Eric Pfanner of the New York Times writes that “The highest court in the European Union said on Thursday that Internet service providers could not be required to monitor their customers’ online activity to filter out the illegal sharing of music and other copyrighted material.”

The decision, handed down by the European Court of Justice, rebuffed a group of composers and musicians suing an Internet Service Provider facilitating file sharing. A lower court had compelled the file sharing outfit to filter out copyrighted songs. The higher court thought the lower court’s decision would violate  “the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information.” Or, to put it less elegantly, the license to steal.

European Court Overturns Rule on Illegal File Sharing

Richard Curtis

Nothing stands in the way of the digital steamroller. In industry after industry, sooner or later some bright person looks at a conventional enterprise and wonders why it’s being performed the old way when new technology can  short circuit the process and save time, money and energy.

That’s what happened when a music student named Edward W. Guo, examining the high price of music scores, looked into the tedious and expensive process of buying scores for musical performances. “The site, the Internet Music Score Library Project, has trod in the footsteps of Google Books and Project Gutenberg and grown to be one of the largest sources of scores anywhere,” writes Daniel Wakin in the New York Times.  “It claims to have 85,000 scores, or parts for nearly 35,000 works, with several thousand being added every month. That is a worrisome pace for traditional music publishers, whose bread and butter comes from renting and selling scores in expensive editions backed by the latest scholarship. More than a business threat, the site has raised messy copyright issues and drawn the ire of established publishers.”

You can visit and, if you’re clever, download a score directly into your laptop or iPad as the Borromeo Quartet does. The pages are turned on the touchscreen the same way that you turn the pages of an iPad e-book.  Some laptops are equipped with a footpad that you tap to turn the page.

Free Trove of Music Scores on Web Hits Sensitive Copyright Note by Daniel J. Wakin in the New York Times.

Richard Curtis

Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by the New York Times.

With the death of George Jellinek, reported earlier this week, the musical history book of the 20th century has closed. Born in Hungary 1919, his parents put him on the last ship carrying emigrees out of harm’s way as the Nazi fist clenched around the throat of Europe. The ship went to Cuba.

The story of Jellinek’s survival and the strange road that brought him from Havana to New York’s musical scene, where he became director of the city’s classical music station and eventually host of a long-running opera program, are chronicled in his book My Road to Radio And The Vocal Scene: Memoir of an Opera Commentator.

I was honored to represent Jellinek on publication of his erudite History through the Opera Glass. For all of us for whom he was a fixture on the radio – the charming, witty and unmistakeably continental voice of an era wiped out by the Second World War – his passing is profoundly saddening. Tributes paid to him over the radio use the same word again and again: George Jellinek was a gentleman.

Below, an all too streamlined summary of a rich life, taken from his autobiography:

Born in Ujpest, Hungary, in 1919, George Jellinek began his musical career playing violin with gypsies in the family’s garden restaurant. He spent his adolescence doing much the same, honing his talent and enriching his own musical education with frequent trips to the Hungarian Royal Opera House. But when Hitler and Chamberlain signed the Munich Pact in 1938, Jellinek’s quiet life was shattered. How the exiled teenager survived World War II, worked his way up from a poor Hungarian immigrant in Cuba and became one of the most important and influential musical administrators in New York is an unconventional but truly American success story.

This memoir documents the inspiring life of George Jellinek, beginning with his childhood in his beloved Hungary. The crisis of World War II soon invaded his life and, leaving behind his family and homeland, he fled west. Having been finally allowed to enter the United States, he was drafted into the U.S. Army in 1942, obligated to bear arms against the country of his birth. This ironic turn of events culminated in his firsthand role in the capture of Ferenc Szálasi, the leader of Hungary’s Hitlerite faction.

The latter half of the book reveals how music helped Jellinek piece back together his broken life in America. After rising to the post of musical director for radio station WQXR, he went on to become the producer and host of The Vocal Scene. His 36 years with that program established it as a revered fixture of New York’s opera life.

The epilogue documents the day on which Hungary’s president bestowed upon Jellinek the Knight’s Cross of the Order of Merit of the Republic of Hungary.

RC

In a famous vaudeville routine, a man is fined two dollars for spitting in the subway, but his righteous lawyer urges his client to fight the judgment. Every time the lawyer denounces the unfairness of the ruling, the judge bops the defendant on the head with a rubber truncheon, shouting “Pay the two dollars!”

Maybe Boston University graduate student Joel Tenenbaum’s lawyer should have counseled him to pay the two dollars. Or, more accurately, the $4,000 that the recording industry demanded of him for downloading copyrighted music from a filesharing website. Or maybe Tenenbaum should have just paid for the 30 songs he originally copped. Instead, his attorney urged him to fight fight fight. According to John Schwartz of the New York Times, “Nearly all of the thousands of people confronted by the industry settle for a few thousand dollars, but Mr. Tenenbaum chose to fight.”

He fought fought fought and the Recording Industry Association of America sued him.

He lost lost lost. He lost lost lost to the tune of a $675,000 judgment. That’s not the tune Tenenbaum bargained for in 2004 when he downloaded his music at a time when the recording industry went on the warpath to defend its copyrights.

According to Schwartz, Tenenbaum’s case was not helped by flamboyant defense tactics by his attorney, which may have been entertaining (they actually quite entertaining) but were not legally persuasive in the eyes of the court.

We report this because of the parallels between the music and book industries. Filesharing and pirate book websites abound, and because many of them are offshore and impossible to prosecute, the next best tactic may be to sue the downloaders. Read Can You Be Sued for Dowhnloading a Book?

Freemongers who think it’s cool to thumb their nose at copyright owners might want to take note of Joel Tenenbaum’s experience – and just pay the two dollars.

RC

Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by the New York Times.

It’s a story about the music industry but the implications for the book business are obvious. Eric Pfanner in the New York Times reports that most of those who copy music from pirate and file-sharing websites would not do so if there were a legal and convenient way to buy it.

“Over the past year,” Pfanner writes, “as sales of CDs have continued to fall and paid-for downloads from services like Apple’s iTunes have fallen short of hopes, record companies have moved to embrace casual file-sharers. Legal services offering free, unlimited streaming of music, rather than downloads, are proliferating. According to a survey published last week, they are taking some of the wind out of the pirates’ sails.

‘Consumers are doing exactly what we said they would do,’ said Steve Purdham, chief executive of We7, a service that says it has attracted two million users in Britain in a little more than half a year by offering unlimited access to millions of songs. ‘They weren’t saying, “Give me pirated music”; they were saying, “Give me the music I want.”‘

The result is a sharp decline in the number of teenagers who downloaded unauthorized streamed music, according to a British poll. Pfanner’s conclusion? “Rather than cannibalizing existing digital businesses, they say, the new services are often attracting people who previously shared files illegally.”

The key to profitability of the service is either a cheap subscription, advertising revenue, or a combination of both. We’ll be watching these services closely to see if they make money or if, instead, human nature reverts to the something-for-nothing mentality that has driven so many well-meaning people into the arms of pirates.

Read Music Industry Lures ‘Casual’ Pirates to Legal Sites and see what you think.

Richard Curtis

Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by the New York Times.

The Nokia cellphone you buy will Come With Music. The capital letters are intentional: purchase of the phone entitles you to unlimited downloads from a catalogue of more than five million tracks, according to Eric Pfanner of the New York Times. “Comes With Music” is the name of the benefit that comes with your purchase.

This is the latest ploy in the music industry’s war on pirates, and of course we’re not necessarily talking about an organized cabal of evil offshore thieves, but also about garden variety citizens who simply can’t understand what’s wrong with ripping a CD, even though the accompanying text has one of those funny (c) symbols next to the song title, composer or performer.

Does this mean the music business has finally surrendered to the Music Wants to Be Free Army? Not at all. When you buy that Nokia, the price of the “free” music is built into the price of the gadget. “Two thousand nine should be the year when the music industry stopped worrying and learned to love the bomb,” Pfanner quotes Feargal Sharkey, head of UK Music, a trade group for the British music industry.

The Nokia scheme is just one of a number of strategies employed by the music industry to counter piracy. You can read about others in Pfanner’s Music Industry Imitates Digital Pirates to Turn a Profit.

The same issues confronting music are operative in book piracy, and the Nokia approach may be appropriate for manufacturers of e-book reading devices as well. But it is the polar opposite of what might be termed the “King Gillette Strategy”. Gillette, the genius who invented disposable razor blade and founded the shaving products business named after him, exhorted emulators to give away the razor and sell the blades. Nokia is selling the razor and giving away the blades.

Which is the better business model? Though disposable and electric razors rendered the question moot, when it comes to music and literature I’m with Gillette.

Richard Curtis

A while back I got a Zune player and tried to load my iTunes library into it. Couldn’t. My Mac friend shook his head. “Why didn’t you ask me? I could have told you iTunes doesn’t sync to non-Apple devices.”

For years, Apple has been segregating its iPod and iTunes Music Store customers from the competition. The biggest caveat for iTunes customers has been that many iTunes files have restrictions that keep you from playing them on anything but an iTunes “authorized” device. No Zunes allowed.

Now that’s going to change, according to Phil Schiller, Apple’s senior vice president for worldwide marketing, who pinch-hit for Steve Jobs as keynoter at Macworld in San Francisco. Apple’s “iTunes-Plus” files, which have higher audio fidelity and no restrictions on copying, will soon be available for all the songs in the iTunes Music Store, effectively ending an era of stifling sales and policing audio files.

In fact, a lot’s going to change thanks to Apple’s decision to end DRM restrictions on music content. “DRM” is jaw-friendly abbreviation for Digital Rights Management, the rules and regulations governing the licensing and exploitation of copyright-protected intellectual property. Brad Stone of the New York Times reports that, “Beginning this week, three of the four major music labels — Sony Music Entertainment, Universal Music Group and Warner Music Group — will begin selling music through iTunes without digital rights management software, or D.R.M., which controls the copying and use of digital files. The fourth, EMI, was already doing so.”

Apple also agreed to set more flexible pricing on song downloads, a concession to the major labels. With Apple music sales drooping somewhat under competitive pressure from rivals like Amazon’s MP3 store, they have agreed to drop prices on slower moving tunes to 69 cents from its rigid one-99-cents-serves-all policy. But hit and hot songs might go out at $1.29 per download. That price could come down as sales soften. Many other tunes will stay at 99 cents. This approach will goose sales of the backlist while taking advantage of hot items without gouging.

“I think the writing was on the wall, both for Apple and the labels, that basically consumers were not going to put up with D.R.M. anymore,” Stone quotes a market research analyst.

Should we look on the same wall for writing about digital books? Stone’s comment about DRM in music might apply to e-books: “Industry pundits have long pointed to D.R.M. as one culprit for the music companies’ woes, saying it alienated some customers while doing little to slow piracy on file-sharing networks.”

One reason the e-book business has taken so long to develop robustly is publishers’ concern – yea obsession – with copyright. No one can blame them, but by insisting on DRM protocols and withholding content from etailers who did not adhere to rigid copyright protections, much traction was lost in the last decade, and still is. Yet, in cases where DRM is not strictly observed such as the MultiFormat feature at Fictionwise, the leading etailer in the business, piracy has not really been as big an issue as one would think. From our own experience here at E-Reads, piracy seems to thrive when books are not readily available or are available only for prohibitive prices. As soon as those books go up for sale, piracy seems to diminish. Given a choice between a free pirated edition and a legitimate one for sale on a reputable website, consumers will usually choose to pay. A key reason is that they are wary of contracting viruses when downloading from pirate sites.

We are all concerned about Steve Jobs’s health and wish him a full and speedy recovery. But whatever is afflicting his hormones has not compromised his mind. His change in policy is smart and will prove a boost to every sector of the digital content business.

RC

If you substitute “books” for “CDs” in Ben Sisario’s New York Times article Music Sales Fell in 2008, but Climbed on the Web, you’ll see parallels both encouraging and disheartening, depending whether you’re in the print books business (which I am) or the e-book business (which I am).

Though total sales of CD’s in the year gone by were high – 361 million – they were down almost 20 percent from 2007. Adding full-album downloads to the charts raises the total to 428 million, but that too represents a 14% decline over the previous year. No matter how you cut it, the arrow pointed down in the year gone by. You can mark some of it down to the economic recession, but when you look at the arrow for sales of digital music, you know it’s not “the economy, Stupid.” Proof is that for the last eight years, when the economy was relatively strong until recently, album sales have been dropping. Between 2000 and 2008, they plummeted by 45%.

On the other hand, in 2008 more than one billion songs were downloaded, a 27 percent increase from 2007, according to Nielsen SoundScan. Five years ago, that figure was 19 million.

If you look at the bar graphs for the e-book business, you see the same dramatic growth. Though stats for all of 2008 aren’t in yet, as of the end of the third quarter e-book revenue was up 57.7% over the same period the year before. Whether it’s books or music, the plain truth is that retailers don’t feel they can generate the same level of sales per square foot of store space (which is how most businesses calculate the profitability of any given product).

But now let’s shift from plain truth to one that is emerging from dust at the crossroads where the hard-copy and digital businesses intersect, and that is the profitability of content purchased on web sites.

One reason that the traditional book and record companies cling to their hard-copy model, in the face of all the evidence that consumers are going in another direction, is that the digital model has not proven it can generate revenue on the same scale as the Old Way. Online advertising, secondary exploitation of content, and other revenue-producers have yet to step up to replace the same functions in world of tangible goods. One of the big causes is the Informaton Wants to Be Free mindset among online consumers, a gaping hole at the ship’s water line that has not yet been sealed. To executives watching the stupdendous paradigm shift in the media, Free Downloader is just one four-letter word away from Freeloader.

According to the Times’s Sisario, however, there is hope. Some record companies, he reports. “…say they are finally beginning to wring significant profits from music on Web sites like YouTube and MySpace.” “As the digital side grows,” he quotes a market research analyst, “you get a different business model, with more revenue streams.” Sisario cites videos and ring tones as kinds of revenues flowing into those streams. “We don’t focus anymore on total album sales or the sale of any one particular product as the metric of revenue or success,” says an executive VP for Universal Music Group’s digital division. “We look at the total consolidated revenue from dozens of revenue lines behind a given artist or project, which include digital sales, the physical business, mobile sales and licensing income.”

Is there a concommitant revenue stream to be exploited by book, newspaper and magazine publishers looking for a bridge to the New World of Digital? I don’t know what the book equivalents of ring tones and videos are, but it’s imperative that publishers find them and find them fast.

RC

Tim Arango reports in the New York Times that Digital Sales Surpass CDs at Atlantic. This should come as no surprise to fifteen-year-olds. In fact, it should come as a surprise to no one of any age. But it’s still another sign that the media is undergoing one of the profoundest transformations in the history of human communications.

Does that mean that dollars have also tipped from the hard copy side to the virtual? Not according to John Rose, a former music business executive quoted by Arango. “It’s not at all clear that digital economics can make up for the drop in physical,” Rose observed.

“With the milestone comes a sobering reality already familiar to newspapers and television producers,” writes Arango. “While digital delivery is becoming a bigger slice of the pie, the overall pie is shrinking fast.”

This too is no surprise to any business person caught in that terminator line where the fading light of the old media meets the rising sun of the new.

Where is the money disappearing to? Once you recite the motto of the new generation – “Information wants to be free” – it shouldn’t be too hard to figure out.

RC