The Evolution of technology,
digital content and copyright
By
Elan Oren
Media History
Up to 80’s – Analog
From the 80’s – Digital
Relatively low quality
Very high quality
High capacity
10x Compression
Costly creation, storage and
bandwidth
Very low cost of creation,
storage and transportation
Costly replication
Easy low cost replication
Copying with redundant quality
Copy identical to Master
Partial protection
Impossible to protect
The Problem
The PC
Internet
Easy creation of digital media
Ideal as a distribution vehicle
Easy duplication
The wider the bandwidth the
bigger the demand.
Easy distribution
Original music was widely made
available in 2003.
NO control
Media
Mostly not protected
Easy to crack
The Constitution and Legal milestones
Congress shall have the power “to promote the progress of science
and the useful arts, by securing for limited times to the authors
and investors the exclusive right to their respective writings and
discoveries”.
1984 – Betamax Universal Vs. Sony.
 1996 – Making copies for personal use is a felony.
 1998 – Increase the term of copyright to 95 years.
 1998 – Digital Millennium Copyright Act (DMCA).
 2001 – “Security System Standards and Certification
Act” – Did NOT pass.

Internet and Digital media
Time line
1998
 mp3.com starts mymp3.com service.
 The company is sued by the music industry for
millions. In 2000 it losses in court and pays
$100m’s in damaged to the plaintiffs. The
company goes bankrupt and bought by one of
the majors.
MP3.COM
sever
hosts users
music files

ISP
WEB
ISP
NO ORIGINAL content is made available by the majors.
Internet and Digital media
Time line
1999
 Napster ,Scour-‫ ו‬iMesh introduce P2P services
based on a centralized server.
 Napster is sued by the majors. In 2001 it losses
in court and goes bankrupt. Scour and
Audiogalaxy shutdown their services.
Napster
server
hosts the
files index
only

ISP
WEB
ISP
NO ORIGINAL content is made available by the majors.
Internet and Digital media
Time line



2000
Gnutella a P2P decentralized open source
protocol.
BearShare, Limewire and other use Gnutella.
WEB site
And
software
download
only

ISP
WEB
ISP
ISP
NO ORIGINAL content is made available by the majors.
Internet and Digital media
Time line
2001
 The Fasttrack decentralized protocol is used by
Kazaa, Morpheus, Grokster and iMesh. The joint
community is larger then Napster.
 Kazza is sued in the Netherlands.
 Kazza, Morpheus and Grokster get sued in CA.
 Other services such as eDonkey.

NO ORIGINAL content is made available by the majors.
Except PressPlay and MusicNet .
Internet and Digital media
Time line
2002
 Kazza WINs in the Dutch court.
 Industry appeals and losses again.
 Based on the 1984 BetaMax rolling in the case of
Universla Vs. Sony

NO ORIGINAL content is made available by the majors.
Except PressPlay and MusicNet .
Internet and Digital media
Time line






2003
Grokster-‫ ו‬MusicCity WIN in CA court based
on the BetaMax case.
Verizon is sued to make end-user data
available to the plaintiffs. Verizon wins and
end-users privacy is kept.
End-users of P2P systems are
sued.
iMesh is sued in NY.
For the 1st time commercial original digital content is
made available trough i-Tunes, Rhapsody,
MusicMatch ,BuyMusic,Napster and others.
Global recording music sales in numbers

2001 – Total sales $34b.
 Sales fell by 5% in value and 6.5% in units
from 2000.
 France up 10% and UK up 8% (3 largest market).
rd
“The falls are attributed to several factors including economic
slowdown, a massive proliferation of CD-burning and
increasing availability of unauthorized internet downloads”.
Source: IFPI Music Piracy Report 2001.
Global recording music sales in numbers

2004 – Total sales $32b (estimated).
 Sales grew by 1.7% in value and 1.3% in units
from 2003.
 USA up 5% and UK up 0.6% France down 5%.
“The figures reflect a slowing of the rate of decline in music sales
of the past four years. This is the best first-half year result
achieved since 2000.
Sales in regional and individual territories varied widely, with the
effects of unauthorized file-sharing on the internet and
commercial piracy, among other factors, still affecting many of the
world's markets”.
Source: IFPI the recording industry – commercial piracy report 2004
The CD’s
Sad Song
The forces behind falling music
sales.
The music industry likes to blame P2P pirates
for its financial woes. But consumers have
plenty of others reasons to stop buying CDs,
like higher prices and a dearth of new
material.
Higher Prices
The cost of a CD has
risen 16% since 1997
Fewer Titles
In recent years, the number of releases has
fallen 14%, and CD prices have climbed
16%. Listeners were paying more and
purchasing less- and sales of CDs sank 7%.
This isn’t to say that felonious file-sharing
hasn’t hurt sales. Stan Liebowitz, author of
Re-thinking the network economy, says
illegal downloads have dealt a $1B blow to
the music industry. But what the RIAA
doesn't want to admit is that CD is reaching
the end of its life cycle, just like the cassette
did several years ago. Hey, labels, want some
unsolicited advice? Give the people what they
want; more music at a cheaper price. Oh,
and you might wanna stop suing your
customers, too.
- Rebecca Harper, Wired 10/2003
New releases have
dipped 14% since 1999
Slower Sales
As formats age, overall
revenue has declined
13% since 1999.
Music Piracy
The scale and nature of the problem
2001-2003
$4.5B in
pirate value.
About $10B
in real value
2001
CD
26%
2001
Legitimate
sales
64%
Pirate
sales
36%
CD-R
9%
Cassette
65%
2003
Cassette
33%
CD
36%
1 in 3 music CDs sold worldwide
is a pirate product
Source: IFPI music piracy report 2001-2004
CD-R
31%
The CD’s
Sad Song
Higher Prices
Hey, labels, want
some unsolicited
advice?
Give the people what
they want; more
music at a cheaper
price.
Oh, and you might
wanna stop suing your
customers, too.
- Rebecca Harper, Wired 10/2003
The cost of a CD has
risen 16% since 1997
Fewer Titles
New releases have
dipped 14% since 1999
Slower Sales
As formats age, overall
revenue has declined
13% since 1999.