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					 Port 21 (Distribution and Promotion Remix)




Brian Geoghagan
Winter 2005
COM546
Professor Gill
   Back In The Day (c.1995)

 Pre-Broadband
 Hard Drive space appx. $1 per megabyte
 MP3 encoder and player released June ‘95 by The
  Fraunhofer Society
 3min Uncompressed = 90min
 3min Compressed (MP3) = 9min
                  1999

   $0.17 per MB (20GB = $300)
   Broadband rapidly spreading
   Increased Internet usage
   Winamp MP3 player
   Increased acceptance of MP3
    technology
                     Napster


   Shawn Fanning
   October 1999
   Centralized Servers
   50-70 Million Users
                    Legal Debate




 R.I.A.A. vs. Napster (December 1999)
    Contributory Infringement – knowingly encouraging infringing activity.
    Vicarious Infringement – violation occurs when operator has the ability to
     supervise users, but chooses not to for financial benefit.
 Metallica/Dr. Dre vs. Napster (April 2000)
             Napster’s Defense

 Fair use
    Sampling
    Space Shifting
    Permissive Distribution
 Non-Commercial & Non-Profit Use
 Does not copy, record, encode or transfer MP3 files
 American Home Recording Act (AHRA)
    Allows recording copyright protected material for personal
     use
Metallica vs. Napster
              The Settlement

 Mutually beneficial
 300,000 users banned from Napster
 Temporary injunction shuts down Napster
 Napster not solely reliable for copyright material on
  servers
 Shared liability with Artists/labels
 Must notify Napster of copyright protected files
 36hrs to remove files
           R.I.A.A. vs Napster

 AHRA not applicable because computer is not recording device
 Religious Technology Center versus Netcom On-Line
  Communication Services.
    ISP responsible for copyright infringement if they know of
     infringement and have the ability to remove the protected
     material
 Sony v. Universal
    Legal use of VCR trumps illegal use
    Sony cannot control what consumers use the VCR for in
     their homes, therefore not liable for any copyright
     infringement
    Time-shifting constitutes Fair Use
                             Decision
   regardless of the number of
    Napster’s infringing versus non-
    infringing uses…plaintiffs would
    likely prevail in establishing that
    Napster knew or had reason to
    know of its users’ infringement
    of plaintiffs’ copyrights
   File sharing harms copyright
    holders ability to make money
    from the same material.
   File sharing is commercial use
    because users get something
    for free they would have had to
    pay for.
             Further Studies

 Didn’t factor increase in video game & DVD
  sales
 Fewer major releases
 Felix Oberholzer and Koleman Strumpf
   Tracked Downloads from file sharing networks and
    RecordScan sales during 2002 and found file sharing had an
    impact “indistiguishable from zero”
   File sharing results in net-increase in music consumption
   Lower cost increases audience size
   Magnitude of file sharing increases social welfare
                                     Future
                                           Success of iTunes Music Store and
                                            portable MP3 players clearly shows
                                            room for growth in digital download
                                            market
        Quic kTime™ and a
       GIF decompr essor
ar e neede d to s ee this picture.         SoulSeek and other P2P Networks
                                           New modes of sharing
                                               MP3 Blogs
                                               BitTorrent
                                               Web based file sharing services
                                                (yousendit.com, rapidshare.de)
                                           Hype Machine reports 400 sales
                                            through iTunes and Amazon in
                                            October.
Questions?

				
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