Kuro takes on music industry over file-sharing

The gloves are off in the fight between the music industry and music-sharing Web sites -- and their users -- after negotiations between the two sides broke down this summer, insiders said yesterday.

"In August we launched a law suit against kuro.com.tw (飛行網) for allowing its members to share music files to which we hold the rights without paying royalty fees," Robin Lee (李瑞斌), secretary general of International Federation of the Phonographic Industry (IFPI) in Taiwan, said yesterday.

Kuro is Taiwan's largest music-sharing Web site with around 500,000 subscribers.

"They are creating an atmosphere where consumers feel it is OK to steal music. Stealing is stealing. If a burglar comes into my house, I have the right and the obligation to take them to court," Lee said.

Pirated disks and Internet sharing have slashed the income of record labels in Taiwan. In 1997, the local industry made NT$12 billion in revenue. Last year, that figure was only NT$4.9 billion, Lee said.

The federation -- which represents 11 record labels including EMI Ltd, Sony Music Entertainment Ltd, Universal Music Ltd, Warner Music Ltd and five local labels -- already won a case against Kuro in February this year when it forced the site to remove all copyrighted images of its stars from its Web pages.

Last September, IFPI took a second sharing site, Ezpeer, to court for infringing its copyrights and is expecting a result in that case later this year. The music industry has not shied away from going after individual copyright violators. IFPI Taiwan has filed suits against two Kuro users and one Ezpeer user.

Kuro is ready for the fight, offering to pay its users' legal fees.

"[Music file sharing] is a technology, a neutral scientific product," Kuro spokesman Philip Wang (王立文) said yesterday. "We don't know why IFPI is trying to make a devil out of it."

"We believe it's the trend, the mainstream. Almost half of Internet users do it, and the industry is going to have to come to terms with that," Wang said. "It's like in 1925 when the industry sued the first radio stations for seven years. They were worried too many people were listening to music for free. Eventually radio proved it could be a good friend, a more efficient promotional tool."

In July, Kuro offered to charge its subscribers a NT$50 "royalty" fee on top of its standard NT$99 monthly charge and pass the money on to the record labels. The industry rejected the offer.

"Kuro is the first Web site that managed to collect a monthly fee," Wang said.

But Kuro offered only one mechanism and withdrew it abruptly in July after only two meetings with industry representatives, Robin Lee said.

Chunghwa Telecom Co (中華電信) has also been pressured to stop providing Internet services to Kuro until the issue is cleared up. Kuro is suing Chunghwa Telecom.