p2pnet - rss feed: p2pnet talks to AllofMP3.com
p2pnet.net news special:- An incredible, and inordinate, amount of mainstream media time is devoted to spreading the wild fiction that copyright infringement of corporate movies and music is threatening world economies.
AllofMP3.com is a small Russian company which has become the international poster child for attacks on independent music download sites.
By itself, it probably doesn’t represent much of a genuine threat to the labels or studios. But if it’s allowed to survive and prosper, its existence would certainly encourage other entrepreneurs to adopt the same marketing approach - DRM-free downloads at reasonable prices - which would result in serious competition for the corporate cartels which, until the Net became universally adopted, had been able to control virtually everything ordinary people saw or heard.
Competition is good: it promotes free choice. But neither ‘choice’ nor ‘competition’ are words found in cartel lexicons. So a massive, and ongoing, multi-million-dollar campaign has been mounted against AllofMP3.com by the cartels, with the record labels to the fore.
Leading it on behalf of the labels and other vested interests is the US administration, which has brought its full weight down on a handful of people in another country who dare to compete with Warner Music, EMI, Vivendi Universal and Sony BMG, with the major movie studios and software houses lurking darkly in the background.
In rich irony, only Warner Music can be said to be truly American. And even it’s run by Canadian. The other three members of the Big 4 music cartel are EMI, Vivendi Universal and Sony BMG, based in Britain, France, Japan and Germany, respectively.
In other words, the US government is generously spending money provided by American tax payers to help four foreign companies maintain an iron grip on a market whose openness would benefit American artists as much, if not more, than artist in other countries.
Nor does it appear anyone in either the United States Trade Representative Office, which is behind much of the US-mounted pressure on AllofMP3.com, nor music industry ‘trade’ organizations, such as the IFPI (International Federation of Phonographic Industry), have made any effort to talk directly with AllofMP3.com executives to find a way to reach an accord.
p2pnet was able to have a word with the people who run AllofMP3.com.
p2pnet :- Who originally started AllofMP3.com and what was the motivation behind it?
AllofMP3.com:- People love music. As digital audio and mobile technologies improve, interest in digital music will only increase. Several years ago we foresaw this situation and thought we could create an Internet store to provide people - both experienced and inexperienced computer users and audiophiles - with a quality service and a wide assortment of music. We obtained all necessary licenses and started our hard work. What will become of it in the long run, our users will decide.
p2pnet :- Approximately how many users does AllofMP3.com currently have?
AllofMP3.com:- We’ve 5,500,000 registered users.
p2pnet :- You’ve been singled out for special attention by the US administration: “I have a hard time imagining Russia becoming a member of the WTO and having a Web site like that [AllofMP3.com] up and running that is so clearly a violation of everyone’s intellectual property rights,” said US Trade Representative Susan Schwab, according to Reuters.
The story went on, “Schwab’s call for the allofmp3.com Web site to be closed came as the United States and Russia are trying once again to reach a deal on Moscow’s 13-year-old bid to join the WTO. Those talks failed in July, primarily because of agricultural issues and U.S. concerns that Russia was not doing enough to stop piracy and counterfeiting of American goods.”
How does it feel to be a principal target of the American anti-p2p effort?
AllofMP3.com:- It is disappointing that United States Trade Representative Susan Schwab completely and deliberately mischaracterized AllofMP3.com. Furthermore, it is irresponsible to use AllofMP3.com as a negotiating instrument in an attempt to extract concessions from Russia in return for US support for accession to the World Trade Organization.
AllofMP3.com is a Russian business that is in complete compliance with Russian law.
p2pnet :- Do you believe the existence of your site stands in the way of US/Russia trade negotiations?
AllofMP3.com:- We believe we are a not barrier to the conclusion of WTO negotiations and that Representative Schwab has deliberately mischaracterized our company. As a Russian-based company, we operate legally under Russian law. It appears the US government is a willing partner in the campaign being waged by the big record companies that wish to shut down our company. And, unfortunately for us, it appears that the US government also sees AllofMP3 as a wedge issue to gain concessions from the Russian government in exchange for its support for WTO ascension.
p2pnet :- What effect might this have on you as a company?
AllofMP3.com:- At the moment it is not possible to define exact terms and conditions of Russia’s accession to WTO. Until the actual accession, which is not soon anyway, WTO rules do not apply to Russian companies. That is also true for any international intellectual property treaties developed under the WTO framework. It is possible that after Russia joins WTO some changes will be made to the national legislation and also that Russia will ratify some new international treaties. But for now it is too early to talk about effect that Russia’s accession to WTO will have on AllOFMP3.com business.
p2pnet :- Have you had any official or unofficial approaches from your government at any level asking you to stop operations in the interests of international goodwill?
AllofMP3.com:- We have not been contacted by Russian government.
p2pnet :- Have you heard from Schwab personally?
AllofMP3.com:- No.
p2pnet :- If you haven’t heard from her, have you heard from anyone else within the US trade office?
AllofMP3.com:- Nobody.
p2pnet :- Who’ve you heard from within the RIAA, or any of the other Big 4 trade organisations, and what did they have to say?
AllofMP3.com:- Nothing.
p2pnet :- Assuming you intended to keep AllofMP3.com online, what will be your next steps?
AllofMP3.com:- We believe the Russian market will continue to grow given the upward trend in incomes and access to the Internet and our plan is to build our business to support this market. We will grow our business by maintaining a dominate position in the market by providing customers a web-friendly site and great functionality at an attractive price point. Currently, we do not envision moving into other digital products.
p2pnet :- On the voucher story currently occupying the mainstream media’s attention, are you concerned with people advertising and selling Allofmp3.com vouchers on sites such as eBay, or on their own sites?
AllofMP3.com:- We don’t sell vouchers. Any user can purchase Gift Certificate on the site and give it to anybody.
p2pnet :- The Big 4’s IFPI (International Federation of Phonographic Industry) is trumpeting the arrest of a Londoner who allegedly worked for Allofmp3.com’s European office. How much truth is there in this?
AllofMP3.com:- The IFPI/ BPI (British Phonographic Industry) turned a person reselling gift certificates into a “European office of AllOFMP3″ in London. After that they initiated the loud “closure” of this “office” and an arrest of its mythical “employee”.
[NOTE: AllofMP3.com said earlier that it’s never been active outside of Russia and, “Thus we do not have any offices or employees abroad”.]
p2pnet :- I know you’ve been through this a hundred times before, but could you please explain, as simply as possible, how you’re able to legally sell downloads online?
AllofMP3.com:- We believe it is legal in Russia under Articles 44 and 45 of the Law of the Russian Federation No. 5351-1 On Copyright and Related Rights dated July 9, 1993, as amended, (the Copyright Law), which authorizes Russian non-profit Russian organizations for collective management of copyrights (Russian Licensing Societies) to grant licenses to entities such as ALLOFMP3. ALLOFMP3 has up-to-date licenses from the Russian Licensing Societies from the Federation of Rights Holders for Collective Management of Copyright with Respect to the Use of Musical Works in Interactive Regime (FAIR) and from the Russian Organization on Collective Management of Rights of Authors and Other Right Holders in Multimedia, Digital Networks & Visual Arts (ROMS).
Russian Copyright Law allows holders of intellectual property rights to establish non-profit organizations such as ROMS which in its capacity oversees licensing agreements and collects royalties and pays them out to copyright holders, aside from some commissions.
The Russian Copyright Law provides non-profit Russian Licensing Societies with a right to grant licenses and to collect royalties for the use of music without necessarily obtaining permission from the copyright owners.
p2pnet :- Do you get many requests from artists to have you to feature their music on your site? Still on this, have you had any well-known musicians ask you to include their music, and if so can you say, who?
AllofMP3.com:- Yes, we get a lot of new requests everyday. But we’ve no story with well-known musicians.
p2pnet :- One of the favourite themes of the Big 4 is: downloads which, presumably, include music from AllofMP3.com, are polluted with viruses and so on and are extremely dangerous: what’s your response to this?
AllofMP3.com:- WOW! We hear about it for the first time 
We’ve no viruses on the site nor in media-files.
p2pnet :- Do have a plan to start offering videos through AllofMP3.com?
AllofMP3.com:- No. We didn’t plan it.
p2pnet :- Do you see any hope of coming to terms with the corporate music industry?
AllofMP3.com:- It’s a question of time. Why not?
p2pnet :- The North American media tend to confine themselves to calling AllofMP3.com an illegal pirate organisation: do the Russian media write about you in the same way?
AllofMP3.com:- The Russian media are proud of AllfofMP3 because of its popularity all over the world.
p2pnet :- And finally, do you have any messages for the people who continue to support you?
AllofMP3.com:- Thank you for using our services! Stay tuned!and
=================
UPDATE:
“Ignore the jurisdictional issues for the moment,” says Digital Copyright Canada’s Russell McOrmond in a comment post, going on:
While AllOfMP3.com may be perfectly legal for Russian customers, it is not legal for them to sell to foreign customers. Copyright and licensing need to be analysed domestically, and you can’t say that what is legal in Russia allows you to do something in Canada or the USA.
Canadians should read this closely as this relates to the type of objections that the major labels have against Canada’s Private Copying regime. Unfortunately, unlike in Russia, many Canadians seem to be opposed to this regime as well - they appear to prefer lawsuits to levies for recorded music.
On the other hand, I wish the levies were moved from legacy recording media (that’s how we share music now) and moved to a voluntary system where those who wish to non-commercially share music, movies or television (including mashups) would pay a flat-fee to a collective society (likely through the ISP as part of the monthly service charge to make things simpler).
We also need a compulsory regime for commercial Internet download and Internet radio. I disagree with the industry executives who claim the current system of private negotiations is working out well.
For those in the USA, think of “Save Internet Radio” which is based on the same issue (although it is streaming rather than downloads).
Collective licensing rates are being set so high by the US government that it will drive the big net radio stations to have to make special deals with the major labels. The net result? The redundant labels make a lot of money, and the actual composer and musician makes far less. While the rate was set far too high, the compulsory license had a formula that was far more fair in terms of the percentages that the composer and musician would make.
As is the case for most of the battles involving music these days, the target of the labels isn’t “piracy” but attacks against the interests of composers and musicians. Even though labels are redundant in the new economy (only needed to finance the historically high costs of recording, editing and distributing recorded content), they want to take the lion’s share of any music industry money and keep composers and musicians poor.
Jon Newton - p2pnet
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Tired of being treated like a criminal? They depend on you, not the other way around. Don’t buy their ‘product’. Do bug your local politicians. Use emails, snail-mail, phone calls, faxes, IM, stop them in the street, blog. And if you’re into organizing, organize petitions, organize demonstrations and then turn up on your local political rep’s doorstep, making sure you’ve contacted your local tv/radio station/newspaper in advance. Don’t just complain. Do something!
May 28th, 2007 at 7:49 am
Ignore the jurisdictional issues for the moment — while AllOfMP3.com may be perfectly legal for Russian customers, it is not legal for them to sell to foreign customers. Copyright and licensing need to be analysed domestically, and you can’t say that what is legal in Russia allows you to do something in Canada or the USA.
Canadians should read this closely as this relates to the type of objections that the major labels have against Canada’s Private Copying regime. Unfortunately, unlike in Russia, many Canadians seem to be opposed to this regime as well — they appear to prefer lawsuits to levies for recorded music.
On the other hand, I wish the levies were moved from legacy recording media (that’s now how we share music now) and moved to a voluntary system where those who wish to non-commercially share music, movies or television (including mashups) would pay a flat-fee to a collective society (likely through the ISP as part of the monthly service charge to make things simpler).
We also need a compulsory regime for commercial Internet download and Internet radio. I disagree with the industry executives that claim that the current system of private negotiations is working out well.
For those in the USA, think of the “Save Internet Radio” which is based on the same issue (although it is streaming rather than downloads). Collective licensing rates are being set so high by the US government that it will drive the big net radio stations to have to make special deals with the major labels. The net result: The redundant labels make a lot of money, and the actual composer and musician make far less money. While the rate was set far too high, the compulsory license had a formula that was far more fair in terms of the percentages that the composer and musician would make.
As is the case for most of the battles involving music these days, the target of the labels isn’t “piracy” but attacks against the interests of composers and musicians. Even though labels are redundant in the new economy (only needed to finance the historically high costs of recording, editing and distributing recorded content), they want to take the lions share of any music industry money and keep composers and musicians poor.
May 28th, 2007 at 10:10 am
This is just another excuse for another John Newton rant.
May 28th, 2007 at 2:46 pm
The EFF came up with a similar idea of voluntary collective licensing, only it was written back in 2003 when it was not yet obvious that the movie, TV, and software industries would follow the same path of destruction as the music industry, so their idea sadly only applies to music.
http://www.eff.org/share/?f=collective_lic_wp.html
May 28th, 2007 at 5:58 pm
This is the best article I’ve read on P2Pnet yet. Kudos Jon!
I’ve only purchased music from one online retailer - AllOfMP3. Their prices were incredible, I chose from an array of formats and bitrates, there was no DRM, and the service was prompt and of high quality.
AllOfMP3 has ruined all other online music retailers for me forever. Except for the lousy site organization (as of 3 years ago) I can’t imagine a more pleasurable music shopping experience.
$5 got me 3 albums and some singles. If a used CD costs me about $10, shouldn’t an intangible, reproducible file with the same content cost far, far less?
Long live AllOfMP3.
May 29th, 2007 at 1:02 am
I’m so pleased that you got what you want. The artists, musicians, singers, songwriters, producers got squat … But, as long as YOU are happy, that’s all that matters. Right?
I wonder if you would mind if I stole your paycheck every week!
May 29th, 2007 at 1:38 am
Why should the population of a country subsidise private companies? Whether it be through storage media taxes, or internet connection levies.
It’s a specious rationale to suggest that because a medium can potentially store/transmit audio data, it should be taxed/levied.
And what about other businesses? What about book authors? Books can potentially stored on these same devices. Are these taxes being shared amongst them? The list is limitless…
What about shops which have a percentage of their stock stolen through shoplifting? Will the government tax the population further to compensate them? If they are doing it for the music business, why not everyone else?. Oh, i forgot, the entertainment business buys/rents politicians, and has pervasive lobby groups.
May 29th, 2007 at 3:55 am
Good interview Jon,
One thing keeps bugging me. What’s the reason that the Big 4 focuses on Allofmp3? What about Gomusic, Legalsounds, Mp3Sugar and dozens of other Russian sites selling cheap DRM free MP3?
Allofmp3 may act like everything is under control, but they are caught in the squeeze of the boycott by Credit Card companies. The big 4 haven been very successful in pressuring credit cars companies to refrain from handling payments to Allofmp3.
Mediaservices, the company behind Allofmp3, have set up a new website named Mp3sparks.com, a clear Allofmp3 clone. The purpose of this move most likely is to get the cash flowing again. Unlike Allofmp3, Mp3Sparks is licensed by FAIR. The credit card processor Chronopay declared a few months ago that they will only do business with download stores licensed by FAIR. For a while this move helped. Users of Mp3Sparks could pay via their credit card. Allofmp3users even were invited to have their account transferred from Allofmp3 to Mp3Sparks. Somehow something went wrong, payment by credit card is no longer possible. A few users have been able to pay but not via Chronopay. Their payments were handled by eCentru another Russian payment processor.
Maybe your contact at Allofmp3 can explain what’s happening?
May 29th, 2007 at 11:16 am
It is quite likely that the happy customer you are angry at would prefer that you DID get your fair share of pay. We all need money for our work in order to live and keep up the music production.
The reason you get squat is not because of this person. It is beacuse change is needed.
Please jump on the bandwagon to help change this.
Your comment indicates that you are thinking the way they want you to think.
May 29th, 2007 at 2:09 pm
” I’m so pleased that you got what you want. The artists, musicians, singers, songwriters, producers got squat … ”
Really ?
You know this how, exactly ??
AllofMP3 pays a licensing collective a fee.
Like soundscan in the americas.
The collective pays the artists .. oops .. the COPYRIGHT HOLDERS
which are almost never the actual artist .. like soundscan and their
ilk are supposed to ( we all know how THAT goes ).
They abide by russian law .. to the letter.
The appropriate Russian licensing agencies get the proper payment
to distribute accordingly.
Artists get squat because they no longer have any control over
their work .. all proceeds belong to the label.
The songwriters usually get their cut .. different collective
agency.
The producers get paid in advance .. per Job .. which is deducted
from whatever royalties the artist is SUPPOSED to get , so the
producer crap you spew is just that .. crap.
The labels steal all of the artists pay, and blame everyone else.
Idiot.
May 29th, 2007 at 2:11 pm
another opportunity for a troll fart
I see you Gachhy
May 29th, 2007 at 3:15 pm
This doesn’t help to make this a credible service!
May 31st, 2007 at 3:57 pm
you should check out the allofmp3 alternatives at http://www.aom3.org
Allofmp3 is actually surprisingly expensive compared to other Russian music shops.
May 31st, 2007 at 8:06 pm
Since Visa, Mastercard, Diners, and American Express, as well as Paypal won’t do business with allofmp3.com, how are they paying for music? The closest I saw was some guy in Australia selling gift vouchers for 150% of face value.
How are they getting their money?
June 17th, 2007 at 1:56 am
I logged into to Allofmp3 and was offered to transfer my account to mp3sparks. I haven’t been able to use the Allofmp3 for a while because I couldn’t add credit. I accepted the transfer and Mp3sparks is an obvious clone of Allofmp3 - which is good. I have been able to add credit using Visa card wihout problem (as of 17th June 07) and I’ve been downloading again. Looks good to me and seems to be working fine. No download manager available yet but you can use any download manager you want - I’m using Free download Manager and it seems to be working fine.
http://www.freedownloadmanager.org/download.htm
July 2nd, 2007 at 2:13 pm
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July 2nd, 2007 at 4:44 pm
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July 6th, 2007 at 5:06 pm
I live in South Africa and have been using All of MP3’s service for some time now. You can import music CD’s and movie DVD’s privately through legal companies to SA, paying applicable import taxes, at a third of the price that the same items cost in local stores.
Where does South African consumers’ money go? To the artists? I think not!
The leading music store in SA, Musica, has decreased all it’s “top 20″ albums prices by almost a third in the attempt to attract the customers they are losing. How can they afford that, one third, if the pricing is realistic? Also they complain about having to import the music to SA, but the CD’s and thier covers are printed locally. So where does the import costs come from?
As long as the people selling music keeps ripping off the consumer and not give the artist thier fair cut, I will keep buying music off the net from Allofmp3 or whoever else is willing to sell it.
And by the way, the last time I checked the artists whose music I bought off the net weren’t pourpors, but multi millionairs. So who is really complaining ?
July 11th, 2007 at 8:42 am
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