The RIAA&#146s Russian front

An internet retailer that’s selling Franz Ferdinand’s latest album for $1.14? Sounds too good to be legal, right? Not in Russia., a digital music warehouse akin to iTunes, has ruffled the feathers of industry recording groups by selling albums at a cut rate, seemingly bypassing industry-standard repayment and copy protection schemes. To add insult to injury, pressure from the recording industry to shut the company down has fallen on deaf ears.


Those ears, belonging to Russian prosecutors, are deaf to the noise produced by recording companies because Russian copyright law may not cover “digital media.” And if the RIAA can’t shut the site down, AllofMP3 poses a more dangerous threat: outperforming accredited mp3 vendors in the marketplace.


The Recording Industry Association of America (RIAA) has been scrabbling since the 1999 debut of Napster to deal with internet music distribution. The organization started by suing companies that maintained “file-sharing” networks, winning victories over Napster and likeminded companies. But since that brief period of success, the recording industry has had a difficult time pinning down responsibility for the file-sharing boondoggle.


In 2003 a federal appeals court ruling allowed Internet Service Provider Verizon to refuse the RIAA’s request for data on its customers. The RIAA has since moved to suing individuals who download or “share” a significant amount of music, but the campaign to discourage internet piracy has caused a massive backlash among internet denizens.


In the case of AllofMP3, the case seems fairly clear, if the RIAA and its international counterpart, the International Federation of Phonographic Industries, can’t get Russian authorities to shut down the service, then they may have to resort to suing the users.


But that’s where things get tricky. In essence, the suits that the RIAA brings against individual music pirates in the U.S. are consistently valid because, almost unquestionably, those who download albums from Grokster, Soulseek or Bittorrent know that what they’re doing isn’t legal.


But customers of a commercial web site like AllofMP3, which seems to be on the up-and-up aside from the grammatical awkwardness of its moniker, have a lack of apparent intent. Instead of being obvious scofflaws, these users are more like unwitting purchasers of untaxed cigarettes. In that case the RIAA may have a very difficult time bringing lawsuits against AllofMP3 users, and it’s unlikely that federal prosecutors would bring charges.


In the course of my reporting, I couldn’t find any federal officials that would call the AllofMP3 situation a “law enforcement” priority. Nor did the RIAA have comment.


This sort of silence just underlines the complexity of problems that law enforcement and the record industry have encountered in trying to shut down the burgeoning online music trade.


According to a spokesperson for the International Federation of Phonographic Industries quoted by ZDNet columnist David Berlind, the federation has succeeded in having the German government declare AllofMP3 illegal and in shutting down the Russian company’s operations in Italy.


But ultimately they haven’t made any progress toward getting the Russian government – the only government with jurisdiction here – to close down the site.


Beyond threatening the RIAA’s authority in the states AllofMP3 also has the potential of threatening iTunes’ hegemony in the marketplace. Because, from a consumer’s perspective, it’s better.


AllofMP3 users have the option of downloading songs in whatever format they’d like. Cutting-edge “lossless” formats are available next to common MP3 and OGG.


With AllofMP3, users don’t have to own an iPod, reformat their music themselves, or break the law by actively ditching the copy protection tags attached to the files they buy online. None of these problems exist because none of the restrictions of use present with current online music brokers are present at AllofMP3.


Fred Von Lohmann, senior staff attorney for the Electronic Frontier Foundation, a non-profit working in the field of digital music consumer rights, hopes that the impermeability of the Russian threat will make the music industry take notice of their own weaknesses.


“I hope the music industry learns from this that there is still a considerable amount of demand out there that’s going unmet,” Lohmann said.


“Copy protections or restrictions are not slowing down unauthorized file trading at all. Every song that’s on iTunes is on EDonkey in about 5 minutes,” he said, “So the only thing they’re doing is frustrating legitimate music fans.”


Those frustrations are in place because of, not in spite of, the RIAA. The recording industry could easily re-contract with Apple or the now-reborn Napster in order to eliminate the copy protections, add new transmutable format options or lossless quality (akin to the extreme hi-fi of a direct drive record player circa 1977).


But that course seems as unlikely as the RIAA actively suing users of AllofMP3 or PayPal, the moneychanger that manages fund transfers between customers and the company.


“I don’t think it’s going to be a productive option to try to sue every competitor out of existence,” Lohmann said. “The option is for the music industry to compete with free.”


“High prices, limited inventory and restrictions on the files are not the way to compete with free.”

And if competing with free is out of the question, it seems that the RIAA will have to learn how to compete with $1.14.