I wish the music industry would start to embrace this kind of distribution model. If Alltunes was in a position to release the numbers of subscribers it had that willingly paid for content I am sure it would put the other entities to shame in spite of its "illegality".

I sincerely hope they are able to accept payments again - I for one will be using that service in a heartbeat, and am happy to recommend it to friends and colleagues... not because I condone any type of illegal activity but because it is 2007 and we live in a different age to the days of the record company empires!

Sony, Warner, EMI, etc... it is time to embrace a more realistic sales model, or lose out to those who find loopholes. There is no place in the public world for your bullying tactics any one!

/rant

Strike one back for the good guys.

Just lets win the war by not buying CD's and expensive downloads

I wonder if that means allofmp3 will start accepting credcards again???

And if it does, does it mean MasterCard holders are still screwed?

Not sure if I would be entirely comfortable with a Russian site having my credit card details, I'm uncomfortable with some US sites!

Retailers (like Microsoft), and most people working at record company want DRM-free music just as bad as customers. It's just a few people at high levels of the MUSIC GROUPS (and it's pretty much only at Universal, SonyBMG and Warners now) who insist on it. DRM means extra layers of complexity (in terms of managing it, supporting it, restricting to which OSes it can be sold to etc) which everyone actually dealing with DRM wants rid of.

The bottom line with alltunes though is that the people who own the rights never agreed to the music being sold on the site - if I sell your car without asking you but give you £100 is that fair? I Agree it was a good model, but not really based in reality.

At the end of the day, you're protected by virtue that any "iffy" debits have to be proven by the credit card company to have been made by you.

If you didn't authorise a payment, that's their problem to resolve, although it still typically appears on your statement until it's resolved "properly".

"The bottom line with alltunes though is that the people who own the rights never agreed to the music being sold on the site - if I sell your car without asking you but give you £100 is that fair?"

Not a very good comparison. A better comparison would be making a perfect replica of my car and selling *that* and then giving me £100. At the moment, I wouldn't mind that one bit as I'm keeping my car for a while, and I could always do with more cash :D

"The bottom line with alltunes though is that the people who own the rights never agreed to the music being sold on the site"

- - -

But specific permission apparently ISN'T a requirement of current Russian law.

Similar rules actually exist in parts of UK law. If a musician wants to perform a musical number as part of a show, it is not necessary to obtain the specific permission of the composer -- because once the sheet music has been sold it is only necessary to pay the PRS flat rate fee. The composer's permission is NOT required and performance rights cannot normally be refused. Apparently, a standing arrangement like that in Russia unintentionally covers web distribution and alltunes claims to pay the Russian equivalent of PRS for the music they distribute.

= = =

"if I sell your car without asking you but give you £100 is that fair?"

- - -

Not a proper comparison, because the composer still has his "car" after you've "sold" it. It would be more like paying £100 for permission to sell photographs of the car. Which incidentally would be £100 more than the law requires, if the car was in a public place when it was photographed.

Whatever fee is set for alltunes' use of music, its the fee that is charged by a body broadly equivalent to PRS in Russia, which is presumably authorised under Russian Laws (that no doubt predate the popularity of the web) to collect such payments -- and if no specific permission is required under Russian law, then the fact that no such permission has been obtained is entirely immaterial.

How GREAT it is watching someone telling the Americans to take their lawsuits and fuck off.

The reason that alltunes wont rip off your credit card is simple economics. They can make way more money supplying the service than trying to take a few people for a few hundred dollars.

The service is everything that, if they didn't have their head so far up their arses, the media companies would provide (and make money on).

Massive library, daily updates, download whole albums at a time and at *A DECENT PRICE*. They charge by the byte - i.e. not per song. So you can download higher bitrate songs but it'll cost you more. What could be fairer than that?

The software is great, too - particularly their client.

Like I say, everything a download service should be.

I'm afraid I'm with DRM man. I don't care for DRM, and I don't much feel like I'm getting the better deal when I'm paying £7.99 for something people are getting for half the price on a Russian site, but...

There's a point where we're just taking the piss because we think we're owed everything for free, or at cost to the poor sod who's bust their backside off - as if record companies don't take enough of a cut already, we're happy to reduce the margins even more. Anyone who posts to that effect here is making Vulture Central a namesake in more ways that one.

The next time you feel that sharing is a good thing, let me know when you're at work and your wife is home and I'll be happy to help out with your point of view. Hell, I'll throw in something to give you a bad taste when you kiss her while I'm at it.

You do know the surviving Beatles were blocking E-Sales of their songs because a "ligitimate" rights holder had done them out of £30 million pounds?

http://news.bbc.co.uk/1/hi/entertainment/6548035.stm

The funny thing here is that two American credit card companies thought it right to enforce what the IFPI thinks is right, who thinks their interpretation and lobbying of American judicial processes is right.

If you don't adopt our laws, or better, do what we want, we will force you to. That is the kind of arrogance that doesn't exactly endear the US to the rest of the western world.

Same thing about Pirate Bay, where, however, Swedish authorities didn't fare that well in the public opinion.

But anyone believing that Russia is now on the forefront of defending civil rights hasn't crossed Mr. Putin's way and should remember that Russia currently is simply very keen on showing that they do not depend on the US.

I just wish that Europe - yes, that includes you too, Great Britain - would get its act together and do the same.

"There's a point where we're just taking the piss because we think we're owed everything for free, or at cost to the poor sod who's bust their backside off"

That is exactly big musics attitude.

They take the money (upto £19) for a cd then pay the artist somewhere between nothing at all and pennies depending if they have actually managed to cover thier advance yet.

What big music dont state is that with online distribution there is no raw materials, pressing, printing, assembling, packing, loading, trucking, shipping, trucking, unloading, storeroom stocking, shelf stocking, till scanning and add a bag costs involved, the entire physical production and distribution costs vanish. It is just the studio production and bandwidth costs.

so WTF do they still want to charge the same amount! Now tell me which of us is taking the piss.

The AllofMP3 model works, and the fact that AllofMP3.com/Alltunes.com have been vindicated through two court cases and artists like Price are giving music away free in protest (though he did make £500,000 out of the deal with the Daily Mail) must now make the dinosaurs in the music industry take stock of their now redundant business models. The vast majority of the population will pay for DRM free music at Realistic prices. I hope that this will now stop the persecution of DRM free music sites, but I fear I hope in vain. However if everyone delayed buying DRM protected music for six months then Maybe the message will get across.

Ho hum , if you read the fine print , in real terms the banks lose ten times plus more monies from out right deliberate credit card fraud by bad lending to questionable customers , it's all in the little word on the balance sheet called "Provisions"

Mind you they make up most if not all these losses in higher interest , annual fees and charges levied against all the paying customers!(one pays for these losers a minimum of three times)

Credit Card Merchant contracts usually have a provisional review clause , which in simple terms in that your contract can be revoked if fraud is too excessive and / or pay a higher merchant surcharge rate if it exceeds a certain number of claims or a certain figure. Finally , we also forget the Banks can and do direct deductions and withdrawals from the Merchant accounts for all credit card charge back transactions from fellow banks within the scheme!

Although , I know of one large Australian Bank which ranked no 44 in 2004 world list , where one credit card merchant is fully subsidized by every paying customer the bank has , and has been from the first day it was signed up!

It is ironic , that the word fraud invokes such an irrational fear , that all Banks go to extreme lengths to hide all those losses within it's annual balance sheet ?

I could be waaaay off the mark here, but didn't AllTunes pay the royalties needed by Russian law to ROMS but it was the Western World who decided to have no part of it, refusing payment from ROMS in the hope they could just have AllOfMP3 closed down quickly under the pretense they were not receiving any royalties?

Had hey just admitted to themselves they were beaten and accepted the payments, which, whilst less than the massive cut they would have for the equivilent sales back home, they would have made a tidy profit from the millions of sales, rather than the naff all they got instead.

Yes, I know there's the long term view, but AllTunes have set a precedent now, one I hope is now demanded by us, the people who pay their wages in the first place.

(like the Beatles story, btw)

Yep, the "AA"s decided to refuse the ROMS payments so they could complain instead.

Note also that the ROMS model is legitimate in Russia because it charges on the radio model -- each download is considered a "performance" and is charged as one.

The fact that you can replay that performance later is true for radio too, and doesn't change the radio's royalty rate.

The fact that you can replay it at the same fidelity is a modern change that Russian law doesn't distinguish.

So ROMS is doing the legal thing in Russia. It might even become the legal thing elsewhere someday...

As anigel points out, downloading a performance and recording it on homemade media isn't the same as buying a CD.

Not only am I, the downloader, doing lots more work and getting a less professional product that probably won't last as long, and won't have glossy cover art, but the record company really is paying practically nothing to distribute it to me. Just like a radio performance in most ways, really.

It seems like a better comparison to me than the current full-price downloads the "AA"s are trying for.

I cannot buy my music here in Asia, So I have to buy on-line, but Amazon etc will not send us the goods here in the Philippines, so I depend on Alltunes for my music.

Please hurry and get back on line.

John

"What big music dont state is that with online distribution there is no raw materials, pressing, printing, assembling, packing, loading, trucking, shipping, trucking, unloading, storeroom stocking, shelf stocking, till scanning and add a bag costs involved, the entire physical production and distribution costs vanish. It is just the studio production and bandwidth costs.

so WTF do they still want to charge the same amount! Now tell me which of us is taking the piss."

You quoted me, so you read the bit that said "as if record companies don't take enough of a cut already".

My point is, you aren't solving a problem but exacerbating it. Hypocrits - and an apparently large proportion of file sharers - don't have points, they have excuses.

Yes, they get paid in advance of royalties, and yes they have to wait for the marketing costs, production, localisation, packaging, distribution (I must say I admire how you turned this into a dozen steps - a sign that you really thought about your reply) etc. costs to be deducted and recouped before they see any profit to their gruelling months, sometimes years, of hard slog. Just remember - royalties are based on sales returns (value) - not on volume. And the 200,000 * 20p *not* the same as 50,000 * £1, because the royalty split is not guaranteed to be upheld at 1:1 value and the market value of the product is reduced in other regions.

Competition is a good thing - and yes, there need to be more models which make music accessible to everyone - and these systems are being explored already in subscription forms and more, but this isn't a post about the music industry or Alltunes.com - it's about the f*cking greed of a big bunch of lazy fat ass sloths who think everything should have a penguin motif on it, and be labelled 'free'. (i have nothing against linux, just the hive mind)

And I seriously hope those are special edition CDs you've been buying for £19.

We already see boring bland "manufactured" groups coming out of things like the stock/aitken/waterman machine, and "groups" whose frontmen can't even play their own instruments have been around for a long time, so it can't be that long before even the music itself is automatically generated. Despite its variety, music composition still follows some basic rules, an entirely virtual computer-generated dance-band seems very possible (PhD topic, anyone?!).

At that point the music production costs will drop practically to zero. The tunes can be composed automatically, and downloaded for free directly from the same system hooked up to a website. All the money will then come from merchandising, selling T-shirts, ringtones, etc. which can't be so easily duplicated.

Are we going to end up with a model where "real" music only exists live?

"Competition is a good thing - and yes, there need to be more models which make music accessible to everyone - and these systems are being explored already in subscription forms and more, but this isn't a post about the music industry or Alltunes.com - it's about the f*cking greed of a big bunch of lazy fat ass sloths who think everything should have a penguin motif on it, and be labelled 'free'. (i have nothing against linux, just the hive mind)"

Hmmm, They didn't see it for free, they just offered payment on what is basicly the sheet music model that the UK used to use.

As was pointed out above the rights managers refused to accept payment.

As I also pointed out above the rights managers have been caught repeatedly with their fingers in the till not correctly assigning payments back to the artists.

I agree music shouldn't be free (unless the artist chooses to give it away) but the current model is so corrupt it can’t be allowed to continue.

Unfortunately music publishing is now a big cartel, which is desperately trying to keep a stranglehold on dwindling income without asking why the income is dwindling.

"Strike one back for the good guys.

Just lets win the war by not buying CD's and expensive downloads"

Good god no, when someone can make a digital download sound as good as a CD i'll think about it, as it stands, unless it's an uncompressed WAV it loses something compared to a CD...

I'll carry on buying my CD's and listening to music, not hiss, compression and wondering where the bass and treble went... cheers!

"I wish the music industry would start to embrace this kind of distribution model."

"The AllofMP3 model works"

I love supporters of AllOfMP3. Always talking about business models as if they're MBA graduates. So let's look at the economics of that 'model' in more detail. It involves;

- paying nothing to your suppliers

- selling at a price that your competitors cannot match

- no investment in future product

- zero marketing and advertising costs

Frankly, if you can't make a profit using this 'model' then you're an idiot. I wonder why it doesn't take off in other industries?

So let's look at the economics of that 'model' in more detail. It involves;

- paying nothing to your suppliers

>> only because they refused to be paid to have an excuse to compain instead

- selling at a price that your competitors cannot match

>> sure they can if they only wanted. Instead they prefer to resort to their cartel arrangements in the hope of extorting a higher price from their customers.

- no investment in future product

>> not every shop invests in development of future products. That's one thing. The other thing is that the uncompetitive business model used by the major media companies encourages investment in inferior product or even outright rubbish. Which only confirms that their model is not based on the economic realities but on the abuse of market power (cartels).

- zero marketing and advertising costs

>> well, if that works for them - what's the problem? You do not automatically become a criminal if you don't spend fortune in advertising costs (not yet). Advertising is to increase sales. If you're happy with your sales you can live without advertising.

> "paying nothing to your suppliers"

There are good precedents for paying almost nothing to suppliers of commodity products in over-supply. Take coffee beans as an example. The difference there is the companies driving the price down are western and the suppliers are in Africa and S America. So that's OK, but if it's the Russians doing it to us, it's the end of civilisation.

And don't try to tell me pop music isn't a commodity. There's far more of it than anyone wants to buy, loads of people desperate to produce it and the costs of production and distribution are low and going ever lower.

> "selling at a price your competitors cannot match"

Better stop making stuff in China. It's cheating.

> "no investment in future product"

And Amazon's investment in future music production is what exactly?

> "zero marketing and advertising costs"

How did people find Allofmp3 then? They must have done something. But, if you can get customers without, I say go for it.

In response to Gav's comment, I'm not an MBA graduate, I only have a regular BA(Hons) business degree. However, I felt compelled to respond to your post.

Whilst I appreciate that there are flaws with the operating model of Alltunes/AllofmP3, I disagree with your argument. Here are my reasons why.

Firstly, you state that AllofMP3 pay nothing to their suppliers. This is untrue - they don't pay artists directly (neither do other online record stores, radio stations, night clubs, etc...) instead they pay ROMS, the Russian equivalent of PRS in the UK and SoundExchange in the US. As has been demonstrated in several court casess, this is legal in Russia, which is the country where AllofMP3 is based and operates from. You may disagree with this practice, but that doesn't mean that your original statement is truthful.

Secondly, you claim that competitors to AllofMP3 are unable to match their prices. Neither you nor I know the true cost of running a site such as AllofMP3 or iTunes, so this statement is unfounded.

Thirdly, you state that the company makes no investment in future products. I'll admit that I find your statement somewhat bizarre. How exactly should a company that resells music be "investing in future product" (sic)? Presumably you mean future products provided by artists - in which case, I would argue that competitors to AllofMP3 are also guilty of this. AllofMP3 pays required fees to ROMS, which has attempted to make payment to the recording companies... how exactly is this different to iTunes paying the required fees for songs that its iPod-owning punters have bought?

Lastly, your point about the company not having any marketing or advertising expenditure is moot. If a company is successful without having to fund expensive marketing campaigns then fair play to them... they've succeeded where others have failed. Other companies employ this tactic too - whether it be through choice (when was the last time you saw an advertising company advertise itself?) or otherwise (the absence of advertising from tobacco companies springs to mind).

Happy to discuss.

"..unless it's an uncompressed WAV it loses something compared to a CD..."

Well Scott, I agree with you there, but you have clearly never used AllofMP3.

You can have the music in any format you want, including .wav. Of course, as you pay per Kb, the smart move is to download in a lossless format like APE or FLAC. As the name implies, lossless formats compress without loss!! This, IMO is why they have been so successful, they give the people what they want.

Why why why don't the music industry see whats going on?

Allofmp3.com is/was VERY successful. They have paid their fees to ROMS, so why don't the music industry/artists just collect the money owed to them instead of moaning.

I sell software, which is easy to pirate, some people pay full retail, but others don't and probably swap it about on the p2p networks. I live with it as there is nothing I can do about it. Now just imagine how happy I would be if there was a so called "pirate" website selling my software at £1 a throw, but they say they are going to give me 15pence for every copy they have sold, now these people paying £1 are oviously people not happy to pay my retail price, so they would not have bought directly from me anyway, so what the hell, give me that 15p you collected for me, it could be thousands of pounds extra I am getting for doing nothing!

Why don't the music industry giants simply copy allofmp3.com and compete with them, its a model that works! Artists only get pennies anyway from album sales, so why not get them "some" extra money ..... rather then nothing. The artists have nothing to lose and plenty to gain. something is always better then nothing.

Someone else mentioned Prince's album give away.... something is better then nothing, he'll have got a big wedge of cash from the newspaper, no hassle with the record companies, so maybe he could have made more from the album selling it in the shops over a long period of time, but nope, no hassle, hes got a one off payment for it and now he doesn't have to worry about piracy EVER! who cares if people share his free giveaway? Also think of the fantastic free publicity he has got... he's going to be so popular with his fans now.

Could this be the most intelligent music business model ever?

> "paying nothing to your suppliers"

> "no investment in future product"

Hmm, just a thought and not a comment on AllofMP3, but isn't this exactly how some of the largest and richest business' in the world operate? Think:

Oil & gas

Mining

Logging

Fishing

How are the rights owners (all of us) compensated in these business models? Our future is being systematically destroyed for huge profit by a very small number of people selling things that they do not own. And, the cost (environmental) to the rest of us is clearly demonstrable.

Oh, it's sanctioned by whatever government takes a cut in that jurisdiction? Well that's OK then!

The record industry have yet to show that they experience *any* sort of loss through so-called copyright infringement. Quite the opposite in fact, CD sales are at an all-time high, despite the industries best attempts at destroying itself.

Didn't I read somewhere that RIAA and buddies wanted to reduce the payment to artists for downloaded content to zero?

I found this link...

http://gear.ign.com/articles/749/749883p1.html

but I didn't see any mention of what the rates were.

allofmp3.com was a great site. Nice interface, flexable encoding options and VERY VERY cheap. Why would anyone bother to download mucis when they can buy the CD for the same money? And given Prince's latest stunt and listening to the various music big business screaming "end of the world", I wonder how long it will be before more bands jump on the wagon. Could well leave the RIAA and people like HMV out in the cold, maybe begging for money on the street with the other junkies.

one can only hope!

Whenever I see a mention of the British Phonographic Assn, I always seem to misread it as the British Pornographic Assn, Am I the only one with this problem?

Maybe it's because rather than nurturing new bands and music as they claim. I suspect they are more like the guy in the move Sid and Nancy, Fat and bloated getting a blowjob from two beautiful ladies in return for "helping" the band.

I'm afraid the few responders to my post are off on the wrong track. Whether AllOfMP3 paid ROMS or not is irrelevant. They paid ROMS a rate that was intended for broadcasters, relying on a loophole in a law created long before the internet. This is significantly lower than what they'd pay for selling the music on.

Not surprisingly, the music industry declined to accept this payment, as to do so would legitimize the arrangement. Don't forget that Russian law enables AllOfMP3 to sell the music whether the copyright holder likes it or not. So the basis of AllOfMP3s business was to take someone else's work, then unilaterally decide what price they'd pay for it. All the time making inroads in other countries' markets that were controlled by a different set of rules. Meanwhile, the music industry's role was simply to like it or lump it. Is it any surprise that they declined to be part of this "business deal"? Can you think of any other industry that would sign up for such an arrangement? An arrangement where you have absolutely no say in who obtains your product, how much they pay you for it, and then have them sell it to your customers on your doorstep, under-cutting everyone else?

The "no investment in future product" is an off-shoot of this. Part of what other retailers pay for product is used to invest in future output. That's what Amazon contributes. AllOfMP3 didn't. It operated on the back of the industry while investing nothing in it.

>Competition is a good thing - and yes, there need to be more models which make music accessible to everyone - and these systems are being explored already in subscription forms and more, but this isn't a post about the music industry or Alltunes.com - it's about the f*cking greed of a big bunch of lazy fat ass sloths who think everything should have a penguin motif on it, and be labelled 'free'. (i have nothing against linux, just the hive mind)

What is funny with people blinded by the market ideology is that they're generally the ones who have the least knowledge and competence in ecnomics.

Let's walk you through a little explanation of the origin of the market economy and its justification by economists.

The general aim is to achieve social good. Meaning the best overall satisfaction of the population. It is NOT and has never been to give an edge to clever people, or to allow a few winners to make lots of money because "they deserve it" or whatever. No, the aim is simply to make the most for the overall population. It seems quite logical, as if that were not the final aim, it would not go together very well with democracy (if the aim is to make the cleverest the richest, then we should favor coups so that clever people end up absolute dictators because "they deserve it").

Starting from there, economists, for a good number of centuries (4 now) have been thinking about how to achieve this. Knowing that man is selfish, achieving overall good is difficult. Fortunately, it was discovered that UNDER A NUMBER OF (quasi mathematical) CONDITIONS, pursuit of slefish profit by everyone may actually be a good way towards the greater good.

This has led to the success of the market economy, where people are free to compete to get the most of whatever they want, and that way achieve the greater good.

But how is that done? It's based on a number of assumptions.

To achieve the social good by selfishness, there must be competition, that is, individuals vying for market share by competing on costs and quality.

But why would that lead to social good? You seem not to know and to stop at "if it's free market, then it's good. People who think further are morons". You're wrong. There is a reason why it leads to social good, and it's not just magic.

It is because competition drives down costs, theoretically and in a perfect world, down to marginal cost of production. And that marginal cost tarification is the price where the most people benefit the most from the products.

And in turn, why should competition drive prices down to marginal cost? It's because of the assumption that all industries face decreasing returns, that is, each new unit costs a bit more than the previous one to make.

That is 17th century economics, based on the main production of the time, that is food (once you've used all good soil, you have to use lower yields soils and thus you get decreasing returns: the additional production requires more efforts than the previous ton) and raw materials (it is quite obvious that petrol is more costly to extract once you've finished readily accessible onshore fields).

Since economists, as opposed to people who know nothing but are just regurgitating general conclusions applied to wrong contexts, are not that dumb, they also have investigated, one century or so later, with the raise of indutrialisation, how to reach social optimum in case of INCREASING returns, that is when the next unit costs less to produce than the previous one. This includes fixed-costs industries, such as... the music industry. Getting ONE Madonna new series of 15 songs takes a lot of money. Making 1.000.000 duplications of these songs can esaily cost around 0 cent (you can just put the first series on a p2p network and here you go, you've got yourself 1.000.000 versinos for free).

The conclusion of modelization, thinking (yes, actually THEY do think) and experience has proved that the optimal way of managing this is through tarification at marginal cost (here, 0 cent), which is the single most important thing that is underlying the efficiency of the free-market economy. Then of course, the producer loses money, because he never gets the initial investment back. Which is why the marginal-cost tarification is not all. There is also the investment subsidy, which can take many form but must be decorrelated from the act of getting access to the product (or it's just a cost which invalidates the possibility of optimal behaviour of agents leading to efficiency). It could be government funded, it could rely on a special tax, it could be based on an all-you-can-eat pricing (priced to cover investment and benefits and followed by a 'free' price), or whatever other schemes.

But it is what economics prove.

Then there come ignorant people who just take the general conclusion (free-market economy is good) and completely ignore the restrictions that apply to this, probably because it's easier for them to think the world is simple. Unfortunately, it doesn't work this way.

As a consequence, there is no justification to the music industry clinging to a model of tarification that is bad for society as a whole, as proven by centuries of economics which you probably know nothing about.

The correct tarification that REAL free-market lovers push for is the one that does make music free, because that is what its marginal cost is. And it's not just by chance if radio is free, if TV in general is either free or based on all-you-can-eat tarification.

Music HAS to go that way if free-market's justifications are to be upheld, and in the same way as a monopoly can rightly be punished for abusing its position (because it runs against competition which is the usual way toward marginal-cost pricing), an oligopoly that prevents marginal-cost tarification should not go unhindered.

All that to say that "Free" is not the word "lazy fat ass sloths who think everything should have a penguin motif on it" use for how the music should be, but the word economists would rather use ("free" including "all-you-can-eat, subscription-based")

So few recreational hours in the week; books, movies, TV, music, internet & vid games competing for our attention (but not competing on price).

They should be paying *us* for the right to consume our most precious and limited resource; Time!

Anyways, I'll be out in the garden...