October 19, 2006

Oh, really, now...

by Chris Randall

I just made the mistake of reading this. My first thought was "hey, why don't you sit down while the grown folks talk?" The problems with his argument are the typical shit, I suppose, from people that have little or no understanding of copyright law. But since I'm fairly certain he reads this site, allow me to rebut:

1. Apple doesn't charge different rates in different countries because they feel like it. Each nationality has different statuatory royalty rates for both mechanical and artist royalties, and the recording industry groups in each nationality negotiate a standard rate with Apple that is largely based upon those rates.

2. This: "Allofmp3.com has already proven that people will pay for unprotected downloads, as long as they're easy to obtain and affordable." This is, in fact, the same thing that has been proven by the guys that sell knockoff Movados out of briefcases in NYC. I hate to put it in these terms, but if you buy music from allofMP3.com, you are literally supporting the coke habit of some Russian mobster's mistress, and nothing more. allofMP3.com is a criminal enterprise, run by the mafia. Speaking as someone who is well represented on that site, I'd like to say the following: I have no problems with someone getting my music from Limewire. In fact, I encourage it. However, I have a _HUGE_ problem with some Russian gangster paying for his blue light special with my hard work.

3. "The third critical advantage of Allofmp3.com is that they are truly international." Actually, they're not international at all. They are, in fact, not even national. Unless you'd say that a chop shop is international because they take apart Mercedes _and_ Cadillacs. AllofMP3.com is a criminal enterprise, and as such, isn't beholden to any standards whatsoever, except those set by the criminals themselves.

In short, stick to vintage video games, a subject with which you have at least a passing understanding.

EDIT: James has put up a mea culpa of sorts, stating that his intention wasn't to hold up a crime syndicate as a model of modern business procedure. Fair enough. However, I think that it's worth mentioning something about one specific point he makes: technically speaking, when you purchase a CD, the only thing you own is the plastic, not the music on it. It's a common misunderstanding, and basically pointless to rebut, but it's like any EULA: caveat emptor.



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Oct.19.2006 @ 4:23 PM
Another reason for staying away from russian sites and for sure those mp3 sites. Many people have seen their visa card being used for some things they actually did not buy !
That's russian commerce for us.

The reason why apple itunes song prices are different :
1. VAT !
2. what CR said.

"The word on the street is that 30% of each iTunes transaction goes directly into Apple's pocket."

The word on the street is that shops get 30% of the sale price in their pockets.. that's international commerce !

Besides without apple's law of 99cent, the price for a song would be more if it was up to the labels !


Oct.19.2006 @ 5:03 PM
"but if you buy music from allofMP3.com, you are literally supporting the coke habit of some Russian mobster's mistress... AllofMP3.com is a criminal enterprise, and as such, isn't beholden to any standards whatsoever, except those set by the criminals themselves."

Damn, you make allofmp3.com sound fresh as hell! :)

But seriously, even if the guy is ignorant about things, that doesn't mean that there isn't a point here. People are frustrated with the way online music is sold. They don't know, and they don't care about things like mechanicals and royalties, they just want music cheap, easy, and fast. At some point the people SELLING a product need to take in consideration the desired people BUYING a product, or the people buying a product might not buy.

When I buy a product, I look at price and convienience. If getting something legally is vastly more expensive, and also far more inconvienient, than getting it illegally, then right or wrong, how can you really expect consumers to pay more for the legal product?

Consumers realize that if MP3s can be sold for next to nothing (or given away for nothing) by criminals, that the value of the music they are buying is lower than the price being charged - if it was higher, then the criminals would be charging more (even stolen consumer electronics gets at least %10-%20 of the real value on the black market).

It is no secret that the big record companies conspired to fix the price of music and to discourage the sale of used music , so why does a consumer feel that they have any moral obligation to help the record companies?

Given the economics and logistics of the internet, music should be vastly cheaper than it is now, period. Even if you need to pay for the expense of recording and production, recording and production is vastly cheaper today than 10 or 20 years ago. You can argue about royalties and mechanicals all you want, but it won't change the minds of a consumer. Unless we want to fight some sort of WAR ON MUSIC PIRACY with all that entails (and personally, fighting a war on anything makes me very worried), allofmp3.com is who online music stores are competing with. Either beat allofmp3.com at their own game, or lose.


Oct.19.2006 @ 5:12 PM
here's my posted reply over there:

If this is where your thinking has landed you, you might want to start over:

A lot of music can be had for FREE! make it yourself, download free music that the authors are willing to give to you.

Some music is not free because the people that made that music wish to sell it for money. They decided to do this and that is what they want to do. Pay special attention to what the artists want because if you do something else, well you're kind of being a crappy person, aren't you? If you are not interested in buying music the way the artists have decided to sell it to you then don't buy it and don't listen to it. Even if you want to. Doing anything else is a golden rule issue: how would you feel if someone pulled your hard earned cash out of your bank account whenever they wanted and there was nothing that you could do about it?

You can opt to buy music on a number of media types all needing different players to use. All forms of media have different benefits and disadvantages. Choose wisely.

If you find that you are becoming overwhelmingly obsessed with media and weighing all sorts of issues about it you should go with the flow and buy a CD. That's what most people do and there are all sorts of ways that you can play music you buy on CDs.

If you are trying to play a record on a tape deck or fussing because you bought a protected AAC and it won't play on your wristwatch then you made poor choices and your anger makes as much sense as bitching about how the sound your new clown horn makes doesn't sound like "Dancing Queen."

Oh yeah, and don't give money to the mob. It fucks up our civilization.


Oct.19.2006 @ 5:18 PM
Chris Randall
I agree with RexRhino there, but the only way to beat allofMP3 at their own game is to not pay royalties at all. A three minute 128K MP3 from that site grosses 9 cents, which isn't even enough to cover the Harry Fox statuatory rate in this country for a three minute song, never mind any other royalties, or the cost of doing business.

That being the case, the musician might as well give their music away in entirety and rely on income from other sources to pay the bills. For what it's worth, that's more or less what we do, for the most part. Our record label hasn't turned anything that could remotely be considered a profit in its entire 8 year existence; most of our income comes when we sell a song to Microsoft or Sony or any of the other companies we normally deal with. We then use that money to press CDs.



Oct.19.2006 @ 7:03 PM
OK so much of what has been said is interesting but I'm struggling to see what LAWS AllofMP3 are breaking? They pay relevant rights fees in their region(The Durma made sure that they we're legal a couple of years ago) and as far as I know they dont rip-off anyone credit card system - I think they use a (cough) reputable russian credit-card company (incredulous maybe, possible? well...yes). Also it's not currently illegal to import said music into several countries around the world (eg the USA, Australia etc.).

We may all see what they are doing as morally dubious. But I cant see it's illegal. You may see this as a technicality, but by that concept all laws are a technicality. The RIAA has spent a LONG time trying to convince the russian government that the ARE doing something illegal, and the russian government has considered it(along with the usual morally repugnant US fair-trade threats), and has decided they are NOT pirates.

As to Chris objecting to nurturing some someones coke habit(I wont genederise this) I'm sure he has the experience, as do many of us here, that upon reflection you can just as easily see making a purchase at your local Kmart of a Universal, Warners, EMI, BMG product at list price ALSO feeds someones pathetic coke habit too...

I'm sorry I dont have better answers, the music industry is broken. The public are routing around it. We will have to deal with that. I think all the target article was saying was that AllOfMP3 might offer some packaging ways to do that....e.g. it really doesnt matter what the issues are behind iTunes wonky pricing structure, AllOfMP3 has solved this and the industry could too.


Oct.19.2006 @ 7:29 PM
Chris Randall
That's the point you're missing.
link [en.wikipedia.or...]">link [en.wikipedia.or...] has all the relevant information. Quite frankly, I don't understand how this isn't obvious, but I'll try to put it in the simplest possible terms:

If a store doesn't have to pay for the products they sell, their only cost is operating overhead. The exact analogy would be the electronics sold "off the back of a truck" in an earlier post. The guy selling these electronics got them for free, so his only cost is operating overhead (and risk, of course.) Thus, everything he makes above his costs is pure profit.

To put it simply: the reason AllofMP3.com can sell things so low is that they don't have to pay for what they sell. This is _NOT_ a solution. This is stealing, plain and simple. There's no grey area at all, and the industry, by and large, isn't broken. You (and the author of the original blog post) are basically saying that people like buying from AllofMP3.com better because it's cheaper, so AllofMP3.com's method is the correct one. That's the dumbest line of logic (or lack thereof) I've ever come across.



Oct.19.2006 @ 7:56 PM
I was the "dissapointed" poster over there. Looks like James has changed his song on the topic and backpedaled appropriately though.

Lindon: most third world countries (Russia included) have legal systems which support domestic piracy of foreign IP. On this and the other points of your post you seem to take the moral relativism path, that one evil is minor in comparison with the many greater evils.

RexRhino: "When I buy a product, I look at price and convienience. If getting something legally is vastly more expensive, and also far more inconvienient, than getting it illegally, then right or wrong, how can you really expect consumers to pay more for the legal product?"

Them there's pretty much the weasel words that the Statute of Anne (and every copyright law since) was designed against.


Oct.19.2006 @ 8:15 PM
Dave McAnally
yeah I agree totally with CR here. Sort of a why buy the cow when you can get the milk for free sorta thing. Seems pretty obvious to me.

I think a better question is 'what is the solution to allofmp3.com'? The only solution I can think of is to enforce the same penalties you would incur if you got caught buying items from a guy off the back of a truck. Seems like if there isn't allofmp3.com, there'd just be some other 'company' doing it, so trying to plug this hole won't solve the problem


Oct.19.2006 @ 8:18 PM
"To put it simply: the reason AllofMP3.com can sell things so low is that they don't have to pay for what they sell"


"This is _NOT_ a solution."


"This is stealing, plain and simple."

- NO.

You're missing the point I think. You seem to think that we(the original poster and I are supporters of AllOfMP3, let me assure you that couldn't be further from the truth.

I'll put it in the simplest possible terms too(using logic):

Stealing = illegal = breaking a law.

AllOfMP3 != breaking a law therefore AllOfMP3 != illegal

illegal !=morally reprehensible || something you and I dont agree with.

You may not agree with AllOfMP3, grief I DONT agree with it, but runnnig around shouting "it's illega!l, it's illegal!" when clearly that is not the case(in Russia at least) isnt going to get it resolved, the RIAA have tried that..didnt work.

"Quite frankly, I don't understand how this isn't obvious", it isnt obvious because its subtle, we've got past the obvious and are now on to the suggesting-ways-to-resolve-the-issue part of the equation.

You have to get past the emotional involvement(and I have some too let me tell you) and look at the rational issue. Lets do that and get away from the personalised nature of this...

To fix AllOfMP3.com you need to change the laws in Russia; quite frankly that's not gonna happen. SO....

We need to take what we can from the AllOfMP3.com experience and think about services that emulate the correct things they do whilst avoiding the incorrect(morally poor) things they do. The original poster suggested:

1. a combined cross-label store(everything in one place)
2. a single price point globally (risk mitigation)
3. a cheap price point (again risk mitigation)

There's quite a bit of economic theory covering music price setting which I dont see much referenced by musicians(well its economic theory after all), but *might* be of value in a discussion of selling music:

Umair Haque delivers a reallly nice precis at:
link [www.bubblegeneron.co...]">link [www.bubblegeneron.co...]

I commend this series of articles to you, especially the elements dealing with "moral hazard". Economists tend not to be perjorative, but essentially it suggests what a fellow musician once said "basically the music industry is a bunch of gangsters..."

As to me saying that people are buying from AllOfMP3.com because its cheaper therefore its correct is a HUGE misrepresentation of what I and(I think) the original author ar saying. Let me articulate it for you:

1. "People are buying from AllOfMP3.com because its cheaper AND its more convienent"
2. "AllOfMP3.com are getting away with it because of a legal loop hole"
3. Its morally wrong
4. However there are some leasons to be learned.

Note the last bit there.


Oct.19.2006 @ 8:24 PM
Downpressor: you say: "most third world countries (Russia included) have legal systems which support domestic piracy of foreign IP".

I agree many countries do have morally reprehensible laws covering IP, but not all are "third world". Historically one of the biggest offenders was/is....The United States of America.


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