Russell Rains of St Edwards on 4 Cases You Need to Know About and How They Affect The Music Industry, Part 1
August 5, 2010
Ariel Hyatt

In May, I traveled to Arhuus, Denmark where I attended and spoke at The SPOT Festival. On the first day, the welcome luncheon speech was delivered by Russell Rains, who is the Program Director for the Digital Media Management MBA program at St. Edwards University, (the only university that offers MBAs in this discipline).

At the top of his talk, Russell mentioned something that made me sit up in my seat: “Everyone in the music industry is watching these four cases very carefully.”  I’m not, I thought to myself, and neither are the hundreds of artists who I speak to globally and represent at Ariel Publicity.  In fact, I had not really heard a lot about these 4 cases more than in brief mentions.  So I fired up my trusty flip cam and taped his talk.

Russell was more than generous to co-contribute to this piece by providing a little more insight on why you my dear independent community of artists should care.

These four legal cases in the US are incredibly important to know about and understand because they demonstrate the war between the content creators and the people who deliver it.

No one needs to tell anyone in and around the music industry that consumer behavior has changed. This is not necessarily a bad thing, as people will always want to have music and they will always be willing to pay for it directly and indirectly. The tough nut to crack is that there is no longer a single way to think about selling music in the future. Forecasting the future of the music business is impossible when you don’t know what the technology is going to be.

But first let’s take a look at the past, before there was commercial art as we know it:

Content was king for 200 years, but now technology is the dominant player. The content is no longer the issue, it’s the delivery. In turn, the median shifted and now delivery is king.

So what does this mean, other than the fact that it’s disruptive and we can’t predict the future (which means it’s very hard to have a business model). That time is going away too.


Case 1: YouTube Viacom vs. YouTube/Google

YouTube is 5 years old and was purchased recently by Google.

Viacom is currently suing YouTube and Google alleging copyright infringement in a one billion dollar lawsuit.

Viacom has hired 18 different companies to post video content to YouTube to help them promote their own properties on the service, but now they are suing them.

1. What the official name of each case?

Viacom International, Inc., Comedy Partners, Country Music Television, Inc., Paramount Pictures Corporation, and Black Entertainment Television, LLC vs. YouTube, Inc., YouTube, LLC., and Google, Inc.

2. Why the case happened / What caused it to get to the courts?

One of the main tenets of the Digital Millennium Copyright Act [DMCA], is the safe harbor provision that protects ISPs and apparently similarly situated parties from liability arising from third party use of the Internet.  The policy seeks to encourage the continued growth of the Internet and one of the main ways this could be realized is by protecting those entities who facilitate the transfer of information from liability arising from the content of that information provided by a third party.  Viacom and other content owners felt that YouTube [now owned by Google] was liable for copyright infringement as a result of the large number of infringing videos appearing on YouTube in its first few years of existence. 

3. What it means for an independent artist?

For better or for worse depending on viewpoint, it means that YouTube will continue to be a main forum for video music performances.  Especially after acquisition by Google, YouTube has diligently lived up to its notice and “take down” obligations under the DMCA relating to those works apparently perceived as violating another’s copyright.  On the one hand, this could to some degree reduce the broadcast of those works not approved by the owner or publisher, while on the other hand may impede the occasional viral spread of works facilitated by YouTube.

4. How this will affect the music career of an independent artist?
YouTube will continue to survive and thrive. Otherwise, the response is the same as above in that those works perceived as unauthorized will continue to be removed which supports notions of copyright, while possibly reducing the viral spread of some videos.

5. Anything you may want to say about why this case is so important?

The court ruled in favor of YouTube June 23, 2010 granting summary judgment.  This came as a surprise to many in the industry and will likely be appealed to the U.S. Second Circuit.


Case 2: Limewire vs. RIAA

The RIAA has created a highly publicized amount of bad will by suing customers. However, when they pursued Limewire the case never went to court because the judge ruled in the RIAA’s favor without hearing the case. What the judge found was: Limewire knew what they were doing and there is a lot of evidence that backs that up (98% of content was illegal).

In June 2010 we will know the damages and they will be unbelievably large.  It will shut down Limewire.

1. What the official name of each case?
Arista Records LLC; Atlantic Recording Corporation; BMG Music; Capitol Records, inc.; Elektra Entertainment Group, Inc.; Interscope Records; LaFace Records, LLC.; Motown Record Company, L.P.; Priority Records, LLC; SONY BMG Music Entertainment; UMG Recordings, Inc., Virgin Records America, Inc., and Warner Bros. Records, Inc. Vs. Lime Wire LLC; Lime Group LLC; Mark Gorton; and Greg Bildson

The case is usually referred to as either RIAA vs. Limewire or Arsta vs. LimeWire

2. Why the case happened / What caused it to get to the courts?
For 10 years, peer-to-peer networks have facilitated the generally unauthorized transfer of music, film and other files.  Limewire, the heir to Napster, Grokster, Aimster, KaZaa and others is currently the largest remaining such entity.  

3. What it means for an independent artist?
At least initially, if Limewire is shutdown fewer unauthorized or illegal music files will be transferred between peers.

4. How this will affect the music career of an independent artist?
One of the main portals or tools of copyright infringement will either be shut down or forced to comply with copyright law.  Theoretically, there will be fewer incidents of works transferring between non-paying consumers.

5. Anything you may want to say about why this case is so important?

LimeWire has been found guilty of copyright infringement along with its founder.  The recording industry is asking that the court shut down the peer-to-peer network and freeze its assets.  Damages may be in the billions of dollars.  This case is important because the legal arguments, issues and holdings continue a long line of cases going back to Napster.  The courts have consistently found that the peer-to-peer networks are liable for inducing others to infringe copyright.  Recently, related to the unauthorized transfer of films, similar arguments have been levied against BitTorrent search engines.

Article originally appeared on Music Think Tank (https://www.musicthinktank.com/).
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