidence was hearsay, and arguably stale anyway, he found that the requirements for discovery were not met and denied the motion put forth by the CRIA. He did not stop there. The Judge continued with far ranging statements regarding whether this was a case of copyright infringement at all.

Read part 3…

Well, it is more accurate to say that file-sharing is not illegal in Canada.

In 2005, I wrote and essay: “Copyright v. Privacy: A Review of the Legal War Between Record Labels and File Sharing from a Canadian Perspective”. I am going to review it here, in my blog and discuss what has happened since. Here is part one of the essay:

In February of 2004, the Canadian Recording Industry Association (CRIA) filed a federal lawsuit against 29 alleged file sharers for copyright infringement and requested their identities from the five major Canadian Internet Service Providers (ISPs). This was the first suit brought by the record label trade group against individual peer-to-peer (P2P) file sharers whom the CRIA claim have caused the loss of millions of dollars and dozens of jobs in the Canadian music industry. Citing privacy concerns, the ISPs refused. The CRIA proceeded to file a motion in the federal court to order the ISPs to disclose their clients’ private information.

This case forced into court the issue of whether file sharing is legal in Canada. In the last several years the Recording Industry Association of America (RIAA), the label trade group for the U.S., has begun suing individual file sharers for infringement of copyright. They are able to do this by virtue of the Digital Millennium Copyright Act (DMCA), which implements the World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty, (WPPT), 20/12/1996 (CRNR/DC/95, December 23, 1996) into U.S. law. The DMCA allows copyright holders, among other things, special rights to sue anonymous infringers. Since the DMCA was signed into law in 1998, over 1500 file sharers have been sued for monetary damages by the RIAA. Canada has not implemented the WIPO treaty into copyright law and thus,
“It’s a more difficult, expensive and cumbersome process [to sue infringers] than in the U.S.” (Hu, 2003 quoted Geist)

The plaintiff, the CRIA, represents the major record labels and claim to produce 80% of all legitimate sales of music in Canada. The Defendants are a number of peer-to-peer file sharing program users (mainly Kazaa) known only by their online aliases. The CRIA claims that it has proof that the defendants have made thousands of copyright protected songs available to the world by placing them in shared folders on their hard drives.

By law, in order to bring action against these defendants, the CRIA must be able to identify who they are. They say that the only way that they can determine their identities is through the ISPs providing Internet access. The alleged file sharers have an expectation of privacy that “is based on both sections 3 and 5 of the Personal Information Protection and Electronic Documents Act (PIPEDA) and on their ISP account agreements.” (Finckenstein, 2004 par. 9) But, under PIPEDA, paragraph 7(3)(c), an ISP may disclose personal information if so required by court order. The ISPs originally refused to provide these names citing PIPEDA and hence the CIRA hence brought a motion to have the court order the ISPs to identify the users.

Gripping, no? Subscribe to this blog and don’t miss the stunning conclusion!!

Read part 2…