Posted on 08/21/2002 10:34:16 AM PDT by Leroy S. Mort
ASPEN, Colo.--The U.S. Department of Justice is prepared to begin prosecuting peer-to-peer pirates, a top government official said on Tuesday.
John Malcolm, a deputy assistant attorney general, said Americans should realize that swapping illicit copies of music and movies is a criminal offense that can result in lengthy prison terms.
"A lot of people think these activities are legal, and they think they ought to be legal," Malcolm told an audience at the Progress and Freedom Foundation’s annual technology and politics summit.
Malcolm said the Internet has become "the world's largest copy machine" and that criminal prosecutions of copyright offenders are now necessary to preserve the viability of America's content industries. "There does have to be some kind of a public message that stealing is stealing is stealing," said Malcolm, who oversees the arm of the Justice Department that prosecutes copyright and computer crime cases.
In an interview, Malcolm would not say when prosecutions would begin. The response to the Sept. 11 terrorist attacks temporarily diverted the department's resources and prevented its attorneys from focusing on this earlier, he said.
A few weeks ago, some of the most senior members of Congress pressured the Justice Department to invoke a little-known law, the No Electronic Theft (NET) Act, against peer-to-peer users who swap files without permission.
Under the NET Act, signed by President Clinton in 1997, it is a federal crime to share copies of copyrighted products such as software, movies or music with anyone, even friends or family members, if the value of the work exceeds $1,000. Violations are punishable by one year in prison, or if the value tops $2,500, "not more than five years" in prison.
Cary Sherman, president of the Recording Industry Association of America (RIAA), said his industry would "welcome" prosecutions that send a message to song-swappers.
"Some prosecutions that make that clear could be very helpful...I think they would think twice if they thought there was a risk of criminal prosecution," said Sherman, who was on the same conference panel.
Christopher Cookson, executive vice president of Warner Bros. and another panelist, said there was "a need for governments to step in and maintain order in society."
Swapping files in violation of the law has always been a civil offense, and the RIAA and the Motion Picture Association of America (MPAA) have the option of suing individual infringers and seeking damages.
But, Malcolm said, criminal prosecutions can be much more effective in intimidating file-swappers who have little assets at risk in a civil suit. "Civil remedies are not adequate...Law enforcement in that regard does have several advantages," Malcolm said. "We have the advantage, when appropriate, of opening up and conducting multi-jurisdictional and international investigations.
"Most parents would be horrified if they walked into a child's room and found 100 stolen CDs...However, these same parents think nothing of having their children spend time online downloading hundreds of songs without paying a dime."
Gary Shapiro, president of the Consumer Electronics Association, said he was skeptical about the view that peer-to-peer piracy should be a criminal offense. "If we have 70 million people in the United States who are breaking the law, we have a big issue."
The DOJ already has used the NET Act to imprison noncommercial software pirates, which software lobbyists hailed as "an important component of the overall effort to prevent software theft."
During his confirmation hearing in June 2001, Attorney General John Ashcroft told Congress that "given the fact that much of America's strength in the world economy is a result of our being the developer and promoter of most of the valuable software, we cannot allow the assets that are held electronically to be pirated or infringed. And so we will make a priority of cybercrime issues."
The letter from Congress complains of "a staggering increase in the amount of intellectual property pirated over the Internet through peer-to-peer systems." Signed by 19 members of Congress, including Sen. Joseph Biden, D-Del., Rep. James Sensenbrenner, R-Wis., and Sen. Dianne Feinstein, D-Ca., the letter urged Ashcroft "to prosecute individuals who intentionally allow mass copying from their computer over peer-to-peer networks."
It is that uniqueness that keeps people long-term as music lovers, being as it is something an individual can more hold as his own. Without such personality music buyers drop out of the market after so long. The Biz's artist marketing targets the go-along, part of the group, lemming phase of music appreciation. That phase has to pass as a person gets older and more sure of himself, becomes a full adult individual.
Yet the Biz leaves it behind for the sake of the easy bucks in high-volume channels.
Interesting that you refer to two guys who are both dead now, so we can't really now how they'd feel about having their music (and their livlihood) stolen over the internet.
Geesh, all this populist claptrap makes me ill. Why don't you just join the Al Gore for president campaign and get him to include "Big Music" in his anti-capitalist crusade.
And please, I dare say not a single one of you gives a rats @$$ about exploited artists. It's simply a means to demogogue the record labels and delegitimize their right to make a profit.
http://www.negativland.com/albini.html
The Problem With Music
by Steve AlbiniWhenever I talk to a band who are about to sign with a major label, I always end up thinking of them in a particular context. I imagine a trench, about four feet wide and five feet deep, maybe sixty yards long, filled with runny, decaying shit. I imagine these people, some of them good friends, some of them barely acquaintances, at one end of this trench. I also imagine a faceless industry lackey at the other end holding a fountain pen and a contract waiting to be signed. Nobody can see what's printed on the contract. It's too far away, and besides, the shit stench is making everybody's eyes water. The lackey shouts to everybody that the first one to swim the trench gets to sign the contract. Everybody dives in the trench and they struggle furiously to get to the other end. Two people arrive simultaneously and begin wrestling furiously, clawing each other and dunking each other under the shit. Eventually, one of them capitulates, and there's only one contestant left. He reaches for the pen, but the Lackey says "Actually, I think you need a little more development. Swim again, please. Backstroke". And he does of course.
Every major label involved in the hunt for new bands now has on staff a high-profile point man, an "A & R" rep who can present a comfortable face to any prospective band. The initials stand for "Artist and Repertoire." because historically, the A & R staff would select artists to record music that they had also selected, out of an available pool of each. This is still the case, though not openly. These guys are universally young [about the same age as the bands being wooed], and nowadays they always have some obvious underground rock credibility flag they can wave.
Lyle Preslar, former guitarist for Minor Threat, is one of them. Terry Tolkin, former NY independent booking agent and assistant manager at Touch and Go is one of them. Al Smith, former soundman at CBGB is one of them. Mike Gitter, former editor of XXX fanzine and contributor to Rip, Kerrang and other lowbrow rags is one of them. Many of the annoying turds who used to staff college radio stations are in their ranks as well. There are several reasons A & R scouts are always young. The explanation usually copped-to is that the scout will be "hip to the current musical "scene." A more important reason is that the bands will intuitively trust someone they think is a peer, and who speaks fondly of the same formative rock and roll experiences. The A & R person is the first person to make contact with the band, and as such is the first person to promise them the moon. Who better to promise them the moon than an idealistic young turk who expects to be calling the shots in a few years, and who has had no previous experience with a big record company. Hell, he's as naive as the band he's duping. When he tells them no one will interfere in their creative process, he probably even believes it. When he sits down with the band for the first time, over a plate of angel hair pasta, he can tell them with all sincerity that when they sign with company X, they're really signing with him and he's on their side. Remember that great gig I saw you at in '85? Didn't we have a blast. By now all rock bands are wise enough to be suspicious of music industry scum. There is a pervasive caricature in popular culture of a portly, middle aged ex-hipster talking a mile-a-minute, using outdated jargon and calling everybody "baby." After meeting "their" A & R guy, the band will say to themselves and everyone else, "He's not like a record company guy at all! He's like one of us." And they will be right. That's one of the reasons he was hired.
These A & R guys are not allowed to write contracts. What they do is present the band with a letter of intent, or "deal memo," which loosely states some terms, and affirms that the band will sign with the label once a contract has been agreed on. The spookiest thing about this harmless sounding little memo, is that it is, for all legal purposes, a binding document. That is, once the band signs it, they are under obligation to conclude a deal with the label. If the label presents them with a contract that the band don't want to sign, all the label has to do is wait. There are a hundred other bands willing to sign the exact same contract, so the label is in a position of strength. These letters never have any terms of expiration, so the band remain bound by the deal memo until a contract is signed, no matter how long that takes. The band cannot sign to another laborer or even put out its own material unless they are released from their agreement, which never happens. Make no mistake about it: once a band has signed a letter of intent, they will either eventually sign a contract that suits the label or they will be destroyed.
One of my favorite bands was held hostage for the better part of two years by a slick young "He's not like a label guy at all," A & R rep, on the basis of such a deal memo. He had failed to come through on any of his promises [something he did with similar effect to another well-known band], and so the band wanted out. Another label expressed interest, but when the A & R man was asked to release the band, he said he would need money or points, or possibly both, before he would consider it. The new label was afraid the price would be too dear, and they said no thanks. On the cusp of making their signature album, an excellent band, humiliated, broke up from the stress and the many months of inactivity. There's this band. They're pretty ordinary, but they're also pretty good, so they've attracted some attention. They're signed to a moderate-sized "independent" label owned by a distribution company, and they have another two albums owed to the label. They're a little ambitious. They'd like to get signed by a major label so they can have some security you know, get some good equipment, tour in a proper tour bus -- nothing fancy, just a little reward for all the hard work. To that end, they got a manager. He knows some of the label guys, and he can shop their next project to all the right people. He takes his cut, sure, but it's only 15%, and if he can get them signed then it's money well spent. Anyways, it doesn't cost them anything if it doesn't work. 15% of nothing isn't much! One day an A & R scout calls them, says he's 'been following them for a while now, and when their manager mentioned them to him, it just "clicked." Would they like to meet with him about the possibility of working out a deal with his label? Wow. Big Break time. They meet the guy, and y'know what -- he's not what they expected from a label guy. He's young and dresses pretty much like the band does. He knows all their favorite bands. He's like one of them. He tells them he wants to go to bat for them, to try to get them everything they want. He says anything is possible with the right attitude.
They conclude the evening by taking home a copy of a deal memo they wrote out and signed on the spot. The A & R guy was full of great ideas, even talked about using a name producer. Butch Vig is out of the question-he wants 100 g's and three points, but they can get Don Fleming for $30,000 plus three points. Even that's a little steep, so maybe they'll go with that guy who used to be in David Letterman's band. He only wants three points. Or they can have just anybody record it (like Warton Tiers, maybe-- cost you 5 or 7 grand] and have Andy Wallace remix it for 4 grand a track plus 2 points. It was a lot to think about. Well, they like this guy and they trust him. Besides, they already signed the deal memo. He must have been serious about wanting them to sign. They break the news to their current label, and the label manager says he wants them to succeed, so they have his blessing. He will need to be compensated, of course, for the remaining albums left on their contract, but he'll work it out with the label himself.
Sub Pop made millions from selling off Nirvana, and Twin Tone hasn't done bad either: 50 grand for the Babes and 60 grand for the Poster Children-- without having to sell a single additional record. It'll be something modest. The new label doesn't mind, so long as it's recoupable out of royalties. Well, they get the final contract, and it's not quite what they expected. They figure it's better to be safe than sorry and they turn it over to a lawyer--one who says he's experienced in entertainment law and he hammers out a few bugs. They're still not sure about it, but the lawyer says he's seen a lot of contracts, and theirs is pretty good. They'll be great royalty: 13% [less a 1O% packaging deduction]. Wasn't it Buffalo Tom that were only getting 12% less 10? Whatever. The old label only wants 50 grand, an no points. Hell, Sub Pop got 3 points when they let Nirvana go. They're signed for four years, with options on each year, for a total of over a million dollars! That's a lot of money in any man's English. The first year's advance alone is $250,000. Just think about it, a quarter million, just for being in a rock band! Their manager thinks it's a great deal, especially the large advance. Besides, he knows a publishing company that will take the band on if they get signed, and even give them an advance of 20 grand, so they'll be making that money too. The manager says publishing is pretty mysterious, and nobody really knows where all the money comes from, but the lawyer can look that contract over too. Hell, it's free money. Their booking agent is excited about the band signing to a major. He says they can maybe average $1,000 or $2,000 a night from now on. That's enough to justify a five week tour, and with tour support, they can use a proper crew, buy some good equipment and even get a tour bus! Buses are pretty expensive, but if you figure in the price of a hotel room for everybody In the band and crew, they're actually about the same cost. Some bands like Therapy? and Sloan and Stereolab use buses on their tours even when they're getting paid only a couple hundred bucks a night, and this tour should earn at least a grand or two every night. It'll be worth it. The band will be more comfortable and will play better.
The agent says a band on a major label can get a merchandising company to pay them an advance on T-shirt sales! ridiculous! There's a gold mine here! The lawyer Should look over the merchandising contract, just to be safe. They get drunk at the signing party. Polaroids are taken and everybody looks thrilled. The label picked them up in a limo. They decided to go with the producer who used to be in Letterman's band. He had these technicians come in and tune the drums for them and tweak their amps and guitars. He had a guy bring in a slew of expensive old "vintage" microphones. Boy, were they "warm." He even had a guy come in and check the phase of all the equipment in the control room! Boy, was he professional. He used a bunch of equipment on them and by the end of it, they all agreed that it sounded very "punchy," yet "warm." All that hard work paid off. With the help of a video, the album went like hotcakes! They sold a quarter million copies! Here is the math that will explain just how fucked they are: These figures are representative of amounts that appear in record contracts daily. There's no need to skew the figures to make the scenario look bad, since real-life examples more than abound. income is bold and underlined, expenses are not.
Advance: $ 250,000 Manager's cut: $ 37,500 Legal fees: $ 10,000 Recording Budget: $ 150,000 Producer's advance: $ 50,000 Studio fee: $ 52,500 Drum Amp, Mic and Phase "Doctors": $ 3,000 Recording tape: $ 8,000 Equipment rental: $ 5,000 Cartage and Transportation: $ 5,000 Lodgings while in studio: $ 10,000 Catering: $ 3,000 Mastering: $ 10,000 Tape copies, reference CDs, shipping tapes, misc. expenses: $ 2,000 Video budget: $ 30,000 Cameras: $ 8,000 Crew: $ 5,000 Processing and transfers: $ 3,000 Off-line: $ 2,000 On-line editing: $ 3,000 Catering: $ 1,000 Stage and construction: $ 3,000 Copies, couriers, transportation: $ 2,000 Director's fee: $ 3,000 Album Artwork: $ 5,000 Promotional photo shoot and duplication: $ 2,000 Band fund: $ 15,000 New fancy professional drum kit: $ 5,000 New fancy professional guitars [2]: $ 3,000 New fancy professional guitar amp rigs [2]: $ 4,000 New fancy potato-shaped bass guitar: $ 1,000 New fancy rack of lights bass amp: $ 1,000 Rehearsal space rental: $ 500 Big blowout party for their friends: $ 500 Tour expense [5 weeks]: $ 50,875 Bus: $ 25,000 Crew [3]: $ 7,500 Food and per diems: $ 7,875 Fuel: $ 3,000 Consumable supplies: $ 3,500 Wardrobe: $ 1,000 Promotion: $ 3,000 Tour gross income: $ 50,000 Agent's cut: $ 7,500 Manager's cut: $ 7,500 Merchandising advance: $ 20,000 Manager's cut: $ 3,000 Lawyer's fee: $ 1,000 Publishing advance: $ 20,000 Manager's cut: $ 3,000 Lawyer's fee: $ 1,000 Record sales: 250,000 @ $12 =
$3,000,000Gross retail revenue Royalty: [13% of 90% of retail]:
$ 351,000Less advance: $ 250,000 Producer's points: [3% less $50,000 advance]:
$ 40,000Promotional budget: $ 25,000 Recoupable buyout from previous label: $ 50,000 Net royalty: $ -14,000
Record company income:
Record wholesale price: $6.50 x 250,000 =
$1,625,000 gross incomeArtist Royalties: $ 351,000 Deficit from royalties: $ 14,000 Manufacturing, packaging and distribution: @ $2.20 per record: $ 550,000 Gross profit: $ 7l0,000
The Balance Sheet: This is how much each player got paid at the end of the game.
Record company: $ 710,000 Producer: $ 90,000 Manager: $ 51,000 Studio: $ 52,500 Previous label: $ 50,000 Agent: $ 7,500 Lawyer: $ 12,000 Band member net income each: The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month. The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never "recouped," the band will have no leverage, and will oblige. The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, won't have earned any royalties from their T-shirts yet. Maybe the T-shirt guys have figured out how to count money like record company guys. Some of your friends are probably already this fucked.
Steve Albini is an independent and corporate rock record producer most widely known for having produced Nirvana's "In Utero".
I don't necessarily disagree with anything he's said here (except I think his budget numbers are a bit free-spending). The bottom line is, an artist and a label are free to do business on the terms both of them agree to. Who's responsibility is it to understand the terms of the contracts? The ones who sign them. If you don't understand the terms, or don't agree to the terms, don't sign. Simple as that. Ditto for the "deal memo". It's a contract.
As I've said before, I suspect there is little concern for the artist here and more concern about indicting Big Music so you can justify stealing from them.
Let me ask you this. Who owns the song I download?
I've all but given up trying to argue any more on these threads. I can beat every pro-piracy argument, every timeIn some way this is a toe to toe battle. Would you have, come brain implants, that every time I remember your song that some electronic transfer makes my account poorer and your own richer? If so we are to fight, and strength, not logic will win out.
Keep talking, you're only showing the depths of your ignorance.
In the context of this discussion, the songwriter (who may or may not be the artist) holds the copyright. But if you're downloading from one of the PTP programs, you're not paying anything. That's the point of contention.
I'm only trying to educate you so you don't keep showing how ignorant of the law you are.
There are websites that list how to get money directly to the artist. If I download a cd and I like it, then I pay the artist $4 or $5. That's a lot more than they'd make otherwise, and a lot less that I have to pay. Does that seem fair to you?
And now that I'm telling you exactly what the law is, and providing you links to it, you can't claim ignorance of the law either.
Admit it, you're simply unwilling to be deterred from stealing music. If you have to claim ignorance, or exploitation, or unfairness, or whatever... so be it. Pathetic.
I know what the Constitution says, and I believe in adherence to the Constitution. I don't think anything about the current Copyright law is outside the bounds of what was prescribed by the Constitution.
Bwa ha ha. Highway speed limits aren't authorized by the Constitution. Does that make them extra-constitutional? You're being ridiculous.
So you think there should be NO copyright protection for music whatsoever? That's a hoot? You'll see the creation of music disappear quicker than Anna Nicole Smith's new TV show.
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