MMW-02 -- German Copyright Issues Plague Ringtone Providers

J@pan Inc Magazine Presents:
Commentary on the week's music technology news

Issue No. 2
Tuesday, January 22, 2002
Dusseldorf, Germany


++ Feature: German Copyright Issues Plague Ringtone Providers
++ Noteworthy News
- KaZaA Suspends Downloads
- Toshiba Announces New Wireless Headset
- Oki Markets new PCM Sound Chip For Cellphones

++ FEATURE: German Copyright Issues Plague Ringtone Providers

This week, several ringtone providers are once again gathered at the
offices of E-Plus in Dusseldorf, Germany, for a second round of
testing on their sites. E-Plus is the German subsidiary of KPN Mobile
and is scheduled to officially launch its i-mode service this March.
As ringtone providers here perform extensive testing on their sites,
some are finding that in addition to technical barriers, there are
also several legal issues to overcome, particularly those related to
copyright infringement.

Whereas Japan has had several years now to formulate a general policy
regarding copyrights and ringtones, Europe is still in the very early
stages of handling this problem, and there are many gray areas
regarding copyright ownership. In Japan, all issues related to music
licensing are handled by JASRAC. At present, JASRAC receives 4.5 yen
for each individual download of every ringtone. Considering how many
millions of ringtones are downloaded each day, it is not surprising
that JASRAC is boasting a 2000 revenue figure of 106 billion yen on
its Web site. While this is undoubtedly a good deal for JASRAC, it is
also popular among the ringtone providers, who would otherwise have
to negotiate with each individual publisher. The current arrangement
is convenient for providers because they can offer any song by any
artist and let JASRAC worry about placating the publishers.

In Germany, the music licensing body is GEMA, and most Japanese
ringtone providers initially anticipated that they would be dealing
directly with GEMA, as their local counterparts are currently doing.
Service proposals were presented to DoCoMo on the assumption that
copyright licenses for the ringtones would be obtained well before
the service was ready to launch.

In the meantime, GEMA made the decision to have Japanese providers go
through JASRAC, who would then kick back a license fee to GEMA. As
the date of the service launch draws nearer (currently March 1 for
Germany), the details of the agreement between GEMA and JASRAC have
not been finalized, meaning that Japanese ringtone providers have no
way of proving that their copyrighted content is properly licensed.
Accordingly, they will be forced to launch their services with only
copyright-free content. This, however, creates a problem in the final
approval process with DoCoMo, as it represents a significant change
in plans from the content the providers initially listed on their

For the time being, it appears that DoCoMo is willing to overlook the
change in content, provided that licenses for the originally planned
content are obtained as soon as possible. Of course, the providers
are also anxious to obtain these licenses, as it is difficult to run
a competitive ringtone download service with only copyright-free
content, and competition is stiff for the all-important menu
positions (see last week's issue). For now, it appears that the only
recourse open to Japanese ringtone providers is to attempt to
negotiate directly with GEMA, while beginning their services with
classical and "sound effect" ringtones.

Like many others in this industry, we'll be watching the March 1
launch with great interest to see how the issue of copyright
ownership unfolds in Germany.

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++ NOTEWORTHY NEWS: KaZaA Suspends Downloads

On January 17, Dutch P2P software maker KaZaA suspended download
service of its popular P2P client program. The company was ordered by
the Amsterdam district court to shut down pending its Jan. 31 ruling
on a lawsuit filed by Dutch music licensing body Buma/Stemra. KaZaA
has over 27 million users, and had defied the shutdown order for
three weeks prior to suspending downloads of the program. At
present, KaZaA is also being sued by the Recording Industry
Association of America (RIAA), the Motion Picture Association of
America (MPAA) and the National Music Publishers' Association (NMPA).

++ NOTEWORTHY NEWS: Toshiba Announces New Wireless Headset

Toshiba Corp. has announced that it will begin selling a
Bluetooth-enabled wireless headset with voice recognition capability.
Among other things, the handset can be used for wireless playback of
music files on a laptop or portable audio player. The headset
complies with the Advanced Sound Distribution profile, a
next-generation profile currently under development by a group of
companies including Toshiba, Sony and Philips. The profile is a
specification for wireless transmission of CD-quality audio data, and
incorporates an encoding method developed by Philips. Advanced Sound
Distribution is expected to be approved as an official profile in

++ NOTEWORTHY NEWS: Oki Markets new PCM Sound Chips For Cellphones

Oki Electric Industry Co. released two new mobile phone sound chips
for pulse code modulation (PCM) sounds. The two LSIs, called the
'ML2860' and 'ML2861,' have PCM sound generation sources which are
based on the General MIDI Level 1 tone arrangement specification.
Both chips have a range of 16 tones. The ML2860 plays 24-voice
chords, while the ML2861 can play up to 32 voices simultaneously.
Both chips have ADPCM decoders that can be used to record audio data
for use as ringtones.

SUBSCRIBERS: 87 as of January 22, 2002

Written by Steve Myers (
Edited by J@pan Inc editorial team (

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