Cheers and Jeers for the Recording Industry
By Cynthia L. Webb
washingtonpost.com Staff Writer
Monday, September 15, 2003

The Recording Industry Association of America's right to pursue a heavy handed legal attack on music pirates. Stealing is stealing, whether it's breaking into a home or downloading a file on the Internet.

No, the RIAA is arbitrarily suing the very people it should be courting and is failing to adapt to a new era of digitally delivered services.

The music piracy controversy is splitting newspaper editorial boards and opinion writers around those two arguments. Here's a sampling:

An editorial in the Detroit Free Press last week blasted the RIAA suits, saying the music industry just doesn't seem to get it when dealing with its largely youthful audience. The youngest among them were practically born online. And online is where you reach them -- not where you hunt them down with lawsuits and half-baked 'amnesty' offers, as the Recording Industry Association of America started doing this week. ... People who want to do the right thing -- make sure artists are paid -- certainly hope for a cyber-solution. Somewhere between spending $13-plus per CD, when you want only one song, and worrying that the industry will sue you for sampling and swapping, the answer should be found online -- not in court.
• Detroit Free Press Editorial: Online Music -- Industry Should Find Better Solution Than Lawsuits

The Modesto Bee in California also took issue with the RIAA's lawsuit brigade: The recording industry, basically, calls downloaders thieves. After all, says the industry, they are stealing copyrighted property. Under current law, the recording industry is right. Downloaders -- or filesharers, if you prefer -- are stealing. No one who uses Kazaa or Morpheus or another P2P can say they haven't been warned about the possibility of being sued. But the RIAA shouldn't lose sight of two critical points: Most of those 'thieves' are also their best customers, often buying CDs after having heard a song or two via a filesharing site. The world has changed and the music industry hasn't. To survive they will have to stop assaulting customers in court and find a way to harness the new technology to create profit. Napster, Kazaa and Morpheus figured it out and have at least 65 million fiercely loyal customers.
• Modesto Bee Editorial: Pirates Vs. Dinosaurs

But Mike Langberg of The San Jose Mercury News writes today that the RIAA's legal moves are absolutely necessary. Langberg: Internet apologists, who seem to believe the most basic rules of right and wrong don't apply to online activity, are appalled. Not me. Property, whether it's your house or the copyright on a song, deserves to be protected by law. Anyone who takes someone else's property without permission must face the possibility of real punishment.
• San Jose Mercury News's Mike Langberg: Record Companies Are Right to Sue Over Greedy Music Downloading

A Montana newspaper, The Missoulian, also sided with the RIAA in an editorial on Friday. Do you think the neighbor kids should be able to waltz into your house and steal your stuff? Do you think shoplifters are entitled to take what they can carry out of a department store? Should your broker be able to skim money from your investment portfolio for his personal use? Well, of course not. So, what's all the uproar over the recording industry's filing lawsuits to stop thieves from pirating music over the Internet?, the paper wrote.
• Missoulian Editorial: Recorded Music Is Free Only To Thieves

A New York Times editorial from last week offered a more balanced assessment of the music industry's legal war against piracy. The editorial argued that the RIAA is right to aggressively pursue people, even minors, who steal their products, but that alone will not solve their problems. They need to change how they do business, and fast, if they want to survive in the 21st century. The newspaper concluded that [t]he only way for the industry to defend itself is to litigate hard, and publicly, against the copyright infringers. But it also needs to adapt to the times. Consumers do not want to pay $18 or $19 for a single CD, a steep price in absolute terms and when compared with other forms of entertainment, like DVD's, which offer more bang for the buck. Universal Music Group's recent decision to reduce prices as much as 30 percent stands as an example for other companies to follow. The industry also needs to improve its technology. File swappers get their music online not only because it is free, but also because it is convenient. Consumers want to get the music they want in their homes, immediately, and they don't want to be forced to buy a whole CD to get a song they like. Online music stores, which keep prices down by eliminating CD's, packaging, delivery and bricks-and-mortar stores, are the wave of the future.
• New York Times Editorial: Suing Music Downloaders (Registration required)

The Consequences of the RIAA Suits

While a number of musicians have quietly cheered the music industry's moves, some artists are worried that the sweep of lawsuits will alienate their fans, The New York Times wrote in an article on Sunday. It would be nice if record companies would include artists on these decisions, Deborah Harry of Blondie told the newspaper, adding that when a grandfather is sued because, unbeknownst to him, his grandchildren are downloading songs on his computer, 'it's embarrassing.'

The singer Moby wrote about the debate on his Web site: The record companies should approach that 14-year-old and say: 'Hey, it's great that you love music. Instead of downloading music for free, why don't you try this very inexpensive service that will enable you to listen to a lot of music and also have access to unreleased tracks and ticket discounts and free merchandise?'

But the Times piece makes clear that artists have serious concerns about the release of their work online: For some of them, the problem with file sharing is control. Before a CD is released, early versions of the songs often end up on file-sharing services, where fans download the music under the misconception that it is the finished product. Other times, songs online by one act are credited to another act. And fans exchange studio outtakes, unreleased songs, and live performances that some artists would prefer remain unheard.
• The New York Times: File-Sharing Battle Leaves Musicians Caught In The Middle (Registration required)

Meanwhile, in a separate article today, The New York Times reports that the RIAA's moves could backfire and create an anonymous black market of sorts for illegal file swapping. The Times said hundreds of software developers are racing to create new systems, or modify existing ones, to let people continue to swap music -- hidden from the prying eyes of the [RIAA], or from any other investigators. ... Some experts wonder if the industry's efforts will create more trouble for it than ever. 'The RIAA is breeding antibiotic-resistant bacteria,' said Clay Shirky, a software developer who teaches new media at New York University.
• The New York Times: Crackdown May Send Music Traders Into Software Underground (Registration required)

The Associated Press noted in an article that while the RIAA may have a hard time collecting damages on its lawsuits since so many of the defendants are minors. Even though experts quoted in the articles said the RIAA has a good case against defendants who refuse to settle the charges, proving a parent's liability for a child's activity is much harder, said Jonathan Zittrain, codirector of the Berkman Center for Internet and Society at Harvard Law School. 'And in general, if you win an action against a kid, you don't get to collect against the parent,' Zittrain said.
• The Associated Press via The Philadelphia Inquirer: Song-Swap Suits May Face An Obstacle

An Inside Job?

While the digital piracy fights waged by the entertainment industry have focused on consumers, some of the worst offenders who nab movies before they are released and put them online are Hollywood insiders, a new study has found. The early debut of 'Hulk' was not the work of the armies of KaZaA-loving college students or cinephile hackers. The copy that made its way to the Internet was an almost-complete working version of the film that had been circulated to an advertising agency as part of the run-up to theatrical release. And 'Hulk' is not alone, The New York Times reported today. According to a new study published by AT&T Labs, the prime source of unauthorized copies of new movies on file-sharing networks appears to be movie industry insiders, not consumers. ... Nearly 80 percent of some 300 copies of popular movies found by the researchers on online file sharing networks 'appeared to have been leaked by industry insiders,' and nearly all showed up online before their official consumer DVD release date, suggesting that consumer DVD copying represents a relatively minor factor compared with insider leaks.
• The New York Times: Hollywood Faces Online Piracy, But It Looks Like An Inside Job (Registration required)

Showtime for AOL's Miller

It seems the honeymoon phase for America Online's newest leader is over. Chief executive Jonathan Miller has a job to do -- he has to deliver, The Financial Times reported, quoting a senior AOL insider. Miller acknowledges the challenge. But he claims AOL's status as one of the world's largest internet service providers has been overshadowed by record write-downs, SEC investigations, volatile subscriptions and the questionable industrial logic of AOL's merger with Time Warner, the article said. As a way to get out of its troubled past, the company could as early as this week vote to drop AOL from the parent company's name: On Thursday the board of AOL Time Warner is expected to endorse a move aimed at rebuilding morale and signalling the future shape and importance of the online division. Less than three years after the merger, the AOL name is likely to be dropped from the corporate masthead, the article said. Mr Miller, who instigated the change of name, believes AOL can only assume its divisional status once the company is plain Time Warner, reflecting the primacy of its entertainment and media operations.
• The Financial Times: Time To Deliver For AOL Chief

Not everyone thinks the name change will help. Dropping AOL from the corporate name is their version of joining a witness protection program where you are given a new identity, Jeff Chester, executive director of the Center for Digital Democracy, told The Atlanta Journal-Constitution. But it won't help the company.
• The Atlanta Journal-Constitution: Battered AOL Entertains Hopes For Brighter Days



Fancy Dialing for Microsoft

A Microsoft-powered cell phone, created in partnership with Motorola, is scheduled for release later this year, starting with AT&T Wireless customers. This phone has been a long time coming for Microsoft. There are phones in the United States based on the company's Pocket PC phone edition — T-Mobile offers one, for instance — and those could technically be called smart phones because they combine a phone with elements of a personal digital assistant. But there are none using Microsoft's Smartphone operating system. Earlier this year, Microsoft began using the Windows Mobile tag for software used in its handheld computers and Smartphone cellphones, The Seattle Times reported.
• The Seattle Times: Microsoft, Motorola Link Up On Smart Phone

Jupiter Research's Michael Gartenberg told The Seattle Post-Intelligencer that the phone is 'a big win' for Microsoft because it's the first time the company has been able to get one of the leading handset vendors to use its Windows Mobile software and one of the major U.S. wireless carriers to bring it to market. A review of sorts on the phone in today's USA Today makes the product sound a lot like a Palm pilot. The MPx200 is designed to let busy professionals quickly extract phone numbers, appointments and e-mail from a Windows PC by placing the handset in a cradle connected to the PC, the article said.
• The Seattle Post-Intelligencer: Microsoft Cracks North American Cell Phone Market
• USA Today: New Microsoft Cell Phone Has Busy Pros In Mind

Microsoft's Money

Meanwhile, the Redmond, Wash.-based software giant said Friday it would double its dividend for investors to 16 cents a share on Nov. 7. The move may raise investor expectations that the company may share more of its cash and bolstered confidence that the software maker can contain its legal risks, The Wall Street Journal said, noting that the dividend will be a cost to the company of about $1.7 billion. Shareholders of record as of Oct. 13 will receive the dividend. The announcement comes eight months after Microsoft announced the first dividend in its nearly 30-year history, which was set at eight cents and paid in March.
• The Wall Street Journal: Dividend Increase at Microsoft Lifts Investor Expectations (Subscription required)

The Seattle Post-Intelligencer noted that the 16-cent dividend is still modest compared with other large companies. The 0.6 percent yield -- the amount of money per share paid to investors divided by the stock price -- ranks among the bottom of Microsoft's 29 peers in the Dow Jones industrial average. Only Intel Corp.'s 0.3 percent yield was lower.
• The Seattle Post-Intelligencer: Microsoft Doubles Dividend

Reader Feedback: Sue Microsoft?

Thanks to the many readers who took the time to chime in about whether or not Microsoft should be held liable for its buggy software. Readers were also asked to weigh in on one expert's prescription for protecting the Internet from viruses and worms: require computer users to obtain a license to surf the Net. Here are some excerpts of edited remarks readers sent in by e-mail:

• While I agree that Microsoft needs to divert more of its massive profit pool to securing its operating system against would-be hackers and intruders, the notion of suing them for flaws in their software is not the answer. Bruce Schneier's assertion that this is tantamount to Firestone's negligence is absurd. If you install a lock on your door, and a criminal happens to pick the lock, do you sue the lock manufacturer for the damages? Of course not. Litigation is not the answer here, either. Doing so would most certainly spark a new legal paradigm in the software world that would be no less harmful to the consumer than the problem they are attempting to remedy. -- Evan Williams, Charlottesville, Va.

• Microsoft has already shown that their voluntary efforts at securing their software are laughable. Unless we want the Internet to slow to a crawl, and e-mail to be practically useless we have no choice but to provide legal means for pressuring them to clean up their own software. ... Yes, the people who write the viruses/worms are guilty, and should be held accountable for their actions. -- John Watlington, Cambridge, Mass.

• Product liability suits should be permitted. It is grossly unfair for Microsoft or any vendor to provide products which have not been sufficiently tested and to allow the gross defects found in Microsoft Windows products. -- Dan Maceda, Washington, D.C.

• If Ford were to put out a recall on a faulty brake system in your car, but you choose not to take it in for the repair at Ford's expense, I doubt the courts are going to rule in your favor when you can't stop and run into someone. Many of the current viruses and worms are taking advantage of well-known problems that have already been fixed by Microsoft, but the owner had never taken the time to install the fix. So Microsoft should not be accountable for people's laziness, but they should be held fully accountable for problems that are known about but not fixed that cause problems for their customers. There are still plenty of those. They also need to be held in some way accountable for making the fixes that are available more widely known, and less time consuming to install for both he novice home user, and the corporate IT guru. -- James Kriebel, La Plata, Md.

• I agree that Microsoft should be required to stand by its product just like any other manufacturer!! What a concept! The 'privilege' of having been allowed to become a de facto monopoly should be balanced by the responsibility of producing a good product. Of course, the licensing of users is not a bad idea. Part of the responsibility for the spread of virus and worms is from the inability of stupid users to simply learn not to respond to e-mails that contain unknown attachments! -- David Lee, Houston.

• The problem with the latest Microsoft defect is that Microsoft shipped the system with the doors wide open to a service unused by most people. That was irresponsible. Had the system been shipped with the doors closed, most of the people having their computers invaded with worms and hackers would not be having problems. ... To place the blame on consumers for not having a firewall to close the doors that shouldn't have been open in the first place is irresponsible. We are now in the position that if a consumer goes to the store today and buys a Windows XP computer or software, the computer will be susceptible to hackers and worms as soon as it is plugged into the network putting their privacy and the operation of the Internet at risk. If nothing else, Microsoft should be forced to pull these defective products from the shelves. In addition, they should be forced to send every registered owner of one of the defective products a CD containing the fixed version of the product. .... The idea for a drivers license is good. A simple solution would be for all ISPs to require an online basic computer knowledge and security awareness training session before an account is granted. -- Gary Flynn, Harrisonburg, Va.

• I don't really believe that calling Microsoft software 'buggy' and 'flawed' is necessarily justified. To me, bugs and flaws would be errant code (which previous Windows versions certainly had plenty of) that causes the software to fail on its own (akin to the Firestone tire analogy), but I wouldn't classify security holes the same way. I don't believe Microsoft has ever made claim to having hack-proof software and they do go out of their way to provide patches as soon as vulnerabilities are discovered. Of course that isn't for entirely altruistic reasons. After all, who's going to buy software that is too easily hacked? The analogy I make is if someone picks the lock on your gas cap and pours sugar in your tank, you wouldn't sue the automobile manufacturer for not providing adequate security for your car. To me this is the same thing. There are plenty of malicious people out there and they are the ones to whom we should direct our ire. Unfortunately, that's a lot like the war on terrorism, we'll never get them all and it only takes a few to wreak havoc. All computer users need to be more vigilant themselves by installing antivirus and firewall software and less paranoid about allowing automatic updates (even from Microsoft) to always have the most current security available. -- Geoff Eargle, Streamwood, Ill.

• I have a more immediate problem than a lawsuit. Why does Microsoft make it so hard to download patches without using their auto-update service? The only way I could find to simply download the latest patch was through a link at the Symantec Web site. -- Ed Harrigan, Washington, D.C.

• The ultimate responsibility in computing is upon the end user. All of the secure software, virus protection systems, and periodic update Web sites don't mean a thing if the end user chooses to ignore the instructions provided by the Manufacturer. ... The only way I can see to educate the public about the dangers of viruses, and the importance of firewalls, anti-virus software, and regular updates is for PC manufacturers to include a training program with their products. ... Having a 'license to use the Internet' makes just about as much sense as holding Microsoft liable for not producing software that is 115% secure. Anyone can obtain a driver's license, but how many people do you know who can actually drive? -- Peter Prout, Tappahannock, Va.

Stay tuned for Tuesday's filter for more reader comments. I appreciate all of those who took the time to write!

Filter is designed for hard-core techies, news junkies and technology professionals alike. Have suggestions, cool links or interesting tales to share? Send your tips and feedback to cindyDOTwebbATwashingtonpost.com. (Yes, those spammers have been having a lot of fun with my e-mail address lately.)

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