AllofMP3 Fights Critics, Loses Visa

[Slimy]

After months of being criticized both in the press and among music industry executives, Russian music service AllofMP3.com shot back Tuesday, saying its business is legitimate. It charged that it has attempted to compensate the record industry, but has been turned down.

AllofMP3's owner Mediaservices pays the Russian Multimedia and Internet Society a 15 percent cut of its sales, it claims. RMIS has attempted to pay the record companies the royalties, but the record companies have refused to take the money.

The record industry maintains that the licensing group has no right to collect or distribute royalties. However, AllofMP3 counters that by paying the group, the site operates within Russian laws. Typically, song downloads cost just pennies per track with full albums retailing for as little as $1 or less.

A slew of record industry organizations including the RIAA and IFPI claim that AllofMP3 is making millions by ripping off artists and consumers, who believe they are purchasing their music legitimately. Authorized services such as Apple's iTunes and Real Rhapsody charge at least 10 times as much for music downloads.

To fight these claims, Mediaservices held a press conference in Washington, D.C. Wednesday to publicly refute claims of piracy. Company Director Vadim Mamotin told reporters through a translator that "nothing could be further from the truth" when its critics call it a bastion for piracy.

Additionally, Mamotin rebuffed claims that his site is preventing Russia's entry into the World Trade Organization, although the U.S. Government has specifically fingered AllofMP3 as one of the reasons to hold up the country's entry into the trade body.

What still remains unclear is AllofMP3's profits or royalty payments. Officials refused to disclose that information at the press conference.

In related news, Visa said Wednesday that it was stripping AllofMP3 of the ability to take Visa credit cards. The company said its move was to comply with recent Russian legislation and international copyright law.

Source

[Slimy]

Update: They're now planning on giving away free music and make money off advertising.

The AllofMP3.com soap opera takes another bizarre twist today with news that the site plans on giving its music away for free and supporting itself through advertising?just as Visa announces its intention to stop processing AllofMP3 payments.

The ad-supported model is exactly the sort of intriguing new initiative that one might announce in one's first-ever press conference, but AllofMP3 said nothing about it. Odd?but the company is still new at this, finally deciding to mount a public defense of its activities after years of attacks from the IFPI and (more recently) the US Trade Representative.

Rory Davenport of Qorvis Communications, who is now handling public relations for AllofMP3, tells Ars that the site's operators have been considering the ad idea for several weeks. The plan would be to offer two services: the current model in which people pay for access to non-DRMed songs, and a second model, where the songs would be free, but would come with DRM that would force consumers to view advertising. All of this would happen within a proprietary player, so burning to CD or syncing to a digital music player are both out of the question.

That plan looked a lot more important yesterday after the International Herald Tribune reported that Visa had finally pulled the plug on AllofMP3 and would not process any more payments from the site. Davenport was unable to confirm to Ars that this had in fact happened.

If true, it could be a death blow to the site. While the ad-supported model might attract some users, most are unlikely to be swayed by DRMed music that can't be moved to an iPod.

The timing of the move was interesting; AllofMP3 has been in business for years, but only had their credit card processing revoked the day that they held their first press conference. Neither Visa nor the IFPI responded to our inquiries by press time, but one certainly wonders whether the IFPI, with no luck petitioning the Russian government, finally found another way to create problems for AllofMP3.

The site still claims to accept credit cards, but we'll see how long this message lasts.

Source

[LOC Veteran]

If you want to use a Visa to buy through them, simply use the pre-paid iCard Click & Buy thing. :D

This is a smart move by allofmp3, though I'm not sure people will appreciate the DRM now. Then again, I don't mind one bit, DRM or not.

[ZEROarmy]

I don't like DRM, but I'll still be a fan of allofmp3.com

They are the only music sales place that is smart enough to offer many different encoding options, and one's much higher quality than the usual junk by the big name providers. No everyone has crappy headphones/speakers and can't hear how bad their 128KB AAC crap is.

[Toology]

It may be free music but DRM still makes me sick to my stomach.

[Shof]

With all the DRM, they are tons of ways to get around it

[0sit0]

they are intelligent. why charge so much for crappy CDs anyway.

[Toology]

You can get around DRM but there are few ways in which doing so doesn't lead to loss of audio quality. Even if you download high bitrate DRM'ed music, burn it to a CD, and then rip it you will lose the DRM but also lose additional fidelity. You would have to rip the CD or transcode the music to .flac (or another lossless codec) just to preserve the already lossy quality of the original music. It's a pain in the ass.

[gaurav]

I'm just waiting till it goes free! :woot:

[zeroday]

Anyone know when they'll give it for free?

[LOC Veteran]

Uh, give what for free? The music is already free.

[chrisgeleven]

I never understood why anyone trusted an illegal Russian web site who is run by who knows who with their credit card information anyways.

People are so stupid it is unbelievable.

[bennett]

LOL, they are doing it for free now. Pretty lame about the DRM bit tho :(

I wonder if the RIAA are going to hack into the place and get there IP's of the server hosting the files and try and take it down. I reckon they would do that haha

Edited October 20, 2006 by bennett

[Carlos11]

I never understood why anyone trusted an illegal Russian web site who is run by who knows who with their credit card information anyways.

People are so stupid it is unbelievable.

This topic is not about people who lost something in a Russian site.

It seems that your statement is just a preconceived opinion.

Maybe you have access to all music with a fair price.

If I want something different I have to spend about U$60 to U$80 per CD. Is it fair?

The music industry doesn't care about it.

I also have lots of vinyl. Did the music industry offer a digital version? No, same songs but I had to buy them again.

All the "legal" download sites exist due the "illegal" sites and p2p. They forced the music industry to rethink the way they sell music.

The "illegal" factor is the success key to your 2G iPod nano (Black) - 8GB! ;)

[coth]

Chrisgeleven, here we go again. The site is not illegal. It is operate legally and own all rights on its content, via related rights (like on radio stations). The thing is forbidden in USA, but legal and considered natural in many countries. And Russia has clearly noted that it will not be forbidden, because it will be unnatural. Everyone trust it simply because it's largest music provider in the world.

As of USA.

1. They just mad, because they have lost Russian market.

2. They are mad because allofmp3 and other Russian internet music markets applies prices to local purchasing power. $15 in USA = $5 in developed subjects of Russia = $0.5 in rural subjects Russia.

[DeusProto]

I never understood why anyone trusted an illegal Russian web site who is run by who knows who with their credit card information anyways.

People are so stupid it is unbelievable.

Allofmp3 is a Russian entity and has been upheld by the Russian courts as being legal.

America's DMCA law does NOT apply to the whole world. Nor does America's other absurd copyright provisions.

[leesmithg]

I thought I would try it out, you listen to a couple of tracks, if I find something I like 99% of the time I nip over to amazon and buy the album anyway.

As for the Rusky's pirating your cc details thats a bit underhanded as you can always do a charge back and tell the bank why if allofmp3 would do that.