The Law Office of Robert A. Falk
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Reading, MA 01867
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Journal
Tuesday, May 16, 2006  

There's a new player in the Consumer vs. Big Music game and its name is lala. Take a look at this and read all about it.

Basically, lala purports to be an online facilitator of CD trading. In other words, you tell lala what you have and what you want, and then for $1.49 lala will take one of what you have and send you one of what you want. Sounds good, doesn't it?

Unlike file sharing, where you violate copyright law by making a copy of the song, with lala, you give up ownership of the whole polycarbonate mass of atoms we call a CD. Unlike the compositions embodied thereon (which you don't own and can not copy) and unlike the sound recordings of those compositions (which you don't own), you do own the CD. And you can do many things with it, legally, and without paying anyone a red cent more.

You can listen to it whenever and wherever you want. You can turn it into a coaster or a Frisbee. You might even be able to make a backup copy under the Fair Use Doctrine (but not according to the RIAA.)

You can give it away or sell it. You could even sell it for more than you paid for it. Of course that was more likely in those halcyon vinyl days when things really did go out of print. You could trade it for a handful of magic beans, or for a cow, or even for a different CD. The only catch is that if you give up ownership of the CD, you give up the license to listen to the recordings of the compositions on the CD.

So, here's where lala fits in. You are simply trading CDs you don't want with other owners of CDs they don't want. Or are you?

I'd like to help lala write their FAQ:

Q: Like, hey, I was just thinking with my brain for a minute... couldn't I just rip my CD before I trade it off?
A: No, that would be illegal.

Q: But, hey, who would know?
A: You and your god.

Q: Well, like, hey, I'm good with that.
A: Well, sure, we thought that you would be.

And that is exactly what lala is hoping, no matter what they say.

Just like the Don't Steal Music pasted on every iPod box, lala pretends it's all about being fair and above board. But, the iPod still plays ripped music on the assumption (nudge nudge, wink wink) that you are only ripping tracks from CDs that you own. Apple could have made it so that iPods only played DRM protected music, but then no one would have bought them, because that is not what the people wanted. (Remember that phrase - or variation of it: Give the people what they want, because we'll be coming back to it.)

lala's founder has a similar entreaty at the website: I ask you to do your part by doing the right thing: remove songs from your iPod or PC if you've agreed to send the CD to another member.

Yes, certainly, right after I erase all the cassettes I made of my friends' albums, and watch all the ads I skipped on this season's Lost before I erase them all from my TiVo.

So let's just call a spade a spade. lala is all about having people do what people do inside their houses, and about having people do what people do outside of their houses: whatever they want without causing physical injury to another inside, and following the law outside.

And let's hear it for the founders of lala for hoisting the RIAA and Big Music on its own petard. These guys are not paragons of virtue; they're not fighting the good fight against the monolith. They're American capitalists trying to make a buck. They're funded by Bain Capital fercriseakes!

For what seems like eons, the labels have been hammering away about abuse of fair use. Civil liberty, constitutional and other non profit groups have been battling Big Music on this front for years. If any praise goes to lala it is because they have joined the fight, whatever their motive, and opened up a whole new front. Just as Lincoln did not free the slaves because slavery was wrong (he did it to foment rebellion in secessionist states) lala and Bain have not joined this fight because it's right. They've joined the fight to make a buck.

The fight continues but on two fronts now. Press on with fair use, but let's hit them with First Sale. Let's beat them with their own statute. How are they going to fight this one?

Must they fight it? What about giving the people what they want? People want the jukebox in the sky. People do not want to own or house CDs. People want to be able to hear what they want, when they want, where they want. Survey after survey says they'll pay a fair price for that. And, study after study indicates that a subscription based system of music distribution without physical product would result in more profits for the Music Industry than it has ever seen. Give the people what they want!

The whole premise of lala, despite what they preach, is that no one wants the damned CD! Get it, rip it and get rid of it for something else you can rip. I'll bet that if you had the option to just get the best files for a couple bucks, instead of getting the actual disc, there'd be a whole lot of happy takers. Oh, yeah, that'd be called iTunes. Give the people what they want.

On the upside for musicians - and it is the musicians who are oddly ignored in this constant tussle - lala promises 20% of its revenues to the recording artists. (How it will allocate these funds remains to be seen.)

It would appear that canning lala and its progeny may require a special law, otherwise, you'd be paying Ford every time you trade in your Pinto. Would Congress pass a law that says once you buy a CD you must own it forever and not give it away or sell it? What are we going to do? Register them like guns? (I'd advocate a 20-day waiting period before anyone could purchase the Pussycat Dolls!) Could you make it illegal to organize a market for goods? Seems to run afoul of what a lot of Americans do every day to put food on the table.

But even with a law, how is it to be enforced? Whereas when you trade in your Pinto you obviously can no longer drive it, just how do you make sure that people don't trade discs that they still have copies of? Can you see Orin Hatch's storm troopers snatching iPods out of the hands of kids at the arcade?

Aha! Booty Drop! Booty Drop! Let me see your booty drop... papers!


Friday, May 12, 2006  

Elliot Spitzer for President!

Now that NY Attorney General Elliott Spitzer has definitively put an end to payola in the music business, it is hoped that he can put his keen eye for malfeasance and sharp sword of justice to more universal (sic) causes.

Once he discovers that, contrary to the world's expectations, Tehran is engaging in a concerted effort to develop nuclear weapons, he can convince Iraq to enter into a consent decree to once and for all halt its proliferation plans.

Or, if he discovers that big oil companies, contrary to consumer's expectations, are reaping record setting profits by manipulating supplies and fixing prices, he can get them to agree to stop and never do it again.

Or, maybe on a smaller scale, if he finds out there's gambling at Rick's (and don't I know we'd all be shocked to learn that) he could put an end to that too.

I know I sleep better at night with Mr. Spitzer not only watching out for me, but really doing something about it!

 

Congratulations to Tom Petty for standing up to scalpers - and policing his fan club:

Rolling Stone: TOM PETTY management and Ticketmaster have canceled more than 400 pre-sale tickets for the classic rocker's June 26th and 27th St. Paul, Minnesota shows (with PEARL JAM) after fans complained of finding jacked-up prices on scalper and other secondary market sites. An estimated 800 tickets for Petty's June 20th concert at New York's Madison Square Garden have also been canceled...

In 1981, after finally emerging as a superstar after 2 under-noticed albums and the breakthrough Damn The Torpedoes, Petty held up the release of his follow-up, Hard Promises, refusing to allow his label to jack up the list price to $8.98, as they were attempting to impose a sliding scale, charging more for albums from so-called superstars than they did for others. [Note to Labels: it didn't work then, it won't work now. Steve Jobs is right. Knock it off.]
Now, after finding that scalpers had joined his fan club in order to purchase great seats at list price, and then auction them off to real fans, Petty's team has taken the unprecedented step of canceling the tickets! The new procedure for fan club ticketing is said to involve will-call pickup on the day of the show, with proper ID. Props to Petty and his management for doing something more than talking, and less than auctioning off the best seats ala Madonna.    

Note the $8.98 airbrushed in just off Petty's elbow

This problem of simultaneously being able to get good tickets into the hands of hard core fans and keeping them out of scalpers' mitts is a thorny matter that we wrestled with back in the mid-nineties when running the Aerosmith fan club, Aeroforce One. Back then, we, along with U2 and believe it or not Barry Manilow, were pioneering the preferred seats for fan club members concept.

After much thought and many scenario run throughs, we settled on a policy that allowed any fan club member to purchase in advance of general sales, at face value, 4 tickets to every show on the tour. But, they had to pick up the tickets at the box office the evening of the show, with proper fan club ID and a photo ID. The promoters hated the extra work, and probably the lost revenue from scalping their own primo seats, but the fans loved it. And, from all accounts and careful observation, it worked. I'm sure we didn't beat all the scalpers, but... we did beat most.

By working with local security to monitor scalping on or near venue premises, and by using recruited fan club members to check with people in the seats we knew we had reserved, we knew that we had more than adequately succeeded. The satisfaction in our fan club resulted in increased sales of travel packages and ancillary merchandise, and positive word of mouth that no money can buy.

Other touring acts are strongly encouraged to follow Petty's lead here, and not Madonna's.

Is it so hard to remember that the object is to put dedicated fans in the best seats at no more than face value pricing?

If you can't get your head around that, you'll never understand our club's free ticket upgrade policy. I'll save that for another day.



Monday, May 01, 2006  

Another nail in the coffin...

A quick read of the complaint in the Allman Bros/Cheap Trick lawsuit against Sony BMG leaves this correspondent ready to issue a summary judgment. The only problem with that is we would be denied the delicious opportunity to hear what Sony has to say for itself.

In paying only roughly four of every ninety-nine cents, Sony uses the following arithmetic. First, they pay on only 85% of sales. This is to allow for free and reduced price goods, breakage and returns. (I know a lot of my MP3's come broken, and many consumers must take advantage of that liberal iTunes Music Store return policy!)

Next, they deduct twenty five percent from the gross, for manufacturing and packaging expenses. (I know I really dig the fancy package that my MP3's come wrapped up in. And, they're so much easier to open than those darned CDs. That engineering must have cost Sony a fortune!)

Finally, in the most cynical of all moves, Sony deducts another 25 to 50% of the gross since the download is a audiophile recording! A downloaded MP3 or AAC is an audiophile recording the same way a T-Shirt with Munch's The Scream on it is a fine art print.

  Dickey Betts exits a Sony accounting meeting

We can only hope that every recording artist signed to Sony joins this lawsuit. This can help bring to light the remaining ludicracies of major label agreements. When consumers learn that even when they buy music the artist still doesn't get paid, the RIAA will have to grasp at more straws to justify its heavy handed attempt to resusitate the Major Label dinosaur by strangling consumers.

Hey, it's May Day! Workers of the world and recording artists unite! Cast off your chains... Oy vey.



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