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                        THE INDUSTRY STANDARD'S
                          M E D I A  G R O K
            A Commentary on What the Press Is Reporting and Why
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                                        | http://www.thestandard.com | 

Monday, August  6, 2001


TOP GROKS  
~~~~~~~~~

Will Music Execs Work This Week?

Doesn't anybody take August off anymore? A flurry of developments 
in the online music business suggests that record company honchos,
congressmen, judges, lawyers and, oh yeah, reporters are still hard 
at work, despite the arrival of the dog days of summer.

The big news, as reported by the Wall Street Journal, is that the
Department of Justice is looking into "possible anticompetitive
problems" surrounding Pressplay and MusicNet, the joint ventures 
of the five major record labels. And then there's the bill intro-
duced in Congress last week that would lay the ground rules for 
distribution of online music. It's enough to make RIAA president 
Hilary Rosen run for the sprinkler.

First, the DOJ action. According to the Journal, the government 
has begun a preliminary antitrust investigation of Pressplay and 
MusicNet that will also look into the labels' copyright rules and 
licensing practices. The move isn't entirely unexpected; the ven-
tures have been under a similar investigation in Europe since June. 
But that doesn't mean the companies are happy about it. An unnamed 
record-biz source whimpered to the San Jose Mercury News, "For the 
past five years, this industry has been endlessly investigated by 
the government. They find nothing. And it costs us a fortune."

According to the Merc, investigators are particularly intrigued by
MusicNet's practice of working with giant online distributors such as
AOL, to the exclusion of the little guys. Never fear, said a lawyer
who talked to the Journal, lots of joint ventures between competitors
have been investigated by the DOJ and allowed to live. In what seems 
a breach of online music reporting etiquette, Rosen wasn't quoted in
either story.

But the almost-ubiquitous Rosen did show up in coverage of the 
Music Online Competition Act (MOCA), which she called "essentially 
a solution - a very bad solution - in search of a problem," according 
to ZDNet. That's not exactly what Reps. Chris Cannon and Rick Boucher 
had in mind, though Cannon did tell Reuters, "This bill has something 
for everyone, and it also has a provision that will give various 
members of the music industry heartburn."

In essence, MOCA would update copyright law so that independent online
music distributors would get the same terms from record labels as the
big guys. For exhaustive details on the bill, see Clint Boulton's
InternetNews piece. And, really, take a few days off, would you? -
Michaela Cavallaro

Online Music Bill Takes Aim at Big Labels
http://www.thestandard.com/article/0,1902,28463,00.html

U.S. Probes Online-Music Ventures For Possible 'Distribution Duopoly'
http://interactive.wsj.com/articles/SB99705423498635089.htm
(Paid subscription required.)

Web music services face antitrust investigation
http://www.siliconvalley.com/docs/news/svfront/music0804001.htm

New bill aims to smooth music downloads
http://www.zdnet.com/zdnn/stories/news/0,4586,5095196,00.html

Music May Yet Stream From Web
http://www.wired.com/news/mp3/0,1285,45813,00.html

Measure Seeks to Level Online Music Licensing Field
http://www.washtech.com/news/media/11653-1.html

Rewriting music copyright laws (Reuters)
http://www.msnbc.com/news/609263.asp

Congressmen Call for Copyright Law Changes
http://www.internetnews.com/streaming-news/article/0,,8161_859791,00.html

Online Music Competition Act Introduced In House
http://www.sonicnet.com/news/story.jhtml?id=1445972

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