Thursday, October 25, 2007

Class Action Lawsuit Targets Clear Channel Ticket Prices

This from Digital Music News. Nice.

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Thursday, October 18, 2007

A Comment on Performances of Copyright

William Patry is my favorite commentator on copyright issues. No one can doubt the man's brilliance in and mastery of the subject, which is probably why I delight in responding to his occasional rhetorical questions. Patry is far more educated and has many years' more experience, but I enjoy the exercise of challenging some of his positions.

This time: Is there a violation of the exclusive public performance right when an otherwise authorized television broadcast in a public business environment (e.g., a gym or truck stop) is altered by a technology employed by the business owner to substitute its own ads in place of those aired by the networks?

Patry points to two cases, one of which is ABC, Inc. et al v. Flying J, Inc., 2007 WL 583176 (S.D.N.Y. Feb. 22, 2007). Flying J used a devise called the segOne, which monitors television broadcasts and when a commercial comes on, the device switches over to play commercials selected by Flying J. Patry questions the merit behind the case because ABC and company brought the suit based on an infringement of their exclusive performance right.

It is true that Flying J properly licensed the broadcasts it airs and it argues that substituting its own ads in place of the original ones is the equivalent of changing the channel during commercial breaks. Patry agrees with Flying J, or at least does not see how not performing part of a broadcast (the commercials) is tantamount to a violation of the performance right. However, I disagree.

The fundamental purpose of copyright is to encourage the arts by protecting the creative integrity of the artist. ABC and its broadcasting brethren create television programs, which are protected by copyright. The programs are financed with advertisements (also copyrighted), which in turn become as much a part of the program as the show itself. Just as the show is a reflection of its creators as an artistic expression, the commercials are equally reflective on the broadcasters. This presumption was confirmed when some broadcasters and local affiliates recently decided not to air a Trojan condom commercial featuring several "pigs" in a bar, hitting on women. In their opinion, this ad would reflect poorly on the network.

If it is accepted that a commercial becomes a part of the program and those commercials are replaced with unauthorized programs, the performance is transformed into something other than what the original author created. It is, to an extent, the legal opposite of sampling: Rather than taking parts of an existing work and incorporating them into a new one, this performance involves taking parts of new works and incorporating them into an existing one. On the other hand, it could simply be called a derivative work.

The end result is the same. By using the segOne, Flying J is performing the work in a manner not authorized by the copyright owner, which is grounds for an infringement action based on the exclusive performance right. Alternatively, a contract claim might exist based on a violation of the license. It does not matter that Flying J was authorized to broadcast the shows because Flying J did not broadcast the shows in the manner consistent with its license.

Flying J's conduct could be analogized to a company obtaining a sync license to use a song in a car commercial, then rerecording a vocal track to substitute the original lyrics with a catchy jingle. Sure, a valid license exists, but did the intervening modification of the song not step outside the scope of that license? Does the performance of the modified song in commercials constitute an infringement?

The argument that using a segOne is the technological equivalent of channel surfing also fails. First, Flying J is broadcasting a totally different program and ceasing the first broadcast entirely. Flying J is actually altering the performance of a single broadcast itself. Second, perhaps more of an equitable argument, viewers know when someone is changing the channel. However, when new commercials are automatically inserted in place of the old ones, the viewer has no reason to think that (a) those commercials were not a part of the original broadcast, or (b) the customized broadcast was authorized by the network.

As might be expected, I also side with the networks on this issue because Flying J and others are making money based on the creative works of others. I'm certainly no fan of major media conglomerates but that is primarily because they tend to be motivated by their profit margin rather than the quality of their artistic output. Where creative expressions are concerned (bearing in mind the very loose definition of "creative expressions" when dealing with copyrights), I find it difficult to support one business entity who is profiting from someone else's creation at the expense of the creator.

Wednesday, October 10, 2007

AIM Tunes - Good for AOL, Bad for Artists

I am the last one to advocate utilizing protectionist technologies (DRM sucks) or reining in innovation (bit torrent is cool) for fear of demonetizing recorded music. However, my anti-control, free-technology loyalties wane when the initiative is spearheaded by a major conglomerate. Fundamentally, my belief is that ingenuity and creativity are the king of queen of progress, while profit motive is the jester.

It is with this perspective that I give a big, "What?!?!" to AIM Tunes. As Paul Reskinoff observes, people have always been able to share files using IM clients. In my eyes, that's no big deal. It's a one-for-one and basically makes it easier for users to share music with their friends, in much the same way (albeit a bit more conveniently) we used to do with making tapes and burning CDs. Plus, there are a million-and-one other ways to use the file sharing capabilities of IM. It's a fundamentally good utility.

What's concerning about AIM Tunes is that it's designed specifically for streaming music from another person's computer. While it remains true to the idea of a one-to-one relationship between people, it blows away the notion of that one person gaining access to one or a limited number of files. AIM Tunes allows a user to stream their friends' entire collection at any time, so long as they are both connected, which also means it eliminates the, "hey, have you heard the new Bees record?" sort of promotion that goes with the old school model.

Perhaps most importantly for AOL is the legal questions surrounding AIM Tunes. Interactive streaming requires a special license and even if AOL gets permission from all of the majors for all of their artists, it will be impossible to guarantee that AOL has licensed every single song in every individual's music collection (A.M. Flavor or Green Genes, for example, are certainly not among the licensors). Therefore, AIM Tunes necessarily will infringe on the rights of those bands.

The other big problem is, how do the rights holders (more importantly, the bands) get paid? If they do have licenses with the majors - and I certainly hope they at least took this measure of precaution - then does AOL have a system in place to account for each track streamed? Does it know the artist/song? Reskinoff makes mention of Amazon's tie-in to offer purchases of streamed music, so there must be some fingerprinting going on, though I can see how any technology used to do so could be highly unreliable.

Even if AOL is paying a royalty per stream and accounting to labels on such a basis, will content owners also get a pro rata share of advertising income?

My thought is that bands and songwriters are going to get the very short end of this stick:

(1) AOL may or may not have licensed content from the majors but even if it has, there is no way to account for every single artist whose music is in a digital file on an AIM user's computer;

(2) Even if AOL is licensing content, it is most likely not paying per stream as the accounting would be a nightmare and inherently unreliable since AOL does not control the source files, thus meaning that artists will not get paid a dime since the labels cannot say how much of the license fee it earns is attributable to each artist and each song and thus, does not trigger the royalty requirement in virtually every recording contract (if income cannot be attributed to a single work, the label doesn't have to pay);

(3) It is highly doubtful that AOL is sharing in ad revenue, and even if it is, this income will also go 100% to the label and none to the artist, since once again the royalty provision will not be triggered.

My problem isn't so much with the technology, as I am not convinced that just because someone can stream music from their friend's computer, they won't go buy the record. What troubles me is that this technology has been unveiled by a major conglomerate who is going to profit handsomely from other people's music. Even if AOL acts as nobly as it can under the circumstances, artists are sure to get short-changed.

Tuesday, October 02, 2007

The Yak Sak is No Barf Bag

This is why I love trademark practice.

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