1. The Evolution of technology, digital content and copyrightBy
Elan Oren

2. Media History Relatively low quality High capacity
Up to 80’s – Analog
Relatively low quality
High capacity
Costly creation, storage and bandwidth
Costly replication
Copying with redundant quality
Partial protection
From the 80’s – Digital
Very high quality
10x Compression
Very low cost of creation, storage and transportation
Easy low cost replication
Copy identical to Master
Impossible to protect

3. The Problem Internet The PC Ideal as a distribution vehicle
The wider the bandwidth the bigger the demand.
Original music was widely made available in 2003.
The PC
Easy creation of digital media
Easy duplication
Easy distribution
NO control
Media
Mostly not protected
Easy to crack

4. The Constitution and Legal milestones
Congress shall have the power “to promote the progress of science and the useful arts, by securing for limited times to the authors and investors the exclusive right to their respective writings and discoveries”.
1984 – Betamax Universal Vs. Sony.
1996 – Making copies for personal use is a felony.
1998 – Increase the term of copyright to 95 years.
1998 – Digital Millennium Copyright Act (DMCA).
2001 – “Security System Standards and Certification Act” – Did NOT pass.

5. Internet and Digital media Time line
1998
mp3.com starts mymp3.com service.
The company is sued by the music industry for millions. In 2000 it losses in court and pays $100m’s in damaged to the plaintiffs. The company goes bankrupt and bought by one of the majors.
NO ORIGINAL content is made available by the majors.
ISP
WEB
MP3.COM sever hosts users music files

6. Internet and Digital media Time line
1999
Napster, Scour ו-iMesh introduce P2P services based on a centralized server.
Napster is sued by the majors. In 2001 it losses in court and goes bankrupt. Scour and Audiogalaxy shutdown their services.
NO ORIGINAL content is made available by the majors.
ISP
WEB
Napster server hosts the files index only

7. Gnutella a P2P decentralized open source protocol.
Internet and Digital media Time line
2000
Gnutella a P2P decentralized open source protocol.
BearShare, Limewire and other use Gnutella.
NO ORIGINAL content is made available by the majors.
ISP
WEB
WEB site
And software download only

8. Internet and Digital media Time line
2001
The Fasttrack decentralized protocol is used by Kazaa, Morpheus, Grokster and iMesh. The joint community is larger then Napster.
Kazza is sued in the Netherlands.
Kazza, Morpheus and Grokster get sued in CA.
Other services such as eDonkey.
NO ORIGINAL content is made available by the majors. Except PressPlay and MusicNet .

9. Internet and Digital media Time line
2002
Kazza WINs in the Dutch court.
Industry appeals and losses again.
Based on the 1984 BetaMax rolling in the case of Universla Vs. Sony
NO ORIGINAL content is made available by the majors. Except PressPlay and MusicNet .

10. Internet and Digital media Time line
2003
Grokster ו-MusicCity WIN in CA court based on the BetaMax case.
Verizon is sued to make end-user data available to the plaintiffs. Verizon wins and end-users privacy is kept.
End-users of P2P systems are
sued.
iMesh is sued in NY.
For the 1st time commercial original digital content is made available trough i-Tunes, Rhapsody, MusicMatch, BuyMusic,Napster and others.

11. Global recording music sales in numbers
2001 – Total sales $34b.
Sales fell by 5% in value and 6.5% in units from 2000.
France up 10% and UK up 8% (3rd largest market).
“The falls are attributed to several factors including economic slowdown, a massive proliferation of CD-burning and increasing availability of unauthorized internet downloads”.
Source: IFPI Music Piracy Report 2001.

12. Global recording music sales in numbers
2004 – Total sales $32b (estimated).
Sales grew by 1.7% in value and 1.3% in units from 2003.
USA up 5% and UK up 0.6% France down 5%.
“The figures reflect a slowing of the rate of decline in music sales of the past four years. This is the best first-half year result achieved since 2000.
Sales in regional and individual territories varied widely, with the effects of unauthorized file-sharing on the internet and commercial piracy, among other factors, still affecting many of the world's markets”.
Source: IFPI the recording industry – commercial piracy report 2004

13. The CD’s Sad Song Higher Prices The forces behind falling music sales.
The cost of a CD has risen 16% since 1997
The forces behind falling music sales.
The music industry likes to blame P2P pirates for its financial woes. But consumers have plenty of others reasons to stop buying CDs, like higher prices and a dearth of new material.
In recent years, the number of releases has fallen 14%, and CD prices have climbed 16%. Listeners were paying more and purchasing less- and sales of CDs sank 7%.
This isn’t to say that felonious file-sharing hasn’t hurt sales. Stan Liebowitz, author of Re-thinking the network economy, says illegal downloads have dealt a $1B blow to the music industry. But what the RIAA doesn't want to admit is that CD is reaching the end of its life cycle, just like the cassette did several years ago. Hey, labels, want some unsolicited advice? Give the people what they want; more music at a cheaper price. Oh, and you might wanna stop suing your customers, too.
- Rebecca Harper, Wired 10/2003
Fewer Titles
New releases have dipped 14% since 1999
Slower Sales
As formats age, overall revenue has declined 13% since 1999.

14. Music Piracy The scale and nature of the problem
$4.5B in pirate value. About $10B in real value
2001
2003
1 in 3 music CDs sold worldwide is a pirate product
Source: IFPI music piracy report

15. Hey, labels, want some unsolicited advice?
The CD’s
Sad Song
Higher Prices
The cost of a CD has risen 16% since 1997
Hey, labels, want some unsolicited advice?
Give the people what they want; more music at a cheaper price.
Oh, and you might wanna stop suing your customers, too.
- Rebecca Harper, Wired 10/2003
Fewer Titles
New releases have dipped 14% since 1999
Slower Sales
As formats age, overall revenue has declined 13% since 1999.