MUSIC DOWNLOADERS NOT REQUIRED TO PAY PERFORMANCE ROYALTIES.

AOL and other online services are not required to pay performance royalties on music downloaded over the Internet, according to a New York federal court. The court held that downloading a song is not a public performance of the song under copyright law.

Both parties had asked for partial summary judgment on the question of whether Internet downloads of music constitutes “performance” of music under the Copyright Act.

U.S. District Judge William C. Conner, found that a download involves copying a file from one computer to another. The file is stored on a recipient’s hard drive and can be copied to other devices such as digital music players.
Downloading, is a reproduction of a copyrighted work, but it is not a public performance right, Judge Conner said. The judge cited statements from the U.S. Copyright Office and the U.S. Department of Commerce, which have taken the position that digital downloads of music are not public performances of those works.

On the other hand, “streaming” is when a song is transmitted over the Internet to be listened to in real time. The file is not stored on the recipient's computer and must be “streamed” again each time the recipient wants to listen to it. The court acknowledged that streaming music is a public performance. United States v. American Society of Composers, Authors & Publishers et al., No. 41-1395, 2007 WL 1346568 (S.D.N.Y. Apr. 25, 2007).

THE FUTURE IS MOBILE

I recently attended the NATPE Mobile ++ conference in Las Vegas to find out how the ability to watch content on mobile devices will change the motion picture and television industry. I learned that there are now more mobile phones in the U.S.A. than people - guess some of us use more than one, and perhaps have a few older models sitting in a drawer. However, only 10 percent of those mobile phones have the capability to exhibit video footage. And only 10 percent of those capable are actually using their phones and mobile devices to watch such content.

Experts predict that the viewers of content on mobile devices are likely to grow exponentially. In the first quarter of 2006, the revenue from mobile video was $51 million; by the third quarter it had risen to $140 million, and mobile video is now a-half-billion-dollar-a-year market. The world has 2.5 billion cell phone subscribers, yet most don't have phones with the new third generation (3-G) technology.

Meanwhile, a new generation of devices is generating enthusiasm among consumers and competition among manufacturers. Samsung Electronics Co. has a new mobile phone, the Ultra Smart F700, which has many of the same features as the new Apple iPhone. The Samsung phone can access the Internet, play music, take pictures, show videos, handle e-mail and share photos. Its third-generation (3G) technology is faster than iPhone's EDGE system, and its 5-megapixel camera has better resolution than the iPhone's 2-megapixels.

Primetime viewing for mobile video is in the afternoon and early evening. According to consumer research firm Telephia, 30 percent of mobile video users watch mobile TV and video clips on their cell phones between noon and 4 pm, and 31 percent watch during the early evening commuting hours of 4 pm to 8 pm. Mobile video viewing drops to nine percent during the regular television primetime hours of 8 pm to 11 pm.

Contrary to popular belief, mobile video usage is being consumed by older age groups, as well as teens. 50 percent of mobile video users are 25-to-36-year-olds, compared to 24 percent of the total mobile population. In terms of gender, mobile video usage does resemble an early adoption profile, where 7 out of 10 users are men, compared to a nearly even male/female ratio for all mobile subscribers. Mobile video user demographics show an ethnically diverse population, with 16 percent of mobile video users being African-American and 27 percent Hispanic, compared to 11 percent for each group for general mobile subscribers. No one has explained why mobile video is so popular with these demographic groups. Surprisingly, 22 percent of mobile video watching is at home, the same amount as during commuting; 16 percent of mobile viewing is done while shopping, and 14 percent happens at work.

Mobile viewing is a personal experience, not often shared with others. News, weather and sports are currently the most watched content. ABC News was the most popular mobile TV channel in the second quarter of 2006, commanding 40 percent of the total mobile TV audience. Thirty-two percent watched The Weather Channel, while Fox Sports and ESPN followed with 31 and 29 percent, respectively.

With the spread of new high-speed 3G networks, distribution of porn is expected to surge. In 2006, adult mobile content generated about $1.4 billion in sales worldwide in a market where mobile entertainment overall generated about $17 billion, according to Juniper Research. While adult mobile content generated far less revenue than other types of entertainment such as the $6.6 billion revenue from music, it will likely grow rapidly over the next several years. By 2011, adult content is expected to account for $3.3 billion worth of mobile content sales out of a total of $77 billion in entertainment revenue. None of the large U.S. wireless carriers offer adult content programming, and there is concern about how to verify subscribers' ages. In Europe and in parts of Asia, carrying porn hasn't been a major issue with even the largest carriers such as Vodafone, Orange and T-Mobile.

The Sundance Institute recently embraced mobile content by joining with the GSM Association (GSMA), to create the Global Short Film Project, a pilot program to showcase independent short films to mobile users worldwide. Six filmmakers who have had films at Sundance received $20,000 each to create short films of three to five minutes for mobile distribution. "Cell phones are fast becoming the 'fourth screen' medium, after television, cinema and computers," according to Sundance Institute founder Robert Redford.

MobiTV, Inc. (http://www.mobitv.com/) is one of the largest content providers with more than one million subscribers. The service is available in the US through Sprint, AT&T, Cingular, Alltel; in the UK through 3UK and Orange; in Canada through Bell Canada, Rogers and TELUS Mobility; in Latin America through América Móvil, Claro and Telcel; and other regional carriers internationally. The service offers many popular TV channels such as MSNBC, ABC News Now, CNN, FOX News Channel, Fox Sports, ESPN 3GTV, NBC Mobile, CNBC, CSPAN, The Discovery Channel, TLC, and The Weather Channel.

Subscribers need to sign up for data packages on top of their monthly voice fees in order to access video clips. Sprint Nextel offers packages for $15, $20 and $25 a month. Verizon Wireless V Cast service costs $15 per month. It is not clear how many consumers are willing to pay $9.99 or more per month for such a subscription, or whether an ad-supported free service is more likely to gain wide acceptance.

The ability to distribute independent films over mobile devices may enable filmmakers to reach consumers by bypassing the established networks and studio gatekeepers that have traditionally been uninterested in niche content and short films. It is by no means clear how the market will develop, and what opportunities will be available for independent filmmakers. But it is worth noting that seven billion dollars was spent last year on ring tones, and a hundred million user generated videos are viewed daily on YouTube.

CANNES FILMMAKERS

Congratulations to our clients Writer/Director Cecilia Miniucchi and Executive Producer Antoni Stutz who feature film "Expired" will be shown as part of the Cannes Film Festival. It will be the closing film in Critics Week. Expired was the only U.S. picture to make it into Critics Week from over 600 features reviewed. The film which was first shown at Sundance. It is a bittersweet comedy starring Samantha Morton and Jason Patric.

DIAMOND DOG COMMENCES PRODUCTION

I am executive producer of a new family film that commenced principal photography this past week in Spokane, Washington. It is a family comedy feature Diamond Dog, being directed and produced by Emmy-winning and DGA Award-nominated Mark Stouffer.

The film stars French Stewart (Clockstoppers) as the boss of a bumbling band of jewel thieves, with Kevin Farley (The Waterboy) and Kelly Perine (One on One) as his sidekick thugs.

The thieves have pulled off a $5 million jewel heist and are in town to make their connection, when a 12 year old boy - played by Luke Benward (How To Eat Fried Worms) -- rescues a dog from them after they threaten it. Unbeknownst to the boy, the dog is the mule they used to smuggle the jewels, and the thieves will do anything to get it back. The boy takes the dog, which he names Diamond, to his secret fort in the woods and prepares for battle. When the thieves come after him, the ingenious traps he's devised wreak havoc.

The film also features John Farley, Garrett Morris, Brittany Curran, Cameron Monaghan and Denyse Tontz.