AllofMP3 Exec Cleared of Charges

By Ed Oswald | Published August 15, 2007, 12:30 PM

The former head of Mediaservices has been cleared of any wrongdoing surrounding AllofMP3 after a Russian court threw out charges against him.

EMI, Universal, and Warner Music Group had sued former Mediaservices chief executive Denis Kvasov for $587,000 USD. However, a Russian District Court judge said that he could not be sued under current laws because of a change in the rules.

Kvasov left Mediaservices in December 2005, while a loophole still existed that allowed the online distribution of music. That hole wasn't closed until September 2006, long after he left. Russian representatives for the music industry were still unsatisfied with the ruling.

IFPI representative Igor Pozhitkov told the Associated Press that the court ignored the fact that prosecutors also accused Kvasov of reproducing the music which, regardless of the loophole, was still illegal at the time he was at the company.

Even with Kvasov escaping charges for his involvement, the record industry is still pursuing charges against others within Mediaservices, including current chief Vadim Mamotin.

Comments

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yay!

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smith288,
the site was taken down not because it was illigal in russia but because of international pressure mounting. Russia seen it has nothing to gain from keeping the site and created a quick show to appease those insisting. does it mean they suddenly think it was wrong? Nope.

Now, that the site is down, what else do you want? for country to adopt your way of thinking? don't you think this is to arrogant of a demand? there are differences in opinion and approaches and you will HAVE to respect that.

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copyright laws are international. arrogance is a problem but so is ignorance. Do you work for free?

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copyright laws are international.

ignorance is definately a problem.

Copyright exist internationally, generally dictated by membership to the WTO. As Russia is not a member of the WTO (yet..) their copyright laws are their own, and they are under no obligation to kow-tow to some moonbats asinine idea that art is a commercial comoddity to be treated with the same laws and restrictions as a car, home, or other "private" property.

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Respect Russia????????????
Are you kidding?????????

Go ask any non-former-KGB in any former USSR nation what they think of Russians.

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That's 'cause they have no art to protect.... let them apply the same philosophy to their oil... or let their arts suddenly flourish & watch how quickly they change their tune.

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not like the site is actually offline. better new name minus the other two

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Russians have no art. now that is one of the most funniest comments i read here for some time now.
brilliant.

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respect Russia?
hmmm... lets see, huge country full of bears, sitting on a s***load of oil and a pile of zoowie-woowie weapons to protect that oil from taking.
yep, feel free to disregard.

BTW, why so many question marks? key stuck?

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You seem to know very little about Russia.

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That's 'cause they have no art to protect.

Wow.

No art in Russia....

That's got to be about the most misinformed statement I've ever seen here, barring trolls.

But for argument's sake, lets take a look your Oil example. Since it's not IP, and not already artificially protected by copyright, it pretty much already falls under the free-market category. A seller of crude can charge any price they want...even $0.01. Of course they won't, that would be stupid. They actually want to make some money, right? By that same logic, selling a track everyone else is selling for $0.40, for $0.01 would be *just* as stupid.

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I think he meant they can't do "Rock and Roll", but I ain't sure.

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disregard and respect are two different words................................

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Someone gets it.... LOL

What does Russia export/sell on a worldwide scale? And no, centuries-old music / art does not count.

Russian population is a huge importer/buyer of all multimedia foreign... in various languages: Spanish soaps are huge over there.

So what incentive does their government have for protecting copyrights IF very little Russian fare has worldwide appeal... on the other hand, why not keep their restless & impoverished populace occupied with cheap vodka & cheap foreign music and movies???

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I've been there & as well have many Russian friends and coworkers.

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We're in agreement re the selling part.

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Ah, but can you respect something you disregard, or have proper regard for something you disrespect?

Meditate on this Ed Gruberman and you will become one with Tai-Kwon Leap...

(If you missed the reference, don't worry, it's pretty left-field, if you catch it, +10 points)

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What you are describing (everyone would sell at $0.40) is called cartel, which is quite the opposite of a free market and competition. In a free market sellers compete with each other, among other things they compete on price, and this tends to drive price to a level just above the cost (i.e. in a free market with healthy competition there would be sellers operating on a very slim margin). And when your costs are ZERO, guess what's your price just above the cost is going to be?

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Boot to the head!

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Na-naaa....

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My bad. I missed the "~". That was "around" $0.40. Ya know, median pricing.

As for costs being ZERO, you've never run a high-availability internet server, have you?

Databases, web (obviously), transaction, connection to the CC companies so you can support credit transactions (These are *not* cheap), etc...

The cost of hosting a high-availability retail outlet is enormous. Frankly, I am surprised Mediaservices wasn't charging more. The upkeep on those servers must have been huge.

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> As for costs being ZERO, you've never run a
> high-availability internet server, have you?

Coincidently I did. Lots of them. Price per transaction is very close to zero.

You are continuously trying to apply logic of "physical" retail where there are expenses associated with every "item" to the world of digital copying where making another item from existing one is virtually free (copying a file).

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Okay:

Here's the test.

Put together a datacenter running high-availability database, web, and commerce servers. Add in enough bandwidth to support thousands of simultaneous users at decent speeds. Throw in a decently trained server support staff, perhaps some folks to handle user support (billing questions, account issues, the always popular "how do I use yer sight" users), Building/office space, marketing, and of course, CDs for every album you're going to offer (although, you can skimp on quality and just re-encode from someone else...expect to lose users though).

Now add all that up and give me a yearly operating budget.

Per your complaints (which *are to some degree valid), change the copyright laws in such a way that a business selling IP must operate *solely* on income from the content they are selling. No ad supported BS, no ability to operate at a loss (funding the business from other ventures), etc. This would include hardware costs, content costs, bandwidth, the whole business unit.

Now tell me anyone would be able to take anything but a negligible portion of the market for any any sustainable time, and *won't* be doing it for profit.

Free? Hardly.

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I hate the the term "Corporate America" like its a big bad conglomerate of evilness. Corporate America is the same folks who donate billions to good causes all around the world each day.

Corporate America gives you this website and the technology behind it.

Corporate America gives you many of the products you enjoy today yet you nancies complain that several of these corporations may or may not be fairly trying to protect their copyrighted materials and "Corporate America" is trying to run the world.

Here is an idea...shut the f&%$ up. I dont like RIAA but I also dont like clueless moonbats throwing around isnults all over the place because of their distrust in capitalism or America when a corporation tries to protect themselves right or wrongly.

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Here here!

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Yeah... they almost got their wish when Communism almost prevailed.

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I would love to see you put music out, have allofmp3 put it on their site with NO permission or distribution to their country and continue to complain about "corporate america"

I could care less about the big 4 but when little labels that are run in someone's basement are getting their material on there with no permission whatsoever, there is something indeed wrong here.

I should also add that the artist that puts out his own music on his own label and releases maybe a pressing of 200 and it still ends up on their site, something is wrong.

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Corporate America at it again. Thinking they own the world and get to police every country in it. This is Russia, and they should have already learned that political pressure doesn't always get results. We all remember The Pirate Bay fiasco and the public backlash surrounding it.

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It really doesn't have anything to do with Corporate America. There are such things as international copyright laws that insure that the copyright holder of anything (in this case music) is entitled to compensation for their product.

If Russia abides by those laws, then what AllofMP3 was doing was violating that and they should be held responsible.

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There are such things as international copyright laws that insure that the copyright holder of anything (in this case music) is entitled to compensation for their product.

And nothing but the RIAA is stopping artists from collecting royalties from the sales on AllofMP3.

AoMP3 gave ROMS the cut, ROMS took the cut, tried to give it to the RIAA, the RIAA refused.

Under the current laws at the time in question, all of the above was perfectly legal except the RIAA's actions. Had I been an artist under contract in the US at that time with music selling on AoMP3, I would have sued the labels for denying me that cut.

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you cant just steal somebody's stuff and justify it by saying "hey, we tried to give you a cut of the money we made of the stolen stuff. Your loss...". Thats basically an anarchy. And anarchy is a form of govt twits love.

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According to Russian copyright law, it was never stolen. Take a look at the copyright laws in Russia sometime. It's actually a *hell* of a lot better than what we've got in our more "civilized" countries.

Under Russian copyright, once material is released, it comes under the control of the retailers and consumers. Retailers set the prices, based on the the consumers are willing to pay. This way, ROMS (or in the US, the RIAA) cannot artificially try and maintain pricing or outdated business models, much less ever hope to market a product containing DRM.

It's not anarchy. It's simply a sane approach to copyright, which, as tankist has pointed out elsewhere, was never intended artificially turn art into a commodity product.

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ROMS sounds like it was left over from former soviet union as it sounds like a communist ideal. (I could be wrong but thats how I am interpretting it)

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Heh...
Which, in your opinion, is better?

The market determining pricing and quality...

Or the Elite (Special Interest Groups and MegaCorps)?

How does either sound like a communist ideal? Under communism, there'd be no art. People would be too busy waiting in the bread lines. ;)

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I remember a post by you on another story relating to this.

You yourself said that the problem is that ROMS tried to decide how much the RIAA should get for sales, and it doesn't work that way.

I can't just take a PT Cruiser, and give the dealer whatever I consider a "fair" price in return. I have to buy it for whatever price he is selling it for.

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Heh...That was a while ago.

You imply the consumer decides the price. That's not what I said. The market does. Our current copyright laws allow the labels to artificially raise prices and impose restrictions that *cannot* exist in a free market in order to protect their outdated business model and pricing.

By forcing the labels to conform to the market to survive instead of perverting it to conform to their model, we'll have more choice and less restrictions while the artists will find it much easier to distribute their work.

It's a change in my position from a year ago, but not a huge one. "Pirating" music is still not the solution. Fixing our copyright laws is.

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That is definitely something I can agree with.

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Your newfound belief in market determining viability of business models (instead of corporations buying laws to protect specific models) is very refreshing, but I am afraid Russian "model" is inconsistent with your current much improved but still erroneous position. Because under Russian model, anyone can sell music for whatever price he wants, as long as he pays appropriate percentage to "owners". Which means that someone can sell entire albums for 1 cent or less, and that would be legal as long as he pays required percentage. And that effectively means that anyone can distribute music for free. Which is fine with me, as you know, but it does contradict even your latest much improved position, unless you already changed your mind on that issue also.

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Because under Russian model, anyone can sell music for whatever price he wants, as long as he pays appropriate percentage to "owners". Which means that someone can sell entire albums for 1 cent or less, and that would be legal as long as he pays required percentage

If that's what the music is worth to folks...

Seriously. Think about it for a second.

First, no retailer is going to charge less than the going rate, at the very least, not *much* less. Retailers, just like giant corporations, are in this to *gasp* make money. If they can sell thousands of tracks for $0.40 each, or thousands of tracks for $.0.01 each, which do you think will make them the most money?

Second, if one is found to be undermining the market with ridiculously lower prices, take way the retailers license. Stop him or her from being able to sell *anything*.

Still a much better solution than what we are currently faced with here in the US.

Sorry I ignored your barbs this time. Haven't had my coffee yet. I'll trade implied insults with you later, if that's OK...

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> First, no retailer is going to charge less than the going rate,
> at the very least, not *much* less.
> Retailers, just like giant corporations,
> are in this to *gasp* make money.

So you want different laws for those who "are in this to make money"? Because as it is today Russian law allows anyone to sell music for whatever price he wants. Take this tankist guy, for example. Someone like him may do it for the love of art. Or take me as another example. Someone like me may do it just to prove a point in a forum's discussion. All it takes is one guy and then everyone can get music virtually free. And since expenses are negligible (digital copying is virtually free as opposed to physical copying) it is indeed very easy thing to do.

> Second, if one is found to be undermining the
> market with ridiculously lower prices,
> take way the retailers license.

And who will determine which prices are "ridiculously low" in a business with virtually zero expenses per "sale"? One can actually make some money distributing full albums for one cent or less.

All this boils down to the fact that current Russian law effectively allows anyone to distribute music for free. Which, again, is fine with me, but does seem to contradict your previously stated position.

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And who will determine which prices are "ridiculously low"

The market. (The retailers, and the consumers)

It's really not as hard to follow as you are apparently trying to make it.

You say under current laws in Russia (actually, under '05 laws), anyone can sell it at whatever price they want. For the most part, this is true... and *yet* AllofMP3, and *many* other Russian based online retailers were selling these tracks at decent market prices, and *still* raking in the dough. Sure, AllofMP3 *could* have sold them at $0.01 per track, but that would probably not have even come close to covering their costs.

Do you think it's just coincidence?

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EDIT
> > > Second, if one is found to be undermining the
> > > market with ridiculously lower prices,
> > > take way the retailers license.
> > And who will determine which prices are "ridiculously low"
> The market. (The retailers, and the consumers)

So "the market" will then "take away the retailers license"?

The bottom line is that it is legal to do so. Are you saying you are fine with the law allowing anyone to distribute music virtually for free because you don't think anyone will actually do it? Should I point you to p2p networks for a counter example? Even while it is illegal, people do it in huge numbers. Are you saying they will stop if it were to become legal?

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Are you saying they will stop if it were to become legal?

Nope. But it doesn't matter. People will always "steal". This has nothing to do with that.

Do I believe that given a legal opportunity to obtain the content they desire for other than ridiculous prices and without the asinine restrictions?

Yeppers.

I also don't believe p2p networks are as huge a problem as some (RIAA?) would have us believe. They're still breaking the bank on sales. Imagine what they could do without the DRM and with sane pricing?

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> Nope. But it doesn't matter. People will always "steal".
> This has nothing to do with that.

What you call "stealing" is only a trivial step away from complying with Russian laws. Authors of p2p software could easily set up "one cent per 1000 songs" pricing, pay required percentage to "owner" and be 100% legal under Russian law. They don't do this only because they don't care about being legal and they don't think what they are doing is stealing.

But if similar laws were enacted in US, no doubt someone would do just that. And then everyone would be getting music virtually free. So unless you concede that people should be allowed to copy music for free, current Russian laws are grossly incompatible with your previously stated position. Because effectively Russian laws allow to do just that: legally distribute music for free.

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What you call "stealing" is only a trivial step away from complying with Russian laws.

I don't call it stealing. I call it copyright infringement. Notice the quotation marks.

Authors of p2p software could easily set up "one cent per 1000 songs" pricing, pay required percentage to "owner" and be 100% legal under Russian law. They don't do this only because they don't care about being legal

Again, this is moot unless you are suggesting that such services would increase in number under such laws...which as Russia is demonstrating, isn't happening. Yes, p2p networks will probably always exist from this point on. As I said above, however, regardless of how "easy" it is, it's well beyond the point. The majority of consumers will continue to choose a legal path of least resistance.

But if similar laws were enacted in US, no doubt someone would do just that.

Based on what? Speculation? Those laws have been in Russia for quite a while. It hasn't happened there, what's so vastly different about the US?

So unless you concede that people should be allowed to copy music for free, current Russian laws are grossly incompatible with your previously stated position.

Only if you assume (ignoring the preponderance of evidence to the contrary in Russia) that such a thing will occur. It's been this way in Russia for a very long time now, and the situation that you suggest should be occurring, is not.

You suggest a possible outcome. But it is based 100% on supposition. There is *zero* supporting evidence to back it up, whereas there is plenty of supporting evidence to the contrary in Russia where such a system has been in place for some time now.

Free market works. There will always be those out there to, for whatever reason, undermine the system. They, historically, tend to fail utterly. It's only when groups like the RIAA (and the government they use) gain far to much control over a market that it fails and both the market and the consumer end up losing.

Man, this is getting long. We're going in circles here. Perhaps another topic, another time?

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> Notice the quotation marks.

And you didn't notice mine?

> Again, this is moot unless you are suggesting
> that such services would increase in number
> under such laws.

No, I did not suggest they would increase in number, I suggested they would have an easy way to become legal while essentially doing exactly what they do today.

> Based on what? Speculation? Those laws have
> been in Russia for quite a while. It hasn't happened there,
> what's so vastly different about the US?

Like I said, it hasn't happened in Russia because file sharers in Russia don't care if it is legal or not. The difference in US is that RIAA is suing people, and as a result many of them care if what they do is legal or not. So if there would be a simple way to make free sharing legal of course there would be a demand for such a network.

The Russian law effectively allows legal free sharing of copyrighted material. Even the obvious question of whether someone will actually do it or not is besides the point. If you support such a law, then you support allowing legal free sharing of copyrighted material.

> Man, this is getting long. We're going in circles here.
> Perhaps another topic, another time?

Perhaps.

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Even the obvious question of whether someone will actually do it or not is besides the point. If you support such a law, then you support allowing legal free sharing of copyrighted material.

If you can sustain a business operating at a loss, more power to you. You won't be doing it for long though, or taking anything but a statistically irrelevant portion of the market.

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