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[12 May 2003]
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"RIAA SUES STUDENT FOR $98 BILLION - CLEAR CHANNEL ANNOUNCES END OF LEGAL PAYOLA AFTER IT ACQUIRES DOMINANT OWNERSHIP OF RADIO STATIONS - APPLE iPOD & UMG IN BED?"

[Nashville, TN - USA]

Trowbridge NEWS BRIEF 05/05/03 Nashville TN

I. "RIAA SHENANIGANS CONTINUE"
II. "APPLE TO BUY OUT UNIVERSAL?"
III. "CLEAR CHANNEL RADIO REMOVES LEGAL PAYOLA"

I. "RIAA SHENANIGANS CONTINUE"
In an unbelievable move, the Recording Industry Association of America (RIAA) served a Michigan Tech student with a $98 Billion lawsuit for running a search engine called FlatLan. The search engine does not provide downloading like Napster did; it only helps users search for downloadable music files.

Three other students from RPI and Princeton were served as well. RIAA seeks to make examples of these individuals, hoping to curb the sharing of digitized music using the internet.

Michigan Tech President Curtis Tompkins called the suit(s) "entrapment and an ambush in terms of how they treated Joe [Nievelt]." Nievelt interned at Microsoft, won a prestigious MIT software coding contest, and, according to the college president, "has an incredibly bright future."

Subsequent to decisions favoring RIAA and Motion Picture Association of America (MPAA) a few years ago, California Judge Marilyn Patel reversed her opinions, accusing RIAA and MPAA of largescale unpleasant tactics to seize control of digital music.

II. "APPLE TO BUYOUT UNIVERSAL?"
Apple is launching its own online service for delivering music downloads and burns using the Apple iPod player. Apple signed a deal with the five major labels for the delivery system.

Previous delivery systems such as PressPlay, MusicNet, and Rhapsody, have cumbersome interfaces and are doing poorly in the market. (SEE "Napster Appeals Court Decision - What People Are Missing" http://TrowbridgePlanetEarth.com/T2/news/NapsterRights.html Quote: "People will not pay for what they can get free.") The iPod purportedly has a smooth easy-to-use purchase interface.

Drawbacks: The iPod is only available on Macs, barely 5% of the PC market. iPod limits the number of burns you get for each 99¢

The LA Times reports Apple is in negotiations to buyout the $6B Universal Music Group (UMG) giant. Steve Jobs' (Apple) objectives coincide with multimedia. A conjunction of Apple and major labels could signal profound changes in the industry, similar to the AOL Time Warner agglomeration.

III. "CLEAR CHANNEL RADIO REMOVES LEGAL PAYOLA"
What is Payola? It was the system of record companies paying radio stations and DJs to play their songs. It was outlawed decades ago, and quickly replaced by legal payola, the "indie" system.

Indies, or independent agents, are paid by record labels to get the labels' songs played on radio. Guess where the money goes? Right, to the radio stations, just like with the old, illegal payola.

The indie system of legal payola has been in effect for four decades. Now, in a pleasant move, Clear Channel Communications announces it will remove all indie promoters in its radio station network.

As usual it's important to LOOK BENEATH THE SURFACE. What's really going on? The real picture is this: The Senate is putting pressure on labels and radio to clean up the legal payola system, and major labels are responding by buying up radio stations across America. They are essentially acquiring every station and forming a virtual monopoly. They don't need legal payola if they own the stations; they merely dictate play lists.

c.05/05/03 McClure & Trowbridge Publishing Ltd
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