The Internet Law Blog


The Organization for Economic Cooperation and Development (OECD) has released a study on digital music. The study, which features a detailed review of online music services, concludes that "it is very difficult to establish a basis to prove a causal relationship between the size of the drop in music sales and the rise of file sharing." The report notes that sales of CDs, as well as the success of licensed on-line music services are likely to have been affected to some degree by a variety of other factors, for example physical piracy and CD burning, competition from other, newer entertainment products and faltering consumer spending in some markets.

I'm surprised at the conclusions drawn in the study. I realize that there are a number of factors that may contribute to the drop in music sales, but when you consider that somewhere between 50 - 60% of all broadband traffic is the result of peer to peer file sharing, it's hard to make a convincing case that file sharing, and more specifically, music downloading, is not a significant factor in the recent deterioration of music sales.

OK, OK, I know this is a blog about Internet law, but I just finished reading this book and I wanted to pass it along. It caught my eye in a New York Times review and, since my knowledge of eastern-European affairs is lacking, I couldn't pass it up. The author effectively weaves his personal story of love into the experiences shaping his decisions during a war that is very misunderstood. The book makes you think about love, tragedy, personal motivations and emotions. It's well written and provides a perspective on U2 that I wasn't aware of. I highly recommend it.


I just finished a presentation to the UT Computer and Computer Law Conference on the Enforceability of Online Agreements. It was a GREAT conference. It was well attended and there were a nuber of excellent presenters. This has always been one of my favorite conferences. I was somewhat surprised that this year the audience seemed to be much more interested in each presentation which lead to a number of very interesting questions. I'm already looking forward to next year's conference.


Well, I'm back. A rather long hiatus I realize - nearly 2 years. Nevertheless, I couldn't stay away. A lot has happened since my last blog but I can't even imagine trying to get everyone caught up. In short, I now have two boys in diapers and bags under my eyes. The boys are a blast and I can't imagine life without them. So, now that I've had a chance to catch my breath, it's time to get back to the blogging business. I'm looking forward to blogging again about Internet law and anything else that seems to be interesting.


Turning a Good Thing Into a Bad Thing
Wasn't it great when we thought that Howard Dean was adding a fresh voice to presidential campainging by utilizing the Internet in new and different ways. He even incorporated blogging into his grass roots operation. But now he's gone too far. Yesterday he acknowledged that his campaign staff spammed an undisclosed number of people with unsolicited political advertisements. His staffers said Dean remained opposed to spam and blamed the spamming on two contractors who had promised to contact only people who had specifically requested to receive the advertisements.


Googlewashing debate continues. The issue is this: Do blogs rate too highly in a Google search? If you search for a story about the man who is selling tea kettles on ebay with reflective photos of his nude body (using the words "tea" "kettle" "nude" and "ebay") the Internet Law Blog is listed number 2 on the search results. True journalists argue that blogs should not receive that kind of presence on Google, and that more traditional media should be rated higher. The important point articulated Doc Searls' important is that "If you want to be in Google, you gotta be on the Web." If traditional media wants Google-views, they should open up their archives to the masses. If they don't, it's hard to be sympathetic to their view that blogs receive too much attention.

But now Google faces a new threat. Microsoft is taking aim at the popular site.

And some amazing facts from Google . . .

It would take 5,707 years to do a manual search of Google's 3 billion Web pages, at one minute a page

It takes 0.5 seconds for Google to search its database

You can have the Google home page set up in 88 languages, including Urdu, Latin and Klingon


The Feds arrested 50 people this weekend. charging them with a variety of crimes, from setting up fake banking websites to collect the account numbers of unsuspecting customers to surreptitiously taping and selling unreleased movies. According to Ashcroft, online crime now accounts for more than one-half of all fraud complaints. Since Jan. 1, the Justice Department and other federal agencies have uncovered more than 89,000 victims bilked out of some $176 million. Hopefully the government has carefully thought through how they will establish jurisdiction over the defendants. More importantly, I hope they have the evidence necessary to prove their allegations so that the online thieves spend some real time in jail. Otherwise, the message will be completely lost.


New Links. I spent a little time updating the links. Check them out when you get a chance.


Spam Soup: Proposed anti-spam legislation gets watered down. According to the Washington Post, Lobbyists for the marketing, retailing and Internet service industries have been working closely with two powerful House committee chairmen to craft federal legislation to curb junk e-mail, creating a bill that state law enforcers and several consumer groups say would do more to protect mass e-mail advertising than to combat spam. Of course, what else would happen if the Direct Marketing Association, America Online, Microsoft and the National Retail Federation (among others) weighed in on an anti-spam bill? This will NOT turn out to be a compromise bill like the legislators suggest.

Who feels the pain when you download music? After making a lot of assumptions, it appears that for every $16.98 album that you don't buy because you downloaded the songs, the promoters, producers and the label lose about $16.64 and the artist loses about $.34. A case study in the NY Daily News breaks down the cash flow of a hypothetical hit album. It identifies all the people that get paid along the food chain, including some odd recoupable record company expenses, like a 25 percent "packaging deduction" and a 15 percent "free goods charge," off the top, most of which the label keeps. The bottom line is that the old model for music distribution no longer works, even at the rates charged by Apple. At iTunes' prices, the 14 songs on a typical CD would cost $13.86, just about the retail price of a CD. However, downloading a song does not incur any of the costs associated with the physical distribution of music, a significant share of the final retail price. As I've mentioned in this blog before, we need a new model for buying music online.


Hacking iTunes. It appears that Apple's new iTunes software contains features that allow Mac users to stream music to each other over a network. Hackers can listen to any song on another network-connected Macintosh's hard drive and they ave converted that ability into listening over the net. This is all very frustrating to Apple, of course, who wanted to stay away from the issues associated with swapping free files. Streaming songs typically requires a specific kind of license from the copyright holders separate from the license required to download and play the same song. The war over streaming licenses has been intense and, IMO, is not over.


An intriguing listing of awards and settlements in IP infringement cases. Gregory Aharonian, Internet Patent News Service, provides a table listing the monetary awards that companies have received because they were either victorious in an IP infringement lawsuit, or they negotiated deal in the absence/presence of a infringement lawsuit, or related technology litigation such as antitrust. He collects the reports from the media and the results are impressive . . . and very interesting. He's looking for more if you know of any.

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