Allofmp3 Restarts Business

An anonymous reader writes "With a pretty short message on their blog, Allofmp3 announced that they will resume their music store soon. According to a Russian court, their music store did not violate any copyright law in Russia, so there was no reason for them to keep it closed."

Legal nuance

According to a Russian court, their music store did not violate any copyright law in Russia,

Ha! Silly Russians! In Capitalist America, copyright law violates YOU!

Re:Legal nuance

SAFE PORT Part II is probably in the works.

The new U.S. law will probably make it illegal to download music from and site hosted in a country that is not in alignment with U.S. IP laws.

Note: I am very much in favor of IP. I think it is a goodness. However, I also believe that terrorist tactics used by the RIAA are immoral and artists, while upholding their IP rights, should disown and disavow the RIAA.

Re:Legal nuance

The new U.S. law will probably make it illegal to download music from and site hosted in a country that is not in alignment with U.S. IP laws.

Why stop at music? Why not all "intellectual property"?

That will in effect make much of the internet "illegal" which would probably be a good thing, because then we will have the choice as to which laws we want to follow. Funny, isn't that how multinational corps work?

Re:Legal nuance

No kidding. I, for one, am sick and tired of the RIAA blowing up innocent civilians. Er, wait.. I'm sick of them taking hostages and demanding passage to a foreign country. Oh wait.. I'm sick of them using aircraft as weapons.

Can we stop using the word "terrorism," and its derivatives, to describe any unsavory act? The proper term in this case would be extortion, or perhaps coercive actions. That's not what terrorists do, it's what petty thugs do. When they start storming concert halls with small arms and tear gas, then by all means, let's start calling them terrorists. Until then, can we please keep things in context?

And lo the beginning of the IP Cold War...

Russia has been flexing it's muscles lately in many fields, to re-establish itself as a power in the world. I would not be surprised if this is part of that muscle-stretching exercise.

Then again it could also just be a case of IP laws not synching up between Russia and elsewhere in the world.

Global Economics

I wonder if this is how foreign nations plan to break the U.S., by bootlegging our digital commodities and harming our most influential industry?

Re:Global Economics

I wonder if this is how foreign nations plan to break the U.S., by bootlegging our digital commodities and harming our most influential industry?

What, exactly, does this have to do with the defense industry?

If you can't beat em', join em'

Maybe finally the RIAA will realize that allofmp3's pricing scheme and business model works and proves that if you price it right and don't use DRM, people will readily pay for music even if it is available for free on P2P.

allofmp3 provided/provides:
A great rating/linking system - "People who bought this also bought...","Similar artists..." - Great way to get "the word" out on new music without any advertising costs whatsoever.
Convenience - No DRM, no "special" download app that tied you to Windows (even if just for downloading). (Yes, there was allTunes, but you could always just download using a normal old browser)
Selection - allofmp3's selection was better than any other online music store I've used, except possibly for iTMS, although due to the DRM I haven't touched iTMS since PyMusique/SharpMusique stopped working.

They also happened to have great prices, but I'd happily pay double the prices of what allofmp3 charged.

Rather than try and sue them out of business, the RIAA should instead drive them out of business the capitalist way - with some nice good competition. Offer the same selection, convenience, organization, and interface as allofmp3, and compromise prices between allofmp3's (admittedly too low) and the RIAA's (way too high for "impulse buys" of tracks/albums I'm not sure about.

While the per-track/per-album price of allofmp3 is much lower, many people (myself included) spend MUCH more money in total there because at allofmp3's prices, there is little risk to buying a whole album as an "impulse buy" when you came for just a single track. RIAA pricing encourages single-track purchasing (odd, since the RIAA is so desperate to encourage full-album purchases.)

Re:If you can't beat em', join em'

And according to the russian court, they were paying their suppliers (or at least the representatives of their suppliers) rightly.

Re:If you can't beat em', join em'

They have offered to pay royalties, but were turned down:

Major record labels once again refused to accept royalty payments from Russian on-line music stores.

IFPI refused to receive money from the Russian royalty collecting entity ROMS (Russian Organization on Collective Management of Rights of Authors and Other Rightholders in Multimedia, Digital Networks & Visual Arts). Although ROMS operates within the law, IFPI insists that the only entity which could act on behalf of the labels and other rightholders and collect royalties is the Russian branch of IFPI (RPA - Russian Phonographic Association) and refuses to accept anything from ROMS.

What would you like them to do, start mailing cheques directly to the artists?

Sources: allofmp3 blog [allofmp3.ru], which links to russian papers.

Re:If you can't beat em', join em'

Again, included in their current price is the costs that they have to legally hold aside and give to ROMS when they sell a track/album. The money is already in ROMS hands, they have already collected it. And in ACCORDANCE with LAW! Just because the RIAA and IFPI (which is the new extension) do not like the law doesn't mean that they can do anything about it in the way they are trying (i.e. get the World Trade Unit, and the European Union, and the USA to force Russia to shut down a perfectly legal business by mandating that Russia will not be allowed to join the European Union until it shuts these places down, because they already tried to lobby for the laws to change and failed (it appears that the Russians are not a susceptible to "contributions" as their American and European counterparts)).

They are abiding by their laws as written. ROMS is the legal entity to send copyright payments to under Russian law. ROMS is setup to pay the appropriate copyright royalties to the proper owner(s) when officially notified by the proper owner(s). The check then goes in the mail (and future payments go in the mail as they arrive). They simply have a system in place to make sure the proper owner of the copyright is compensated, and not someone with the false claim to the copyright, and this is in accordance to LAW. Stop complaining that you don't like it. I don't like the fact that women in Saudi Arabia need to keep their heads covered, but that is the law in that country. Same thing with no being able to chew bubble gum in Singapore...

Re:If you can't beat em', join em'

Except, of course, that the "one guy" is a sovereign nation enforcing its laws (specifically, as regards compulsory licensing). And in truth the situation isn't all that different from what pertains in the US. ROMS is essentially equivalent to an organization called SoundExchange, which collects those compulsory-license royalties you've heard about on webcasts, and is a division... you guessed it... of the RIAA. Russians just happen to enjoy a slightly broader license grant under their system than do Americans under theirs. So this is a case of "your laws are different from ours... OMG IP terrists!"

Re:If you can't beat em', join em'

You equate the Russian law to illegitimate legalized theft, however the Russian law involved is largely identical to US law in principle and operation.

Both US law and Russian law grant a statutory license for any company to send absolutely any music over the internet, both US law and Russian law say that music may be sent in any format (including MP3), both US law and Russian law grant permission to do so without the permission of the copyright holder - or even to do so against the express dis-permission to do so from a copyright holder, both US law and Russian law designate a national collective body to receive the payments and to distribute those payments to the copyright holders, both US law and Russian law dictate what those royalty rates will be.

For example Pandora.com is a US company operating under that largely identical law and sending MP3s to people perfectly legally.

So what *is* the difference between US law and Russian law? Well there are basically two significant differences. US law has a couple of restrictions trying to prevent it from looking like a "store". If someone requests a specific song, you must wait at least an hour before sending it. You can't announce what music you are going to send. You can't send more than three songs from the same artist or two songs from the same album within any given hour. Probably one or two other quirky rules. But largely it boils down to that first rule - if someone wants to in effect "buy" a specific song download you have to wait at least an hour before initiating the transfer. Oh, and US law says the company can't *TELL* you that they sent you a download. Yeah, the good old "lets close our eyes real hard and pretend the facts of reality don't exist and maybe they will go away". Pandora.com "looks" like a "streaming" radio, and they don't *tell* you they sent you a 128kbps MP3 file download. But they did. If you take a look in your system temp folder, all the MP3 files are sitting there. They are named "Access-1" and "Access-2" etc, and they have no file extension. You just rename the file and tack on the .MP3 extension and there you go. Of course if we all close our eyes real hard we can pretend that there actually is any technical difference between a stream and a download, and we can pretend that MP3 file isn't sitting there on your harddrive, and if we squeeze our eyes shut REALLY REALLY HARD AND NO ONE PEEKS, then in a week or so the operating system will automagically delete all of the downloaded MP3 files sitting in your temp folder and *poof* the download never actually happened! Closing our eyes worked!

Oh wait.... I almost forgot. I said there were basically TWO differences between US law and Russian law! It wouldn't be very fair at all for me write that rather long paragraph on the first difference and then quietly exit without telling what that second significant difference is, now would it?

Well the other difference is the different royalty rates. Yeah, I guess I have to admit that is a pretty important difference. Not just an important difference, but a LARGE difference. In fact it works out to about twenty times difference in royalty rate. Yeah, a twenty time difference in money for the artists isn't even even in the same ballpark. Russian law and US law don't set anywhere near the same payments for artists.

Oh wait... I think I might have been a bit unclear there on the difference between US law and Russian law, and particularly about those royalty rates. It's Russian that sets a twenty times higher payment rate for artists, and it is US law that sets twenty times lower payment rate for artists. Sorry if maybe you got the impression it was the other way around :) Those damn evil Russians allowing sending of MP3 files over the internet without the copyright holder's permission on the exact same statutory license legal basis as US law allows sending of MP3 files over the internet without the copyright holder's permission, and then Russia having the audacity to

Re:If you can't beat em', join em'

> You can price anything right if you choose not to pay your suppliers.

... but enough about the RIAA.

Re:If you can't beat em', join em'

Have you seen the breakdown of who gets what from albums these days?

Despite the high prices for the consumer, the supplier (artist) gets almost nothing.

Current track prices are way too high ($1.30 for usable content with an incredibly limited selection), and while allofmp3's were too low (10-25 cents/track depending on length and compression), a compromise somewhere between the two (maybe 50 cents for no-DRM) would likely be quite successful.

They could even reduce advertising budgets significantly and simply use the "similar artists" and "people also bought x" features that most good online stores have nowadays.

Re:If you can't beat em', join em'

Current track prices are way too high ($1.30 for usable content with an incredibly limited selection), and while allofmp3's were too low (10-25 cents/track depending on length and compression), a compromise somewhere between the two (maybe 50 cents for no-DRM) would likely be quite successful.

I wouldn't say that allofmp3 prices were too low. At $0.03/MB, a 3:30 FLAC song weighs in at 22.5MB/$0.67 and a ~62 minute album is 417MB/$12.51. I can walk into Newbury Comics and get most albums on CD for $10 to $14. Buying music online should be cheaper for the consumer, not just more profitable for the distributer, who doesn't pay any of the costs associated with physical media. $1.30 per track on iTunes is outrageous.

(Part of this post was recycled from this one [slashdot.org])

Re:If you can't beat em', join em'

Allofmp3 payed ROMS, but the RIAA's russian branch (IFPI) refused to take payment.

http://blogs.allofmp3.ru/music_news/2007/08/27/ifp i-refused-to-recieve-royalties-in-russia/ [allofmp3.ru]

Re:If you can't beat em', join em'

Don't be daft. It's more like you come into my store and offer me $0.01 for a case of beer, and I refuse, and you walk out of the store with the beer anyway.

No, it's more like he walks into your store and offers you $0.01 for a case of beer, you refuse, a passing police officer reminds you that the $0.01/case price is fixed by law and declared to be fair , and he walks out of the store with the beer.

You can't just name your own terms/price

AllOfMP3 didn't! The Russian government named its price, and AllOfMP3 complied.

Conversely, the RIAA would have a rather hard time going after allofMP3 for copyright infringement...

...and that's exactly the way it should be, since AllOfMP3 wasn't committing it, according to Russian law -- which, incidentally, is the only law that matters in this discussion, whether you like it or not!

Never stopped doing business...

...just changed names for a bit (to MP3sparks.com). I had a balance on AllofMP3, heard that 'sparks was a front, so I logged on using my 'MP3 ID and, sure enough, they'd "transferred" my balance. And guess what? Alltunes (their download tool) never stopped working either, and without me having to change a single setting.

Re:So, you're essentially paying a pirate money, h

You know, actually, allofmp3 does pay royalties in Russia to ROMS (an agency setup under Russian law by the Russian government). The issue is that western companies do not recognize ROMS and instead 'demand' that Russian media companies deal with the equivalent of the Russian RIAA.

So what he is doing here is supporting an organization which is battling the influence exerted by the RIAA while legally distributing DRM free music.

Admittedly, there is a question of whether the amounts involved adequately compensate artists but, honestly, is not virtually any system better than what the RIAA promotes.

]{

Re:So, you're essentially paying a pirate money, h

The big problem is that the amount paid to ROMS is incredibly small and has not been negotiated with the rights holders or artists.

Well that's an amusing argument, considering that the US *ALSO* has a statutory licensing law and that rate has also not been been negotiated with the rights holders or artists.

Oh wait, I forgot to echo back to you the the part about the amount paid being incredibly small. Oops, my bad. Well lets see, the royalty rate under US law for a company sending the identical MP3 file to someone, compared to the Russian rate is... accrding to my calculator.... hmmm lets see line up the decimal point there....

Ah there we go! It's a multiplier of about TWENTY difference in royalty rate!

WOW! That's a frigin huge difference in royalty rate!

Under Russian law AllOfMP3.com has to pay TWENTY TIMES MORE in royalty rate than Pandora.com had to pay in royalty rate under US law when they sent me the exact same MP3 file. Yep, that's right, the Russian royalty rate is vastly higher than the US royalty rate.

You are absolutely welcome to say that Russian royalty rates should be higher, but you cannot argue that there is anything wrong or illegitimate about the principle or general operation of that law. In legal principle and in fundamental aspects the Russian law is effectively identical to US law. There are differences in some details, but absolutely not in anything altering the basic legitamacy of that law.
Russian law is absolutely legitimate

The "we pay royalties to ROMS" claim is a smokescreen to hide the fact that allofmp3.com is not paying enough money to the creators to actually sustain their work.

Two points. First of all the RIAA refusing to accept the money and refusing to pass that money on to their artists... and prohibiting their artists from directly collecting their money themselves is a public relations and political ploy. It is a small price to pay for the wonderful chant that RIAA artists are not getting paid at all, and to back up their bogus claim that the law itself is illegitimate.

Secondly, I would fully welcome increasing the royalty rate in Russian law. It is fundamentally a legitamate and GOOD law, and yes it should direct more money to the artists. And the US law royalty should also be massivly increased to match the Russian rate... provided that some defective-by-design arbitrary clauses in US law were removed to match Russian law... for example the US law prohibits sending more than three songs from a single artist or more than two songs from a single album within a single hour. Crank up the royalty rates to pay artists more and get rid of the (US) arbitrary restrictions on the timing of sending songs.

Of course that is the LAST thing the RIAA wants. They don't care squat about how well their artists get paid. And in fact they aren't particularly thinking about what rate they are getting paid on it either. What they are in a frenzy over is that fact that the broader market effect would be to more open opportunities to INDIE musicians. The RIAA's very existence is founded upon artists *NEEDING* to sign their soul away in an RIAA Label contract. If new artists find a broader marketplace more conducive to indie survival, the RIAA's influx of new lifeblood starts drying up. It doesn't matter what royalty rate the RIAA picks up in the short term if they lose control and indie artists are no longer forced to sign up with the RIAA middleman.

A good statutory license means that the RIAA (and their artists) get paid their due, but that the RIAA lose their VETO power to shut down any music enterprise at will, lose the power to extort other companies into compliance.

It's easy to dismiss the rights holders as "a bunch of rich musicians" who aren't earning a few extra million

Actually I'm thinking more in terms of "lots of the poor musicians should be making more tens of thousands each... a living wage.

An indie artist could be reasonably pleas

Domain blocked in Denmark

Bored one day I was using Google to find a ringtone for a friend and happened to drop on AllOfMP3, (just clicking through the list as one does,) and was presented by a page from my ISP saying it was blocked. I found it a little disconcerting that my ISP is deciding who I can communicate with.

For a moment I thought it's no longer the net I grew up with.

As I wasn't particularly interested in finding the ringtone or going to AllOfMP3 anyway thought I'd alleviate my boredom by investigating how they'd done this. Turns out they've only poisoned their DNS. So if you get the correct IP address from somewhere else and stick it in your hosts file you can work around it.

So the net returned back to normal: identified censorship as an error and routed 'round it.

Whew!

Not very many comments here yet...

Everybody must be busy downloading MP3s!

Allofmp3 sells your email address to spammers

I give each company I deal with a different email address so I know when they have sold my address to spammers. Shortly after allofmp3.com was being shut down for the first time, I started getting spam to the email address that I had given to allofmp3.com. Remember, that address was never given to anyone except allofmp3.com.

I guess they figured if they can't make money selling music that they don't have any rights to, then the would supplement their income by selling out their customers' email addresses to worthless spammers.

Pretty sad actually.

p.s. funny, but true coincidence... The capcha word for me to post this anonymously is "poacher"

Sooo many "In Soviet Russia" Jokes...

... oh my $DEITY there's just so many to ponder. In Soviet Russia... ...You don't play music, music plays you! ...You don't sell music, music sells you! ...You don't KABLAM

Ahhh, better now.

corporations taste of it's own medicine?

So, it's ok for big corporations to off shore things like manufacturing + tech support to cheaper countries.

But when another company takes advantages of its laws and it effects the company here. Oh noes!

WTO

Considering that Russia is now part of WTO, it will be interesting to see what will happen. Russia obeyed their law and agreements that we had with them. But will USA now take this to WTO and object to this? My guess is that USA will lose this appeal, and that will cause numerous other countries to allow other companies in on similar companies. Of course, this comes on top of the WTC looking at allowing Antigua and other countries that were denied off shore betting from USA.

In the end, this could pretty much negate all that W. tried to accomplish during his 8 years. That is the large American companies keep their copyrights under draconian conditions, and receive large royalties.

Violating Russian copyright law is very difficult

If you want to violate Russian copyright law, you pretty much have to walk up to the artist and punch them directly in the mouth, and even then it's a pretty close legal call.

This is futuristic Science Fiction

..at least as of today. The note on the allofmp3 site is dated August 31.

Source of AllOfMP3's music?

How can they get so much free music, in Russia?...

At least my MP3s still work

Unlike the DRM laden crap I got that committed suicide the moment the shop closed.

Goddamn useless bloody subjects

Is it that hard to make the subject reflect the actual state of affairs? They haven't restarted allofmp3.com yet. All they've said is "The service will be resumed in the foreseeable future."

Re:Ah well, there you go

He-he http://www.fas.org/nuke/guide/russia/icbm/rt-2pmu. htm [fas.org]

Re:NL -vs- RU

In Holland you can smoke pot on the streets,
in Russia you can download everything legaly.

Tough call.

Yeah, really tough call. So, move to Holland and keep your shell in .ru.

Re:Obligitory..

Slashdot broke my Nelson Muntz tags.

Re:shut them down

Wait, you're talking about the RIAA, right?

I actually do pay for my music (well okay, 98% of it, I download singles that I wouldn't otherwise buy the album to listen to, or will later get the album - no I don't do singles, waste of money..), but between these guys and RIA*/recording industry types, I know who I'd prefer to get rid of. They screw over artists, and these days it's very apparent that they're screwing over their customers too. They have no honour.

Re:NL -vs- RU

Technically it's frowned in if you smoke it in the streets. You are supposed to go to the Coffee Shops to smoke it.

Re:NL -vs- RU

In Holland you can download music and films legally too. Only uploading is illegal.

My sweet lord...

And how about them artists that leech the notes, chords, progressions, theory, and instruments of music?

Actually, a music publisher tried this and won: Bright Tunes Music v. Harrisongs Music. Use Google if you're not familiar with this case.

Re:/.ers are the kings of truthimess

You dont seem to actually get it. Yes they are legally selling the songs on their site (in Russia), they paid the licensing fees to the music companies already. Just because allofmp3 is exploiting a loophole in the contract they signed with the American music industry (the music industry would do the same damn thing if the tables were turned), does not make it illegal, possibly immoral, but they are legally distributing the music in Russia. The whole issue is that allofmp3.com has a license to broadcast the music they offer, by Russian law people have the right to record broadcast music. AllofMP3.com just cuts out the middle man and allows people to do the time and place shifting on the music they are technically broadcasting right from their site (download the mp3 of the song), which is perfectly legal in Russia. The music industry is just pissed because allofmp3.com is doing to them what they did to so many artists in the past, using loopholes to make a buck off of someone elses music. Like I said, morally they are not doing the right thing (though it is a kind of perverse justice on the music industry), but they are operating legally within the boundries of the Russian legal system.

Re:/.ers are the kings of truthimess

What they are doing is still unethical because the have not come to an agreement with the copyright holders

So, radio is "unethical" as well? Radio has no agreement with the copyright holders either, instead radio settles with the representing organizations. Russian law simply puts distribution on the net under similar regulations as broadcasting by radio. What makes that "unethical"? Just the fact that the profits for the music industry are by far lower under such circumstances?