Why Are The Record Labels Demanding Money To Let People Stream Legally Purchased Music?

from the isn't-that-music-that-I'm-free-to-listen-to? dept

Lately, I've been playing around with various music locker services, just to get a better understanding of how they work and to be able to access my (legally purchased) music collection on various machines and devices. So far, they're all a bit limited, but it shouldn't be long until they get better. However, the industry has always hated music locker services, and insisted that they somehow violate their copyright, even when the lockers simply allow individuals to place shift their own legal music. There's an ongoing lawsuit over Michael Robertson's MP3Tunes for which a decision is expected shortly. At the same time, Apple has been trying to quietly enter the market without disturbing the record labels.

Why? Because the labels have this bizarre theory of copyright that says that even if you have a music locker with entirely legal and authorized music, you still need to pay license fees to stream the music from the locker. It's difficult to understand how that makes any sense at all, either from a common sense or legal standpoint, and the labels may have a difficult time getting such a concept to stand up in court. But I'm reminded of the issue again as reports are leaking of Google's proposed music service, which would include a music locker component. Apparently a big stumbling block, however, is that Google wants to charge $25/year for it, and do a 50/50 split with the labels.

The labels, of course, are quite upset at such a proposal, claiming it's ridiculous, both in terms of the total amount and the revenue share. But I'm wondering what their complaint is here. If the music is legally purchased (or is given away in an authorized manner for free), then how can they possibly demand such exorbitant rates for streaming that very same music? This is going to backfire on the labels in a big way. Their constant refrain of "pay us every time you use," is looking more and more desperate.


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    Paddy Duke (profile), Sep 17th, 2010 @ 2:16am

    The simple answer: because they are assholes.

    The slightly less simple answer: because they are entitled assholes who do not (or will not) understand how digital commodities work.

     

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    Anonymous Coward, Sep 17th, 2010 @ 2:36am

    I wonder if they will try to charge people for setting up a server in their own home LoL

     

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    Anonymous Coward, Sep 17th, 2010 @ 2:37am

    It's difficult to understand how that makes any sense at all, either from a common sense or legal standpoint, and the labels may have a difficult time getting such a concept to stand up in court.

    What's your argument that it doesn't make sense from a legal standpoint? As far as I can tell, making those copies is prohibited under Section 106 unless there's some mitigating factor like fair use, but to my knowledge commercially-operated "music lockers" haven't been adjudicated as fair use.

    Are you extrapolating from the ability to space-shift music from a CD onto, e.g., an iPod? That's an argument, but then again if I rip a CD to my iPod I am not temporarily giving that copy to a third-party entity who is going to commercially benefit, directly or indirectly, from my doing so, which knots up the fair use argument somewhat.

    I'm not saying that it's NOT fair use, I'm just saying that it doesn't seem perfectly obvious that it is, either.

     

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    Anonymous Coward, Sep 17th, 2010 @ 2:39am

    Re:

    The simple answer: because they are assholes.

    Troll.

     

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    Pierre Wolff (profile), Sep 17th, 2010 @ 2:44am

    Is it possible that because in reality place shifting your music is you making a copy of your music from your hard drive to the cloud service? Of course, there's a right to make a copy of your own music for backup purposes, but in a world of digital files, none of this makes any sense since there's no physical scarcity issues.

    OK, I'm with Paddy, they're assholes :)

    BTW, the much like the GOP are the ones most likely to be lax about laws and guidelines that mess oil companies, it's the Democrats that are the biggest supporters of all of these entertainment companies' ridiculous copyright schemes.

     

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    Anonymous Coward, Sep 17th, 2010 @ 3:04am

    Totally unrelated but about asking for money is the john doe's filling to quash based on improper procedure from the copyright coalition or something.

    http://www.eff.org/deeplinks/2010/09/john-doe-strikes-back-new-developments-us

    And in the process asking to be reimbursed by their troubles Uwe boll and the other guy from the Hurt Locker are about to get hurt.

     

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    PaulT (profile), Sep 17th, 2010 @ 3:05am

    Re:

    Seems perfectly obvious to me that it is, but that's clearly just opinion.

    You buy music (a licence to listen to it, as the labels are trying to enforce on us). You wish to listen to said music, but don't happen to have the physical media to hand. However, a 3rd party provides you with the music you'd legally paid for without the original media being involved. No money is "lost" to the label, because only a drooling idiot would pay again for the music they already own and should have access to (vinyl/tape upgraders excluded). Simple.

    One of the problems with the modern entertainment industry is the fact that they want to charge you for every single possible use of the content. This has never been possible, and attempts to clamp down on fair use will only backfire.

     

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    Anonymous Coward, Sep 17th, 2010 @ 3:16am

    The real answer is because organizations made a business of "Protecting The Artists" in the hey-day of mob rule. I'm told that protecting artists was a simple process- when you would go into a club or jazz hall, a man would stand out front of a club or music hall with a paper bag. To get entry, patrons were required to place a dollar or two into the paper bag. This fee was to "protect the artist". It would be interesting if someone sequenced the events around passage of major copyright law and the creation of new licensing authorities alongside a timeline of mob control. Look at the life of Paul Ricca and John Roselli as a starting point.

     

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    Anonymous Coward, Sep 17th, 2010 @ 3:32am

    Totally unrelated but about asking for money is the john doe's filling to quash based on improper procedure from the copyright coalition or something.

    http://www.eff.org/deeplinks/2010/09/john-doe-strikes-back-new-developments-us

    And in the process asking to be reimbursed by their troubles Uwe boll and the other guy from the Hurt Locker are about to get hurt.

     

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    Ima Fish (profile), Sep 17th, 2010 @ 4:28am

    I wrote this piece of satire years ago to explain this very situation:

    The RIAA and the MPAA sues Monster Cable for copyright infringement.

    December 8, 2006 on 8:03 pm

    Hollywood –The RIAA and the MPAA held a joint press conference this afternoon to discuss their class action lawsuit against Monster Cable Products, Inc. and other manufacturers of audio and video cabling and wires.

    The chief attorney in charge of the lawsuit, William Donaldson, stated that “it’s been clear for some time that when someone plays a CD or DVD that a copy of the content is being created and sent over wires. At no time has anyone from a wire or cabling manufacturer asked permission to make such copies. And to make it even worse, some manufacturers such as Monster claim to increase the quality of the picture or sound with the use of their cables. That would certainly be an unauthorized derivative work in direct violation of 17 USC 106 (2). It’s a simple fact that we have to sue these monsters to make them pay their fair share.”

    Spokesman for the audio and video cabling industry, David Clark, said that the lawsuit is without merit. “Clearly the end-user who buys a CD or a DVD has the right to play the content and without wires, that’d be impossible.”

    Donaldson responded by saying that there is no license in any DVD or CD sold which gives playback rights. “When a consumer buys a CD, for example, he’s licensing a single copy. That’s the copy he holds in his hands. Can someone show me any language in the packaging where the consumer has the right to play it back? I’m serious, that’s just ludicrous.”

    While some in the cabling and wire manufacturing industry are hoping to work out a licensing structure similar to those imposed on cassette and blank CDs, it is felt by the copyright industry that such a system is not applicable here. Adds Donaldson, “With blank CDs you can only record one copy. Cassettes were only good for three or four copies at best. But with wires, they’ll copy millions of songs in their lifetime. Such an egregious infringement cannot be settled with a one-time licensing payment.”

    The lawsuit will require all manufacturers of electronically conductive materials to bring their products into compliance with the broadcast flag. “After we succeed in our lawsuit,” continues Donaldson, “all wires will contain devices that track infringing content copying. These devices will wirelessly transmit information as to what content was copied to our headquarters. We’re not being greedy with this proposal, we’re only asking for a dollar per song, two dollars for each half and hour of television programming, and $10.00 for each movie. That is addition to the 433 trillion dollars we’re asking for in estimated past economic damages.”

    Monster Cable founder Noel Lee was shocked by the gouging being perpetrated by the copyright industry. “Sure, we sell cables that cost us 5 cents for a hundred bucks. But god, expecting to get paid multiple times every time a song or movie is played is beyond greed.”

    Donaldson stated that “anyone who thinks we do not have the right to compensation for this infringement is certainly a communist, as any God-loving American believes strongly in property rights. Except when a poor neighborhood needs to be torn down to make a strip mall, of course.”

     

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    Anonymous Coward, Sep 17th, 2010 @ 4:30am

    I've got to agree that Google has muddied the waters here - by making the offer, ironically, Google has actually given 'the mouse a cookie' and the mouse is trying to steal as much as it can get. I use the word 'steal' because the music industry has been notoriously difficult, backward and even unethical in how it has dealt with the emergence of digital content.

    Regardless of what's written in the fine print a.k.a. 'fair use' policies and whatnot, ultimately, the industry needs to decide what 'it' is exactly that they are selling?: is it the rights for personal listening to a specific piece of material, a tangible object such as a CD or MP3 file, or a specific license identifying a specific delivery (method of listening) for a specific piece of content. I'm sure the music industry would jump on the third choice - but the third choice would be ridiculously impossible to define as they would either need explicitly define a license for every possible iteration of use (god knows they'd die trying) which is limitless and ultimately impossible to enforce.

    Imagine life under the third choice - you buy a CD, but you can only listen to that CD; if you CD wears out, too bad - license dies with it; gave your CD to a friend? -he has to buy a license too; sell your CD? -nope, not allowed; rip your CD? -heck no - if you want to do that, you must purchase a supplementary license to transfer your content to another medium and that's only for use on your pink Ipod Touch with sparkles on it.

    The above is what the music industry is seeking - and it's purely because they want to legislate the world back to 1984 (pun intended) where all you could do was buy something on the medium it was intended until it broke/wore out - and then you bought it again. The answer is simple - license for personal use in any wave, shape or form - focus on illegal distribution but chances are, if you satisfy the first condition, the illegal part will drop off considerably. Piracy is the result of the Music Industry's draconian constraints on the consumer (remember how long it took to get LEGAL online downloads?) - not because consumers don't want to pay for their content.

     

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    abc gum, Sep 17th, 2010 @ 5:06am

    Re: Re:

    Truth hurts

     

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    Anonymous Coward, Sep 17th, 2010 @ 5:07am

    "Why Are The Record Labels Demanding Money To Let People Stream Legally Purchased Music?"

    Because it is what they do(remember Igor?), instead of working they try to squeeze people.

    The industry is full of low life liars that would love to force others to give money to them.

     

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    abc gum, Sep 17th, 2010 @ 5:20am

    Re:

    This is another of many reasons why the cloud is not a good idea for most.

    Also, I think you'll find that all politics is subject to bribery, coersion, blackmail and extortion. I guess it is human nature.

     

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    martyburns (profile), Sep 17th, 2010 @ 5:25am

    Re:

    I've just moved to a smaller house and put loads of CDs into (paid) storage.

    Should the storage firm be coughing up every time I go get a couple and copy them to my ipod? I mean, the storage facility is commercially benefiting to the tune of £45 per month for storing all that music for me..

     

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    fogbugzd (profile), Sep 17th, 2010 @ 5:51am

    How much for the artist?

    I wonder how much of the Google deal will end up going to the artist. If the YouTube deal is any guide, the labels will structure this so the get to keep all of their share without giving a penny to the artists.

     

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    fogbugzd (profile), Sep 17th, 2010 @ 5:51am

    How much for the artist?

    I wonder how much of the Google deal will end up going to the artist. If the YouTube deal is any guide, the labels will structure this so the get to keep all of their share without giving a penny to the artists.

     

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    Grrr, Sep 17th, 2010 @ 5:55am

    Is this ever going to end?

    Its none stop with this crap.

    Consumers want to buy the media, then play it on any format that suits them.

    Thats the digital way of things - Its here its happening & all attempts to exploit more money from the consumer is pushing them down illegal avenues. Avenues that were created for the 80's.

    As an artist myself, I will never sign to a label. Its far easier to connect with my fanbase directly, skipping the middle(Muddle)man.

    You buy a song from me & that gives you the right to copy to any media format that suits you, including making multiple recordings i.e. Car, Home, mobile player. I don't care.

    My fans pay for the song or album once. A fair days pay for a fair days work. I see no need to then hassle my fans into parting with more money in order to listen to the music in whatever format they like. Public broadcasting & Radio airplay costs the same - because this is free advertising so I have no problems with them just buying the song or album just like everyone else.

    The record labels can no longer justify their reaction to the digital world. Artists are starting to see that in their present form the labels are useless & damaging to the artists themselves.

    With a label free model a successful artist can make more money. Because their music is more accessable & there are no middle men taking large chunks of the proceeds to sue the very people who are paying for my work.

    Record labels really don't add any value now, they are dinosaurs & the meteor has struck. Time for a new species to arise from their ashes....

     

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    Ooh, Sep 17th, 2010 @ 6:04am

    Re: Is this ever going to end?

    Dunno about anyone else but this idea seems sound to me.

    The best way to purchase anything is with no strings attached....

    The labels have more strings than an full orchestra, and that just ties everything down.
    Bad practice.
    Bad common sense.
    Bad attitude.
    Bad customer service.
    No clue as to the comming storm....

     

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    Berenerd (profile), Sep 17th, 2010 @ 6:16am

    Re:

    I don't see a difference between my Ipod and other storage options.
    Online Lockers are indeed a storage option. I pay to have my files from my PC backed up online. its my work and my personal items. does this mean Symantec now needs to be paying the Labels money because my MP3s are there?

     

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    mike allen (profile), Sep 17th, 2010 @ 6:50am

    of course they will

    in the same way they take loads of cash from hairdressers and radio stations internet broadcasters etc. they are totally stupid.

     

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    Anonymous Coward, Sep 17th, 2010 @ 7:06am

    For me the issue is pretty clear. All digital downloads you DO NOT own. They and the content are owned by the creators of the files. Either software, music or movies, the content, is not yours, you cannot claim it is yours even if you change it (ie change the source code and recompile, hack the executable to get it to run, or format shift etc...) But what you DO OWN is a license to use and modify the legally bought digital product for your own personal use. So while I do not OWN the content, I do OWN the license to play it back and to get it to play back on any other device I own. Fair use completely applies to digital lockers. If it is a digital locker, then I am basically renting space like I rent an apartment. I can put my music in there and have it available to the device of my choice. It is no different if it comes from a cloud based storage device or if it comes from my hard drive, it is just storage space owned or rented or leased by me for me.

    The whole argument that the company is also making money by advertising displayed on the webpage and they (the **AA) should get a cut is ridiculous. That's like saying they should get a cut of advertising revenue from a flyer stuck on a door located in front of my apartment building cause there are CDs inside.

     

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    Chuck Norris' Enemy (deceased) (profile), Sep 17th, 2010 @ 7:32am

    All about the numbers

    The more they claim they are owed, the more they claim they lost to piracy.

     

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    Anonymous Coward, Sep 17th, 2010 @ 7:33am

    The more the major labels bitch and complain and sue. The better the Indies do. From a PR point of view the major labels suck and I wouldn't buy records from any of them. Sony, Innerscope, Time Warner. Frak em all. Who needs them. The beauty of the capitalist system is that you don't have to buy their crap or their business model.
    Plenty of great music available from independents who don't have a twisted view of their product.
    C'est la vie to the LATE, not so great, a-hole Music Industry.

     

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    Anonymous Coward, Sep 17th, 2010 @ 7:42am

    I have led a fortunate life because I have gotten to know personally some of the great rockers of the 60's and the 70's in California. I worked as a sound man and equipment humper for several years. After partying with many of them, the common thread in the conversation(s) has been how they were screwed by the record companies. It was enough to make me choose another profession. The record labels claim to be fighting for your rights and the collection of your royalties but they don't pay the old guys royalties. It's called an improvement in the accounting method. The only person I ever met that got royalties was the guy that wrote 'Fascination' (Ted Grouya) in the 1920's and he got royalty checks from ASCAP, not a record company. Not one Rock Musician I know get royalty checks from any record company. They get them from ASCAP, BMI, etc. So what the hell are the record companies fighting about. Sales that don't exist.

     

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    Cynyr (profile), Sep 17th, 2010 @ 7:44am

    Re:

    Are you extrapolating from the ability to space-shift music from a CD onto, e.g., an iPod? That's an argument, but then again if I rip a CD to my iPod I am not temporarily giving that copy to a third-party entity who is going to commercially benefit, directly or indirectly, from my doing so, which knots up the fair use argument somewhat.

    If the third party can get to it (encrypted file/vault/partition/etc) how does the third party have a copy? would it be ok if hosted the files on a co-located server? how about just a VM on a box that had other VMs? how about just a vserver?

    Thats where us technical folk get lost, all a locker is, is a co-located storage space, with some auth/encryption applied to it. now the vaults are cheaper because you can't run whatever you like, or anything CPU intensive on it. As they say "you get what you pay for"(which is a lie btw but meh).

    I view a vault no differently that a home server that happens to be located somewhere else for better connectivity.

     

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    Anonymous Coward, Sep 17th, 2010 @ 7:49am

    Re:

    ...but then again if I rip a CD to my iPod I am not temporarily giving that copy to a third-party entity who is going to commercially benefit, directly or indirectly, from my doing so...

    Really? Most people rip a copy on a system using an OS such as Windows which you have no ownership of but some license agreement with a 3rd party and you have a digital copy there. You pipe that into your iTunes library which is going to do a large number of statistic collections on the music and the user using it and send that back to the mothership. You push it to your iPod which is a device where a 3rd party owns the operating system likes to collect data about which songs you listen to the most and mark as favorites, so they can market to you.

    There is most likely less third party involvement and profit pushing your song to a bit locker than ripping it from CD to your iPod.

     

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    Anonymous Coward, Sep 17th, 2010 @ 8:45am

    Re: Re: Re:

    Right in the asshole . . . .

     

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    Anonymous Coward, Sep 17th, 2010 @ 9:17am

    !

    Pretty soon they will want counters on my ipod so they can charge to buy then charge for every time i listen too. Really, what's the difference between streaming from a digital locker and streaming through the wire on my headphones?

     

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    Anonymous Coward, Sep 17th, 2010 @ 10:16am

    So much hate for the music industry middlemen - you go too easy on them.

     

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    roymond, Sep 17th, 2010 @ 10:46am

    Don't like the labels? Support indies, then.

    There's tons of free or direct-from-artist music that totally rocks (jazz and classical, as well). So let's stop complaining about the labels' abuses. BTW, the artists on those labels support everything they do, so find new artists and support them in another model for music.

    Enough of this copyright whining, already. Laws exist because someone wants it that way.

     

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    Anonymous Coward, Sep 17th, 2010 @ 10:48am

    Re:

    I doubt they don't understand the digital world. I think they're doing it because they can.

     

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    Anonymous Coward, Sep 17th, 2010 @ 11:06am

    Ummm... isn't it Google asking you to pay a fee... In this situation the labels aren't asking you the consumer for anything... they're asking Google for a revenue share of a service they want to provide that only works on the premise that artists/lable property can be stored on it. Why should Google be able to leverage content storage as a marketing angle to their product and not have to pay a share of that revenue?

    Sorry but the knee jerk reaction that labels = bad & greedy / Google = good and artist friendly is just plain wrong.

     

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    Hephaestus (profile), Sep 17th, 2010 @ 11:21am

    "This is going to backfire on the labels in a big way. Their constant refrain of "pay us every time you use," is looking more and more desperate."

    How much is enough ... just one dollar more.

     

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    Anonymous Coward, Sep 17th, 2010 @ 2:02pm

    Re:

    Google is already offering a 50/50 split with the rights holders. That's far more generous than the right holders deserve.

    Honestly, the labels deserve absolutely nothing from Google here. If I bought a server to stream all my music to me, the labels wouldn't get a single cent from this. So why should the labels get any of this when a third-party offers to do this as a service for me?

     

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    hmm, Sep 17th, 2010 @ 5:26pm

    just wait til they want DRM embedded into your frontal cortex, so everytime you hum a song to yourself, or remember a pop video you get auto-gouged, (sorry i mean charged) for it.

    Actually I should patent that idea because someone somewhere would probably try it....

     

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    Richard (profile), Sep 17th, 2010 @ 5:42pm

    So the problem is with just streaming the files from the locker? What about if I'm just downloading them, for example I upload my legally purchased mp3's to a locker for backup purposes, then my hard drive dies, but luckily, I have a backup, so I download them and yay, I have my stuff back.

    Oh, but wait, what exactly is the difference between streaming and downloading????? That's right.... NOTHING.

     

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    Mike Masnick (profile), Sep 17th, 2010 @ 10:10pm

    Re: Don't like the labels? Support indies, then.

    There's tons of free or direct-from-artist music that totally rocks (jazz and classical, as well). So let's stop complaining about the labels' abuses. BTW, the artists on those labels support everything they do, so find new artists and support them in another model for music.

    Indeed. We talk about that kind of thing all the time. But this impacts even the indies. We're talking about a music locker, that the indies *cannot* take advantage of because the majors won't let them exist without paying ridiculous fees.

    That's the problem.

    Enough of this copyright whining, already. Laws exist because someone wants it that way.


    And thus we shouldn't complain about them and fix them?

     

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    MadderMak (profile), Sep 18th, 2010 @ 6:45pm

    Re: Is this ever going to end?

    Feel free to link your work, profile or provide any other information....

    What you just said inclines me to purchase your music if it's half-good and too my tast and to introduce my circle of friends to you.

    (or were you just making a point? you seemed to miss a perfect opportunity to connect with new fans)

     

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    MadderMak (profile), Sep 18th, 2010 @ 6:45pm

    Re: Is this ever going to end?

    Feel free to link your work, profile or provide any other information....

    What you just said inclines me to purchase your music if it's half-good and too my tast and to introduce my circle of friends to you.

    (or were you just making a point? you seemed to miss a perfect opportunity to connect with new fans)

     

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    MadderMak (profile), Sep 18th, 2010 @ 6:46pm

    Re: Re: Is this ever going to end?

    sry for the double post... firefox had a moment :)

     

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    JEDIDIAH, Sep 19th, 2010 @ 8:18am

    Corporate ignoring the individual again...

    The 3rd party is being paid to maintain a storage space. They're no different from the U-store types of places that you might put that tacky old lamp you inherited from your grandfather.

    They are simply being paid to build and maintain networks and servers that most people don't have the expertise to deal with. Anyone with a broadband connection can do the same thing if they have the expertise.

    I should be able to access my stuff regardless of where I am or who I am paying to host the service and what exactly you call what they're doing.

    Next they will want a pay-per-view royalty from iTunes and Amazon.

     

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    Anonymous Coward, Sep 19th, 2010 @ 8:24am

    Re:

    > Why should Google be able to leverage content storage
    > as a marketing angle to their product and not have to
    > pay a share of that revenue?

    Because I already paid for it.

    All Google is doing is storing it.

    They could advertise this as your own private FTP server and it would accomplish the same thing. Really, Google doesn't owe the RIAA a damn thing. The RIAA are pure mob style thieves on this occasion.

     

    reply to this | link to this | view in thread ]

  44.  
    identicon
    hmm, Sep 19th, 2010 @ 10:52am

    if you bought the CD...you're allowed to give it away or do whatever you want with the physical material...

    if you bought the rights to the song itself you're allowed to stream it to yourself to/from anywhere you choose

    if you bought the "personal listening right"...you're allowed to format/place-shift the song to anything you want

    what the industry wants is pretty much a "give us all your money and then you get exactly nothing in return" arrangement.....and if that money is compulsory so much the better..perhaps a tax on hearing a song somewhere and being able to hum it to yourself?

     

    reply to this | link to this | view in thread ]

  45.  
    identicon
    hmm, Sep 19th, 2010 @ 10:54am

    to be honest, the way the music industry is heading it's about to claim its a "traditional business" that ought to be funded by tax payers, like medieval skills such as blacksmithing, whether or not its a valid business model to "keep traditional skills alive"...

    After all we can't let the old-fashioned ways of price gouging, and outright lying to the public (not to mention stealing from tax payers) die out can we? :)

     

    reply to this | link to this | view in thread ]


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