In the last year, a number of American-based online music businesses have taken advantage of new software, offering consumers faster access to streamed and downloaded music online. Two actions for copyright infringement have been brought against MP3.com, the most significant by RIAA (Recording Industry Association of America) in relation to their new my.mp3.com account service which offers members two new means of music delivery.
Music publishing companies MPL Communications and Peer International have also launched a joint copyright infringement action. Both companies licence the recording, reproduction and distribution of musical works for which they either own or control the copyright. They claim MP3.com has infringed copyright by both copying music onto their own server, and by delivering those works over the Internet, without the permission of the copyright holder.
The outcome of these actions will affect recording artists worldwide, including Australia. MP3.com's new services may have a detrimental effect on both potential income from CD sales (due to the recording artists and record company), and mechanical royalties from the mechanical reproduction of the composition (due to either the composer or their music publisher). If MP3.com succeed, it will make it very difficult for Australian recording artists and record companies to prevent or control US online music sites playing their music and they will not be entitled to any licence fees.
MP3.com have bought over 80,000 CDS and copied them into digital files, creating an "online music library" growing by over 1500 CDs a day. My.mp3.com members can collate their own personal online music library which can be accessed wherever and whenever they connect to the Net. With Beam-It, MP3.com members can download software which instantly recognises music CDS placed in their computer at home. The software enables instant access to streaming of mp3 digital versions of that CD, and instantly registers those versions to their personal my.mp3.com online music library (housed on the MP3.com servers). Instant Listening offers the same service when members buy a CD online through an MP3.com partner. Unlike other online services that take around 20 minutes to transform a full CD into a digital file, MP3.com offers the music instantly.
The unauthorised copying of CDs into digital files to create the MP3.com online library is the basis of RIAA's copyright action. No permission or licence was sought by MP3.com from any of RIAA's record label members. Accordingly, RIAA want the service shut down and are seeking damages and costs.
Does the new MP3.com service allow users to listen and copy CDs without buying them? MP3.com claim only the person who buys the CD is entitled to listen to that music through their service. Therefore sale and mechanical royalties payable to the composer/music publisher and recording artists/record companies should not be affected. But RIAA note there is no way of ensuring that a person who uses the Beam-It service actually bought the CD.
MP3.com claim their services is simply another media device, a "virtual CD player". When someone buys a CD they are "buying a licence to listen to that music on any format and on any device in the world, and thus are covered by the First Sale Doctrine. This US-specific doctrine states that any person who owns an authorised copy of a CD is allowed to "sell or otherwise dispose" of that copy anyway they like, without needing the original copyright owner's permission. However, the law does not allow that CD owner to copy or perform the work without the copyright owner's permission. So even if MP3.com own the CDs, which are authorised copies of sound recordings, it's still doubtful whether theyhave the right to upload them onto the Internet.
MP3.com also argue that individuals loading their own CDs onto Internet servers for personal listening also fall under the copyright defence of 'fair use'.