No Patent For Music Royalty Technology

In re Scott P. Schreer, No. 2012-1564 (Fed. Cir. May 21, 2013).

The Court of Appeals for the Federal Circuit affirmed the Board of Patent Appeals decision that "the claims would have been obvious to one of ordinary skill in the art at the time of invention..."  The patent application sought to cure problems relating to the "public performance" right of copyright holders by claiming a method of compensating the copyright holders.  "Generally speaking, the claimed method method consists of embedding identification information in an audio file, broadcasting the audio file in a public broadcast, receiving the audio file by a monitoring station, correlating the identification information to a copyright holder, and then compensating the copyright holder."

Napster - DRM Free

Napster, who has a sale catalogue of 6 million songs, today stripped DRM from all paid downloads on its digital music service in favor of unprotected MP3s.

The company has support from all 4 major labels. (Given Napster's legal history with the labels, it's kind of ironic, right?)

Notably, customers cannot (yet) replace their previously purchased DRM-laden files with the new unprotected versions. Does the media-upgrade strategy correlate to other historical "upgrades": LP to tape, tape to CD, CD to...errr...minidisc? Will consumers purchase DRM-free copies of songs they previously downloaded with DRM?

[Billboard article.]

More MP3 Choice - Yahoo!

Yahoo! is in preliminary discussions with major recording labels to offer a DRM-free (i.e., without copyright protection software) digital music down-load service. Amazon and iTunes: look out!

It is not yet clear whether Yahoo! will follow an a la carte purchase model, or a free-download/ad-supported model. OTCS opines that an ad-supported model would be a major shift in the digital download market. Given the death of the subscription model, is ad-supported "free" downloading the nail in the a la carte model's coffin? Time will tell.

Sony Adds Catalogue to Amazon; Ups Competition with iTunes

Sony BMG became the last of the major labels to begin selling its music in mp3 format on The deal includes the labels entire catalogue.

The result of the deal is two-fold. First, it increases's competition with Apple iTunes. Second, the music will be sold without digital rights management software, or DRM, nailing another coffin in an on-line music distribution model based on limiting user's experience with the media.

...and again, this is good for the consumer! More choice, more options, more freedom. It now seems inevitable that iTunes will need to lift its DRM software in order to offer consumers a competitive product.

Accross the Pond, EU Takes Bite into Apple

Item 1: The European Union closed its anti-trust investigation into Apple iTunes operation. However, "some copyright issues remain". Notably, the European Commission refused to address other copyright restrictions in place, i.e., DRM.

Item 2: Apple will eliminate its price discrimination across the EU. Users of iTunes in Britain are charged approximately 9 cents more per download than users in other EU nations that use the Euro currency. In the coming months, users across the EU will be charged a uniform "pan-EU" price per download. However, what this means if the record labels fail to get on board and lower their wholesale prices to Apple is yet to be seen? It seems unlikely that the majors will forfeit the huge market iTunes provides by playing hard-ball and not lowering their prices. Similarly, small and indie labels will likely adjust their prices to maintain their access to their product via a mass-distributor like iTunes. what does this mean to Apple? Are they no longer a "Standard Oil"?

Napster Caves; Drops DRM

The Wall Street Journal reports that Napster -- the company once synonymous with illegal on-line file sharing -- has dropped its software which limits the way users can listen to music.

Napster offered a subscription streaming service, which prevented subscribers from downloading a permanent copy of a sound recording to their hard-drive. With the termination of its digital rights management (DRM) program, it appears that Napster will now be an on-line music distributor modeled after traditional brick-and-mortar record stores (e.g., iTunes). In other words, users will be able to purchase their music and take it to-go, available on a whim.

Does this signal the death of subscription-based model of on-line content distribution? OTCS never believed this model would work - users, OTCS believes, prefer paying a la carte, rather than a monthly subscription fee.

And Then There Were None

With the announcement that Sony BMG will cease distributing music on-line with digital rights management (DRM), there are no longer any major labels using such technology to curb on-line copyright infringement. (See OTCS links to "Digital Rights Management", below.)

Though Sony BMG is making the move to DRM on less-than-its-entire catalogue, this marks the end of an era in the way media companies distribute content on-line. Following an old addage, as goes the music business, so goes the others. OTCS can't help but predict that in the near future, other media outlets (e.g., broadcast networks, who only recently distribute video on-line) will be forced to cut-back on anti-copying measures.

What does this mean for iTunes? Or its now-and-future competitors? All OTCS can do is observe that whatever effects this has to on-line distribution businesses, the inevitable elimination of all DRM is only good for the consumer, and similarly, artists alike.

Music On Your Mobile

Universal Music group entered into an agreement with Nokia Corp., the worlds largest mobile-phone maker by sales, to offer UNLIMITED music downloads for a year on phones carrying the "Ovi" platform, which allows users to buy music. (The core of the service is based on Nokia's prior acquisition of Loudeye for $60 mil.) Dubbed "Comes With Music", users -- who will get a 1 year free subscription and access to Universal's repertoire of artists -- can also transfer music to their computers, though making multiple copies in violation of Copyright protections is limited (DRM).

The service is sure to compete with Apple iTunes/iPhone, and is part of Nokia's continuing expansion into providing on-line services over its telephones.

The real question is whether mobile is truly the direction music is heading? Yes, the iPhone is cool - having your music and phone handy for on-the-go people is a seeming "must". But is it THE ANSWER? Or, just one path of many?