Why Cdigix’s Music Service is Closing & Record Numbers of DMCA Notices

In a letter entitled “On Cdigix and Digital Media on Campus,”Cdigix. Inc. CEO Larry Jacobson explains why his company is ceasing their online entertainment service. Among other themes they hear from their customers are (a) “Legal music services on campus are not core to our school’s mission” and (b) “Our legal music service is getting only moderate interest from students.” These mirror some findings from last year’s ResNet Applied Research Group’s multi-institutional survey; they certainly mirror my own experiences and discussions with many higher education administrators.

One issue not addressed by Jacobson is the timing of this change. As noted by the Chronicle, “some colleges may be left explaining to their students why they will suddenly be denied free music” in the middle of the academic semester. One issue clearly addressed by Jacobson, however, is that “the record labels and digital music retailers have failed to create a business structure that can satisfy market demands and one that has seen little change since…2004.” And that is a great segue into our next topic…

The Associated Press reports an update on the RIAA’s relentless campaign to issue DMCA takedown notices to college and university students allegedly infringing their copyrights. As noted by the AP, “the music industry is sending thousands more copyright complaints to universities this school year than last. In some cases, students are targeted for allegedly sharing a single mp3 file online.” At many institutions, the number of DMCA notices has significantly increased during the 2006-2007 academic year. The RIAA made available to the AP a list of the top 25 institutions to which it has sent DMCA takedown notices (the Chronicle’s list is well-formatted and easier to read). Remember, though, that DMCA do not measure copyright infringement.

I’m not real sure where all of this leaves us. With Cdigix gone, Ruckus is effectively in command of this market. I have also been told that federal legislators are still interested in this issue (with Berman in charge of the House subcommittee most interested in this issue, I’m sure it will continue to be an issue). Further, I have been told that some of those intimately involved with the Joint Committee of the Higher Education and Entertainment Communities are very displeased with the committee and its direction. Others will erroneously cite the evidence discussed above (record DMCA takedown notices to colleges and universities) as evidence of a continued rise in copyright infringement.

It’s a bit of a mess and I don’t know how it will shake out.