Challenges

Posted by: mike on November 6, 2006 @ 9:51 am
Filed under: Music Business News

Below is a story that appeared in the International Herald Tribune recently. It’s about an internet web store operating out of Moscow which is flagrantly flaunting copyright laws. We know this because they are selling our albums via download and they are not an authorized distributor of ours. Much as I dislike it, stuff like this aligns us with the jerks who run the gigantic, multinational corporations who control the record business. It is maybe the only thing we have in common with them.

What truly differentiates us from them is our customer base, those of you who purchase our stuff directly from us at our web store , and especially our subscribers who have bought into our concept and are directly supporting our efforts. This kind of story reveals to me how important all of you are to us. We hope to continue to keep you interested, to make music that challenges and inspires you and to grow the community that is Greenleaf Music. It is our way of surviving in this environment.

Moscow Music Site Defends Free Downloads
By THOMAS CRAMPTON

PARIS – A Web site based in Moscow that the United States Commerce Department has branded as the world’s highest-volume online seller of pirated music plans to release hundreds of thousands of albums free, the site said.

Low prices and ease of use have made AllofMP3 a consumer favorite among music download sites, but the site – which claims to operate legally under Russian copyright law – faces ongoing legal battles with the music industry and harsh criticism from the United States government.

Tuesday, the credit card company Visa International said that it had suspended card service to the site, citing concerns over copyright issues.


The United States trade representative, Susan Schwab, has warned that continued operation of the site signals a lack of respect for intellectual property law that could jeopardize Russia’s long-sought entry into the World Trade Organization.

AllofMP3, which lists no telephone number on its Web site and normally declines all comment, undertook a rare public relations offensive.

Vadim Mamotin, director general of the site’s parent company, Mediaservices, spoke through a translator by telephone with the International Herald Tribune and then participated in an online chat with 59 journalists. Mr. Mamotin maintained that the company operated legally under Russian law.

“In six years of operation we have never been convicted by a Russian court or declared illegal,” Mr. Mamotin said in the telephone interview. “Under Russian law, we are 100 percent legal.”

Mr. Mamotin said that the site, which claims five million subscribers and a growth rate of 5,000 a day, pays artists by turning over 15 percent of its revenue to a collecting agency, the Russian Multimedia and Internet Society, or ROMS. by its initials in Russian.

Organizations representing global authors, composers, music publishers and record companies issued a statement, however, calling for closure of the site and reaffirming their stance that both ROMS and AllofMP3 operate illegally.

“Under the copyright laws of virtually every country in the world, including Russia, it is illegal to distribute recordings without the permission of the rights owners,” read the statement, released by the International Federation of the Phonographic Industry, the International Confederation of Societies of Authors and Composers and the Recording Industry Association of America. “ROMS has no mandate from international rights holders to license the site in or outside of Russia.”

The battle with AllofMP3 comes as the Internet continues to bring upheaval to the music industry by radically changing distribution models.

Some players, like Pirate Bay in Sweden, continue to operate illegally, while others, like Napster and Kazaa, have converted their operations into legal pay sites in cooperation with music industry.

Also on Tuesday, the International Federation of the Phonographic Industry said it had begun legal action against 8,000 people in 17 countries, aiming at computer users who illegally share their music collections over the Internet. The federation, which represents record companies around the world, said that many of the targets of the suits were the parents of children who had been illegally sharing music files, The Associated Press reported.

AllofMP3 said Tuesday that as of today, its business model would move toward an ad-supported distribution of free content. The company, which previously charged about $1 an album, plans to offer consumers a new software program that allows them to download any song from the site for free. AllofMP3 claims to have a catalogue of hundreds of thousands of albums, increasing at a rate of 1,000 a month.

Users of the new service will only be able to listen to songs by using the AllofMP3 software, and the songs will be usable on just one computer at a time. The interface, called Music for the Masses, will initially be available for Microsoft Windows, with an Apple version arriving in several weeks, Mr. Mamotin said.

The idea, he said, is to make the offering attractive enough to win new customers and build a big enough community to attract advertising.

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