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 Michael Betts once owned a photography studio, but for the past couple of years he's made a business out of distributing images rather than taking them. Today his Toronto-based company, DigiSphere, offers the latest iteration of Fotoglif, a site that provides bloggers and other Web publishers free images taken by the same professional shooters who supply news agencies around the world. Previously, Fotoglif compensated the agencies for the shots that were published online; now it will cut bloggers in on the action too.
What's interesting here is how Fotoglif confronts a problem common to copyright holders online. Just as it's relatively easy to find and copy media online, it's brain-dead simple for Web publishers to grab photos from around the Net and slap them onto their sites. Sure, there are companies such as Attributor that crawl the Web to search for unauthorized uses of copyrighted material, helping the owners of the material to identify infringers. But the scale of the infringing is vast, and it's not clear how much return a copyright holder might get from a big investment in enforcement.
Instead of trying to track and stop infringers, Fotoglif's strategy is to offer online publishers something better than free ...
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The sale of The Pirate Bay probably ranks as the week's biggest news for those of us who obsess about copyright issues, followed by the ruling that Usenet.com's newsgroup-access service infringed on the major record companies' copyrights and the Supreme Court's decision not to take Hollywood's appeal of the Cablevision network DVR ruling. But two other developments in U.S. courts seem more important to the average music fan because of the potential they have for disrupting digital services.
The first is the latest lawsuit filed Monday by MCS Music America of Nashville and a dozen other music publishers against the operators of two current and one former subscription-music services. The suit seeks a hefty financial penalty from the companies for including the publishers' songs in their services, even though federal law compels the publishers to grant the necessary licenses. The second is a move by the American Society of Composers, Authors and Publishers to have a federal court declare that cellphone ringtones aren't downloadsbut rather public performances for which they are entitled royalties. In other words, ASCAP argues that playing a 15-second snippet of "Don't Talk to Me About Love" when a call comes in is the legal equivalent of blasting the song over the speakers at a hockey rink. In fact, ASCAP argues, it's an infringement even with the volume turned off.
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 The recent prosecution of The Pirate Bay, a popular site for finding and downloading bootlegged movies, songs, video games and software, suggested that the company's gleeful flouting of copyright law might not be sustainable. (The Stockholm District Court sentenced four of The Pirate Bay's leaders to a year in jail after finding them guilty of violating copyrights, and fined them close to $30 million.) Something had to change at TPB, and it looks like it's going to be three things: the ownership, the business model and the infrastructure. Whether the site ends its love affair with all things bootlegged, however, is another question entirely.
Variety reported that Swedish video game company Global Gaming Factory X agreed to pay about $7.7 million to buy TPB, although the site's blog hinted that the deal was still tentative. (Apprently, the buyer still has to raise the money.) Variety quoted Global Gaming CEO Hans Pandeya as saying the value in TPB was its traffic: more than 20 million visitors and 1 billion page views a month.
"In order to live on, The Pirate Bay requires a new business model, which satisfies the requirements and needs of all parties, content providers, broadband operators, end users and the judiciary," Pandeya said. "Content creators and providers need to control their content and get paid for it. File sharers need faster downloads and better quality."
But as TPB's blog notes, "If the new owners will screw around with the site, nobody will keep using it. That's the biggest insurance one can have that the site will be run in the way that we all want to." Loosely translated, that means Global Gaming will quickly lose those 20 million visitors if it tries to stop users from downloading "Transformers: Revenge of the Fallen" for free....
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The Supreme Court left intact the U.S. 2nd Circuit Court of Appeals' ruling in favor of Cablevision's network DVR service, a move that almost certainly will lead more cable operators to offer TiVo-like services without putting recorders in their subscribers' homes. Advocates on both sides raced to put their own spin on the court's decision, which the justices issued sans comment. Here are two typical ones: Gary Shapiro, head of the Consumer Electronics Assn., said the decision was important to innovation in remote computing and data storage, such as Google's online applications and Apple's .Mac (now called MobileMe) service. Patrick Ross, executive director of the Copyright Alliance, countered that the decision "is unfortunate and potentially harmful to creators and creative enterprises across the spectrum of copyright industries."
But as the Justice Department noted in its brief, which urged the justices not to take up the case, the 2nd Circuit's ruling may not have much bearing on other companies' services.
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 Maybe Jammie Thomas-Rasset should have quit while she was behind. Just as in Thomas-Rasset's first trial in 2007, a Minnesota jury found today that she infringed the copyrights of two dozen major-label songs on the Kazaa file-sharing network. But the new jury handed down a much larger punishment -- $80,000 a song, not $9,250. For the labels, that's roughly equivalent to selling 114,000 songs at Apple's iTunes Store.
Thomas-Rasset didn't seem likely to pay the original $222,000 penalty, so it seems even less likely that the RIAA will be able to extract nearly $2 million from her. The trade group has always been more interested in winning the judgment than the amount awarded; spokeswoman Cara Duckworth told CNet that the group has been willing to settle "since day one." But the size of the jury's verdict may only increase calls for Congress or the courts to reduce the financial penalties for copyright infringement Thomas-Rasset's was the first trial in the campaign against individual file-sharers that the RIAA began in 2003 and ended late last year. As such, it was one of the few tests of the legal underpinnings of that campaign, including the argument that making tracks available to others online (by keeping them in a folder that was open for sharing) was a form of infringement. U.S. District Judge Michael J. Davis instructed the jury in Thomas-Rasset's first trial that making songs available was an infringement, a low threshold that would enable the labels to prove piracy just by collecting lists of the songs in people's shared folders. But Davis second-guessed himself after the verdict and ordered a new trial, mirroring the views of several other judges who had rejected the RIAA's interpretation of the law. The result of the second trial suggests that the higher threshold isn't enough to derail the labels in an infringement lawsuit. The RIAA's anti-piracy contractor, MediaSentry, presented evidence that Thomas-Rasset actually distributed 11 copyrighted songs through Kazaa (to MediaSentry's investigators), and cited metadata from tracks in her shared folder strongly suggesting that the files had themselves been downloaded, not purchased or ripped from her CD collection. RIAA witnesses also linked the Kazaa uploads to a unique identifier on Thomas-Rasset's modem and computer and showed that the unusual username on the Kazaa account matched one that Thomas-Rasset acknowledged using on several other websites. In other words, the RIAA's case was built entirely on circumstantial evidence, but there was a lot of it. Thomas-Rasset and her attorneys seemed eager to continue their battle against the RIAA, and although the trade group insists that it doesn't plan to file any new cases, there are still a number of older claims yet to be resolved. Defense attorneys are fighting these on several fronts, arguing that, among other things, MediaSentry's investigative tactics were illegal. More interesting, IMHO, is the argument Harvard Law Professor Charles Nesson and others are raising that the statutory damages provided in copyright law are grossly excessive -- even unconstitutionally so. The two Thomas-Rasset verdicts, each of which was reached after just a few hours of deliberations, reflect the juries' irritation with her defense. But even if she did put 24 copyrighted songs in her shared folder, it's hard to believe that the labels suffered anything close to $2 million in damages. More important, the mere threat of such a penalty could persuade some accused infringers to settle with the RIAA rather than fight, even if they weren't the ones responsible. Thomas-Rasset may not be a sympathetic defendant, and there's no excuse for illegal downloading. But she will have done all Internet users a favor if her case prompts lawmakers to recalibrate the statutory damages in copyright law. -- Jon Healey
Healey writes editorials for The Times' Opinion Manufacturing Division. Photo credit: Julia Cheng / Associated Press
 Vuze -- the company that's trying to sell licensed, high-def videos to users of the BitTorrent file-sharing software -- has spent much of the past two years trying to persuade Hollywood that its users are customers, not thieves. So far, however, the major studios have entrusted little to Vuze beyond movie trailers and other promotional videos. Now Vuze is trying to prod Hollywood with some eye-opening data about its clientele's buying habits and purchasing power: in addition to being copyright infringers, they spend a lot of money on movies and movie-watching gear. Said Vuze CEO Gilles BianRosa, "Those users are actually Hollywood's best customers."
Yes, that's a self-serving comment. But BianRosa's assertion is supported by a survey by media consulting firm Frank N. Magid Associates of about 1,300 Internet users between the ages of 18 and 44, nearly 700 of whom use Vuze. The survey, which Vuze released late Tuesday, included the following insights about the members of the company's audience:
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 Just what, exactly, are all those Hollywood types getting in return for their investment in Barack Obama's presidential bid? The Justice Department, a steady ally for the entertainment industry on copyright issues during the Bush administration, today opposed the studios in a potentially precedent-setting dispute with Cablevision over TV recording services. U.S. Solicitor General Elena Kagan urged the Supreme Court not to review the 2nd Circuit's ruling, which held that Cablevision's "network DVR" service did not infringe copyrights (download the brief here.) In addition to some technical arguments about the suitability of the case, Kagan maintained that a network-based recording service controlled by a consumer was on the same legal footing as a VCR in the home -- a device the Supreme Court famously defended in the 1984 Betamax ruling. The critical issue is who makes a recording, not how or where it's made, she wrote, and the 2nd Circuit was correct in finding that individual consumers would be the ones recording TV shows, not Cablevision.
The brief drew praise in tech circles, but Kagan took pains to emphasize how narrow the 2nd Circuit's ruling was. "The court of appeals announced no 'categorical exemption from direct liability' (Pet. 24) for providers of automated services and it did not 'assume[]' (Pet. 19 n.4) that only one person can 'make' a particular copy," she wrote. In other words, the administration's position is that the 2nd Circuit's decision doesn't provide a broad shield for Web 2.0 companies that want to replace home recording and playback devices with online services. Besides, as the brief notes, the appeals court didn't consider the possibility of contributory infringement because the studios and Cablevision agreed not to litigate those issues. (The parties agreed to take fair-use defenses off the table, too.)
Nevertheless, her stance is a departure from the previous administration's expansive view of copyrights. It also shows a welcome degree of technological literacy. "Respondents’ proposed RS-DVR service is part of a broader transition from analog to digital recording and playback, and from business models where consumers purchase a tangible item to those where they pay for a service,” Kagan wrote. Or as Gigi Sohn, president of the advocacy group Public Knowledge, put it more tartly, "Common sense would dictate that a recording is a recording, whether made on a set-top box or in a cable head-end."
Credit: Chip Somodevilla / Getty Images
-- Jon Healey
Healey writes editorials for The Times' Opinion Manufacturing Division.
 The Digital Watermarking Alliance, a group that encourages content owners to embed unique identifiers in media as a way to combat piracy and promote new distribution models online, released a study this morning on the prevalence of illegal downloading and the motives behind it. (Download the .pdf here.) Done by market research firm Interpret, it used an online survey to gauge how many U.S. residents were downloading media legally and illegally. Then it did what amounted to a push poll of 996 downloaders (again, both legal and illegal) ages 13 to 49, exploring their behavior in more detail and measuring their reaction to watermarking technology. Not surprisingly, given who was paying for it, the survey found that embedding watermarks (called "digital serial numbers" in the survey) could deter people from sharing content online. In particular, a third of the downloaders said they definitely or probably wouldn't use file-sharing services to obtain content if watermarks were deployed, and half said the same thing about uploading.
I take some of the findings with a grain of salt, such as the assertion that using watermarks would lead illegal downloaders to buy more content from legitimate sources. Watermarks may very well drive some people away from file sharing, but they won't stop them from going to sites that stream free songs or bootlegged movies. As the survey points out, multiple factors influence how people choose to acquire content. Nevertheless, the study provided a number of intriguing insights, including the following:
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 Grooveshark, a former song-swapping service that has evolved into an on-demand jukebox, unveiled a nifty new site (and API) today called Tinysong. It's yet another example of technology racing ahead while the content industry's lawyers try to sort out the legalities of it all.
Tinysong is like Seeqpod combined with Tinyurl or Bit.ly -- it marries an online music streaming engine with a link creator. You enter the name of a song or artist. It returns a list of possible matches. You pick one, and it generates a link to a stream of that tune on the Grooveshark site. An even better version is offered by Ping.fm, which has integrated Tinysong into its tool for broadcasting content to all your social networks. Let's say you want to tell all your Facebook friends and Twitter followers something snappy about the looming GM bankruptcy filing (and don't we all?), punctuated with a link to the ultimate song about doomed motorists. Ping.fm lets you do that in a single step. OK, so maybe I'm the only one who wants to do that. But you get my point -- Tinysong makes it that much easier to add a soundtrack to our microblogged lives.
Like Seeqpod, though, Grooveshark operates in an unlicensed gray area. Seeqpod, which filed for bankruptcy protection in March, let users stream music from various nooks and crannies online -- with or without the copyright owners' permission, and without paying royalties. The bankruptcy filing halted the lawsuits by Warner Music Group and EMI before they could be resolved, and there's some debate on whether Seeqpod would have been held liable; after all, Seeqpod says it didn't host any of the song files, it merely helped people find them. Grooveshark may be in a more precarious legal situation because it appears to host the song files that users stream. That, at least, was its approach when it launched in 2007 as a way to stream music for free from other users' collections, or buy them for 99 cents a track. Company executives have maintained throughout that the site was designed to be win-win, with copyright holders sharing in the revenue. They have yet to strike licensing deals with the major record companies, however, and they've dropped the paid downloads in favor of advertising-supported streams. (Company executives didn't respond to my requests for comment.)
Grooveshark is slick, has a vast library of music and incorporates an impressive recommendation engine and playlist generator. And Tinysong is a great application. These technologies deliver fully on the promise of the Internet as a "heavenly jukebox." If the past is any guide, the labels will tolerate Grooveshark and its Tinysong app until it builds some momentum online, and then their lawyers will descend on the company. It would be better for all concerned if the labels licensed the back end for such services, then let innovators do their thing. Unfortunately, that's not likely to happen until someone finds a way to generate a meaningful amount of advertising revenue from on-demand music streams. Looking at Grooveshark's site, I don't find an effective advertising model -- you can listen to hours of music without bothering to look at the ads. I do, however, find a great online music experience, albeit one that may not be long for this world.
Update, 8:55 p.m.: Grooveshark CEO Sam Tarantino e-mailed to say, "We've secured a major deal and more are coming but I'm not allowed to say who yet." So my pessimism about Grooveshark's ability to avoid a lethal label lawsuit may be overstated. Stay tuned.
-- Jon Healey
Healey writes editorials for The Times' Opinion Manufacturing Division.
 You would think that the movie industry, which celebrates documentarians every year at its awards ceremonies, would want to help those same filmmakers overcome the hurdles posed by changing technology. But Hollywood's copyright holders don't see things quite that way. In fact, they're trying to make it harder for documentarians to practice their craft, opposing the latter's bid for the freedom to extract short clips directly from DVDs.
As instructed by Congress in the 1998 Digital Millennium Copyright Act, the Copyright Office considers requests every three years to create or renew exemptions to the DMCA's ban on circumventing the electronic locks on copyrighted material. Such "technical protection measures" include the encryption on DVDs. In one of the rare exemptions granted by the Copyright Office, film professors have been permitted to copy short clips from DVDs for the purpose of creating video compilations for their classes. Of course, the DMCA makes it illegal for anyone to make or sell a tool that professors could use to extract these clips from discs; luckily for them, it's easy to find (illegal) software online that can do the trick.
Anyway, the Copyright Office held hearings last week on the latest requests for exemptions, including one from a group of documentary filmmakers. Led by Kartemquin Educational Films (the producers of "Hoop Dreams") and joined by well-known filmmakers such as Kirby Dick ("This Film Is Not Yet Rated") and Morgan Spurlock ("Super Size Me"), the group seeks permission to copy short segments from DVDsfor their work. The group (whose papers were prepared by a team from USC's Intellectual Property and Technology Law Clinic and Beverly Hills attorney Michael C. Donaldson) notes that VHS production has all but ceased, meaning that DVD is the de facto medium for video. And without the ability to make fair use of material on DVDs, the group contends, documentaries that cast their subjects in a negative or mocking light may not be possible....
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