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NEWS: Court Victory For Music Industry Against Kazaa

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posted on Sep, 5 2005 @ 04:10 PM
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With worldwide ramifications, the music industry claimed a victory against file sharing music piracy after the Australian Federal Court ruled that Kazaa had illegally infringed copyright of music artists. 30 Music companies including Sony, Emi and Warner had sued Australian company Sharman Networks, the creators of kazaa, alleging the software allowed an unprecedented scale of copyright infringement.
 



finance.news.com.au
"Those who authorise and promote file-sharing, particularly for their own profit, should be held accountable."

Justice Wilcox said Sharman Networks and US company Altnet – which delivered "piggyback" technology with Kazaa – had implemented no technical measures to prevent the sharing of copyright files.

"It would be against their financial interest to do so," he said.

The judge said it had long been obvious that warnings on the Kazaa website against sharing of copyright files were "ineffective to prevent, or even substantially to curtail, copyright infringements by users".

Far from trying to discourage copyright file sharing, the Kazaa website exhorted users to increase their file-sharing, effectively encouraging visitors "to think it 'cool' to defy the record companies by ignoring copyright constraints", he said.

Justice Wilcox acknowledged that Sharman "probably cannot totally prevent copyright infringement by users", and did not order Kazaa to be shut down.

But he ordered that Sharman and Altnet be restrained from authorising Kazaa users to breach copyright, and that modifications be made to future technology to reduce copyright infringement.

Current Kazaa users should be pressured to upgrade to the modified software, the judge said.

The record companies will seek damages in a separate hearing, but Justice Wilcox awarded them 90 per cent of costs.

Sharman Networks intends to appeal against the decision.



Please visit the link provided for the complete story.


This is a major victory and means that it is now opened up to sue Kazaa and other file sharing creators for millions of dollars in lost revenue. Kazaa owners are to appeal the case and have not been ordered to shut down but rather to put safeguards into the program to stop copy righted music to be shared amongst users.

I do believe in artists copyright but at the same time, how much out of the sale of a cd actually goes to the artist? Most of it goes to greedy mega companies who push the price sky high. With the price so high of music cd's I can see why people wouldn't bother and go and download the music free.




posted on Sep, 5 2005 @ 04:38 PM
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To be honest, they'll just do what overnet has done and limewire.

When you download make you tick a box and agree to not sending copyrighted information and move on their little way happy as can be.



posted on Sep, 5 2005 @ 04:52 PM
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I think this is a good thing that the major labels won this suit, and I know many of you probably don't want to hear that. But the next time you download music without paying for it, maybe you ought to consider working for your employer for free. Yeah, that's right, for free. Could you do it? No, because you probably cannot afford it. So what makes you think artists or record labels can afford to give you their music for free? Huh? The industry is tough enough as it is, let alone with millions of people that would steal your work.

I must respectfully disagree with you on the price of music being to high. And for several reasons. The biggest of which is that the average person has no clue what artists really go through to bring that $13 or $15 CD into their living room.

In the case of major label releases, losses across their staff of artists are usually so high, that approximately 5% of the artists on the label usually carry it. A whopping 90 to 95% of their investments in new artists usually don't make them money.

In the case of independent releases, the effects of pirating are even worse. This is because usually the artist themselves foots the bill for the recording, producing, mastering, and costs for CD duplications. And that doesn't even count all the hundreds of hours personally invested, as well as personal investments in equipment. Not to mention setbacks with personnel, rewrites, distribution, radio play, and plenty more. [/rant]



posted on Sep, 5 2005 @ 05:20 PM
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TrueAmerican, how much of that is down to the massive amounts of profits made off of each C.D. though?

If you think about it for a long moment, in the U.K. it costs betwen £15 and £20 per-C.D. when in fact, I know it has cost them less then £3 to make.

The mark-up is massive and a joke.

[My older sister is a music producer and my ex's dad is Sony's [head] Lawyer for their Music Department in Europe.]

Music is a passion of mine, but time and time again they are ruining good musicians careers so they can make more and more money.

Maybe it's about time artists get a fair share and we lower the prices? Both of which would result in more sales and less musicians having to live on nothing.

Look at Immortal Technique. Self produces and distrubets his albums, cheaply and is nearly platinum.



posted on Sep, 5 2005 @ 05:37 PM
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Well, one thing we need to keep in mind here is the investment vs. the expected return. And on that note I would ask you if that figure you quoted included ALL of the costs? Such as the advance to the artist, the recording costs, and all the points they pay out on any given record?

In the case of major labels, that have most of the international radioplay and distribution sewed up, they can expect a certain return on their investments, because they know they have the avenues to promote it properly, and internationally. And even THEN they still lose massive amounts of money on most artists.

In the case of local independent releases, it is almost impossible to make any kind of money on local releases. You figure your average CD costs about $5,000.00 to record and duplicate (1,000), and that's at a very LOW level studio, with corners being cut all over the place. That means each CD would have to sell for $5 JUST TO RECOUPE the investement. And that's 1,000 CD totally sold, too. You know how hard it is for a local guy to sell 1,000 CD's, with the radio stations telling 'em no and the distributors laughing at 'em? Very hard. It does happen, but it is rare, relatively speaking.

With your comment, you are assuming that the CD will sell. But just selling it period is an issue that has to be looked at when discussing what the average price of a new CD is, and whether it was major label released or not.



posted on Sep, 5 2005 @ 05:43 PM
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Digital Hardcore Recordings can knock an album out for £100,000 that's their top end artists. [They are one of the largest independent record labels].

They only make 10% of costs on the album, which I was told [when I looked into it], I could pay for [studio time] by touring with other bands. After 6months they would pay for the £10,000 studio fee and then the first £1000 I earn would be theirs the rest mine.

Immortal Technique put the figure at below $10,000 USD for his second album which has shifted 60,000 or 80,000 at $5 USD each. All of it going to him + tours.

A lot of bands don't make money because they get screwed over. They are told they have to make 200% return before they see any money and then only get paid every 6months...



posted on Sep, 5 2005 @ 05:46 PM
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Originally posted by TrueAmerican
I must respectfully disagree with you on the price of music being to high. And for several reasons. The biggest of which is that the average person has no clue what artists really go through to bring that $13 or $15 CD into their living room.


Sure there's a process, but it's not the label that gets screwed in the end, it's the artist. And the artist is only getting around 9% of that $13 or $15.


In the case of major label releases, losses across their staff of artists are usually so high, that approximately 5% of the artists on the label usually carry it. A whopping 90 to 95% of their investments in new artists usually don't make them money.


But they don't lose any money either. Essentially the label gives the artist a loan to make an album, if the album doesn't sell the artist still owes the money. I'm not going to take up the page with doing the math (u2u me and I'll show you the work) but a label typically makes over $9 million by the time the artist is out of debt to the label. If the artist doesn't sell the 430k units to break even, then it owes money to the label at a 66% interest rate!!! Talk about loan sharks



In the case of independent releases, the effects of pirating are even worse. This is because usually the artist themselves foots the bill for the recording, producing, mastering, and costs for CD duplications. And that doesn't even count all the hundreds of hours personally invested, as well as personal investments in equipment. Not to mention setbacks with personnel, rewrites, distribution, radio play, and plenty more. [/rant]


I think you're missing the point with independant releases. If they're willing to front the money to do all this, most indie artists care a lot more about people hearing their music then buying albums. File sharing has done nothing but help the indie music world flourish. If you can't find the record to buy in the first place, who are you hurting?

These lawsuits are mostly about corperate greed. The major labels are going through a hard time trying to figure out how to survive when you can bypass using their mega-studios and get as good sound quality at a quarter of the cost. They don't know how to deal with the iPod generation really they're just having a hard time catching on.

The only worthy purpose for these lawsuits IMO is trying to push out the free programs and help implement programs like iTunes where anyone can put their songs for sale. Instead of whining about downloading, labels should realize it's not going to stop and find a way to buy into it.

Check out a good book on copyrights and piracy (for free!) online if you want to download it: Free Culture

[edit on 5-9-2005 by Street Scholar]



posted on Sep, 5 2005 @ 06:01 PM
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Well, I think we are trying to compare apples and oranges here. As you well know Scholar, judging from your depth of reply to this, each record deal that is negotiated these days is unique. And the figures and commitments vary widely in those deals.

And your comment about the 66% interest is a new one on me.

Previously, record companies would for the most part not require artists to pay for any unrecouped losses. I guess that must have changed.

As to me being clueless, yeah... I got no clue. (oh, I see now you edited your post and took that out.)


But ok, you produce an album, try to sell it, and come back to this post and tell me you appreciate file sharing for free.



posted on Sep, 5 2005 @ 06:02 PM
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9%?

I know for a fact Atari Teenage Riot got £0.70p for every £16.00 album.

About 5%.

That was how Sony did business and still does in fact.



posted on Sep, 5 2005 @ 06:03 PM
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More importantly who the hell is still using Kazaa, come on now, eMule be the way to go.


like a band? See them live.



posted on Sep, 5 2005 @ 06:07 PM
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This opens the door for them to go after internet service providers as well. Maybe if the music industry actually produced a good product people would buy more. I must own a hundred DVDs. I own 1 CD. I thought it was funny when a report was published saying that people that illegally trade music files also buy more than anyone else. Puts the music industry in a really bad spot. They are forced with the choice of killing illegal trading and chasing off their best customers or simply letting it go.

I know you don't want people stealing your product but unlike physical merchandise when someone trades a file you don't physically lose money. However it may keep someone else from buying a cd. Or not. But cracking down may chase off people that do buy your product so acting against it may (and I think it has) reduce profits even more.



posted on Sep, 5 2005 @ 06:08 PM
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Check out this video I picked off of EBaumsworld a couple of years ago:

www.couchblog.de...

Sorry about the above link -- apparently the video isn't on the net anymore. Anyway, it's funny. I still have the video file, but I don't know how to make it available for everyone to watch.

[edit on 5-9-2005 by Astronomer68]



posted on Sep, 5 2005 @ 06:35 PM
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TrueAmerican, have a WATS from me.

You said it perfectly - and I know it's an unpopular view.

Several years ago, my exhusband and a few of his friends invested heavily in a local band; they ended up losing more than a few thousand dollars, but the painful part (for him) was knowing that the music ended up being traded online for free (and without the band's permission too) - this meant that even the paltry $0.75 from each CD that might have been sold wasn't reaching the artists.

Yes, it's all very well saying that the reason pirating music is ok is because the band only gets a tiny amount from each cd sale to begin with...but if you take that away, they are getting nothing at all.

If a band chooses to allow downloading? That's *fantastic*. It's a great step, and it's a noble step.

But if they don't - that's their prerogative, and they shouldn't be penalised for wanting what's theirs.



posted on Sep, 5 2005 @ 06:42 PM
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I would have no problem paying 16 to 20$ for an Cd .BUT 90%of the time lets face it theres usaly only one SONG you realy want the rest is just FILLER .Back in the day they had a 45 (record ) so if all you wanted was one song thats what you payed for.
Now you put ten songs I want on a ten soung CD then its worth the 16$
other then that its a rip off . So why should anyone want to pay for the other 9 they dident want?
This is the excact reasion I dont own 1 CD .OOO I wont download them eather . Because that is stealing .But theres a legeal way napsater has goin legit .So for 5$ I can download quite a few songs Without worrying about needing a lawer lol.
so it in a way the 45 is back .they may shut down EVERY file shring program there is but they CANT stop us from getting it legit and in the end they will eather change or go broke in eather case you will still be able to get your music legit .



posted on Sep, 5 2005 @ 06:51 PM
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As to my statistics, these are all from the "standard" contract you receive from a label (before negotiations) and it's been like that way for at least the last decade or so. The statistic on A.T.R. is probably after a few of the deductions labels can make, including: container charge (25% of retail deducted), breakage clause (states only 90% of sales are valid), and the 3/4 royalty for R&D of CD technology. After these it usually takes an artist at least 846k units to break even.

Most first time artists don't know any better then to just take the contract without negotiating (most of them don't know they can).


Originally posted by TrueAmerican
But ok, you produce an album, try to sell it, and come back to this post and tell me you appreciate file sharing for free.


The irony of your comment is that producers take a flat fee and some of the record sales, they get a great deal. (I know you didn't mean me be the producer, but be the band producing
)

In fact, that is part of what I do as a musician, engineer, producer. I have very mixed feelings about file sharing because I have seen both sides of it. On one hand I have seen bands, who would never have been heard of, make a huge following for themselves as a result of filesharing. On the other hand I have seen the impact technology is having on the world of music since some of the greatest studios are closing down.

But I think labels are blaming filesharing for market losses when there are other contributors. It's like yelling at someone for getting sprayed with a hose when it's already raining balls and your already soaking wet.

In any case, I think music is the benefactor of file sharing. The more music is judged for it's quality and not for its marketing, the better music will get. Most bands make their money off touring, yet the live music scene is really hurting. If you're worried about the artist not making money, actually do something for the artist and go enjoy a show and buy a CD directly from them.

TrueAmerican, your second post (which wasn't there to me when I hit 'reply' the first time) definately showed you aren't as clueless as I thought from your first post, ergo the edit.

Tinkleflower, my sympathy to the loss, but I doubt it was filesharing's fault. From the sounds of it, maybe no one would have bought it in the first place. The fact that it was traded online means probably more people heard it then ever would have, and it wasn't worth buying. As for "taking that away" and "getting nothing at all," then the band wasn't doing what they're supposed to do. They should be generating revenue from shows, t-shirts, stickers, and all that hoopla. I'm sorry, taking nothing from nothing is still nothing.

Seriously, filesharing is a skapegoat. I'm sorry the band your exhusband invested in sucked. When people write albums that are more then a single with filler, then people will buy it, but it still takes more then CDs to see any cash flow in.


[edit on 5-9-2005 by Street Scholar]



posted on Sep, 5 2005 @ 06:55 PM
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Street Scholar you hit the nail on the head.

Most major bands make money off of touring and not the C.Ds.

I know Slayer made £100,000 from two days work in the U.K. from playing live profit. Which is a hell of a lot more than they do from album sales because of the low-percentage they earn.

Maybe the record companies should just lower prices and take less of a cut?

More people would be a £10 album, then would be the same album for £18.



posted on Sep, 5 2005 @ 07:00 PM
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Originally posted by Simcity4Rushour
Now you put ten songs I want on a ten soung CD then its worth the 16$
other then that its a rip off . So why should anyone want to pay for the other 9 they dident want?


The thing is, you individually don't get to choose - that's not how the product is sold. You might not like the rest of the tracks on the cd, but who says 75% of their fans don't absolutely love the rest of the cd? It's unreasonable, really, to expect every cd to cater solely to your specific desires, you know?

Whether or not we like it (and I hate some cds that I've bought, for the same reason!), the product is sold complete. As is. That's about all there is to it, really, when all's said and done. There's no inherent right, as the buyer, to decide which bits of the final product you want to buy and which you don't.



posted on Sep, 5 2005 @ 07:54 PM
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It's about time!

I hope they finally go after the makers of blank tapes and CDR's, too.





posted on Sep, 5 2005 @ 08:15 PM
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I find this to be such a sad little issue. From where I sit I see it as not being about the music, it is about the distribution methods. The powers that be make their money on CD's, that is the manufactur and distribution of music on CD's. The same system that has been obsolete the second the net became popular. And, like the the milkmen, eggmen, and the lovable doddo birds, they domed to be replaced. The thing is that what replaced it, made the record exec's and most of their business model obsolete as well, and so they are fighting tooth and nail and, in essense, impeding progress by trying to strong arm the consumer the same way they managed to strong arm the musicians.

IMO they are dinosuers and sooner they are removed the sooner music can about about the artists and they people they make music for, and not about propping up an outdated industry. Shame on the RIAA and those that try to protect them for standing against progress.



posted on Sep, 5 2005 @ 08:42 PM
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Originally posted by Street Scholar
....Most first time artists don't know any better then to just take the contract without negotiating (most of them don't know they can).


Hmmm, that's interesting....Considering that most major labels won't even talk to an artist directly without representation (i.e. a music attorney or artist manager), because it's like trying to discuss physics with an idiot, I think I see what kinds of bands you are talking about.


... On one hand I have seen bands, who would never have been heard of, make a huge following for themselves as a result of filesharing...


IMO bands don't make it or get huge followings because of filesharing. They make it based on the combined efforts of all of their marketing, radioplay, touring and for the quality of their product as guaged to fit a particular music market or purpose. Another problem here Scholar is that we can't just combine sum the results of filesharing on major label artists vs. local artists. The situations are different, but in essense the results are the same. Filesharing hurts the majors and deprives locals of much needed financial help. I understand the need for promotion, and the majors understand it too. That's why they issue special promotional cd's, meant for people in the industry, usually. And that's why some bands allow free downloads to get started, because they don't have much else to help them.


In any case, I think music is the benefactor of file sharing.The more music is judged for it's quality and not for its marketing, the better music will get....


I really think this couldn't be further from the truth. And here's why. To create quality music, well-produced and recorded, it usually takes more time. More time = more money. More filesharing= less money, whether to the artist or a company.


Most bands make their money off touring, yet the live music scene is really hurting.


Yeah, another very good reason to stop the damn filesharing and get your money to the artist for their music, and to the company that put it out, as it rightly should be.

Tinkleflower, thank you. ^5




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