Industry Update

Jammie Thomas Appeal: Just weeks after having been found liable for $220,000 in damages for allegedly offering 24 music tracks on her KaZaa account, Jammie Thomas has filed a notice of remittitur with the US District Court for the District of Minnesota, asking the judge to slash the jury's damage award, contending that she should receive a retrial that assesses the damages based on the actual damages suffered by the labels resulting from her making the files available.

This is not the first time a defendant in a file-sharing lawsuit has taken that tack—it was a central argument in the case of UMG v. Lindor, where Marie Lindor's attorney argued that the actual damages were more in the neighborhood of 70¢ per song—approximately the amount the labels receive from legal downloads. Record labels have steadfastly refused to disclose that amount, although in the Thomas case, an RIAA lawyer admitted that 70¢ "was in the range."

Sony counsel Jennifer Pariser admitted in the Thomas case, "We haven't stopped to calculate the amount of damages we've suffered due to downloading." Thomas' current argument is that any amount above those damages actually suffered by the labels is "purely punitive and should be scrutinized by the Court."

Citing precedents established by BMW of North America v. Gore and State Farm v. Campbell, Thomas' attorney Brian Toder argues that the statutory damages should be capped at 10 times the actual damages suffered. The RIAA begs to differ.

iTunes changes its tune: Apple's iTunes Store announced that it was dropping the price of its non-DRM iTunes+ 256kbps files to the same 99¢ price as regular iTunes files, presumably to compete with Amazon MP3. Apple claims this now makes it the largest source of non-DRM music on the Web.

When Apple first announced iTunes+, the higher-rez files cost $1.29, as opposed to the regular 99¢ file price. Customers who had purchased the lower-rez files could "upgrade" for the 30¢ difference. The company has not announced how—or whether—regular iTunes files can be converted to the similarly priced non-DRM version.

The Well-Tempered Web: Alex Ross argues in the October 22 issue of The New Yorker that the Web has been good to classical music, claiming that classical websites and blogs have "been expanding at a sometimes alarming rate."

After giving us glad tidings, however, he does also offer the Snakes on a Plane warning: "Things invariably appear more important on the Internet than they are in the real world."

As always, Ross writes gracefully and passionately—the essay is worth reading.

Radiohead and the brave new world: When Radiohead decided to offer its In Rainbows for whatever consumers wanted to pay—including nothing—many people predicted the business model would change everything. Maybe not: Despite the album's ready availability at no charge from the band itself, BigChampagne, the company that charts file-sharing activity, has announced that it was grabbed by over 240,000 Bit Torrent users in the first day alone, followed by a steady 100,000/day in the week after.

Radiohead has decided not to offer any hard figures on its "legitimate" album downloads, but industry experts estimate that 1.2 million downloads occurred within the first week, with an average price initially cited as $8, although Wired speculates that a more accurate price would be $5.

Even at $5, that means Radiohead realized between $6 million and $10 million in its first week of sales. What that means in the long term remains uncertain. BigChampagne's CEO Eric Garland speculated that the band has now given legitimacy to sites like Bit Torrent, since both Radiohead and the P2P site offered the same product for the same price.
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