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3.30.2005

MUSIC/FILE SHARING
www.economist.com

The music business should have stuck by Thomas Edison’s technology if it wanted to avoid the threat of piracy. His wax cylinders could record a performance but could not be reproduced; that became possible only with the invention of the flat-disc record some years later. On Tuesday March 29th, America’s Supreme Court began to hear testimony in a case brought by the big entertainment companies that is intended to stop the illegal downloading of copyright-protected music and film. The industry’s target is the peer-to-peer (P2P) technology that allows the swapping of files directly over the internet. The case in question pits two makers of file-sharing software, StreamCast Networks and Grokster, against the entertainment business, represented by one of Hollywood's most famous studios, Metro-Goldwyn-Mayer (MGM). And the judges, despite their years, showed that they were well acquainted with the world of file swappers and the digital gadgetry that a ruling against the P2P firms might stymie.

The entertainment business has long been susceptible to copyright infringement-and it has usually blamed the electronics industry. The music industry first cried foul at the introduction of the cassette-tape recorder in the late 1960s. More recently, the digitisation of music has led to widespread “burning” of music tracks on CDs using home computers. The latest threat to the record companies is a copying technique of even greater speed, ease and scope. Every day some 4m Americans swap music files over the internet, according to figures from Pew, an independent research organisation. Now the swapping of new films online is also gaining ground, to the chagrin of the movie industry. Donald Verrilli, the lawyer representing the entertainment business, said in Tuesday's court hearing that file-sharing was “a gigantic engine of infringement” that allowed the theft of 2.6 billion digital music, film and other files every month.



The file-sharing threat has come at a particularly bad time for the music industry, which is struggling to reverse a long-term decline. According to the IFPI, a recording-industry body, worldwide music sales plunged in value by 22% in the five years to 2003-a drop of over $6 billion. In 2004, sales fell by 1.3%, though that decline looks less bad when revenue from legal digital downloads is added in. Though there has been a debate on the extent to which file-sharers would otherwise have gone out and bought copies of the songs they are downloading, the music industry largely blames them for its ills, noting that CD sales are dipping steeply in countries where broadband internet access is growing fast. Since P2P software allows computers to talk directly to others running the same program without intermediaries, Grokster and StreamCast argue that they are unable to control how their software is being used, and thus are not responsible for any illegal sharing.

Some suggest that the latest attempt to curb illicit file-swapping-legal action against the technology that drives P2P networks-threatens the future of innovation. Justice Antonin Scalia appeared to have some sympathy with this view. He suggested that a ruling for the plaintiffs in MGM v Grokster could stifle development of new technologies, since potential innovators might fear that, as he put it, “I'm a new inventor, I'm going to get sued right away.”

The Betamax precedent
In court, the two software firms cited the case of Sony’s Betamax technology as a precedent. The home video-recording system, which was eventually superseded by the rival VHS format, faced a suit in 1984 in which Disney and Universal called for its ban. The film studios feared that the ability to record on to video would allow considerable infringement of their copyright. The Supreme Court ruled then that Sony was not liable because the equipment had “substantial” uses other than infringement, such as the recording of TV programmes for later viewing. (Ironically, Sony nowadays owns a giant music-recording business and thus finds itself, awkwardly, on both sides of the argument.)

Similarly, the software produced by StreamCast and Grokster has significant non-infringing uses, such as sharing music that is not copyright-protected and making phone calls over the internet. In fact, some make the case that P2P technology could make the internet more robust and secure by avoiding the use of centralised servers, and that the entertainment companies’ lawsuit is thus harmful to the web as a whole. Richard Taranto, Grokster's lawyer, pressed the justices to apply the Sony precedent but was reminded by Justice Ruth Bader Ginsburg that the previous ruling was longer and less straightforward than merely deciding if a technology had some non-infringing uses.

Napster, the first and best-known of the file-sharing businesses, was killed off by the music industry in 2001. Because it used central servers and so had the ability to block users who broke copyright laws, a judge issued an injunction ordering Napster to shut its servers down. At the time, it boasted some 14m users. Since then, the industry has ramped up action against file-sharing and widened its attack by going after individual downloaders as well.

At present, some 8,000 individuals around the world face lawsuits for illegal file-sharing. The industry has backed up its legal moves with a publicity offensive aimed at convincing the public that unauthorised downloading is theft. As well as cinema- and TV-advertising campaigns, 45m instant messages have gone out to users of P2P services, warning them to stop putting copyright material on the internet. America’s Department of Justice has weighed in too, even suggesting that P2P services could be used to support terrorism. Others have muttered darkly that the technology is a conduit for illegal pornography.

There are some signs that these measures are working: surveys suggest that internet users are becoming more wary of illegal file-sharing, for instance. However, according to the IFPI’s own figures, the number of unauthorised music files on the web has grown in recent months after falling sharply in the first half of 2004 (see chart). The number of users is also up, with 8.6m offering illegal files compared with 6.2m a year ago.

The music business has employed other defensive measures. Apart from a round of mergers and cost-cutting over recent years, the industry has tried to embrace legal downloading. Napster itself was reborn as a legal downloading service. In 2004, says the IFPI, the number of legal-download sites increased four-fold to 230 and the number of legal downloads to over 200m. Apple’s iTunes, the largest legal-download catalogue, has more than 1m songs and handles over 1m downloads a day.

The Supreme Court is expected to take about three months to rule on MGM v Grokster. But even if the entertainment business wins the case, while managing to coax more users into downloading legally, its problems are unlikely to go away. The rush into legal downloading is bound to cannibalise sales of CDs and DVDs, hitting profits. And perhaps the decline in global sales is indicative of a far greater problem for the music industry-that consumers simply think many of its products are not worth paying for.

/Soulseek
Grokster
Limewire/

MORE U2
New York Times review

"I don't know if I can take it/ I'm not easy on my knees," Bono sang, and in case an arena full of fans didn't believe him, he spent two hours proving it. Over and over again, during Monday night's sold-out world-premiere concert here, he dropped to his knees to emphasize a point. Kneeling is Bono's way of reminding everyone that he contains multitudes: when he went down, he became a repentant sinner, an eager-to-please lover, an abused prisoner, even - if this isn't too much of a stretch - a grateful 44-year-old rock star, basking in his fans' adulation.

The concert, at a rather plain hockey rink with a rather unplain name (officially, it's the iPay One Center at the Sports Arena), was the first of the band's "Vertigo 2005" tour, celebrating the release of its strong new album, "How to Dismantle an Atomic Bomb" (Interscope). U2 is not, to put it mildly, the kind of band that seems sheepish about its own popularity, and so tonight's concert didn't aim to surprise or confuse or tease the audience. This was an intensely satisfying performance by a band that has figured out what it does best and seems content to do it. Some bands get swallowed up by big arenas, but U2 was built for them: the Edge's echoey guitar lines are only improved when they bounce off concrete walls, and Bono's lyrics are best when they're delivered by tens of thousands of fans.

If anyone loves U2 more than the fans, it is record executives. Nearly 30 years into its career, the band has evolved from selling lots of vinyl LP's to selling lots of branded iPods. The customers are loyal, and Bono's charity work has only strengthened the brand; he's idealistic and outspoken but not, for the most part, controversial. The band's new live show is sturdy but not flashy; the only special effect is a giant beaded curtain where the flashing beads do double duty as pixels in a huge video screen. The tour is to continue through the end of the year, with a series of European dates this summer. The band is to play Continental Airlines Arena in East Rutherford, N.J., on May 17 and 18, and Madison Square Garden on May 21 and again for five dates in October.

In 1997, when U2 released the ambitious, electronica-influenced album "Pop," the group didn't seem quite as bulletproof as it does now: you got the sense that, for better and for worse, its members were struggling to stay current. But these days, current seems less current than ever. U2's old-fashioned earnestness and big, ringing guitars seem right at home in today's old-fashioned alternative-rock world. Not coincidentally, the band has booked old-fashioned young alternative-rock bands to open for them, including the Killers, Snow Patrol and Kings of Leon, who opened tonight's performance. And right before U2 took the stage, the sound system blasted "Wake Up," by the Arcade Fire - a sly way, perhaps, of asking whether the resounding guitar chords and pleading vocals sounded familiar.

As always, Bono put on a show of his own, not only kneeling but strutting and pantomiming and begging for sing-alongs. At one point he lay flat on his back, and you didn't have to be a fan of the provokable basketball player Ron Artest to wonder what reaction might have been inspired by a well-aimed cup of something cold. There were speeches, too: perhaps there is a room where Americans resent listening to an Irishman lecture them about the Rev. Dr. Martin Luther King Jr. ("He wasn't just talking about the American dream," Bono explained. "His dream was even bigger than that.") But this wasn't it.

While Bono delighted in playing the diplomat and playing the showman (and in hinting that these two characters have something in common), the rest of the band got down to work, creating the deceptively simple sounds and textures that appear again and again in their songs. Even when the Edge was unleashing one of his jagged shock-therapy solos, it was Bono who gave the outsize performance, jolting in time to the noise.

In 2000, U2 released "All That You Can't Leave Behind," a handsome and self-consciously old-fashioned album that yielded a string of hits, including "Beautiful Day," built around a gorgeous and buoyant bass line by Adam Clayton, whose low notes surged up to match Bono's optimism. The new album has a few more sharp (and sometimes painful) edges, and some unexpected turns. ("One Step Closer," which the band didn't play tonight, is a surprisingly effective bit of Velvet Undergroundish murmuring.)

Mainly, though, the message is the same on both albums: "Atomic Bomb," like its predecessor, pays tribute to the joy of making noise with people you love. Whereas the earlier album had "Elevation" (after tonight's ramshackle version, Bono said, "We can screw up a little bit, right?"), this one has "Vertigo," another tribute to the dizzying power of musical connection. "You give me something I can feel," Bono exclaimed, and he could have been either addressing his fans or impersonating them. This is a band that has lasted for a remarkably long time without exploding, and the set design echoed the unsplit atom in the album's title. The Edge, Mr. Clayton and the drummer, Larry Mullen Jr., were the nucleus, standing mainly still on the main stage. And Bono, of course, was the electron, orbiting his bandmates on a circular catwalk that extended into the crowd; every time he returned to the stage it seemed like a joyful reunion.

One of the night's final songs was "Yahweh," which sounds faintly ridiculous when it appears at the end of "Atomic Bomb": "Yahweh, Yahweh/ Always pain before a child is born," Bono cries out, and you might wish he were delivering nonsense syllables instead. But when the band played an acoustic-guitar version near the end of the concert, it was transformed into something powerful. Yet again, Bono tilted his head back and asked the fans to join him - an audacious gesture, but not a misguided one. As Bono knows better than anyone, it's hard to smirk when you're singing at the top of your lungs.

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