A well-researched story in Billboard shows that record labels, as usual are doing their utmost to shoot themselves in the foot over Amazon’s new Cloud Drive concept. They wanted Amazon to have consulted them prior to launching the product, suggesting that it might need some form of paid for license.
Cutting to the quick Amazon has compared the online storage to an external hard drive and the Cloud Player to Windows Media Player ‘ given that it both stores, and plays content into internet streams.
It’s not unusual for content businesses to concern themselves with storage and the most famous instance is the US Supreme Court, often referred to the Betamax ruling, because it was brought against Sony and its Betamax technology but equally applied to the VHS technology which won in the market. It was a touch and go decision which hinged on whether or not the technology for storing was itself illegal ‘ or, as the supreme Court eventually found, had it several other non-infringing uses.
In other words, because you might take a video of your family and use Betamax tape to store that, it could be used for something that wasn’t illegal therefore the technology could not be banned. Eventually the US laws on copyright, which had always supported a fair use clause (unlike most countries in Europe) has come to think of this as a Fair Use. In original copyright law dating back to 1886 under the Berne convention Fair Use was drummed up so that newspapers could quote from written works to give a taste of a piece of writing. In some countries the act of storing copies of a copyrighted work remains illegal on a VHS tape or DVD recorder, but it is largely ignored by law enforcement and instead only resale of such works is seen as the major crime.
Given that it is okay to store a copy of a copyrighted work for personal use in the US, and that the Amazon Cloud drive makes content available only for personal use, any interference by the record labels has to stem from the fact of ‘where’ it is stored, rather than the fact that it is stored. The Supreme Court in the US has already said it is not interested in ruling on network DVRs, which left an appeals court ruling that in principle they are legal.
The was a case involving New York pay TV operation Cablevision back in 2006, against 20th Century Fox, Universal Studios and Disney, which was resolved in favor of the studios at the district court level, appealed and reversed in the Appeal courts and then left alone by the Supreme court.
So the principle that content is stored on a hard drive in a remote location and accessed over a network has been enshrined in US law when it applies to video, so by association must also be true of music.
Last week the studios went after start up Zediva, which rigs up remote DVDs to stream content over the internet in a service similar to Netflix but with no content licenses, and this is being seen by studios as a public performance. Zediva rightly asks what is the difference between what it is doing and DVD rental, and the studios say that Zediva is the company playing the content, and playing it to people who have not paid the studios anything.
The Public performance attack may or may not work on Zediva, and we won’t know unless it goes through several courts, but it can’t apply to legitimate owners of content who then choose to store it on the Amazon Cloud Drive, because they have already paid something for the content.
Amazon has swapped letters with the record labels to say that a new license is not required and that it is all good news, since MP3 sales at Amazon have already gone up as a result of the service.
Amazon insists that its Cloud Drive service is similar to Google Docs, Microsoft SkyDrive and other internet file backup services, none of which require a license and that its Cloud Player is no different from Windows Media Player and any number of other media players out there on phones, tablets and PCs.
Amazon concedes that it plans to seek licenses for later “potential enhancements to Cloud Drive and Cloud Player,’ such as letting other customers sample music, but doesn’t require it yet.
Perhaps the biggest bone of contention comes, according to the Billboard article, in the National Music Publishers Association asking why Amazon has not put in place a system to check that all content placed in the Cloud Drive is legally obtained, though we’re not sure just what it is the Association can be asking for. YouTube is free, so any copyrighted music has no place there, but the Cloud Drive should have copyrighted music in it. Perhaps it is saying that Amazon should check not for fingerprints of music but for watermarks which in some cases identify which player generated the music file. Watermarks are not universal (for instance they are not found on all CDs) and a watermark only helps you track down the source of a music file which is known to be traded illegally, and of course these files aren’t being traded.
You might ask why Apple, with its iTunes player is not made to install software which will throw out illegally obtained music, which of course it can’t, or why Windows Media Player on the PC doesn’t do the same.
The Association is quoted as saying that Amazon’s initial approach “doesn’t create an environment of trust and cooperation,” and neither do public pronouncements about one of your largest customers, accusing them of things which are clearly not illegal, and which have led to improved sales. We would suggest Amazon will remain in the clear on this one, and that when the dust settles the labels and the Association will see little point in further ruffling of Amazon’s feathers.