The Time to Hesitate is Through: Amazon’s Thievery Requires Decisive Action

Emmanuel Legrand reports in his excellent newsletter that:

Music industry trade group the Recording Industry Association of America (RIAA) has asked the US government for tougher measures against infringers, in particular in the online marketplace. The proposal was part of a submission to the US Department of Commerce, as part of its request for comments on the state of the state of counterfeit and pirated goods.

You can read the RIAA’s submission here.

Counterfeiting and pirating of physical music products facilitated by online platforms continues to cause harm to our members. In 2019, we conducted two studies to identify the amount of counterfeit offerings of music CDs on popular online platforms, including a study on the prevalence of high quality counterfeit box sets on certain platforms and a study on the prevalence of high quality counterfeits for a broad sample of current and evergreen album titles released by the major U.S. record labels. As further discussed below, each of these studies showed significant counterfeit activity on the noted online platforms, including findings that:

  • A recent sample purchase program found 100% of new high quality box sets offered for sale through eBay or AliExpress in the U.S. were counterfeit; and
  • A recent sample purchase program found 11% of new CDs offered for sale on Amazon were counterfeit, and 16% of new CDs sold on eBay were counterfeit.

    For the study on box sets of music, we identified and made test buys on eBay and AliExpress’s U.S. platforms of 10 well known artist box set titles released by major U.S record labels. Each purchase was made after a search for “brand new” box sets of the titles selected, and a purchase of the 4 lowest priced box sets on each platform, without regard to seller location. We then examined the products that were shipped to us. On both eBay and AliExpress, 100% of the test buys of the box sets were counterfeit. This is of particular concern as box sets are premium physical music products designed for the superfan that often contain the most significant sound recordings in an artist’s repertoire.

The conclusion is:

Trafficking of counterfeit and pirated goods, whether in the form of physical CDs, box sets or artist merchandise, as well as online infringement of music and music videos in digital form, continues to significantly impact the music industry. We believe more can be done, including implementation of voluntary measures as well as governmental action, to deter and reduce such activity, and create a healthier online ecosystem where all can thrive.

Amazon apparently was the only one of the bootleggers who responded, and did so with the usual non answer and deflection:

Our customers expect that when they make a purchase through Amazon’s store—either directly from Amazon or from one of its millions of third-party sellers—they will receive authentic products. Amazon strictly prohibits the sale of counterfeit products and we invest heavily in both funds and company energy to ensure our policy is followed. We work with and empower brands through programs like Brand Registry, Transparency, and Project Zero to ensure only authentic products are sold in our stores. We investigate any claim of counterfeit thoroughly, including removing the item, permanently removing the bad actor, pursuing legal action or working with law enforcement as appropriate.

Sound familiar?  Kind of like how YouTube responds to the community flagging?  Investigating after the illegal goods are being sold is not the point.  Getting caught is not the point.  The point is stopping the illegal goods from getting onto the platform in the first place.

The reason this drivel from Amazon sounds like tired crap is because it is tired crap.  And crystalizes that they think the problem is getting caught and that what they really want is to keep getting away with it.

And this is where I disagree a bit with RIAA–the time for voluntary measures has passed.  Someone needs to go to jail–someone high up who almost invariably knew what was going on (for example, grand jury documents told the U.S. Attorney for Rhode Island “Larry Page knew what was going on“).

Then we can talk again about voluntary measures to keep their butts out of the slammer–not their pathetic little “Project Zero.”  I got your project zero right here.

Remember the great continuum that has driven homo sapiens for millennia:

FEAR <———> GREED

We need Jeff Bezos closer to the FEAR end than the GREED end.

Remember that data is the new exposure, streaming is the new physical and that both these tropes have something in common–artists are being driven to substitute away from low to no margin streaming and away from sustainable margins on physical like CDs with no revenue replacement.  (Unless you’re in the 5% of tracks that account for 90% of streaming revenue in the hyper efficient market share distribution of streaming revenue.)

Against that background, we find that the online platforms like eBay, Alibaba and Amazon are going even further toward evil and doing little or nothing in their rush to drive physical retail out of business to stop the sale of counterfeit CDs delivered to your door by Amazon Prime or Ali-express.  And most honest business folk would probably think they are pretty shameless about it and ask how could they get away with sucking up the revenue from counterfeits into their maelstrom of cash?

But before you go down that rabbit hole, you need to understand an important fact about the mind set of Silicon Valley–and it’s the same mindset that gave us both Google and Theranos.  It’s not that they made a choice to do evil.  It’s that they don’t understand there is a choice about doing evil.  It’s how these little soulless people sit in front of Congress and lie and feel good about themselves.  The Internet is their Ring of Gyges and they are unconcerned about justice because their thing is getting away with it, not getting caught and getting richer than Croesus.

russia_medvedev_facebook_zuck

Somewhere in their development they lacked the normative guide–or “sherpa” in their case–that should have developed a self-governing code to map their behavior.  Parents, pastors, priests, rabbis, teachers, all failed to make a dent.  These are the kind of people who don’t stop when the European Commission fines them billions.  They don’t care how they treat their employees as long as they’re the richest man in the world.  They don’t care about ripping off artists.  Their reaction to getting caught is not fixing the problem, their reaction is to buy the shillery and try to make us look greedy for expecting them to behave.

If a $5 billion fine didn’t work, how about $50 billion?  Let’s try that.  But even in the Silicon Valley dual class system, the corporate royalty might start thinking about offering up an executive to save the company.

This is why the solution probably isn’t voluntary.  It probably has a lot more zeros on it than any normal person  would think reasonable, or is a court order for very specific behavior, or simply prison.

 

 

@IFPI_org: World’s Largest Stream Ripping Site Faces International Legal Action

[Editor Charlie sez: Thanks to YouTube, stream ripping is the latest tool of bootleggers and pirates.  Here’s how it works:  YouTube allows live shows to be posted as videos, stream rippers grab the audio files and then upload those files as bootlegs to be sold as mp3s or monetized as “lyric videos”.  Google then serves “address unknown” NOIs on those bootleg recordings with the Copyright Office to avoid paying mechanical royalties to songwriters OR being audited.  More racketeering from Google, that purposely launches products they can’t control that create harm Google can predict. Maybe the Department of Justice could spend more time prosecuting criminals than harassing songwriters with their rogue antitrust division.  Every time the recording industry has to bring these lawsuits instead of the government bringing criminal prosecutions, it just means that the government avoids having do do actual work.]

London and Washington, DC, 26th September 2016 – Organisations representing record companies in the US and UK took legal action today against Youtube-mp3.org, the world’s largest site dedicated to offering illegally “stream ripped” music.  Both the site and its operator have generated millions of dollars without paying any remuneration to artists and rights holders. The activities also breach YouTube’s Terms of Service [that YouTube does nothing to stop].

Stream ripping is the process of ‘ripping’ or creating a downloadable file from content that is available to stream online.  It is often done with music videos, to create copies of tracks that can be downloaded and listened to offline or on other devices.

IFPI Chief Executive Frances Moore said:

“This is a coordinated action to protect the rights of artists and labels from the blatant infringements of YouTube-mp3, the world’s single-largest ‘stream ripping’ site.

“Music companies and digital services today offer fans more options than ever before to listen to music legally, when and where they want to do so – over hundreds of services with scores of millions of tracks – all while compensating artists and labels. Stream ripping sites should not be allowed jeopardise this.”

Cary Sherman, the Chairman and CEO of the Recording Industry Association of America (RIAA) said:

“This site is raking in millions on the backs of artists, songwriters and labels.  We are doing our part, but everyone in the music ecosystem who says they believe that artists should be compensated for their work has a role to play.  It should not be so easy to engage in this activity in the first place, and no stream ripping site should appear at the top of any search result or app chart.”

Geoff Taylor, BPI Chief Executive, said:

“It’s time to stop illegal sites like this building huge fortunes by ripping off artists and labels.  Fans have access now to a fantastic range of legal music streaming services, but they can only exist if we take action to tackle the online black market.  We hope that responsible advertisers, search engines and hosting providers will also reflect on the ethics of supporting sites that enrich themselves by defrauding creators.”

Alison Wenham, CEO of WIN (Worldwide Independent Network) & AIM (Association for Independent Music) endorsed the action, adding:

“Stream ripping is not a victimless crime, it involves ripping off the artists and companies who invest their time and money into making music for the public to enjoy.  The more stream ripping takes place, the less investment into music will be made to the ultimate detriment of music fans.”

Richard Burgess, CEO of A2IM, representing US independent record labels said:

“Stream ripping is yet another illegal activity that deprives artists, songwriters, publishers, and labels of their rightful revenues and their ability to make a living. It must be stopped immediately.”

In the US, legal proceedings were filed in federal court in California against the site and its operator, Philip Matesanz, for flagrantly violating copyrights.  In the UK, the BPI, representing UK record labels, put the stream ripping site on formal notice of intended legal action if it does not cease infringing.

Stream ripping is the fastest growing form of music piracy globally and has now replaced other forms of downloading as the most prevalent form of online music piracy.  Research published earlier this month by IFPI and Ipsos finds that stream ripping sites are operating on a massive scale, with 49 per cent of all 16-24 year olds engaged in the activity, according to Ipsos.

YouTube-mp3.org is the largest stream-ripping site with more than 60 million unique users per month.  Based in Germany, the site has a global user base and provides a simple way of creating an audio file from a YouTube video.

Despite paying no money to the creators or owners of music, stream ripping sites are using the high levels of traffic they generate to make money from advertising.  The prominently placed adverts on YouTube-MP3, often from major brands, are estimated to generate hundreds of thousands of dollars per month for YouTube-mp3.

-Ends-

For further information please contact:

IFPI:  Adrian Strain Adrian.strain@ifpi.org, John Blewett john.blewett@ifpi.org +44 (0)20 7878 7939 / 7935

 BPI: Gennaro Castaldo, gennaro.castaldo@bpi.co.uk +44 (0)20 7803 1326 / +44 (0)7801 194 139

RIAA:  Jonathan Lamy, jlamy@riaa.com, Cara Duckworth, cduckworth@riaa.com +1 202 857 9627

Notes to editors:

About IFPI

IFPI is the organisation that promotes the interests of the international recording industry worldwide. Its membership comprises some 1,300 major and independent companies in 60 countries. It also has affiliated industry national groups in 57 countries.  IFPI’s mission is to promote the value of recorded music, campaign for the rights of record producers and expand the commercial uses of recorded music in all markets where its members operate.

About RIAA

The Recording Industry Association of America® (RIAA) is the trade organization that supports and promotes the creative and financial vitality of the major music companies. Its members comprise the most vibrant record industry in the world, investing in great artists to help them reach their potential and connect to their fans. Nearly 85% of all legitimate recorded music produced and sold in the United States is created, manufactured or distributed by RIAA members.

About the BPI (British Phonographic Industry) Promoting British Music

The BPI was formed in 1973 as a representative voice of the UK recorded music business.  As a trade association it promotes recorded music in the UK and worldwide, including through its overseas trade missions and the Music Export Growth Scheme, and also champions the rights and interests of a broad range of members through its content protection work.  Its membership is made up of over 370 independent music labels and the UK’s three major record companies, which in 2015 collectively accounted for over 80 per cent of the recorded music consumed in the UK – the world’s third largest music market – and whose artists claimed around one in every six albums sold around the world.