WE ARE STRONGLY OPPOSED TO PIRACY. It’s true. Downhill Battle is very concerned about the potentially disastrous effects of piracy on our global economy. We’re also extremely concerned about links between piracy and international terrorism. What’s prompted this sudden and surprising change of focus? An op-ed about piracy (the real kind) in today’s New York Times: read it.

Let’s talk about “piracy”: Propaganda campaigns are often undergirded by a dishonest use of language, and the RIAA’s PR campaign is no exception. The connection between actual piracy (as in, groups armed with machetes and submachine guns hijaking a boat, subdoing or killing crewmembers) and commercial copyright infringement was always tenuous and highly metaphorical. Music piracy resembles real piracy about as much as, say, character assasination resembles an actual assasination. But if you play along, the metaphor to commercial copyright infringement does sort of work out: pirates divert the profits of somebody else’s work, to themselves.

But when lobbyists and pundits make the leap to calling noncommercial infringement “piracy”, the metaphor– stretched too far–simply snaps. Imagine this headline: “Pirates board frieghter carrying CDs, lounge around on deck chairs for a few days listening to music, then leave. When ship reaches shore weeks later, some buy CDs. But fewer and different CDs than they would have bought.”

Those pirates would strike fear in the hearts of commercial navigators everywhere, wouldn’t they?

Words matter, and the next time you hear someone refer to “music piracy,” remind them what piracy actually is. Finally, in the hierarchy of loaded and misleading terms, “music piracy” is a lightweight. “Intellectual property,” on the other hand, is one of the giants of the genre. How can we have a productive debate about whether art and ideas should be treated like physical property when the word we’re using for art and ideas (“intellectual property”) already implies one answer to that question? “Exactly,” say record company lobbyists.

More on that later, but for a quick intro, check out RMS.

HERE IT IS, with very little fanfare: Downhill Battle’s Quarterly Report for Q1 2004. It’s been a very intense three months, ladies and gentlemen. Thank you everyone for the help and support. Celebrate the occassion by convincing 10 friends to never pay for major label music again.

If you want to get active, remember our Get Involved page. And if you’re in Utah or Vermont, please contact us ASAP regarding an extremely exciting project.

DO THE RIAA LAWSUITS HELP TERRORISTS? An opinion piece (via p2pnet) in Tuesday’s Stanford Daily argues that the lawsuit campaign, if it’s successful (a big if), will create a nightmare for anti-terrorism agencies by pushing masses of regular folks onto encrypted networks like Freenet, MUTE, or GNUnet. As a rhetorical move, this “something-we-don’t-like-for-other-reasons helps terrorists” line invites abuse, but here it’s rather convincing. And it’s not the first time this case has been made: see Shirky’s “The RIAA Succeeds Where the Cypherpunks Failed”.

While it’s pretty clear that, if the lawsuits succeed at making Kazaa et al. unusable, music fans will settle on other ways to share music, it’s still an open question whether encrypted networks will be the preferred method. So in three years the NSA might not be wading through piles of encrypted Brittney albums while trying to track down the next Osama bin Laden, but the RIAA still has a problem of their own: whether people end up sharing music on Freenet, with iPods, or with recordable DVDs that hold 100 albums, it’s going to be impossible to track. And once traffic starts being impossible to track, the possibility of a Voluntary Collective Licensing (VCL) system goes out the window.

It might be helpful to look at it this way: right now, the major labels have a safety net. A VCL scheme–where people can pay $5 on their monthly internet bill for legal access to all the music they want and their money gets divided up according to downloads–could easily bring in just as much money as the labels are making now (and it would be way better for musicians). They’ll never accept it of course, because then they’d be on equal competitive footing with unsigned musicians and with hundreds of independent labels that have much better luck at picking great music (some call it good taste), but at least they have a Plan B if the lawsuit campaign fails. However, as soon as all the people who’d rather not give them money move to encrypted networks or off the internet completely (to iPods and DVD-Rs) there’s no longer a way to track downloads, and a VCL scheme stops being possible.

At that point the major labels no longer have the option of a slow death, as competition from indies chips away at their market share. They just go down in flames.

On an equally pleasant note, the new version of our favorite anonymous filesharing client MUTE came out last week. Zero point three, baby.

THE FUTURE OF MUSIC COALITION is having a conference in DC in a couple of weeks, and Downhill Battle’s Holmes Wilson will be participating in one of their panels. As an organization, they’ve done a bunch of great work stimulating discussion within the music business about problems that need to be dealt with, and we’re really looking forward to attending. Plus we might get to meet Cary Sherman

Reading the schedule for the event, one thing jumped out: a description of their panel on the Grey Album and the controversy we kicked up:

“In February 2004, DJ Danger Mouse took Jay-Z’s Black Album and mixed it with The Beatles’ White Album to create?The Grey Album. The album, which the DJ created and released without seeking consent from the copyright owners, was barely made available before DJ Danger Mouse received cease and desist letters from the Beatles’ label, EMI. Clearly these laws are not limiting creativity, nor are they impeding circulation, but they are making it impossible to circulate this type of creativity legally.”(Our emphasis)

It seems like the focus of the panel will be on creating a legal structure that’s sampling friendly, and that’s exactly where to put the focus right now. But it’s always telling when even within friendly circles, there’s such a deep misunderstanding of the sample-based music issue.

First of all, the laws are impeding circulation. To conclude otherwise is to look at the success of one album (one that happened to have an incredible gimmick, and that had hundreds of activists behind it willing to run a severe legal risk) and take that as par for the course. It’s not; sample based music gets suppressed all the time, at a variety of levels.

Second, the claim “clearly these laws are not limiting creativity” takes a very narrow and simplistic view of the state of affairs in sample based music. Certainly, people are still able to mess around with samples in their bedroom, but if they create with an eye towards making something they could eventually make public through the usual channels (radio play, selling records) without detriment to their career, then they will consistently shy away from samples they aren’t sure they’ll be able to clear.

When a producer in the studio is constantly thinking, “Can I clear this? Will somebody recognize it?” often that leads to “Aw fuck it, I’ll just use a drum machine.” Every time that happens, the major labels’ copyright regime has limited creativity. Something that would have been made, was not.

When this happens over and over again to successive generations of artists, it will radically change the path of an artform. That’s what the sampling crackdown in the early nineties did to hip hop.

Of course, like what happens when a slab of sidewalk tries to keep down a tree, hip hop production grew around the legal barrier and producers like Timbaland, Dre, and the Neptunes started making incredibly soulful beats with drum machines and generated tones. We’re not worried about hip hop. It’s a genre that chews up adversity and spits it out as myth and defines itself in terms of the obstacles. Even the impending crash of the music establishment is starting to get spun into mythology (check out Chicago rapper Common’s verse on car-wreck-survivor Kanye West’s “Get ’em high”: So when the industry crash, I survive like Kanye).

But whether or not some cool things happen when the record companies and copyright law place a barrier in the path of creative flow, it’s wrong to deny that the barrier exists. Just as even though some rappers might turn music industry corruption into lyrical gold (listen to “Industrial Revolution” by The Immortal Technique right now), it’s still worth trying to remove that corruption.

Great music is never made in isolation. It’s about listening to people who are raising the bar, getting ideas and inspiration, and raising the bar a little higher yourself. A legal environment where DJs are worried about getting sued impedes that cycle, and we get less great music. We obviously think projects like Illegal-art are good things, but the fact that a bunch of people can download your illegal music doesn’t just solve the problem.

Ultimately, p2p networks may prove more helpful to sample based musicians as a wrecking ball than as a distribution network. That is, filesharing networks give music fans the power to weaken the major label monopoly to the point where it has more pressing concerns than a mash-up or a remix album.

Let’s do it.

WE WROTE YESTERDAY ABOUT the House and Senate anti-sharing bills, and we mentioned that they shed light on the legal weakness of the RIAA’s current lawsuit campaign. To get more specific, both laws establish criminal or civil penalties for “making available” a copyrighted work.

From CNET: “If the PDEA became law, prosecutors would not have to prove that $1,000 in copyrighted materials were downloaded–they would need only to show that those files had been publicly accessible in a shared folder.”

Why is that important? Because while it’s easy to see what someone has made available in their shared folder, it’s very difficult to prove that any given files have been downloaded– statistically speaking it’s impossible. We’re not lawyers and the standard of proof here may be lower, but keep in mind that if a parent with young children (as most of those targeted for lawsuits have been) ended up in front of a jury of other parents, the prosecution would need to have a rock-solid case. It’s important to note that, back in October when we were speaking daily with attorneys handling the first round of lawsuits, all these lawyers kept saying: “if one of these cases went to trial, no one has any idea how it would turn out.”

Of course when the labels were suing people none of this was a problem. Faced with the risk of losing their home (damages could be assessed at $150,000 per song) parents predictably choose to end the whole nightmare and settle for $3,000-$10,000 (from a second mortgage, perhaps). But if the Department of Justice starts going after people with criminal charges, settlements won’t be in the picture–these cases will go to trial. And with the law as it is, they could very well lose. Back in January CNET’s Declan McCullagh puzzled about why the DOJ hadn’t already begun prosecuting filesharers despite intense pressure from Congress. Maybe now we’ve got the answer: the DOJ doesn’t think it could win. And if the U.S. Attorney General can’t win one of these cases, it’s not likely that any record label could.

Though again, when several giant corporations sue a family with kids, it doesn’t matter who’s right. Can you wait to see these companies start filing for bankruptcy? We can’t.

WE PROMISE WE’LL GET BACK to Problem #2 (see last night’s post below), and a discussion of House and Senate anti-filesharing legislation, later today. But if you haven’t heard about it already, you should check out justafan.org, a music activism project by two Wilco fans, Ronen Givony and Jeff Dashley. When Wilco’s latest album leaked onto filesharing networks, they built a site where people who’d downloaded the album could give something back. They contacted band members, and set up a donation page to the hottest charitable organization on the planet (and Wilco’s pick) Doctors Without Borders. In the first day they raised $1500, says this article in Rolling Stone. When asked by Glorious Noise in an interview about the idea behind justafan.org, they cite Grey Tuesday as part of their inspiration:

The idea very much came out of the blue, after I finished reading a story in the New York Times Magazine about the Grey Album, and that DJ [Danger Mouse] being served with a cease-and-desist order, and all the websites that organized that one-day protest around it—and it got me to thinking, well, shit. Read the interview

It’s official, music activism–as a movement–is getting a lot bigger than Downhill Battle.

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Some interesting background on Wilco: they’re one of the many bands signed to a major label that went through the hellish experience of making an album that their label refused to release (this happens way too much). That album, Yankee Hotel Foxtrot, flooded filesharing networks and the band began streaming it for free from their website. When the album finally came out, it debuted at #13 on the U.S. charts.

The story of Wilco, in general, and justafan.org, in particular, demonstrate that when people value a piece of music, they’ll voluntarily pay money to support it. That’s something that has the major labels terrified: people might like Yeah by Usher/Lil John/Ludacris (I do) but do they value it enough to pay for it when they can get it for free? Probably not.

Everyone should read this interview with the justafan.org creators in Glorious Noise. Oh, and for any t-shirts or stickers you buy today, the proceeds will go to Doctors Without Borders via justafan.org.

THERE ARE TWO VERY IMPORTANT bills right now working their way through the U.S. House and Senate right now. And the major record labels have two major short-term problems with their lawsuit campaign against families, which both bills are designed to address.

The first problem:

Most people are being very rational about filesharing. When the lawsuits first started, everyone expected filesharers to be scared away in droves. But according to BigChampagne, a company that tracks networks like Fastrack and Gnutella, the numbers just keep rising, even after successive rounds of lawsuits. Why? Because people are just too rational: the odds of getting sued will be well under 1/10,000 and the odds drop to zero if you only keep a small number of songs in your shared folder (which is plenty to keep these networks functioning swimmingly). People say “it won’t happen to me,” and they’re 99.9999% right.

The major labels will need to sue 100 times as many people to get the results they want, but lawyers cost money. Senators are cheaper (Hollywood Democrats and Texas Republicans are practically free) and with a few thousand dollars of lobbying (including campaign contributions to Leahy Hatch, Berman and Smith), the RIAA may be able to get the federal government to do their work for them. More people will get hit with civil or criminal cases, the penalties will be higher, people will get scared, and it just might keep the major label monopoly alive. The Senate bill (the PIRATE act) and the House bill (PDEA) will give the Department of Justice the legal foundation they need to go after filesharers. Currently, DOJ doesn’t have that.

Which brings us to the major labels’ second major short-term problem:

Labels may not have the legal grounds to pursue filesharers either. These two bills are may be an attempt to change the law before someone in the U.S. calls their bluff. More on this tomorrow. Also: if you live in either Vermont or Utah, please contact us as soon as possible regarding upcoming projects.

 Thievery Corporation

THIEVERY CORPORATION are a Washington, DC – based duo who run a club, a label, and who make fine electronic music. The first interview from DHB team member Matt Bernstein:

Read the interview with Thievery Corporation.

AS WE DISCUSSED in our previous post, a new study was released this week which concludes filesharing doesn’t hurt major label sales. We noted that we disagree with these findings, and wanted to add one more thought about music activism strategy.

While it’s easy (and fun) to use studies like this one to make the RIAA look stupid, in the long term it’s just not good politics. Music activists should be always defending filesharing on its cultural merits and for its potential to bring positive change to the music industry– we shouldn’t fall back on the defense that p2p helps major label sales (especially since it’s very likely that it doesn’t).

To make progress in the fight for a fairer music industry, we need to move the debate to questions like: “What’s good for musicians?” and “What’s good for culture?” If we can do that, we’ll win the debate every time because the record companies simply don’t have a leg to stand on (see the reasons). But if we rely on the argument that filesharing helps sales of major label CDs, we trap ourselves in their game: falling major labels sales then become a justification to ban filesharing, rather than a success for the campaign to break their monopoly.

Most of all, if filesharing doesn’t hurt the major labels, it’s bad news for music, for musicians, and for fans. It’s crucial to remember that we aren’t here to convince the big 5 labels to reform their businesses; good people have tried and failed at that for decades. Instead, we’re here to finally break the major label monopoly, and filesharing is one of the most potent tools we have. We should be proud that people are deciding not to pay for major label music and are using p2p instead– it’s a true victory for music.

THE HUGE NEWS TODAY, is, of course, the Canadian Federal Court ruling that filesharing does not constitute copyright infringement, and that the major labels cannot continue with plans to sue individuals. Very exciting and crucially important for filesharing worldwide. If you live in Canada, you now have a moral obligation to share major label music 24/7. The news and the court decision.

We’ll have a lot more to say about that story as it develops, but we also wanted to discuss a new academic study that was released this week, which concludes that filesharing does not impact CD sales (it’s been getting a lot of attention). The study seems very well thought out and takes some interesting approaches to disentangling the closely linked rates of filesharing and CD sales (you can read the study here). Ultimately, however, studies of this issue are forced to use indirect social science and economics methods, which make it extremely difficult to convincingly show causality. Which is to say, it’s impossible to do a true experiment measuring CD sales with and without filesharing because researchers can’t just turn off the world’s p2p networks.

The study’s authors have said that they were initially surprised by their own findings. Frankly, we are still skeptical. We may be misreading what is a rather technical paper, but the study seems to be investigating the theory that: if filesharing affects CD sales, then when filesharing becomes somewhat easier or more difficult (e.g. when the number of available p2p copies of a particular album fluctuates), users will buy fewer or more CDs, respectively. Finding no correlation between ease of filesharing and sales, they conclude that filesharing does not affect sales. But there could be many other causal links that lead filesharing to reduce major label sales– including the way that the very existence of filesharing networks reduces the perceived value of physical CDs (people often say, “I’m not going to pay for that CD if I can get it for free,” even if they don’t actually end up downloading it).

While it’s tempting to argue that filesharing doesn’t hurt the major labels (it gives us a convenient justification for supporting filesharing), everything else we know about the industry indicates that it does. There are of course balancing effects– for example, many people use filesharing to try new music and then later decide to purchase the album. But realisitically, this seems like a minority of filesharers, and with the rise of iPods and other mp3s players that don’t tie the user to a computer, interest in owning physical CDs is likely to drop considerably.

And the study rightly points out that the primary effect of filesharing is to greatly increase consumption of music and there is no disputing the fact that the overwhelming majority of downloads are not substitutes for CD purchases. Ultimately, however, filesharing (as well as CD burning) reduces major label CD sales because they separate the decision to listen to music from the decision to pay for it. Given a choice for the first time about whether to pay into a corrupt industry, consumers are saying ‘no’. The media consistently underestimates how political filesharing really is (which is another reason why people were so surprised and impressed by Grey Tuesday). Fans are starting to ask, “Why should I pay $16 for a CD when virtually none of the money gets to musicians?” Saving that money for a t-shirt or a concert is better for them and doesn’t perpetuate the major label monopoly. Of course for independent labels, the story could be very different: fans have good reasons to continue supporting indie labels that are working in the interest of musicians and that have a real commitment to art. And with the major labels bribing radio stations to keep independent music off the air (payola), the publicity that filesharing gives independent artists is crucial.

But while we disagree with this study’s central findings, the authors do make some other very interesting observations, which are well stated and are absolutely crucial concepts for an informed debate about the future of the music industry. Most importantly, they argue that since very few albums are profitable in the current industry (especially for musicians), the financial performance of the industry will have little effect on the availability of music. This runs counter to scare-mongering by the major labels, who insist that people will stop making music if people stop paying for it. As Ian MacKaye of Fugazi told us “If people lose their incentive to make music because they’re not making money, they’re not musicians. They’re business people. Musicians don’t have a choice in the matter, you gotta make music. There’s no choice! It’s not a fucking job description– there’s no choice!” And as these economists point out, there is real value gained from having free access to music:

“Shifts from sales to downloads are simply transfers between firms and consumers. And while we have argued that file sharing imposes little dynamic cost in terms of future production, it has considerably increased the consumption of recorded music. File sharing lowers the price and allows an apparently large pool of individuals to enjoy music. The sheer magnitude of this activity, the billions of tracks which are downloaded each year, suggests the added social welfare from file sharing is likely to be quite high.”

Ren Bucholz at the Electronic Frontier Foundation (today they have an April’s fools webpage posted) consistently points out that peer-to-peer networks have created the largest music library the world has ever seen. But instead of embracing this amazing development and finding ways to make it work for musicians and fans, the most powerful music institutions in society (i.e. the five major record labels) are trying to destroy it. And don’t let them tell you that the current pay-for-download services which have high prices and very limited selections are a comparable substitute—it’s not even close to the same experience.

But none of this means that we can’t support musicians while also preserving unrestricted access to music: Ren and the other fine folks at the EFF have recently proposed a voluntary collective licensing system that could be the future (if we can manage to weaken the major labels enough that they can’t stop it). Essentially, you would pay a $5 or $10 fee to your ISP each month and you could fileshare as much as you like. The money would get divided up among musicians based on how many people were downloading what albums. And who wouldn’t sign up for that? Read the EFF’s proposal and check out this wonderful explanatory diagram that Ren made.

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The release of this study comes on the heels of news earlier this week that the Australian recording industry sold a record high number of CDs (despite the major labels’ attempts to conceal this fact so that they can continue to support reactionary filesharing policies). We’re still not sure what the breakdown is on the sales increase, specifically whether it’s coming from major label or independent sales. A friend of ours in Australia who’s a successful musician / indy label owner tells us:

“Are there any smaller labels here? Yup there sure are… Without doubt these guys are doing the best of them all.

Although as Australia is such a small market the retail stores also own a lot of the smaller labels and the smaller labels are just getting swallowed up everyday.”