A student from Boston University in the US has been handed a whopping $67500 fine this week for illegally downloading music between 1999 and 2007.

This isn’t the first case of such a fine and it certainly won’t be the last but there was one very interesting quote by one of the judges. He said whilst trimming 10% off the initial fine that it was “unconstitutionally excessive.”

Now that is quite open to interpretation but lets put this into perspective for just a moment.

95% of all music is sourced illegally, a best case scenario would indicate that at least 80% of music consumers have at one point or another sourced music illegally. It is the absolute margin-of-error minority that are punished, literally a fraction of a percent are caught and yet Joel Tenenbaum was caught and not just punished, but made an example of.

His fine was deemed “unconstitutionally excessive”, not words that you’ll hear in the courtroom everyday.

And what this shows is the music industries tactics. When they have a victim on the rack (which isn’t all that often) they exert all of their influence to pursue the highest punishments possible, create media attention and generally try and scaremonger the more influenceable sections of society.

Now once again, we don’t support illegal downloads in any way, being a musician nowadays is hard enough as this fine series on Bild recently outlined. That said, the music industries attempts at policing and protecting their interests don’t serve to deter but merely to show totalitarianism which draws no sympathy from consumers.

For too long the public has awaited changes in how music comes to market. Whilst people haven’t completely stopped going to record stores, once thriving hotspots are now much quieter or even being closed such as the inconic HMV Shibuya in Tokyo.

Time is money and who has the time to browse around a store when everything is a click away on the internet? I have no doubt that people are willing to pay for their music, simply they won’t pay exorbitant prices for poor quality music brought to market in the last desirable way.

Music is so easy to produce nowadays, particularly rap and R&B which is what the publishers push to the top of the charts nowadays but prices haven’t dipped, instead the industry wants to compensate for fewer sales with bigger margins but that isn’t how business works.

Consumers no longer need physical copies of their music which cost so much more money to produce, to ship, to purchase etc. etc. etc.

The most ironic part is that online downloads are just waiting to be taken over. iTunes is successful but many people don’t want to buy from Apple. Amazon is fine as well but the publishers control supply, what is stopping them from utilizing their product to their own advantage?

Imagine a music megastore. One website with every track from every artist all supplied directly from the labels where for a monthly fee of say $10 you had unlimited access to 100% legal music for the rest of your life to be used wherever you want, in whichever format you choose.

For now it remains a dream, but it is inexplicable why this sort of megastore hasn’t been opened. The meager costs would amount to petty cash for the industry, enable them to fairly and accurately compensate their artists on the basis of downloads, it would legalise a thriving industry and countless people would switch from illegal to legal downloads.

No-one likes to read stories of their favourite bands being broke but consumers don’t consider illegal downloads as theft from the artists, if anything its theft from big business.

With a centralized download system, enforceable laws could be introduced which don’t require breaches of anti-privacy laws. If you don’t have a paid license, you can’t legally have digital music.

Tenenbaum will be stuck with a huge fine but unless the music industry changes its methods, it will continue to lose friends and money at an ever-increasing speed and $67500 fines won’t make up for their lost revenue.

So Ofcom, the regulator and competition authority in the UK has finally announced what everyone already knew; music consumers like singles.

In 2009, 98% of singles sales were digital, a staggering number and the trend is showing increases year upon year, even through the recession which is good news for any industry.

Ofcom went into some depth (379 pages to be precise) to produce their figures which serve to confirm general expectations. For example, ‘Among 16-24s, over half (52 per cent) of their media activity is simultaneous.’

What does this mean? It means that young people will browse the internet and have a playlist running on their computer, they might play a handheld console whilst listening to their ipod or even watch films on handheld devices whilst simultaneously listening to music.

Half of their consumption of music is secondary. 16-24 year olds of previous generations would lock themselves in their bedroom upon purchasing the latest Zeppelin or Pink Floyd records and concentrate entirely on the music, listening to every track over-and-over.

But that is no longer the case. 16-24 years olds in the 21^st-century have a plethora of entertainment options with which the music industry must compete. Hence, this demographic will multi-task and simultaneously consumer more than one media which means both forms are simultaneously receiving less attention than previously.

So consumers don’t necessarily want to hear the latest experiments from their favourite artists but they’ll reach immediately for their chart hits, the duets of the stars and the songs from the latest movies popular amongst this age group.

And here the music industry cannot be accused of not moving with the times.

Whereas previously an album might produce a single or two, three in the more extreme cases, nowadays marketing attention is on the latest individual hits rather than full albums, they are quicker to produce and both easier and more profitable to sell.

Artists release singles between albums allowing them to remain in the public eye and continue to earn money between albums.

Albums are no longer the bread-and-butter of the music industry. Focus is and should remain on singles and how they can be effective vehicles to produce money for artists and publishers alike.

Fan followings will be harder to build up but it should offer smaller artists more chances as there is no other industry with one-hit wonders who can ‘fluke’ it and make a lot of money.

American colleges have taken up the slack in the fight against music piracy, by-law now having to install software to block illegal downloading on campus.

So what will this do for the music industry?

Well, nothing to be frank.

College students downloading music via P2P networks on campus are now faced with fines of up to $30,000 for a single illegal song or $250,000 if the judges deem their actions to have been ‘wilfull’ – a debt which makes any student loan look like small changed.

‘The University of North Carolina website lists expulsion as a possible consequence. Vassar College requires first-time offenders to perform 20 hours of “sanctioned service” and pay a $25 fine. Second-time offenders face double the service requirements, double the fines and loss of Internet access, says spokesman Jeff Kosmacher.’

These are part of the requirements of the 2008 Digital Millennium Copyright Act which took effect July 1 and Universities are struggling to get everything in place before students return for the new year in Fall.

Really all this shows is the lack of bite and outdatedness of the processes. An act signed off in 2008, coming into place in mid 2010 to deal with the internet is already long past it’s validity with law-makers not understand current and future internet trends well enough to enact serious, enforceable laws.

The focus on networks such as KaZaA and Limewire - two networks that reached their peaks about 5 years ago – shows the lack of knowledge and the effects of time on internet laws.

Megaupload, Angelfire, Rapidshare, Hotwire – none of these sites will be black-listed by the required software even though they enable Users to download music every bit as illegally, only faster and with less traceability, not to mention culpability thus making them far more attractive to Users.

Education institutes and employers the world over have tried to block access to sites such as Facebook and MySpace which are said to be ‘productivity killers’ but Users are always one step ahead with networks of proxy sites allowing blocks to be circumvented with no trouble at all, these softwares will encounter exactly the same problems.

Sure, colleges don’t want to be culpable in illegal activities of any kind, that is perfectly understandable and we expect tomorrow’s leaders to undergo a fitting social and academic learning curve in their time at university but at the end of the day, the wrong target has been fired upon.

Young adults in their late teens and early twenties are THE main target group for the music industry. If it wasn’t for colleges across the world being hubs of music, think of the bands that would never have formed. No Queen, No Coldplay, No REM, No Radiohead or The Strokes, not to mention the people who would never have been introduced to The Beatles, Pink Floyd, The Police, Bob Marley – all the artists that people discover whilst growing up at college and discovering the world.

The industry targets this demographic, these are the cool, trendy people that teens aspire to be and the thirty-somethings wish they were once again.

However, whilst they are the biggest music consumers, they’re also the demographic in the worst position to finance such an expensive product and at the same time, the most technologically inclined and capable of sourcing it illegally.

But rather than fighting the war, the industry has targeted a skirmish which will have no positive net result on stopping illegal music downloads. Colleges have to now police their connections, something that no courts have been able to enforce on ISPs but also have to fork out large amounts to do so.

If laws are to be enacted to curb online music piracy, they need to come into place far quicker and have a little more future orientation to curb current and emerging trends. By blocking KaZaA and Limewire, colleges will see P2P downloads eliminated from their networks but students have already found other methods and these should have been the focus.

So wait a few months for the measures to be heralded as a success while the sophomores download the latest chart music, free, illegally and without trace.

It’s unfortunate and we certainly don’t condone it, but reality is staring the industry in the face, the longer they look away to their old pots of gold and long for the return of million-album-sales-per-week, the more artists will be disinclined to make music worthy of purchase while key demographics will continue to break the law if a proper solution isn’t found and enacted in a reasonable timeframe.

An interesting perspective from a blog post this week about the situation of illegal downloads in France.

Hadopi begun legally monitoring Users in July whilst the policing of illegal downloads begins September in what is a world-first, at least in the Western World. The agency will send out an estimated 10,000 emails a day to Users caught downloading illegally and monitor their activity for six months at which point repeat offenders receive a more sternly worded response.

The third strike leads to the cutoff of the internet connection. An interesting dilemma given the contingencies which might lead to this situation.

How many families will be without internet in 12 months time due to one family member’s insolence? How many people will falsely be accused through hacked connections and re-routes? Will schools be shut down due to their students illegal downloads, or businesses that in many cases cannot legally follow their employee’s online behavior? How do the consequences justify the costs, both financial and social?

To me and to Catherine Denevue who also campaigned against the new laws, this is one big, big can-of-worms that the French have opened that will find it’s way to the European courts where it will be tossed out and the music industry will have more scorn poured upon it for ‘defending an outdated business model.’

The courts and the law have been unable to control illegal downloading for a decade, what makes the French think that Hadopi will be any different? Hackers have already developed the “Hadopi Router” which can supposedly bypass the controls whilst there are tens-of-thousands of proxies which will bypass anything Hadopi has in place.

The first tests are indicating that it’s not deterring Users in any case and really, it’s a lose-lose for the music industry. File-sharing will simply migrate from the P2P networks to the file-hosting sites such as Megaupload and Rapidshare, where the authorities have even less power to act.

This solution won’t stem the tide, finding a workable business model that has long-term prospects is the only answer.

People will pay for music if they get a fair deal. The $10.99 cost for the latest Eminem album far outweighs the minor risks Users face when downloading music illegally, particularly for young people who simply don’t have that sort of money and would like to buy multiple albums per month.

The industry needs to move to a centralized payment system whereby artists can pool their music and charge Users a one-off monthly fee, say $5 or $15 per household and allow them complete access. Users don’t buy the music, they buy a license and anyone without this license and in possession of digital music is in breach of the law, simple.

Pay the publishers a percentage of the total income based on their share of downloads and let them sort out how they pay their artists but then no-one can complain. Users get a product at a fair price, Publishers can eliminate a good deal of illegal downloads and artists get paid properly, based on the popularity of their music rather than the names they have generated for themselves.

Today we have ‘fast-food-music’, mass produced by computers. Mixing and producing has been made extremely simple with new technologies and thus it is unrealistic to expect Users to pay through the nose for something that is much less of an art-form than 20 years ago, Publishers won’t have billion dollar turnovers in todays day-and-age but the production costs have also gone through the floor, prices need to be cut and the industry needs to move on from the days of the golden goose where a band could sell a million albums in a week.

Find other ways to make money, the public wants a new golden age of music and for that to happen, artists have to be happy, they have to want it and they won’t if they can’t make ends meat because their employers can’t find a working business model to pay the bills.

Kevin Costner just dropped his $8.5 Million lawsuit against his former, now bankrupt Marketing company Mahee Worldwide Ventures.

What on earth does this have to do with ClipGenerator™ I hear you ask? Well directly, nothing, indirectly quite a bit.

Costner, best known to most as the star of Waterworld, The Postman and of course The Bodyguard launched a failed country music career which he entrusted the marketing and some online presence to the aforementioned MWV. His career didn’t take off so he sued.

That MWV were meant to book Costner five shows a year, maintain a website and pay $8.5 Million for the privilege is utterly absurd and while it pales in comparison to deals such as the 10-year contract signed by Madonna, it shows where the real issue lies.

Costner is an actor and MWV sought to capitalize on his name. While I’m not a fan of his music, thereare numerous artists with a track record of crossing over from film-to-music and vice versa.

That said, Costner is in his mid-50s, playing a relatively unpopular genre of music to a limited fanbase. He was never going to receive the reception of a Jamie Foxx, LL Cool J or Eminem and something must have gone seriously wrong in MWVs calculations of how they were going to not only recoup their $8.5 Million, but also make a profit on top of it.

So forget Costner’s career for a minute – most people who’ve heard him have done so anyway.

The problem here is the sums forked out by companies in the music industry expecting some massive pay-day in return.

The days of selling a million albums in a week at double digit prices, they are long-gone and if companies want to persist with these numbers as the basis for their business models, they’ll promptly join A-Track and Glitter-Rock on the trash heap.

A capitalistic approach of paying exorbitant sums of money to big name acts no longer works as these fees can’t be re-claimed. Kids don’t hang around in record stores and there is no line-up to get the newest album from their favourite band, people still love music, but it is consumed in different ways now than even a decade ago let alone a generation ago.

Up-and-coming bands no longer expect to become millionaires overnight, artists realize that change has come to the music industry but as long as draconian contracts like MWV’s exist, the industry won’t change.

There are an array of business models out there that work, where artists and rights-holders alike get paid the fair worth for the material and the sooner other companies move away from their outdated ideas based on greed, the better.

Many people aren’t aware of it but Australia – that big empty landmass on the other side of the globe – sometimes is ahead of the rest of the world.

The recent case against ISP iiNet was indeed the first of it’s kind and served to set a precedent as an alliance of film-makers, television studios and companies with interests in music-rights took the ISP to court for ‘authorising’ the downloading of copyrighted materials.

Firstly the location is interesting – Australia. Known mainly for AC/DC and Russel Crowe, the entertainment industry is light-years behind that seen in Europe and the USA but the laws governing internet usage are some of the most stringent in the Western World.

It was this fact that led the alliance to believe that they would be able to win a landmark victory under Australian federal law. However, Judges and Gods smiled favourably upon the ISP and deemed that iiNet couldn’t be held accountable for the copyright infringements of it’s clients, thus dealing a hammer-blow to the music and movie industries.

However, UK-based Ministry of Sound (MOS), an extremely popular label in Australia has begun sending letters threatening legal proceedings after obtaining individual IP-Addresses of iiNet’s clients via court order who it claims, sourced and/or shared MOS music illegally.

MOS are willing to settle with end-users for AUD$700 each (€470) or take them to court. Some Users have already paid-up, scared of the consequences despite legal advice that such threats are largely unenforceable.

Whilst we don’t purport to agree with the illegal downloading or sharing of music, one struggles to see the sense behind MOS’s move. Sure they might have a list of IPs and by shaking a few trees might get a few coconuts but it’s hard work for little result and still doesn’t solve the inherent problem.

I’ve blogged a number of times about our ClipGenerator accounting system where everyone gets their fair share of the pie and indeed we have a deal in place to use MOS material. If they are so keen to protect their rights then a push must be made to newer technologies which allow Users access to digital music at fair prices and give labels and publishers as well as artists the protection and financial compensation they deserve.

MOS might have won a battle but unless they change tactics, they can’t win the war. Keep your eyes peeled for other such cases to crop up in Australia over the next 12 to 18 months and hope that sometime, someone starts to change the business model behind the music industry so that artists can get what paid what they truly deserve.

The big news this week was of UK Broadband provider, TalkTalk rejecting a proposal from the Performing Rights Society for Music (PRS) to control the amount of illegal music sharing at the ISP level.

TalkTalk told SkyNews Online, “It would require monitoring of traffic and this has huge implications in respect of directives on privacy and data retention.

“It’s profoundly unfair - it is like making a bus company responsible for shoplifters who use their buses to get to the shops.

“It is futile since people will switch to undetectable methods e.g. encrypted sercices, streaming.”

Whilst many artists continue to complain about no longer receiving their fair share for their intellectual properties, there are a few who have embraced the online market place.

Radiohead famously released their album, In Rainbows and allowed fans to donate for the download, essentially giving it away.

Whilst there were some avid fans who donated US$100 (or about 8 times the price of the album) they raked in an average of $6 per User, but many, caught up in this ‘new idea’ went and downloaded the album for free, thus exposing the band to a whole new audience and generating huge amounts of publicity by being one of the first groups to successfully beat the old business models within the industry.

TalkTalk continued on in a similar vein noting that it is the decaying business model of the music industry that is disadvantageous to artists in the way they are rewarded for their work.

Many in the online industry believe it is the responsibility of the labels and publishers to find a working business model, by suggesting that ISPs begin to invade the privacy of their consumers so rights holders can receive their fair share is merely circumventing the larger issue at hand.

Indeed pulling sites such as Movies-Links.tv which was seized this week for linking to illegal content only further serves to put such topics to the forefront of the average Joe. By reading about all of these sites in a Google News feed he might even learn more and possibly be encouraged to make use of such sites which he otherwise might not have known existed.

Even the punishments for End-Users caught downloading illegally have been dealt a crippling blow this week.

These are some of the many dilemma’s facing both the movie and music industries when it comes to illegal online distribution, continuously bringing their dilemma to the public conscience doesn’t actually help them, it has the exact opposite effect.

It’s time that new business models such Trivid’s are not only accepted by music labels and publishers, but are also pushed forward into the spotlight. Gone are the mega-millions days where money flowed like a stream in Spring but that’s not to say that Shareholders can’t receive dividends, Artists can’t make healthy livings and User’s won’t be prepared to pay for legal music – simply taking the first steps down this path rather than shifting the blame for a failing industry is all that is required.

Devin Leonard in his article on the new york times website cites a passage from the book Fortune’s Fool by Fred Goodman stating;

“It is the first commercial medium to feel the gale force of cyberspace.” And “The entire business, including the Warner Music Group, has been blown off its foundation.”

Whilst the article itself might sound like an early obituary for the music industry, Leonard seems to hold some hope that current and future stars earn what they deserve from their music. Lamenting that current pop queen Lady Gaga can barely sell a fraction of the albums that Britney Spears sold in the 90’s shows the desolate state of the music industry.

Indeed there are legal and legitimate ways that artists can profit from their music on the internet.

The Telegraph had an interesting piece earlier this year noting that by now people must have heard of  iTunes or Amazon’s music store which are legal ways of sourcing digital music whilst many people choose to run playlists on Youtube to get their music but their large scale deals with major publishers are unfair to smaller artists who are paid percentually rather than on a per-use basis meaning they don’t get paid what they should.

That is where technologies such as ClipGenerator™ come in with a viable alternative.

This technology sources pre-screened music from major labels and allows Users to combine their favourite songs from artists such as

The system then counts each use of the artists music and at the end of each month, the artist is paid a share from dividends generated by advertising.

Perhaps the music industry should take up the challenged outlined in the article on the Telegraph website and start protecting its rights, promoting legal alternatives that are still free to end-users such as ClipGenerator where everyone gets their fair share of the pie.

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