[Ecommerce] International Herald Tribune: Russian Download Site Is Popular and Possibly Illegal

[Thiru Balasubramaniam]

<SNIP>

So great is the official level of concern about AllofMP3 that American
trade negotiators darkly warned that the Web site could jeopardize
Russia's long-sought entry into the World Trade Organization
<http://topics.nytimes.com/top/reference/timestopics/organizations/w/world_=
trade_organization/index.html?inline=3Dnyt-org>.

Operating through what music industry lobbyists say is a loophole in
Russia's copyright law, AllofMP3 offers a vast catalogue of music that
includes artists who have not permitted their work to be sold online =97
like the Beatles and Metallica =97 at a fraction the cost of services like
Apple Computer's iTunes service.



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June 1, 2006


  Russian Download Site Is Popular and Possibly Illegal

By THOMAS CRAMPTON
<http://query.nytimes.com/search/query?ppds=3DbylL&v1=3DTHOMAS%20CRAMPTON&f=
dq=3D19960101&td=3Dsysdate&sort=3Dnewest&ac=3DTHOMAS%20CRAMPTON&inline=3Dny=
t-per>
International Herald Tribune

PARIS, June 1 =97 Rising consumer popularity is turning AllofMP3.com
<http://AllofMP3.com>, a music downloading service based in Moscow, into
a global Internet success story, except for one important detail: The
site may well be illegal.

So great is the official level of concern about AllofMP3 that American
trade negotiators darkly warned that the Web site could jeopardize
Russia's long-sought entry into the World Trade Organization
<http://topics.nytimes.com/top/reference/timestopics/organizations/w/world_=
trade_organization/index.html?inline=3Dnyt-org>.

Operating through what music industry lobbyists say is a loophole in
Russia's copyright law, AllofMP3 offers a vast catalogue of music that
includes artists who have not permitted their work to be sold online =97
like the Beatles and Metallica =97 at a fraction the cost of services like
Apple Computer's iTunes service.

Sold by the megabyte instead of by the song, an album of 10 songs or so
on AllofMP3 can cost the equivalent of less than $1, compared with 99
cents per song on iTunes.

And unlike iTunes and other commercial services, songs purchased with
AllofMP3's downloading software have no restrictions on copying.

It is an offer that may seem too good to be true, but in Russia,
considered to be a hotbed of digital piracy and theft of intellectual
property, courts have so far allowed the site to operate, despite
efforts by the record labels Warner, Universal and EMI to aid
prosecutors there.

Music industry officials say AllofMP3, which first came to their
attention in 2004, is a large-scale commercial piracy site, and they
dismiss its claims of legality. "It is totally unprecedented to have a
pirate site operating so openly for so long," said Neil Turkewitz,
executive vice president of the Recording Industry Association of
America, who is based in Washington.

People associated with AllofMP3, which lists no telephone contacts on
its Web site, declined to comment for this article when tracked down by
domain-name ownership records kept by Verisign. Those records show that
Ivan Fedorov of Media Services in Moscow is the owner.

AllofMP3.com says on the site that it can legally sell to any user based
in Russia and warns foreign users to verify the legality within their
countries for themselves. The site features a wide selection of Russian
music, but is written in English with prices listed in United States
dollars.

AllofMP3 asserts its legality by citing a license issued by a collecting
society, the Russian Multimedia and Internet Society.

In most countries, the collecting societies that receive royalty
payments for the sale or use of artistic works need reciprocal
agreements with overseas copyright holders, according to agencies that
represent right holders.

According to Russia's 1993 copyright law, however, collecting societies
are permitted to act on behalf of rights holders who have not authorized
them to do so. Collecting societies have thus been set up to gather
royalties for foreign copyright holders without their authorization.
Infringement cases have also affected foreign-produced software, films
and books.

The result is that numerous organizations in Russia receive royalties
for the use of foreign artistic works, but never pass on that money to
the artists or music companies, according to the International
Confederation of Societies of Authors and Composers, the umbrella
organization for collecting societies.

"These collecting agencies are thieves and frauds because they accept
money while pretending to represent artists," said Eric Baptiste,
director general of the confederation. "They play off a bizarre aspect
of the Russian law that we are lobbying to change."

Consumers have been flocking to the site, particularly from Britain,
where a survey in March ranked AllofMP3 second only to iTunes in
popularity among self-described music enthusiasts surveyed by XTN Data.

Amazon.com's Web site rating service, Alexa, ranks AllofMP3 as having
the 986th highest level of traffic of any site on the Web over the past
three months.

Use in the United States reached 345,000 unique visitors in April, an
increase of 57 percent over January, but a tiny fraction of the 19
million that used the iTunes software online, according to Comscore, a
service that monitors the habits of Internet users.