TK's MORNING BUZZ: MP3.Com Ruling May Not Affect Home Video Today, But Its Impact Will Be Noticed in Years to Come

7 Sep, 2000 By: Thomas K. Arnold

It was with a keen eye that the video industry watched yesterday's federal court ruling against MP3.com that found the Internet music file-sharing service guilty of copyright infringement and slapped the San Diego-based company with a staggering $250 million penalty.

The ruling cast a pall on the entire practice of downloading copyrighted material via the Web for free, a practice MP3.com and its brethren--Napster and other new-media upstarts--defended on the grounds that "sharing" isn't the same as "selling."

Regardless, U.S. District Judge Jed Rakoff's ruling seemed to say, it's piracy.

Technology hasn't yet progressed to the point where consumers can easily download entire movies. It's going to be awhile before we get there. And yet the ruling against MP3.com, barring any reversal on appeal, is sure to chill the enthusiasm of online entrepreneurs who are already making plans to take Internet file-sharing to the next level.

Video suppliers and retailers can breathe a little easier. Selling downloadable music over the Internet has already proven itself a formidable threat to brick-and-mortar retailers, some of whom, like Albany, N.Y.-based Trans World Entertainment, have shrewdly begun to sell music electronically themselves, both on their Web sites and at in-store kiosks.

But giving it away for free, well, there's simply no way any existing retailer can compete.

Not only that, but the MP3.com way of getting music to consumers hurts everyone else in the recording industry's food chain as well, from the studios, who get no licensing fees, to the performers, who get no royalties.

The landmark federal ruling may not affect home video today, but you can bet your Web browser its impact will be noticed in the years to come.

Comments? Contact TK directly at: TKArnold@aol.com