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Phonorecords: A Matter Where Matter Still Matters

 

Judge Sullivan’s decision in the recent Capitol Records versus ReDigi ruling allows for what we all know is perfectly legal; exchange and personal uses of original physical media, like the original commercial CDs that Murfie stores for an owner, providing access only to the owner.

Beyond that, the ruling was a bit of a letdown. In this modern era of digital audio delivered across high speed networks, we all wanted a profound decision about the future of ownership of our media.  We wanted a ruling that clearly let us know whether our iTunes downloads were albums we really owned versus data we’ve merely licensed. Instead, the case came down to the copying of… phonorecords. Phonorecords?

As defined by copyright law, phonorecords are the “material objects” in which the music is fixed. When the law was created in 1976, this meant vinyl records, eight-track tapes, and cassettes. The various music formats which followed over the years were also very clearly material objects. In the ReDigi case, the judge takes the definition of phonorecord to an entirely new level that now includes the physical section of magnetic bits stored on our harddrives in the case of iTunes downloads. By contrast, an album that is sold or accessed on Murfie’s platform simply is a CD phonorecord, stored for its owner’s convenience in Murfie’s disc vault.

And, this is where ReDigi ran into trouble. The instant that original, licensed download of Thriller was saved on our harddrive, that tiny section of bits on our physical drive became the material object associated with that phonorecord. Short of teleportation, it didn’t matter how fancy ReDigi’s system of transferring data was because, in the end, ownership of the concrete physical thing wasn’t conveyed to the buyer. The judge ruled that the laws of physics made it impossible to transfer a phonorecord (i.e. a material object) across a network in a manner that didn’t involve making a copy.

Extending the definition of a phonorecord to account for bits on a drive leaves open some interesting questions. The judge ruled that the first sale doctrine “still protects a lawful owner’s sale of her ‘particular’ phonorecord, be it a computer hard disk, iPod, or other memory device onto which the file was originally downloaded.” This seems to imply that we’re able to sell a harddrive containing a bundle of original mp3 downloads. But what about those mp3s that were transferred over to this harddrive when we upgraded it to a larger size? Or, even those files that were copied over to a new directory (file system specifics aside)?

In tying the case back to elements of copyright in place long before the rise of digital audio, the judge took a conservative approach and declined an opportunity to chart a path for first sale in the digital realm. He cited as much in his decision: “Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology.”

In other words, congress needs to update our laws if the original copy of your iTunes download on your harddrive is going to be considered something more than a phonorecord that’s stuck with you (or whomever has your computer). So, for those of us waiting around for a digital first sale doctrine, it could be a while.

In the meantime, Murfie already provides a path forward for music ownership in a digital world. We’ll continue to maximize the value of your music within time-tested laws, but we also applaud any work entrepreneurs, legislators, and courts do to modernize those laws to reflect how our systems for transacting, storing, and accessing music, books, and movies that we own actually work. These advances are good for all parties and can hardly fail to lead to many new opportunities for creators, the various supporting media businesses, and fans alike.

Please drop in and check us out.

Last updated: 04/02/2013 at 4:22pm; a draft was posted by mistake

TIME Ponders Digital Music at End-Times

A copy of a recent issue of TIME crossed my desk recently, and an article by Katy Steinmetz asks:

What happens to your virtual things when you’re gone?

Steinmetz’s article “From Here to E-ternity” isn’t available online – except to subscribers – but it is worth seeking out, as she thoughtfully surveys the state of “post-death” rules and options around E-Books, Music, Games, Photos, Movies & TV, E-Mail, Social Media, and Domains.

The good folks at the Guardian Express did a nice follow-on piece that includes much of the data from the TIME article. The  grid of the different media types is worth a look-see.

We at Murfie believe that you can and should own your music. Today, there are hundreds of thousands of albums on Murfie, and each is backed by a physical Compact Disc that belongs to a customer. It’s theirs to take physical delivery of, stream or download music from, to give away, to sell, or even to pass along to their progeny when they shuffle off this mortal coil.

Owned -vs- Rented Media and the “Right to Resell”

Bill Rosenblatt of GiantSteps Media published a thought-provoking article The right to resell: a ticking time bomb over digital goods. It’s worth a read. Below I’ve shared some of my comments on his article.

When it comes to media in our culture today, we have two crisp models of acquisition, as defined by contracts, legislation, and case law: ownership and rental. Ownership falls almost exclusively into the “physical media” bucket and “digital media” is generally a rental (licensed) model. I for one hope we can someday work out a third model for “digital ownership” that works for consumers and for creators and for rights-holders.

If we as a society can create this third model of “digital ownership” sooner rather than later, we can leave “rented media” behind, in what will be a comparatively small bucket of “non-transferrable assets.” For example, over the last 30 years, US consumers have invested, in 2012 dollars, on the order of a quarter-trillion dollars in physical CDs, each with crisp fair-use and first-sale rights. The comparative total investment in rented digital music in the last 8 years is on the order of 5% of that.

We should be thoughtful about railing against rights-holders for the legal rights (or lack thereof) of the digital music that consumers have (bought) rented. In theory, we consumers knew exactly what we were getting into. That is to say, the terms of the licenses we agreed to are not unclear. Of course one can argue whether the average 18 year-old can and will read and understand all that legalese.

The ReDigi solution strives to expand the scopes of both legislative dicta and case-law. As Mr. Rosenblatt suggests, they’ve chosen a challenging mountain to climb. I’m not so sure I agree with his aside that it’s an odd position for ReDigi to take to enable first-sale-like rights AND bring the rights-holders in to participate as well. While this is indeed a deviation from what legislatures and judges have enabled, let’s be open-minded about asking questions like “why not?” as we attempt to sort out these thorny problems.

The fundamental challenge here (IMHO) is that most consumers of downloaded content make certain assumptions that they have fair-use and first-sale rights. They do not generally have those rights.

Each and every day Murfie wrestles with these issues of ownership -vs- rental as we attempt to integrate all of our customers’ music purchases across any and every physical and digital format.

Open Letter to Bruce Willis

 

Dear Bruce,

We weren’t surprised to learn that the recent stories about taking on Apple over rights to your iTunes collection turned out to be false. However, we suspect that this issue may be of genuine concern to you and to others who have amassed large collections of digital music downloads. For that, we feel your pain – and would like to lend a hand.

As a way to clear up the music ownership question and hopefully make up for some of the trouble caused by the free-wheeling London media, we have a simple offer for you: let us replace your entire iTunes collection, on us, with music you’ll really own on Murfie. We’ve even already opened up a Murfie account for you with some albums we suspect are part of your library.

I’m sure you have an absolutely incredible music collection. And, if you’re like most of us, it’s split between all of your CDs and the stuff you’ve downloaded from iTunes. The ownership rights that come with your CDs are clear. You can give them to a friend, trade them, sell them, donate them, and easily leave them to your heirs–all things that can be done with the music you own on Murfie.

However, as the recent press coverage has pointed out, your rights to the music you’ve downloaded are quite a bit more complicated. You’re likely limited in terms of how or where you can listen to your music. You certainly can’t sell or trade your downloads, and only time will tell if it will ever become possible to legally transfer rights to your downloads to your estate.

So, let us move your music collection to Murfie. To sweeten the deal, for every album in your collection that you move to Murfie, we’ll donate $10 to our charity of choice, the VH1 Save the Music Foundation. What do you say? You’ll get a complete collection of music you own and help out a great cause in the process. It doesn’t get better than that!

Sincerely,
Matt Younkle, Co-Founder
info@murfie.com

cdsvscloud

Music Ownership versus Music Rental

The Labor Day holiday this year almost turned into Litigation Day as rumors of Die Hard star Bruce Willis’s unhappiness with the licensing terms of his extensive iTunes library hit the intertubes. A British tabloid apparently started the story, which ultimately turned out to be unfounded. But the substantial dust that the story kicked-up has been exceedingly interesting to watch.

Fundamentally, music services like iTunes and Amazon Cloud Player and Spotify are about renting access to certain music. You pay a fee and you get access. When you stop paying or, in this particular case, when you cease breathing, that access goes poof. This is a reasonable way to consume music so long as you understand that it’s just a rental – not ownership – and that rental extends only to you.

Murfie is different.

We operate on the equivalent of the music gold standard. Each album at Murfie – whether you’re listening to it, buying or selling it, trading it, or giving it to a friend – is backed by an actual, physical CD that is stored in our warehouse. Our customers own their CDs and Murfie takes care of their collections. I guess maybe it’s more of a “silver standard” ;-) .

Instead of having their 100, 1000, or more CDs gathering dust on a shelf, Murfie adds value to our members’ CD collections by digitizing the discs for anytime/anywhere access; by offering a marketplace where they can buy, sell, and trade their discs; and by getting all that plastic the heck out of their homes. If you want your CDs back, or you want to give them to your kids (regardless of your breathing status), we ship them to you, or transfer ownership at Murfie, as you prefer. They are yours after all!