Allofmp3 vows to continue despite tougher copyright laws

A few weeks ago I proclaimed that Allofmp3.com would give up it's current business model by September 1st. Turns out I was wrong - for now, at least. But things are changing in Russia, at least when it comes to the letter of the law. Russia toughened it's copyright law back in 2004, but a few key amendments were delayed to take effect today.

These amendments deal with the protection of ponorecordings on the internet - an area that was before left unaddressed, allowing Allofmp3.com and similiar sites to use collective licensing provisions similiar to those a radio station would use for music licensing. Now what exactly is changing today, and which effect will this have on music download platforms? Actually, it's pretty complicated - which is why I asked an expert.

Michael Newcity is an Associate Professor at the Center for Slavic, Eurasian, and East European Studies at Duke University, and he is specialized in Russia's copyright law. He explained the changes in detail for me for another article I wrote about the subject. Unfortunately I couldn't quote everything he said in that article, so I decided to share his detailed explanation of the new amendments here:

"2004 AMENDMENTS PARA 3(A): This provision amends Article 16(2) of the 1993 Copyright Law relating to the exclusive rights of the author by including as such a right the right to disseminate the work in a way that any person, regardless of place or time, may have access to it via an interactive method (e.g., the Internet).

2004 AMENDMENTS PARA 8: This provision amends Article 37(2) of the 1993 law, which relates to the exclusive rights of the performer of a work. [I assume you understand the different between the rights of an author of a work (copyright) and the rights of the performer and producer of a performance (neighboring rights).] As of 9/1/06, these rights will include the right of the performer to disseminate recordings of a performance or dramatic production to the public via the Internet (although it is expressed in generic language).

2004 AMENDMENTS PARA 9: This amends Article 38(2) of the 1993 law relating to the exclusive rights of phonogram makers, which will now include the right to dissemination via the Internet.

2004 AMENDMENTS PARA 10: This amends Article 39 of the 1993 law, which relates to the circumstances under which a recording can be used without permission but with the payment of royalty. This amendment provides that this limited fair use does not apply to the dissemination of recordings via the Internet."

Phew. Okay. Now what does all this mean? Basically, it means that from now on copyright holders in Russia can control the use of their works online. When it comes to recorded music these rights are oftentimes held by record companies. So sites like Allofmp3.com would need a license from record companies for every song they offer for download. Which they obviously won't get in many cases, because the music industry didn't really appreciate the way Allofmp3 was doing business during the last six years.

Allofmp3 announced back in June that they were in negotiations with rights holders. The declared goal of these negotioations was "to agree with all rightholders on the prices and royalties amounts by September 1, 2006." I can only guess that didn't go so well. Allofmp3 didn't want to comment on the progress of these negotiations. But their Department of Public Relation and Advertising had some rather candid things to say about some of the rights holders - namely, the record companies:

"It worth mentioning that according to the strategy of developing Allofmp3.com, we will not deal with intermediaries – major record labels – in any form, and will conclude direct agreements with the authors who would thus earn up to 70% in royalties from the sales on Allofmp3.com."

Now of course this strategy is a little confusing, because the composers only hold the rights for the musical works, but not the sound recordings. Those are oftentimes in the hands of those intermediaries that Allofmp3 doesn't want to deal with. In any form. Guess the conflict between the record companies and Allofmp3 isn't gonna end anytime soon.

So what will change for Allofmp3 and it's customers in the weeks and months to come? In their own words:

"Nothing. Allofmp3.com work will continue to be legal, as it has always been. On the 1st of September the amendments to the Russian copyright law will come in force, which enable recording companies to withdraw their records from associations for collective copyright management. Earlier it was only an owner of a copyright who had such a right."

Okay. Nothing is changing. But record companies have the right to withdraw their works from the Allofmp3 catalogue - presumably through the collective rights society ROMS.ru. One could foresee two outcomes of this: Record companies could actually take action and exclude their catalogues from ROMS licensing and thus dry out Allofmp3. No music, no customers. Or they could leave the status quo, continue not to deal with ROMS to not give it any more credibility and sue the hell out of Allofmp3 for using their works.

Now the second step seems to be more logical from a legal point of view, but the first one might actually be quicker. Something is telling me that the decision will be made by lawyers tho. Guess we'll be able to follow the Allofmp3 drama for quite some time to come.