Editorial: Allofmp3: Too legit to quit?

“Of course, we will survive. The music industry is rapidly changing and we will change with it.”

That line was issued in a virtual press conference today by the bargain-basement Internet music store, allofmp3.com.
In the press conference, the Russian-based website that sells full CD downloads for around $2 to customers worldwide vehemently denied accusations by the Recording Industry Association of America (RIAA), International Federation of the Phonographic Industry (IFPI), the British Phonographic Industry and music labels including Universal Music Group, Warner Music Inc., SonyBMG Music Entertainment and EMI Group PLC, that the site is selling copyrighted material illegally.
“AllofMP3 is a legitimate business that is incorporated in Russia, pays taxes in Russia and pays royalties to the iTunes).
The company says it pays 15% of its sales to the Russian-based society ROMS, the Russian Multimedia and Internet Society, as royalties for the artists (the record companies have allegedly refused all attempted payments from ROMS) and the prices on its site reflect the actual cost of a CD in Russia.
So what is the truth? Good luck on this one. International copyright law is about as complicated as putting together an internal combustion engine without instructions or a working knowledge of mechanics.
Length of copyright protection varies from country to country, as does the level of enforcement.
In the US, the RIAA has lead a charge against illegal file sharing — sharing music on services like Napster — suing companies and users for copyright infringement. And, not to side with an organization that has been successfully sued for price fixing, but they are right about file sharing — it is stealing.
But allofmp3 represents a fascinating gray area. It does appear to be a legitimate company, they do appear to comply with Russian law (no matter how lax anyone says it is), they do appear to be attempting to pay artists for the legitimate sale of their music, and (without any advertising at all) have attracted a worldwide customer base.
I am in no way going to claim that I am an expert on media law — in fact, I would bet that most people who are experts in media law couldn’t say whether allofmp3 if this is breaking the law or merely bending it. I am also NOT going to recommend shopping there until they get their legal issues settled.
My opinion though is that allofmp3 may be the future business model for all legitimate music download sites. It at least raises some rather obvious concerns about the current state of the music industry:
Why do music downloads cost the same as (or more than) the cost of purchasing a physical CD — even after you strip away the expensive packaging, distribution, losses due to breakage during shipping, credit for theft, and other pricing points that cause CDs to cost between $8 and $15?
Why does it cost $2 for a CD in Russia and $15 for the same CD here?
Does international copyright law allow all countries to participate in the sale and distribution of digital music on a level playing field or is this once again an intricate international music price-fixing scheme?There is a great myth that we are moving toward an international marketplace. If this is true, businesses like allofmp3 are going to exist — legitimately, and the copyright governing agencies and online music stores are all going to have to suck it up and compete.