Born In '88

Thanksgiving Day had barely begun when Kevin Hofman’s BlackBerry buzzed. It was one of the technical operators of OnSmash.com, Mr. Hofman’s popular hip-hop blog, telling him that the site had gone mysteriously blank just after midnight.

At first I thought it was hackers,” Mr. Hofman said. But within hours a notice went up on the site saying that its domain name had been seized by the United States Immigration and Customs Enforcement unit of the Department of Homeland Security; it was one of dozens of sites shut down, accused of copyright infringement and selling counterfeit goods.

But Mr. Hofman, a brawny Long Islander in his early 30s who formerly worked for a major record label, does not think of himself as a pirate.

Read the rest over at NYT

I’m a NYT fan, even did one of their training programs, but this story is late man. I vividly remember having text, bbm and gchat arguments discussions over what this meant for hip-hop and blogosphere during Thanksgiving weekend. Why so tardy for the party?

Major label Electrical and Musical Industries (EMI) has been going through it. Recently, a lawsuit found that EMI illegally distributed their label’s music via Rapidshare as part of a viral marketing effort. Apparently, Mp3Tunes owner Michael Robertson uncovered some “secret” emails that put the British label in a compromising position. EMI has been in a three-year-long litigation with Mp3tunes over the infringement of copyrighted music.

The 41-page lawsuit accuses Mp3tunes of allowing illegal music downloads but given recent developments the case might be thrown out as early as January 2011 as EMI appears hypocritical. Even more, so many links have been distributed from the EMI camp that the label is unable to distinguish authorized from unauthorized links.

If more record labels are caught illegally distributing music, what does this mean for the RIAA’s anti-piracy stance? Public relations nightmare aside. The litigation in EMI v Mp3tunes can set a precedent for all anti-piracy suits to come. Recently, music blogs, OnSmash and Dajaz1, were seized by the government, presumably for copyright infringement reasons. This EMI case may be their saving grace.

But it gets worse for the fourth largest label in the industry. Reportedly, EMI might be up for grabs and major labels Warner Music Group and Bertelsmann Music Group want in—making the big four label families, the big three. EMI has been in a world of debt and it is likely their lenders, Citigroup will takeover. The Terra Firma investors are not interested in pumping more cash into the label (think $270 mil) to keep it afloat; Previously Terra Firma bought EMI in 2007 after the label was hit by a $350 mil loss. Citigroup can take control of EMI by Christmas and they are likely to sell the label—WMG and BMG have expressed interest in splitting up EMI. Wonder who will get Katy Perry, Snoop Dogg and Lily Allen.

In any case, more lay-offs are to be expected and some artists are likely to get dropped from the super label family. Stay tuned.

Elsewhere across the pond the majors (Sony BMG, WMG, Universal and EMI) have been pressuring internet service providers in Ireland to punish illegal downloaders. Reportedly, the labels have been muscling Irish ISP’s to suspend users caught downloading pirated content. Provider, Eircom has agreed to enforce a “four strikes” deal if the labels agree to go after other providers in the country.

The first two strikes are letters detailing the ills of illegal downloading, the third a one week suspension and the fourth a one year account suspension. DSL Reports brings up an interesting point, if illegal downloaders tend to be the biggest buyers of content then won’t kicking them off the web mean losing valuable customers?

Also, is this fair to ISPs? When the RIAA approached Google about a similar agreement, Google offered a service where search queries containing pirated music would be handed over to them, at a cost. Google would charge $5 per one thousand queries to recoup the cost of searching. That means 1 billion piracy queries would cost a cool $5 mil and that’s just for queries. The RIAA would have to then determine a course of action for taking the individual links down. I searched “Kanye West All of the Lights .mp3” and Google uncovered 616 mil results, that alone would add over $3 mil to an invoice.

For the record, I had the Kanye West leak and later pre-ordered the album. I also got a listen of another (Read: several) album leak and passed on the purchase. Something to think about.