MMW-16 -- MMO Japan to Fight Court Decision

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J@pan Inc Magazine Presents:
M U S I C M E D I A W A T C H
Commentary on the Week's Music Technology News
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Issue No. 16
Wednesday, May 8, 2002
Tokyo

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CONTENTS

++ FEATURE: MMO Japan to Fight Court Decision

++ NOTEWORTHY NEWS:
- Broadband Karaoke Trial Service Starts in April
- New Study Says Music Sales Boosted By File-sharing

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++ FEATURE: MMO Japan to Fight Court Decision

In our feature of February 20, we reported on the court injunction
sought by a group of 19 record companies together with JASRAC that
would force MMO Japan to suspend operation of its popular File
Rogue file-sharing service. This week, we have decided to postpone
the planned feature on Yamaha's MA3 sound chip to provide an update on
the MMO Japan case.

In April, the Tokyo District Court ruled that MMO Japan was indeed in
violation of copyright law and ordered the company to halt operation
of its service. The ruling was unusually quick for a Japanese court,
coming only two months after the companies applied for the injunction,
and interestingly, just a few weeks after a Dutch Court reversed an
earlier ruling against P2P maker KaZaA.

Speaking at the recent P2P conference held in Tokyo last month,
Michihito Matsuda, president of MMO Japan, said that he would fight
the Tokyo Court ruling, resolving never to give up until his company
wins a reversal. The company has also posted a notice on its web site
saying that it has "temporarily suspended as of April 16."

Matsuda went on to say that MMO Japan is preparing to implement
systems for copyright management and fee-collecting, and is confident
he can convince the courts that the copyrights of the files will be
protected. He says he understands that the record companies are just
trying to protect their interests, but nonetheless insists that "the
Internet industry should assert its commercial rights more
aggressively against other industries."

As we pointed out in our February feature, the odds of escaping the
initial suspension of service order from the court were very much
against MMO Japan. Not only does JASRAC wield considerable financial
and legal clout, but Japanese courts often take their cues from the
West on issues relating to new industries and technologies. Prior to
April, all of the foreign court rulings had gone against the providers
of file exchange services.

Considering the recent turn of events with KaZaA and the Dutch courts,
however, the chances of MMO Japan winning a reversal -- while still a
longshot -- are at least a little better than before. In the US,
where a group of P2P providers including Streamcast Networks are being
sued by the RIAA, a California judge has set an October 2002 jury
trial date. No doubt the outcome of this case will also have a heavy
impact on the battle between MMO Japan and the record companies.

While this will certainly be an issue to watch, it should be even more
interesting to see how the Japanese record companies deal with the
next generation of Japanese file-sharing software which springing up
in MMO's wake. There are already Japanese patches for BearShare and
MacTella, and many new services are likely to appear in the coming
months. As was the case with Napster, it's a pretty safe bet the
publicity from the MMO court battle will open a lot of enthusiastic
eyes in Japan to other options for sharing music files.

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++ NOTEWORTHY NEWS
(Long URLs may break across two lines, so copy to your browser.)

** Broadband Karaoke Trial Service Starts in April

KDDI has teamed with karaoke gianta Daiichikosho and
Fandango Inc. to jointly produce karaoke content and distribute it
through optical fiber. Called FTTH (Fiber-to-the-home) Trial
Service, the content delivery system will begin with a total of
twelve song titles. If all goes well with the trial service, the
companies say that full operation could begin at the earliest by April
2003.

Source:
http://www.nikkeibp.asiabiztech.com/wcs/leaf?CID=onair/asabt/news/182551

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** New Study Says Music Sales Boosted By File-sharing

A study released last week by Jupiter Research reports that more than
a third of people who regularly use file-sharing services are spending
more money on music than they did before they started using the
services. The report is based on a survey of 3,319 people which was
conducted last summer. "It is safe to say that active usage of online
music content is one of the best predictors of increased consumer
purchasing," writes Aram Sinnreich in the report.
The study goes on to note that the average drop in individual music
spending was greater than the average increase in spending, which
could explain the record industry's claim of an overall decrease in
sales.

Source: http://news.com.com/2100-1023-898813.html

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SUBSCRIBERS: 744 as of May 8, 2002

STAFF Written by Steve Myers (steve.myers@l8tech.com)
Steve Myers heads the Theta Group at Layer-8 Technologies, which
specializes in the development of music-related software
applications.

Edited by J@pan Inc editors (editors@japaninc.com)

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