Music Industry stupidity

As previously discussed, DRM is for slack-jawed yokels.

The Ghost in the CD - New York Times After years of battling users of free peer-to-peer file-sharing networks (and the software companies that support them), the recording industry now identifies “casual piracy” - the simple copying and sharing of CD's with friends - as the biggest threat to its bottom line.

Oh yeah, that's the reason for poor sales. Not the industry consolidation into a few mega-companies with so-called bean counters running things, not the preoccupation with hit singles from the latest sensation (as opposed to cultivating bands for artistic merits while growing a fan base). I get to pontificate because I am a heavy consumer of music for the last 20 years - let me tell you, the number of albums that don't get sold because of 'casual piracy' is very small. If I make a copy of some obscure Kinky Friedman CD for a friend, or burn someone a copy of Sticky Fingers because their copy is on vinyl collecting dust, Sony/BMG executives aren't going to have to sell their houses in the Hamptons.

The issue for Sony/BMG and their peers is that they don't really want to sell music anymore - they want to retain control of the music once it is sold, sort of like software licenses. They want to monetize every play of every song they 'own', ensuring a steady revenue stream. I hope their nefarious plan fails.

The entertainment industry has complained that in the digital world, wanton piracy can bleed revenues. Along with lawsuits and legislative lobbying, infusing digital media with tricked-out code to limit how, when and by whom it is used is one way copyright holders have sought to keep control of their products. ... For its part, Sony BMG, along with First 4 Internet, the British software company that developed the D.R.M. code, issued a software patch to address the security concerns. It also publicized a convoluted “uninstall” process for the software that requires users to provide their e-mail addresses and make multiple visits to a Sony BMG Web site - a move that further angered consumers.

But the industry's mad dash to protect artists - or more accurately, its profits - may have led Sony BMG to move so aggressively, and disastrously, on the D.R.M. front.

In a PowerPoint presentation before the National Association of Recording Merchandisers in San Diego in August, Mitch Bainwol, the chief executive of the Recording Industry Association of America, underlined the urgency: “Key point: Burning and ripping are becoming a greater threat than P2P,” a reference to peer-to-peer file sharing.

That assertion was predicated on numbers compiled by the market research firm NPD Group. They showed that in 2004, only about 55 percent of consumers acquired their music by legal means: either buying a CD (51 percent) or downloading it from a paid online music site (4 percent). About 16 percent acquired music from peer-to-peer networks, according to the survey. And the remainder - 29 percent - reported acquiring their music either on CD's burned by friends or family, or by borrowing legally purchased CD's and “ripping” the tracks to their computers.

First, I question these numbers. Did they question the 29% and ask if the acquired music was something 'almost' bought? In other words, if that music wasn't 'loaned' from someone, would it have been bought? Probably not. Friends give me songs/albums, but most of the time these are things I either had no intention of purchasing myself, or have never heard of, and thus wouldn't have purchased.

Second, if the record labels weren't so greedy, and priced new albums cheaper, I'd hazard a guess that they would sell more. I'm too lazy to look up inflation numbers, but in the day of vinyl, brand new albums were $6-$7 bucks. Why are CDs twice that much? or more? The cost of the raw materials has shrunk, why has the cost of the product doubled?

Third, Sony was just stupid to give a green light to allow a virus (and that's basically what a root-kit is, or at least a route to install a future virus) to be installed on consumers computers (well, consumers who own Windows machines). Idiots.

Sony BMG seems to have failed that test when, in seeking to limit consumers to making three copies of its CD's, it embedded the First 4 Internet software, which penetrates deeply into the PC's of users with a program that introduced a real, if minor, security risk.

It all began unraveling early last month, after an American customer notified F-Secure, a Finnish antivirus company, of some files attempting to hide themselves on his computer. F-Secure deduced that the Van Zant CD had deposited a program that looked a lot like a “rootkit” - typically a dirty word in computer security circles because it describes software tools used to hack the deepest level of a computer system and hide the footprints of an intruder.

That might have been bad enough, said Mikko H. Hypponen, the chief research officer of F-Secure, but the rootkit also proved capable not just of hiding itself, but any file, folder or process on the computer that used a five-character string as part of its name.
No other file on a typical computer would have that string in its name. But if an enterprising virus writer managed to figure out the system, named his bug appropriately, and somehow got it onto the machine of a consumer whose only real sin was listening to Celine Dion's “On ne Change Pas” on his PC, Sony BMG's copy-protection software would cloak the worm.. it was clear that at least a few virus writers were attempting to exploit it.

“It was designed to be speed-bump technology,” said Mathew Gilliat-Smith, the chief executive of First 4 Internet, meaning it would slow down those seeking to circumvent the copy restrictions.
F-secure quietly contacted Sony BMG and First 4 Internet with its concerns, but on Oct. 31, Mark Russinovich, a security expert at SysInternals.com, published his own discovery of the rootkit on his blog. Public outrage followed on the Internet as the program was further examined, the end user license agreement deconstructed, and Sony BMG's response scrutinized.

Not only that, but the EFF posted this analysis of the Sony EULA (End user License Agreement) you agree to when you listen to a Sony audio product (which isn't really a CD, by definition):

First, a baseline. When you buy a regular CD, you own it. You do not “license” it. You own it outright. You're allowed to do anything with it you like, so long as you don't violate one of the exclusive rights reserved to the copyright owner. So you can play the CD at your next dinner party (copyright owners get no rights over private performances), you can loan it to a friend (thanks to the “first sale” doctrine), or make a copy for use on your iPod (thanks to “fair use”). Every use that falls outside the limited exclusive rights of the copyright owner belongs to you, the owner of the CD.

Now compare that baseline with the world according to the Sony-BMG EULA, which applies to any digital copies you make of the music on the CD:

1. If your house gets burgled, you have to delete all your music from your laptop when you get home. That's because the EULA says that your rights to any copies terminate as soon as you no longer possess the original CD.

2. You can't keep your music on any computers at work. The EULA only gives you the right to put copies on a “personal home computer system owned by you.”

3. If you move out of the country, you have to delete all your music. The EULA specifically forbids “export” outside the country where you reside.

4. You must install any and all updates, or else lose the music on your computer. The EULA immediately terminates if you fail to install any update. No more holding out on those hobble-ware downgrades masquerading as updates.

5. Sony-BMG can install and use backdoors in the copy protection software or media player to “enforce their rights” against you, at any time, without notice. And Sony-BMG disclaims any liability if this “self help” crashes your computer, exposes you to security risks, or any other harm.

6. The EULA says Sony-BMG will never be liable to you for more than $5.00. That's right, no matter what happens, you can't even get back what you paid for the CD.

7. If you file for bankruptcy, you have to delete all the music on your computer. Seriously.

8. You have no right to transfer the music on your computer, even along with the original CD.

9. Forget about using the music as a soundtrack for your latest family photo slideshow, or mash-ups, or sampling. The EULA forbids changing, altering, or make derivative works from the music on your computer.

Yikes! bring back the 8-track!

Tags: copyright, /DRM