Opinion and analysis of the day's music news.


Supreme Court Refuses To Hear File Sharing Case
-- The U.S. Supreme Court refused to hear a case brought against a Texas teen for illegally acquiring 37 songs through a file-sharing service. Whitney Harper was found guilty of copyright infringement and ordered to pay $27,750. The lower court ruled Harper was an “innocent infringer” who should have to pay far less for each infringement. However, that ruling was overturned by a federal appeals court.

Only Justice Samuel Alito indicated he would have heard the case and questioned the copyright notice placed on CDs by record labels. Those notices, the labels had successfully argued, inform people of the laws pertaining to copyright music and preclude the use an “innocent infringer” defense. But Alito asked how a person in the post-phonorecord age could have reasonably determined if her actions were illegal.

He wrote: “The theory of §402(d) (the section that deals with notice of copyright) appears to be that a person who copies music from a material object bearing the prescribed copyright notice is deemed to have ‘reason to believe that his or her acts constituted an infringement,’ §504(c)(2). But a person who downloads a digital music file generally does not see any material object bearing a copyright notice, and accordingly there is force to the argument that §402(d) does not apply. In such a case, the question would simply be whether the infringer ‘was . . . aware and had . . .reason to believe,’ §504(c)(2), that the downloading was illegal.”

Harper’s legal team includes Kiwi Camara, the Houston-based attorney who represented Jammie Thomas-Rasset in her re-trial earlier this year. In that case, the jury increased the penalty for acquiring 24 songs through a P2P service to $1.92 million from the $222,000 awarded in the first trial. (BusinessWeek, Supreme Court Decision)


Report: Mulve Operator Cleared
-- The operator of the Mulve file-sharing app has been cleared of wrongdoing, according to TorrentFreak. The report quotes a person who goes by the name ms3arch who claims to have done all the coding for Mulve and says the other person was targeted because the domain was registered under his name. The Mulve app downloaded music files from the Russian site Vkontakte. It was released in May. The arrests by UK police happened in October.

As an interesting prologue to the story, the person just cleared plans for starting a legal music project. UK authorities may not have brought charges against this person, but they appeared to have provided a deterrent against creating another music project of dubious legal standing. (TorrentFreak)


Rockhouse Partners Unveils New Marketing Platform and Service
-- Rockhouse Partners, a Nashville-based entertainment agency, has launched a new division called Rockhouse Live that offers a proprietary marketing platform and service to help clients sell more tickets. Rockhouse Live targets touring properties, fairs, festivals, venues and sports teams. The year-old Rockhouse Partners counts as its clients the Nashville Predators professional hockey team, Churchill Downs’ Hullabaloo music festival, a number of state fairs (Tennessee, Delaware, West Virginia) and Nashville’s Ryman Auditorium.

Rockhouse Live is a timely addition to the company. First, not all ticket sellers have the tools to create and manage marketing campaigns. Second, ticket sellers are increasingly challenged to move tickets in a cost-effective manner. The economic downturn has left venues, promoters and sports teams with more empty seats than usual. Thus, there is a need to sell inventory without resorting to price cuts. Do a better job with online marketing and there will be less of a need to drop prices. And if there is one thing ticket sellers are reluctant to do these days, it is to condition customers to expect lower ticket prices because sellers are sweating their unsold inventories.


Should Movie Studios Be Thanking Netflix?
- The movie industry offers an intriguing parallel to the music industry. DVD sales are tanking and studios are becoming increasingly defensive against new distribution channels (think Redbox). Movie studios are going through an encore performance of record labels’ struggle to retain control in an increasingly chaotic market.

TechCrunch asks why the movie industry continues to hate Netflix even though the service continues to save the movie industry. That’s like asking why record labels have a love-hate relationship with digital downloads. Yeah, download sales are great, but they have coincided with a drop-off in CD sales.

But should movie studios simply thank Netflix for giving consumers a legal alternative to piracy? TechCrunch thinks so: “As is the case with iTunes for the music labels, the question is not whether DVD customers are depriving them of revenue by going to Netflix, but whether would-be pirates are instead choosing to consume movies legally from a source that is prepared to write billion dollar royalty checks to the studios. The answer to that question is, clearly, yes – and for that the studios should be hugging Netflix CEO Reed Hastings, as tightly as book publishers should be hugging Jeff Bezos for creating the Kindle. He’s essentially rescued their business from the very edge of the pirates’ plank.”

Digital success is a double-edged sword. In a perfect world, evolution would represent an economic gain over previous formats. But only the consumer has gained -- iTunes over the CD, Netflix over DVD purchases, cheap Kindle books over more expensive printed books. Creators and content owners can smile knowing that pirates can legally stream their movies, but they cringe in knowing that former DVD buyers can easily switch to legal streams as well.

So, movie studios will build their own streaming services in hopes of commanding top dollar for their own films. And like record labels who sell direct to fans, they will find that they will be able to peel away a fairly small percentage of viewers. Just as music buyers have their preferred venues (mainly iTunes), movie watchers will have their preferred venues as well. Netflix is a preferred venue. Hulu is also one. Maybe YouTube will become one. People gravitate toward these services in part because they are easy to use and provide value above and beyond the content (Netflix’s recommendations and hardware integration, for example). (TechCrunch)

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