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Kazaa Agrees to Pay $100m to the Record Industry

Posted by samzenpus on Thu Jul 27, 2006 08:30 AM
from the pay-up dept.
siddesu writes "BBC has the following breaking story: File-sharing site Kazaa will become a legal music download service following a series of high-profile legal battles. The peer-to-peer network has also agreed to pay $100m (£53m) in damages to the record industry. The announcement follows the release of a music industry report that says more than 20 billion music tracks have been downloaded illegally in the last year. Hungry artists across the globe rejoice."
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  • just how much will each artist make? (Score:5, Insightful)

    by LiquidCoooled (634315) on Thursday July 27 2006, @08:32AM (#15790350)
    I know theres a lot of artists, but does anybody know just how many and just how much of this money will actually go to the artists?

    I personally think they will still be hungry.
  • Next in line to pay up (Score:4, Funny)

    by MECC (8478) * on Thursday July 27 2006, @08:32AM (#15790357)
    Now lets see how much they'll pay to all the people whose PCs have been crippled by all the malware kazaa dumps on their computers.

    FTFA: We have won another battle in an ongoing war," said John Kennedy, chairman and CEO of the International Federation of the Phonographic Industries (IFPI). "We move forward with a spring in our step."

    All they have to do now is get all those undead [betanews.com] offenders to pay up.

  • the cost of music (Score:5, Insightful)

    by tehwebguy (860335) on Thursday July 27 2006, @08:35AM (#15790372)
    (http://www.theworldwidewebguy.com/)
    $100,000,000.00 / 20,000,000,000 Songs = $0.005

    seems rather hypocritical that the RIAA won't allow AllofMP3 to sell songs for $0.05 when they are selling them for 10 times less..
  • But.... (Score:5, Interesting)

    by zo1dberg (939135) on Thursday July 27 2006, @08:35AM (#15790374)
    Why does the money go to "the record industry", and not these "hungry artists"?
    • Re:But.... by 42Penguins (Score:2) Thursday July 27 2006, @08:38AM
    • Re:But.... by evdubs (Score:1) Thursday July 27 2006, @08:52AM
    • Re:But.... by delinear (Score:1) Thursday July 27 2006, @03:10PM
  • Proper Settlement (Score:5, Interesting)

    by N8F8 (4562) on Thursday July 27 2006, @08:36AM (#15790378)
    The record industry claimants should get a 20% discount on future Kazaa downloads.

    Like the rest of us ever get a real settlement from record indutry abuses.
  • 20 Billion Tracks? (Score:5, Insightful)

    by stealie72 (246899) on Thursday July 27 2006, @08:36AM (#15790380)
    Wow, 3+ tracks for every person on the planet?

    How do they know those are all illegal? My CD collection is in my attic. My p2p software is on my desktop. I DL tracks from CDs I own all the time, because it's easier than finding the CD.

    Did that get counted as an illegal download?
  • Well... (Score:5, Insightful)

    by kripkenstein (913150) on Thursday July 27 2006, @08:36AM (#15790383)
    (http://neolicity.blogspot.com/)
    In other news, use of Bittorrent and eDonkey networks is up.

    "We have won another battle in an ongoing war [...] We move forward with a spring in our step."

    I have to hand it to these guys, they can sure convince themselves of what they want to believe in.
    • Re:Well... by MrSquirrel (Score:2) Thursday July 27 2006, @09:00AM
    • Re:Well... by delinear (Score:2) Thursday July 27 2006, @03:20PM
  • Finally, we Canadians win some recognition where it is due. >.>

    Frankly, I'm too lazy to download music. If I really want a CD, I'll buy it, or bug my friend's to see if they have it, and maybe do a music swap. Which of course includes ripping it to my computer.
  • And the artists get... (Score:5, Insightful)

    And the hungry artists who were "damaged" by this get a $1 off coupon for their next recording session advance.

    Kazaa would be better off throwing in the towel, a keyword search is too broad to block only protected works and will result in the service being mostly unusable for either legit or non legit uses.
  • OMG this is totally awesome (Score:5, Insightful)

    by Heir Of The Mess (939658) on Thursday July 27 2006, @08:42AM (#15790417)
    (http://johnstewien.spaces.live.com/)
    Now instead of having a large range of MP3s to choose from I can choose from a limited range of music that is encumbered with DRM. Where do I send my money?...allofmp3.com I guess. I wonder if the music industry will eventually get it?
  • by VEGETA_GT (255721) on Thursday July 27 2006, @08:42AM (#15790421)
    Ok seriously, dose the record industry think going after kazaa well stop internet downloads. First ff, kazaa is pain anyway, seriously screwing up network traffic. There are already much better solutions out there to acquire music. Any time some web site or program gets taking down, another always seams to come in to take its place. The RIAA needs to get a clue and say, we can't beat it, lets find a way to use it. And they are also to dumb to realize its already helping them as it is. I have so many friends who download a cd before they buy it. If its crap, hay pay for it, if it's good then they get it.

    But what program do you think are next on the list to take over from kazaa and be the next target of the RIAA/MPAA.
  • That's just as interesting a subject as their change of heart. Ideally there would be:

    1) the option to purchase individual tracks cheap, like iTunes
    2) with as little DRM as possible (preferably none)
    3) the option to buy full albums that cost less than the physical version (say, Five Bucks)
    4) the full albums would have the goodies like lyrics
    5) there would be bonus materials not available in stores (just like with CDs that killed the LP)
    6) Peer review of the tracks and/or albums would be permitted *by those who have bought them*, so we could know if the music was good or TeH sUcK.

    Anyway, just some thoughts.
  • All New DRMed service coming soon? (Score:3, Interesting)

    by trawg (308495) on Thursday July 27 2006, @08:43AM (#15790427)
    (http://trog.qgl.org)
    Cool - will the 'new Kazaa'...

    - have anywhere near the range of the old one?
    - ship us DRMed files that aren't compatible with all our devices?
    - cost less, the same or more than iTunes?
    - be adware sponsored to keep costs of music down?

    Unless there are favourable answers to all these questions (and more, no doubt), what possible incentive is there going to be to use this service.

    I'd happily pay $50 a month (or whatever, some reasonable monthly fee / bandwidth even) to download whatever mp3s I wanted from Kazaa that anyone wanted to share. I'd happily let my downloads be tracked so it could go into a big database somewhere so royalties could be paid to artists and labels.
  • 20 billion downloads? (Score:3, Insightful)

    by complete loony (663508) <Jeremy@Lakeman.gmail@com> on Thursday July 27 2006, @08:44AM (#15790442)
    That's not a war, that's a massacre.
  • Ka-what? (Score:2)

    by Simon Garlick (104721) on Thursday July 27 2006, @08:44AM (#15790446)
    Kazaa...? Oh, I remember. It was big back in the nineties, right?

    What, it still exists?! No way.
    • Shaq by krell (Score:1) Thursday July 27 2006, @08:46AM
    • Re:Ka-what? by deviceb (Score:1) Thursday July 27 2006, @10:24AM
  • Behind the Times (Score:5, Funny)

    by Billosaur (927319) * <wgrother&optonline,net> on Thursday July 27 2006, @08:45AM (#15790448)
    (Last Journal: Wednesday November 07, @10:09AM)
    "We have won another battle in an ongoing war," said John Kennedy, chairman and CEO of the International Federation of the Phonographic Industries (IFPI). "We move forward with a spring in our step."

    The International Federation of the Phonographic Industries? Ok guys, it's the 21st Century, so you may want to update the name a little. Although, I have to admit, the new USB turntable I installed on my multi-media PC is smokin'!

    I wonder if they ever get confused with the International Federation of the Pornographic Industries?

  • by segedunum (883035) on Thursday July 27 2006, @08:45AM (#15790449)
    (http://ponsaelius.blogspot.com/)
    ...and countless others that then disappear without trace and become replaced by other filesharing networks and software. Brilliant. Minds like golfish some people... Minds like golfish some people... Minds like golfish some people... Minds like golfish some people... Minds like golfish some people...

    "The market is now fragmenting. Unless you are an ardent downloader it is becoming harder to know where to go," he said.

    Yer, I know. Everyone struggled when Napster ceased to be.
  • by zuki (845560) on Thursday July 27 2006, @08:47AM (#15790464)
    (Last Journal: Thursday October 12 2006, @05:21AM)
    What the scariest thing is with this type of settlement is that no one,absolutely no one seems to really know - or care - about what will happen to such a huge pile of money, and further that it probably will only go to enrich those who have major chart successes, their lawyers, or the IFPI itself (claiming it needs more $$ to fight piracy), rather than those copyright holders whose music was actually downloaded.

    Of course, as with a major news organization such as the BBC, no need to wax philosophic on the actual real-world meaning and consequences of such actions, and the possible windfall (or lack thereof) to those who created the content in question. Rethorical question if you ask me.

    Sort of like the "War On Terror(TM)"... By now everyone forgot why we are fighting it, as we are too involved in the day-to-day fighting to remember what it was supposed to be about.

    Carry on lads, carry on....

    Z.
  • by Volante3192 (953645) on Thursday July 27 2006, @08:49AM (#15790472)
    And with Kazaa's refocusing into a pay service, it clearly shows that the RIAA is finally realizing the power that peer to peer networks have and will be able to mold it into a high quality distribution method. Plus there's already a high installed userbase to give this new service a strong kickstart.

    What's that? Look at Napster? Didn't they get sued to oblivian?

    THAT'S a pay service now too?! We're doomed...
  • Canada Number 2? (Score:5, Interesting)

    by Anonymous Coward on Thursday July 27 2006, @08:49AM (#15790473)
    TFReport cites Canada as the second worst 'offender' in music downloads worldwide.
    Perhaps that is due to our Blank Media levy [wikipedia.org] that makes downloading essentially legal in this country.
    Now whether those billions of tracks were subsequently uploaded is another question entirely (this is not covered by the levy), but i suppose that doesn't help the RIAA:

    "Them there Canucks did 23 Braaziiiilion downloads. Invade Canada!!"
  • RIAA wins! No one else does... (Score:5, Insightful)

    by paladinwannabe2 (889776) on Thursday July 27 2006, @08:51AM (#15790484)
    "Hungry artists across the globe rejoice" isn't even in the article- probably because it's just wrong. And while I do not support illegal filesharing, I do have to agree with earlier posters that the starving artists won't see a dime of this settlement. In fact, I'd be suprised if any artists, even the 'big names', get some of the settlement. The artist's contract only gets them money under certain conditions- and I'll bet that 'settlements from lawsuits' are not one of those conditions. No, this is a victory for the RIAA, but not particularly helpful to anyone else.
  • Yeah...Right... (Score:1)

    by infosec_spaz (968690) on Thursday July 27 2006, @08:54AM (#15790503)
    (http://www.threatminded.com/)
    Like the actual artists will see one fucking penny of it!! RIAA will claim that legal costs have eaten it all up, and that they sued on behalf of the artist, so there is no money left, but from now on, the artist will see more money...anyone besides me see a terrible ass raping here?!?!?
  • by ysaric (665140) on Thursday July 27 2006, @08:57AM (#15790523)

    This money could be used for attorney fees for going after the next P2P company, or to go after individuals downloaders/sharers, or to R&D for the next DRM scheme, or for lobbying governments for laws that benefit them and/or make it easier for them to target the above groups.

    One thing it will likely not be used for is to work to further integrate musicians and their music into quality, legal digital distribution channels that allow broad consumer rights.
  • Go Mexico Go! (Score:3, Informative)

    by xtracto (837672) on Thursday July 27 2006, @09:11AM (#15790616)
    (Last Journal: Saturday October 20, @06:40PM)
    Wee Mexico on the TOP 10 list!.

    On a serious note, instead of "fragmenting" and making harder to see where to go, what they are doing is homogenizing (spell??) it. All those kazaa users will go ([to bittorrent+emule+X]-1) P2P software that is available. That is great from my point of view because that way you will have to hunt less places to get what you need.

    I remember once I downloaded winmx and could found the GAMEDEV magazine ISO disks, unfortunately I could not download it because my connction was still a modem. In those days you had edonkey, kazaa, imesh, napster, and I dont remember how many others.

    The more of those netwoks they close, the better another network will become (in anonymity, content and users).

  • by layer3switch (783864) on Thursday July 27 2006, @09:20AM (#15790702)
    Record Industry represented by RIAA, the Zoo keeper
    Artists, dirty animals yanked out of their natural habitat (street corner)
    The sign, "Please, Don't Feed the Artists."
    Listeners, "We are not allowed to see animals outside of the Zoo... because it's illegal..."

    I hope, ./er's minds are still active and imaginative enough to draw that satire cartoon in your mind.
  • RI, MP, Kaz (Score:1)

    by naddington (852722) on Thursday July 27 2006, @09:31AM (#15790802)
    Now we have another group to call **AA.
  • 20 billion songs (Score:1)

    by future assassin (639396) on Thursday July 27 2006, @09:42AM (#15790891)
    (http://www.aperture.ca/)
    Minus all the ones I already owned on cd but was to lazy to rip off my cd's so I slowly downloaded them when I had time. Multiply that by tens of 1000's of times and the number shivels down. I wonder if they threw in software/cracks/porn vids into that number.
  • Perhaps the money could go... (Score:3, Interesting)

    by ursabear (818651) on Thursday July 27 2006, @09:43AM (#15790896)
    (http://jimmybearpearson.com/ | Last Journal: Thursday November 09 2006, @10:10AM)
    I don't know if the settlement will change the way music/software/content is traded and shuffled via the internet.


    But, here is my hope: I'd like to see the RIAA spend that $100m on the following:

    *) Pay royalties/living wage/etc. to all those artists from the early days of recordings - the ones that got paid a pittance for performance, but never received any living from the subsequent profitability and ownership of those tunes/recordings. There are tons of older musicians out there that the public loves - musicians that are living in the "poor house" while corporations collect royalties.

    *) Fund music education in the schools. Give good instruments to schools - particularly in areas where funding is scarce, and the kids can ill afford today's $1k+ instruments. Help pay music educators, particularly where budgets don't fund liberal arts.

    *) Fund collaborations between experienced artists and up-and-coming artists. The beauty of music is that it is also meant to be shared between musicians, on top of being shared with its listeners. Fund collaborations with folks like B.B. King, Carlos Santana, Yoyo Ma, etc. and kids who are getting started out with music.

    *) Fund and encourage labels to take risks with artists that are not necessarily the latest commercial success. If not funding the labels, fund the musicians themselves and give them access to qualified folks who can help spread their music.

    *) Use the money to promote a broad spectrum of music from less-than-well-known artists. Give the listeners of the world music that comes from the soul, not the boardroom.
  • by TheGratefulNet (143330) on Thursday July 27 2006, @09:49AM (#15790963)
    the artists won't get a penny.

    what will happen is the riaa's lawyers will get a new house, car and maybe some other toys, too.

    riaa: "another day, another lawsuit"

  • Um funny numbers. (Score:4, Insightful)

    by tinkerghost (944862) on Thursday July 27 2006, @10:01AM (#15791081)
    OK 80% of Pirate CD stands (physical media) were closed in a Mexican city -> 25%+ increase in sales.
    .25/.8=.3125 = 31%+ of all sales in the city were pirate CD's - physicals not downloads - and not including impulse buys because they were cheap.
    I really think that the record companies might want to redirect their efforts from the P2P users & back to the sources. 30%+ of the CD's were not being cranked out in somebody's basement. This is & always has been big business.
    Kaazzaa was stupid, IIRC they offered tracks for sale, but they also encouraged trading.
    Personnally, I'm not certain how a P2P company can effectively filter files. Most titles contain common words. Filtering out audio files titled 'Stupid Boy Band #1' is also going to filter any podcast review of it. MD5 checking on the file? Rip w/ a different bitrate & it changes - hell you can rip a random watermark into the file & no 2 source copies of the song would have the same MD5.
    The only effective thing is to respond to requests to remove specific indexes. But any bets on **AA surfing & submitting a request to every search engine every day? P2P has a lot of legitimate uses, some that distributers are starting to recognize, and it's not going away. So somewhere/sometime there has to be a compromise. So far the **AA isn't willing to see that. But as long as they are going to keep dumping restrictions people don't like onto how people can use thier media, they are going to see people pirating things en masse.
  • We stand still. (Score:1)

    by bruno.fatia (989391) on Thursday July 27 2006, @10:24AM (#15791293)
    (http://www.trancemirror.com/)
    PRIORITY COUNTRIES
    • Brazil
    • Canada
    • China
    • Greece
    • Indonesia
    • Italy
    • Mexico
    • Russia
    • South Korea
    • Spain
    Source: IFPI Just move in here and you'll be fine! I hope to be 1st on that list forever! Although some ISPs are now traffic shaping, that's only BitTorrent, you can still pretty much anything :)
  • by Mayhem178 (920970) on Thursday July 27 2006, @10:27AM (#15791312)
    The more you tighten your grip, RIAA, the more P2P networks will slip through your fingers.
  • by Kengineer (246142) on Thursday July 27 2006, @10:32AM (#15791368)
    Come on people, who here really thinks that Kazaa is going to pay that kind of money to the RIAA?

    An even better question is, do they even have that kind of money in the first place?!

    More likely Kazaa will just divest themselves of all their assets, loot what they can from the cofers and then declare bankruptcy.
  • hungry artists? (Score:1)

    by pxuongl (758399) on Thursday July 27 2006, @10:57AM (#15791623)
    i think that hungry artists existed long before p2p networks sprung up
  • Not a bad price (Score:2)

    by Photar (5491) <`photar' `at' `photar.net'> on Thursday July 27 2006, @11:03AM (#15791675)
    (http://photar.net/)
    20B songs for 100M is 200 songs per dollar. Thats half a cent per song, better than allofmp3.com's prices.
  • by delire (809063) on Thursday July 27 2006, @11:11AM (#15791742)

    Files might be being downloaded 'illegally' but here in Europe the recording industry is doing better than it ever was. These n-billion files that are being downloaded cannot be counted as a loss, as they wouldn't be bought anyway. They are being downloaded precisely because they are free; an argument for damage here is absurd.

    P2P is best thought of as an advanced try-before-you-buy network. For this reason the people that are losing money from P2P are not recording artists, but Marketing Execs that would like to steer our consumption interests and habits, in short to push crap on us we don't want. P2P lifts the standards of consumer choice.

    "Artists around the world rejoice", my llama..
  • What I Wonder... (Score:2)

    by Nom du Keyboard (633989) on Thursday July 27 2006, @11:11AM (#15791743)
    What I wonder in all this: Does Sharman even have $100M+?

    Do they have more than that?

  • The freenetbay? (Score:2)

    by haeger (85819) on Thursday July 27 2006, @11:17AM (#15791798)
    Why isn't there a thefreenetbay.org somewhere that does what thepiratebay.org does? Sharing keys to downloadable material on freenet. God knows there's a lot there, and it's quite easy to find.
    What would be harder to find though are the ones sharing. Yes, speed is still low but that's being worked on afaik, and for anonymity that might be a low price to pay?

    .haeger

  • Payment to 'record industry' (Score:2, Interesting)

    by xnomdig (845370) on Thursday July 27 2006, @11:41AM (#15791996)
    The payment by kazaa of $100-million dollars to the 'record indistry' for the download of 20-billion 'tracks' works out to 0.5 cent per track. It can't possibly be worth the while of the 'record industry' to distibute this trifle to the creators of the original works (even if the 'record industry' already know how many times each artist's work was downloaded), so it's pretty obvious the $100-million will be used instead to fatten the coffers of the 'record industry' and never be seen by the creators of original work. Of course, this sort of theft compounds the theft of downloading the 'tracks' in the first place.

    Until purchase or per use royalty is paid directly to the creators of original work, it will never be equitable. If royalty were paid directly to the creators of original work, it would then be up to them to pay for services (e.g., distribution, promotion, etc.) rendered (if the services were actually rendered satisfactorily).

    Paying purchase or per use royalty to the creators of original work clearly was impractical/impossible before the advent of computers and computer networks. Nowadays, it should be a simple matter to pay purchase or per use royalty directly to the creators of original work and leave the present 'media companies' out of the royalty payment chain altogether. What are now the 'media companies' could continue to provide their 'services', but they would be paid at the discretion of the creators of original work -- for services actually rendered to the satisfaction of the creators of original work.

    If the public and the creators of original works would together petition the (Federal) lawmakers, a 'direct' royalty payment system using the Internet could soon be put in place. The same legislation should also void all existing 'artists contracts' with the 'media companies' as they would have been made superfluous. Contracts with 'media companiees' have always been a bad idea, as demonstrated by the observable fact that they have gone so horribly wrong.

    Remember the whole point of copyright and royalty payment is to encourage and reward the creators of original work. Funneling the royalty payment through a third party (e.g., the 'media companies', 'publishers', etc.) was always a bad idea, but it started when there was no other option. The Internet makes it possible to fix this mess rather easily.

  • Ha (Score:1)

    by toxicity69 (925460) on Thursday July 27 2006, @01:15PM (#15792968)
    I heard about this on the car radio driving home from work. They had a record executive talking smugly "Oh we can do this, that, the other, etc." I just had to laugh, I mean, seriously, anyone who can read English hasn't used Kazaa in years. Its full of fake files, not just the RIAAs but also those of people who, for some reason, like to use up a lot of their own bandwidth transmitting bogus files....and its also ridden with viruses. They probably did more good for the p2p community than bad. In any case, far better p2p systems like Bittorrent have replaced it, by taking down Kazaa they took down probably the most obvious target, but most assuredly did practically nothing to stop p2p piracy.
  • I have seen reports that Kazaa has entered into a settlement with the RIAA, under which it will seek to sell "licensed" RIAA music throught p2p technology. The terms of the settlement have not been disclosed. I am assuming that the settlement does not in any way affect the thousands of lawsuits against Kazaa customers. If that is so, it's wrong. Many of the fine people who are being terrorized by the RIAA are in this mess because of Kazaa, and a settlement which gets Kazaa off the hook with the RIAA but doesn't do anything for the good folks who took Kazaa at its word, is not something I find comforting in the least. I would have thought that Kazaa would have done something to end the reign of terror against its customers. If the settlement doesn't provide for the cessation of RIAA litigation against Kazaa customers, and if Kazaa will be working with the RIAA to sell licensed distribution, I would call upon all members of the public to boycott the 'new Kazaa' to the same extent that they are boycotting the RIAA. And I would call upon all defendants in RIAA cases, who are being sued because of Kazaa, to consider -- if they have the means to do so -- cross suing Kazaa.
  • by ampersmith (991547) on Thursday July 27 2006, @06:37PM (#15795561)
    (Last Journal: Friday September 22 2006, @10:45AM)
    Just wondering if this is related to Ebay's effort to clean up the legal status of Nicklas Zennstrom and Janus Friss. They've been steering clear of the US for years, refusing invitations to speak at industry events, etc. I believe Ebay had put some pretty serious legal and ol' boy network effort into straightening this out. Maybe some of their 2.4 billion will be helping Kazaa pay its bill. I would guess we might be seeing them here sometime soon.
  • by Squigley (213068) on Friday July 28 2006, @12:34AM (#15796763)
    (http://www.squigley.net/)
    People still use Kazaa? gees. It went down the toilet after they stopped Morpheus connecting to the network, I thought that was pretty much the end of it.
  • I mean, the RIAA Probably pushed them, and threatened them with lawsuits!!
  • by wackysootroom (243310) on Thursday July 27 2006, @08:37AM (#15790386)
    (http://www.voip-university.com/)
    I think you missed the sarcasm in the story.
    [ Parent ]
  • by lastchance_000 (847415) * on Thursday July 27 2006, @09:11AM (#15790617)
    Yes, but in a fews years they'll be on VH1 Behind the Music and you'll see how they lost it all.
    [ Parent ]
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