Friday the Americans and the Russians came to terms over their trade differences, leading the US to OK Russian entry into the World Trade organization. The pact covers several grievences, one of them focused on Russia’s poor track record on intellectual property rights. The poster boy for this issue became Russian music service AllofMP3.com, which was elevated to this dubious position thanks to a British report. The report found that AllofMP3 was the number two service in the UK, behind only Apple, with an impressive 15% of the regional market. Indeed, AllofMP3′s low prices for music tracks combined with their availability in multiple formats without interoperability-killing DRM arguably made it the second most popular service worldwide, an achievment supported by Alexa figures.
The question now is will the Russiand take steps to close the service down immediately or wait until its formal entry into the WTO, still threatened by former soviet satellites Moldova and Georgia.
But then maybe the point is moot? The other month the entertainment industry successfully convinced the major credit card companies including Visa and Mastercard to cut off AllofMP3. With its main source of international money exchange removed, AllofMP3 was forced to shift its business from a pay-per-track scheme to an advertised-based model. Whether the company can survive on the new model is debateable.
But if it is successful, then pressure will most likely be brought on Russia to honor its copyright committments and take action against AllofMP3. That doesn’t necessarily mean closing the service as Russia could impose a government licensing commission to serve as intermediary between the worldwide record industry and the Russian digital record market.