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ReDigi: Is the Necessary Step a Fair Use? (Part 17 of our Online Music Services Series)
November 14, 2011 by Rick Sanders | Category: Blawg, Blog, Online Music Series | Tags: #onlinemusicseries, copyright, fair use, first sale, market dynamics, ReDigi, reverse engineering
When is Making Temporary, Intermediate Copies a Fair Use?
Last time, we discussed whether ReDigi could avail itself of the “essential step defense,” on the theory that making intermediate copies of the music files was necessary for ReDigi to carry out its (assumed*) right to re-sell the files under the first-sale doctrine. I concluded that the essential step defense probably doesn’t apply because, even if digital content qualified as a “computer program,” the defense is limited to “utilization” of computer programs “in conjunction with a machine,” and I thought utilization was probably limited to executing a program and couldn’t be stretched to cover re-selling the “program.”
* As we discussed here, this is by no means conclusive. We’re assuming the first-sale doctrine applies for purposes of this discussion.
So, there’s no specific right under the Copyright Act to make temporary, intermediate copies of a work as necessary to exercise some other right in connection with that work. But the idea is appealing. If you have the right to do X, a technicality of copyright law shouldn’t prevent you from doing so, right?
Copyright Legal Technicalities and Fair Use Revisited
This causes us to revisit two of the basic … Read More»
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ReDigi: A Digital Secondary Market (Part 15 of Our Online Music Services Series)
Can ReDigi Take Advantage of the First Sale Doctrine?
When I first contemplated this Online Music Services Series, I decided not to discuss Apple’s iTunes Store service or similar services because (1) they weren’t new, and (2) the relevant law was pretty boring. While it’s true that the U.S. Supreme Court recently let stand a lower-court ruling that downloading songs from iTunes-like services does not constitute a “public performance,” hardly anyone was surprised by the result.* When you download a song from iTunes, Apple is making a copy of the song file and sending it to you–it’s your own copy, which you can play whenever you want. This is different from streaming services in which multiple users receive the streams of music derived from the same “single master” but which they don’t get to keep.
* ASCAP sued because, although its case was a long-shot, the amount of money at stake made it worth the effort. ASCAP is charged with collecting royalties for public performances on behalf of songwriters, so if downloads were public performances…
ReDigi and the Creation of a Digital Secondary Market
But, then along comes ReDigi, a twist on the iTunes Store model that … Read More»
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Help Us Spotify; You’re Our Only Hope! (Part 14 of our Online Music Services Series)
The Planets Align for the Music Industry. Will it Be Enough?
In our last post, we examined the overlapping music-licensing regimes to explain, in part, why it took Spotify two years to get licensed in the U.S. We also looked at the music industry’s unhappy history with the internet, which also helped explain Spotify’s licensing struggles. We now look at what Spotify means to the music industry’s future. A lot might be riding on Spotify.
For all the technology firms looking to make money from music, consider how few of them even get as far as Spotify in being able to present the music industry a comprehensive internet-based scheme. A couple spring to mind: Rhapsody in 2001, and Apple in 2003.* This means that, when Spotify came calling, the industry actually had little practical experience on which to base a very perilous decision: how much to charge for music. Since the royalty rate is by far the biggest cost incurred by online music service providers–Rhapsody is said to pay 60% of its revenues in royalties, Pandora 50%–the royalty rate demanded by the music industry pretty much dictates the price of the product. Set it too high, and the service … Read More»
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Spotify: A New Hope (Part 13 of our Online Music Services Series)
Or, the Attractions (and Distractions) of Licensing
Spotify has been available in the United States for a few months now. Until the recent kerfuffle involving its Facebook integration, the reviews have been positive. If you review the features list with which we started this Online Music Services Series, you’ll see that Spotify comes as closer to giving consumers what they want than any other service. In fact, it’s not even that close:
- Portability: check: with Spotify Premium, you can listen to longs off-line and you gain access to Spotify’s mobile apps.
- On-demand: check: you can listen to any song you want to in either your or Spotify’s catalog;
- Music discovery: half-check: Spotify has a feature that allows others to share music with you, which should help you discover music you like, but nothing quite as robust as Pandora’s Music Genome.
- Extensive catalog: check: Spotify’s catalog has about 15 million songs.
- Low cost: half-check: Spotify Free has all of the features above except portability; for that, you need to shell out $9.99 a month, and you lose all access should your subscription expire.*
* If I were starting this series over again, I might have … Read More»
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Turntable.fm: Can Internet Radio Consist of Rotating Guest DJs? (Part 12 in our Online Music Service Series)
Is Turntable.fm Too Cool for the Webcasting Tribe?
In our last two posts in this series, we saw how Pandora had to jump through about twelve hoops to come under the statutory webcaster license (just for the right to pay statutory royalties!), and even then, its business model was found to be legal only a couple of years ago. Yet, compared to Turntable.fm, Pandora’s business is straightforward. Turntable.fm’s innovations have earned it raves from the technocrati–and make for a fascinating copyright case study.
Whereas Pandora uses a computer algorithm to generate personalized playlists for its users, Turntable.fm encourages users to act as tastemakers, then further encourages the tastemakers by creating a kind of social competition, with the audience as judges. It’s a kind of warp-speed American Idol but for cool kids and recorded music. Turntable.fm is still in beta, so its final form isn’t necessarily set. The description that follows is based on reports by users and Turntable.fm’s own FAQ.
I Am the DJ, I Am What I Play
Turntable.fm enables users to set up “rooms,” which are typically themed by music genre. Visitors may opt to be a “DJ” or simply an audience member. If you choose … Read More»
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Pandora Almost Wasn’t: the Definition of “Interactive” (Part 11 of our Online Music Services Series)
When “Unique” Doesn’t Mean “Special” (and Why that Actually Makes Sense)
Last time, we looked at how venerable Pandora fits into the legal ecosystem of online music services. It’s a webcaster, which means that, if it plays its cards exactly right, it can avail itself of a statutory license for the right to stream sound recordings. It turned out this is an arduous task, but Pandora (and many other webcasters) have been up to the task. Except for one thing, which could have blown the whole project out of the water.
The first requirement that a webcaster must meet to be eligible for the statutory license is not to be an “interactive service.” The Copyright Act provides a lengthy definition of interactive service, but it boils down to (1) playing requests, or (2) creating a program “specially” for the user. It’s easy to avoid definition (1). But what does it mean for a program to be “specially created for the recipient”? The most successful webcasters are successful because they can create programs that are unique to the user. Does that make them also “special” to the user?
As it happens, in 2001, the music industry sued one such … Read More»
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You Are on Pandora, Ladies and Gentlemen (Part 10 of our Online Music Services Series)
Pass the Tests, Join the Webcasting Tribe
Pandora has actually been around for a long time. It launched in 2005. It bills itself as “internet radio,” but that’s not quite right. There are no disc jockeys making song selections. Instead, it uses its famed Music Genome algorithm to choose songs that Pandora thinks you’ll like. You probably know how it works: you enter the title of a song or the name of an artist, and Pandora provides you with a stream of music that is musically like that song or artist, automatically.* The alternative was to place genres into increasingly narrow genres and sub-genres. This requires a lot of hard work by taste-makers, who must be constantly updating their genres and sub-genres in light of new music. (Anyone remember the old Listen.com?) Some truly great artists were very difficult to classify. Some songs were like WALL•E’s spork, neither fork nor spoon.
* You can also choose music by genre, but that seems to defeat the point.
This idea, by the way, had been kicking around since 2000 as the Music Genome Project. It’s always been a little difficult to describe in abstract terms the kind of music … Read More»
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Music-Locker Services: DMCA Protection and the “Single Master” (Part 9 of our Online Music Services Series)
What We Did Learn (Sort of) from the MP3Tunes Decision
In our last post, we looked at what the MP3Tunes decision didn’t tell us–that it didn’t put the music industry’s best argument to the test. We looked at the contours of this “nuclear option,” including the elephant-in-the-room possibility that the music industry could once again go after individual consumers. In this post, we’ll look at what the MP3Tunes decision did tell us–sort of–about the legality of music-locker services.
DMCA Safe-Harbor Protection Redux
As with Grooveshark, music-locker services have two ends. In one end, the user uploads song files.* Out the other end, the service “streams”** the song files to the user’s various devices. Unlike Grooveshark, however,, the subscribers can enjoy only their own music (whereas Grooveshark users could enjoy everyone else’s music, too). This might (or might not) make a big legal difference.
* Apple’s service will have a major difference. With Apple’s “Match” service, if you purchased your music through Apple’s iTunes store, you won’t need to upload the song file at all–you can “stream” Apple’s own copy of the song file. Apple has obtained licenses from the rights holders to do this.
** I put stream in … Read More»
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Music-Locker Services: Is in the Cloud in the Cards? (Part 8 of Our Online Music Services Series)
What the MP3Tunes Decision Tells Us About Music-Locker Services
(I know I said that our next posts in our Online Music Service Series would be about Pandora and Turntable.fm, but the recent decision in the MP3Tunes case has inspired me to look at the Amazon, Google and Apple music-locker services, instead. We’ll use the MP3Tunes decision as a spring-board for discussing music-locker services. We’ll get to Pandora and Turntable.fm next week.)
You might have heard about the decision handed down earlier this week in Capitol Records, Inc. v. MP3Tunes, LLC. You might especially have heard that the decision is “good news” for “music-locker” services like Amazon’s and Google’s–and, by extension, that Apple was foolish to obtain licenses. You might even have heard that “music-locker” services are now definitely 100% legal.
The decision certainly wasn’t bad news for Amazon and Google. We have additional confirmation that providers of music-locker services are not ineligible for DMCA safe-harbor protection. Which we all figured was the case. The most we can say is that Amazon has gone from about 90% certain, to about 92% certain, that the mere fact that its music lockers are likely to be host to infringing content won’t, … Read More»
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In Grooveshark’s Defense: Red Flags and Financial Benefit (Part 7 in our Online Music Services Series)
Why Grooveshark Might Not Swim into the DMCA Safe Harbor
In our last blog post, we examined two of the four main requirements for Grooveshark’s DMCA safe-harbor defense. Those requirements were (1) having and implementing a repeat-infringer policy, and (2) compliance with the notice-and-takedown procedure. We gave Grooveshark a pass on those two requirements. We now look at the two remaining requirements: (3) lack of actual knowledge or “awareness” and (4) lack of direct financial benefit. We think these two requirements will be much trickier for Grooveshark.
Knowledge and “Awareness”
To qualify for DMCA safe-harbor protection, you (as the website operator) must (1) not have actual knowledge of the infringement,* (2) not be “aware of facts or circumstances” that make the infringement apparent, and (3) “expeditiously” stop the infringement, once you are obtain such knowledge or “awareness.”
* Want to hear something weird? If someone sends you a defective DMCA takedown notice, but it includes enough information to put you on notice that infringing activity is going on, you are not deemed to have actual knowledge or even “awareness” of the infringement. Although this is illogical, there’s a good reason for it. Otherwise, there’d be no reason for … Read More»
