Archive for May, 2006

China Stiffens Penalties for Online Piracy

Tuesday, May 30th, 2006

New regulations go into effect July 1 in China targeting distributors of unauthorized content online. The regulations, which carry a maximum administrative fine of approximately US$12,000, target search engines like Baidu, which are the backbone of online file sharing in China, as millions of users can search the various Chinese search engines for links to thousands of unauthorized copies of songs and movies.

Bloomberg.com quotes one analyst as saying that “Baidu will be under a lot of pressure to stop offering links to illegal MP3 files and may have to stop their MP3 search service.” Stop offering links to illegal MP3 files? I don’t see it. Providing links to unauthorized content is a cornerstone of Chinese search engine revenue–not just for Baidu, but for all the Chinese search engines. A $12,000 fine is not going to intimidate any search engine; they’ll just chalk it up to the cost of doing business.

But they’re painted into a corner, and effectively, copyright owners have forced their hand. These search engines want to go legit and play ball with copyright owners. But if Baidu were to give up its MP3 links, as the analyst quoted above suggests, they’d be committing suicide. The other Chinese search engines would gladly take Baidu’s share of the music search traffic, administrative fines and all. Copyright owners are not going to win a shoving match with search engines.

But, in the words of Obi Wan Kenobi, “You can’t win. But there are alternatives to fighting.” For example, search engines have offered to give copyright owners a portion of their ad revenue in return for licensing the content, but the major entertainment companies will have none of it. Some Chinese record companies–like Taihe Rye, a successful domestic Chinese label–recognize that online piracy is a fact of life and business, so Taihe has made special arrangements with Baidu to clamp down on pirate links for the first two weeks after a new release. This allows Taihe to capture the majority of its expected revenue from a release while not eviscerating Baidu’s revenue or market share. $12,000 fines won’t do it. Frankly, even bigger penalties are unlikely to have much effect. But copyright owners have alternatives.

Posted in China, Intellectual Property Law, Music, P2P, Piracy | 3 Comments »

Asia at the Cutting Edge?

Tuesday, May 30th, 2006

Today (5/30/06), Berkman’s Digital Media in Asia Project co-founder Eric Priest will give an informal lunchtime talk on Asia’s role in shaping the future global entertainment industries. Info is as follows:

Berkman Tuesday Luncheon Series, Tuesday, May 30 – 12:30 pm
Berkman Conference Room, Berkman Center
1587 Mass. Ave., Harvard Law School, Cambridge MA

Guest: Eric Priest
Topic: Asia at the Cutting Edge?

Some believe Asia is at the cutting edge of twenty-first century entertainment industry business models. A combination of high copyright piracy levels and high-tech populations has led entertainment companies in places like China, Hong Kong, Taiwan, and South Korea to embrace the internet and emerging digital and mobile technologies as they seek innovative new revenue sources. This includes a massive new market for citizen-created media (music and movies) on the internet in China. What are the trends and are they really leading to sustainable business models for the rest of the world to emulate? Is the conservative state-run media in China creating a strong market for alternative, citizen-created Internet media and what are the implications for Chinese society, politics, and the entertainment industries? With all the emphasis on technology, is creativity increasingly an afterthought?

Eric Priest is a research fellow in the Berkman Center’s project on Internet Filtering, and a cofounder of Berkman’s Digital Media in Asia Project. He is also a visiting researcher at Harvard Law School, and an adjunct professor of law at Chicago-Kent College of Law.

Bio: http://cyber.law.harvard.edu/home/eric_priest
Digital Media in Asia project blog: http://blogs.law.harvard.edu/dmablog/

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Posted in China, Hong Kong, Intellectual Property Law, Internet, Mobile Music, Music, Piracy, South Korea, Taiwan | 3 Comments »

Arrests and lawsuits continue in Hong Kong for File Sharing

Monday, May 15th, 2006

A teenager was arrested in Hong Kong for hosting 600 songs for download on his computer, and a court sided with the movie industry, requiring internet service providers to turn over the names of users sharing movies online.

Speaking privately to people in the Hong Kong entertainment industry last week, there is pessimism that these tactics will yield results. The fact is, they acknowledge, that young people view the likelihood of getting sued or arrested on par with the likelihood of winning the lottery.

Posted in Film/DVD, Hong Kong, Internet, Music, P2P, Piracy | Comments Closed

Live from Music Matters Asia

Thursday, May 11th, 2006

I’m currently in Hong Kong attending the Music Matters Asia music industry conference, where, unsurprisingly, digital media and internet file sharing is the hot topic. The slogan of Day 1: mobile is the future.  The primary growth area (and really the only meaningful growth area) for music through 2010 is monetized mobile downloads.

Here are some highlights from yesterday’s panel discussions.  I’ll add info about more highlights over the next day or two.

-Major labels in Asia claim to embrace and look forward to digital, online music distribution as an opportunity more than a challenge.  I’m not sure if this was conference-induced exuberance or whether it’s a real sentiment (probably a little of both).  I’m also not sure whether this professed excitement is shared by the major label home offices in New York and London.  It would not surprise me if Asia executives were in fact more rosy about the future than their bosses because high piracy rates have historically forced music companies in Asia to be flexible and adjust to new situations, so embracing new revenue sources is natural for them.

-I thought the best panel of the day was “Meet the Neighbors,” the only non-music industry panel.  On this panel were executives from “neighboring” industries: videogaming/online gaming, television, and mobile communications.  They raised two of the most prescient points made all day.  First, one of the panelists remarked: I’ve been listening all day and I haven’t heard anyone talk about musicians.

1) Everyone talks about ringtones, downloading, market share, but what about the artists?  Cliche, yes, but it is an absolutely key point that the industry can only survive if people are able to connect and experience artists and technology and business models enable and encourage artists to create great music.

2) The industry has to get over it’s centralist, top-down mentality.  Music is not just what record companies distribute to passive consumers.  Consumers today want to create, and share their creations.  They want technologies and business models that enable that and are seeking and finding those regardless of what the business model record companies push.

Posted in China, Hong Kong, Internet, Mobile Music, Music | 2 Comments »