Make mine with music: Preloaded iPods

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There’s a hot new trend in iPods, and for a change it has nothing to do with Apple: iPods for sale, pre-loaded with content. Shuffles, videos and nanos. Classical, Jazz, and Hip-hop. Pick your player and your musical poison, and a reseller will ship it directly to your doorstep. No more ripping CDs or DVDs. No more downloading. Just Gigabytes of audio and video, pre-loaded on the world’s most popular player.

While eBayers and others who want to sell a used player laden with copyrighted music are most definitely courting trouble with the copyright watchdogs such as the Recording Industry Association of America, a handful of companies are exploring legal avenues to sell loaded iPods. These services are typically marketed as timesavers and solutions for anyone without a high-speed Internet connection or who wants to give an iPod as a gift.

Music on the menu

One such company is Joyci. Company founder Robin Dowling says he makes every effort to ensure that Joyci operates in compliance with copyright laws. Rather than ripping tracks from CDs, or downloading them from the Internet, all of the preloaded music that ships on Joyci-sold iPods come from the iTunes Music Store.

“Everything is done legally,” Dowling said. “I’ve worked hard to do everything by the book”

As Dowling describes the process, a customer selects an iPod from Joyci and can either make a custom order of individually selected songs, or select preset 100-song packages—jazz, hip-hop, rock, and more. Dowling then opens a new account with the iTunes Music Store using a randomly generated ID and downloads the music. Next, he loads tracks to a brand new iPod, and copies them on a data CD or DVD. Finally, he deletes the tracks from his machine and de-authorizes it; the iPod and data CD are sent to customers, along with the randomly generated log-in and password for the iTunes Music Store.

“I create an iTunes account for each customer with a customer ID which they can continue using if they want to,” Dowling said.

But despite Dowling’s intentions, he might still not be totally in the clear, says Fred von Lohmann, an attorney with the Electronic Frontier Foundation, a nonprofit civil liberties advocacy group focused on the digital world. Von Lohmann describes the territory occupied by Joyci as a “gray area.” Though the practice would be perfectly legal were he dealing in traditional media, says von Lohmann, digital copies are different and the rules that apply to them remain to be settled. Making a copy of purchased songs and going back and deleting the original doesn’t necessarily fix the problem, von Lohmann tells Playlist.

“I don’t see why the copyright owner is hurt by that, but technically if they wanted to they probably could come up with a legal theory to go after [Joyci],” von Lohmann says.

The more interesting question, von Lohmann notes, is does this violate Apple’s terms of service for the iTunes Music Store? Those terms state that customers “shall be authorized to use the Products only for personal, noncommercial use.”

“Apple may be able to come after him if they want to,” said von Lohmann, adding that there is not much reason for the company to do so as long as Downing is actually deleting tracks and re-purchasing them, generating revenue for Apple. But the company still might not like the commercial nature of such a business. “He’s basically appointed himself as a reseller of iTunes music store tracks.”

Downing makes money by charging a premium over what a customer would pay if they simply bought everything from Apple. A 2GB iPod nano with 100 tracks loaded on it costs $319 from Joyci, not including shipping. Purchased directly from Apple, the same thing would cost $298. Essentially, Joyci customers pay extra for labor and the use of the company’s broadband connection. Downing says that in addition to the customers you’d expect who can’t access the iTunes Music Store or are buying iPods as gifts, others are willing to pay simply for the convenience factor.

“When I started with it, it was for older people or people without Internet connections, so that was my initial target group. But I realized later on that a lot of companies were interested in it, too,” he said.

Video to go?

Shoppers in the market for a video iPod have similar services at their disposal. A company called TVMyPod sells those pre-loaded with movies and television shows.

TVMyPod did not return phone calls or messages requesting information, but according to the company’s Web site, it operates in a similar manner to Joyci, sending originals of purchased media along with the iPod itself. In this case, however, the media is DVDs.

Potential customers choose media from TVMyPod’s selection of DVDs—it offers TV shows, movies, sports and music DVDs—and the company will load them on a video iPod and mail it out. Consumers can either buy a new video iPod from the TVMyPod, or mail one in and the company will load media on it and mail it back. To comply with the fair use provision of copyright law, it also sends out the purchased DVD with the iPod.

But that raises the question of whether the company is violating the Digital Millennium Copyright Act (DMCA). The DMCA makes it illegal to circumvent encryption, such as the copy protection on DVDs, even for material which you own yourself. In order to rip a DVD directly to your hard drive, one must decrypt it, and in doing so, violate the DMCA. So is TVMyPod committing a DMCA violation when it copies a DVD for you?

“The answer completely depends on how they are going about doing that,” von Lohmann said. “If using a tool like HandBrake that is definitely a course fraught with DMCA trouble. With that, I think they would have some serious legal exposure. My understanding is that they are not doing that, My understanding is that they are capturing it with an analog output.”

Analog captures from DVD video produce a much lower quality copy. While you would not be able to pass one off to a replicator to make DVD-quality videos, an analog capture should still look fine on your iPod. Better yet, if you do want to copy your DVDs to an iPod, it’s a legal way to do so, while ripping them directly is a DMCA violation. Though you might use a similar method in both cases, the distinction between analog and digital copying makes all the difference, says the EFF’s von Lohmann.

“It is sort of ridiculous—because this would apply not just to companies but individuals as well—that you are forced to use a more inconvenient, lower-quality mechanism to transfer media that you own to your iPod,” he said. “And that’s all thanks to the DMCA.”

The RIAA would not comment on specific cases, or the actions of particular companies, but it did note that in some cases, selling an iPod with content loaded on it is perfectly permissible. The key, says RIAA spokesperson Jonathan Lamy, is whether or not the music players are being sold with licensed content.

“Are there examples where it would be permissible for iPods to include pre-loaded content? Absolutely. The U2 example comes to mind,” Lamy told Playlist via e-mail. “Record labels want to continue to develop and license this kind of business model. It has real potential but it will only be undercut if iPods are re-sold on eBay chock full of copyrighted music collections.”

Not for resale

Indeed, used iPods often show up for sale on on eBay, Craigslist, and elsewhere, loaded with the previous owner’s music collection. The EFF says that this is another area where the law is not clear, but the RIAA disagrees with that assessment.

“It is, in our judgment, a very clear legal issue,” Lamy said. An RIAA statement contends that “selling an iPod pre-loaded with music is no different than selling a DVD onto which you have burned your entire music collection. Either act is a clear violation of U.S. copyright law.”

Despite the disagreement over the clarity of the law, however, von Lohmann points out that there are more practical issues to consider if you’re thinking of unloading an iPod with your music collection still on it—namely exposure to a lawsuit.

“Why would you want to tangle with the RIAA?” von Lohmann asked. “If the RIAA does sue you over it, it will cost you far more to defend than you could possibly make [from the sale of a used iPod].”

If all this sounds confusing, that’s because it is, even for attorneys who argue these issues. Much of the case law remains to be conclusively settled, and until it is, you’ll find attorneys and advocates arguing over all sorts of fair use and other copyright issues. In the meantime, it’s probably best to play it safe and stay off of the RIAA or MPAA radar screens. This is easy to do; don’t sell or share your copyrighted digital content. Unless, that is, you have a really good attorney. Because the groups you’d run afoul of certainly do.

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