A blog for musicians and music industry people. It is a free educational resource and it is also the way I advertise my music consulting services. I am an entertainment professional with deep roots in the music industry. Throughout my music career I have been a major label A&R representative, a music supervisor, an artist manager, a reality show producer, a bass player and the head of a digital record label.
Posts Tagged ‘music copyright’
Twitter decided against a SoundCloud acquisition. And Republicans continued to explain the new Songwriter Equity Act. Also, the global dance music industry hit $6.2 billion.
Twitter Walking Away from SoundCloud
Insiders announced on early last week that Twitter was in serious talks about buying the Berlin-rooted audio service SoundCloud. Recode, The Wall Street Journal and several other news outlets broke the news of the potential purchase on Monday, but by Tuesday, CNet reported that the deal was off.
The deal would have been Twitter’s biggest purchase to date. Sources close to the issue said that Twitter ultimately backed out of talks because “the numbers didn’t add up.”
SoundCloud raised $60 million in 2013, pushing its value up to $700 million. Twitter’s biggest acquisition thus far was MoPub, an ad network that cost the social networking platform $350 million in October.
Twitter was likely seeking out a streaming music company like SoundCloud, with a global user base, in order to help redeem itself from the failure of the #Music app and to continue its growth.
Both Twitter and SoundCloud refused to comment on the situation.
What Does the New Songwriter Equity Act Mean for the Music Business?
Senate Republicans recently introduced a new rendition of the Songwriter Equity Act at a songwriting conference held at Nashville’s Bluebird Café. Backers of the new bill include Bob Corker (R-Tenn.), Lamar Alexander (R-Tenn.), Orrin Hatch (R-Utah), and Representative Doug Collins (R-Ga). They introduced a version to the House in February, but according to industry analyst Peter Weber of The Week, the Act still raises many questions how music creators are paid.
The Songwriter Equity Act would update two parts of the U.S. Copyright Act and potentially update some of the “archaic” elements of U.S. copyright law for the Digital Age. And Weber pointed out that the proposed bill would “reform the market without upending it,” much as ObamaCare is trying to do for the healthcare industry.
Under the current system, songwriters typically share or sign over copyright to a music publisher. Once a song is recorded, the songwriter and publisher get paid each time a song is purchased or paid in public. And songwriters get royalty payments from four sources: sale of recorded songs (mechanical royalties); public performance of the song (performance royalties); appearance of a song on a TV show, ad or in a film (synchronization royalties); sheet music royalties. Synchronization royalties typically bring in the most cash to songwriter.
The Songwriter Equity Act is proposing to do two things to increase the amount songwriters, publishers and PROs get. It would provide more criteria for the rate court judge to consider when setting performance royalty rates and add the performance rates that get paid to musicians and record labels through SoundExchange into that rate.
But it would also encourage the Copyright Royalty Board (the CRB, which consists of just three judges) to get rid of the current 9.1-cent mechanical royalty rate and bump it up to “fair market value.” As it stands, the CRB determines rates based on what “would have been negotiated in the marketplace between a willing buyer and a willing seller.” The new bill would propose that the CRB also think about “marketplace, economic, and use information presented by the participants” plus the royalties paid to artists and creators for “comparable uses and comparable circumstances under voluntary license agreements,” i.e., film and television.
But Weber revealed, the new plan is not without its problems: “The first is that, while “fair market value” sounds good, how do you determine the market worth of a songwriter’s composition? This is especially true when there is no “willing seller” in the market — the compulsory license means that the songwriter has to sell, whether she likes it or not.”
Another issue is, while the bill says Congress would make sure that songwriter royalties “shall not be diminished in any respect as a result of the rights granted” despite changes to copyright law, the fair market value of music is currently less than 9.1 cents per sale – potentially closer to zero in the Digital Age.
What “fair market value” really means, particularly for performance royalties, is the money advertisers, television networks and film studios pay to play copyrighted music in ads, films and shows. And, as Weber said, if streaming services cannot afford to stream music, songwriters will actually get less money, as people flock back to pirated music online.
In terms of how many songwriters will benefit from the new legislation, copyright lawyer Raymond Scott advised, “… even if you double the relatively small performance royalty songwriters get each time their song is played, that won’t matter for songwriters who don’t get much of the pie ASCAP and BMI slices up; the real winner will be already successful songwriters whose songs are widely played in prominent places.”
And those backing the new bill provided examples in Nashville: Linda Perry, writer of the song “Beautiful,” which was a hit by Christina Aguilera streamed 12 million times on Pandora during a three-month period, and Perry only earned $349.16. Desmond Child wrote “Living on a Prayer” and only earned $110.42 for six million plays.
However, Gregory Alan Barnes, a lawyer for the Digital Media Association noted that “Beautiful” was made a hit by Aguilera in 2002 and “in the 10-year history prior to 2012 the song had sold more than 3 million copies, been covered on at least 10 different occasions, and performed on a countless number of televised award shows, talent competitions, charitable events, and live concerts,” generating “millions of dollars in performance and mechanical royalties for Perry, her music publishers, and other business partners.” And Bon Jovi’s triple-platinum “Living on a Prayer” was released in 1986.
Weber concluded, “Unlike ObamaCare, though, there’s no pretense of trying to benefit the consumer. Today’s music copyright system is hanging in a quirky balance, and everyone involved — record labels, recording artists, music publishers, royalty collectors, Hollywood studios, and music broadcasters — wants a bigger cut of the royalties or smaller slice of the payments … If songwriters get higher performance royalties, everyone will demand more money and music will cost more or be less available.”
Global Dance Music Industry Still Booming
The worldwide dance music industry is worth a whopping $6.2 billion, revealed Mixmag and a The International Music Summit (IMS) 2014 Business Report.
These numbers mean the industry is up $2.2 billion from estimates in 2013, calculated by the Association for Electronic Music (AFEM). Figures include festival revenue ($1.03 billion), club shows ($2.4 billion) and value pulled from SoundCloud ($140 million), a major promotion platform for dance artists.
Dance music has become so huge in Las Vegas that revenue from club dates in that city added up to $800 million, matching recorded music sales. Streaming and video services are worth $600 million, whereas DJ software and hardware sales have hit $360 million. DJ earnings not in the music industry have been valued at $60 million.
The announcement of the latest dance industry numbers came in within days of dance artist Calvin Harris’ second-place finish in The Sunday Times’ rich list of musicians under 30. Last year, he was named as the fourth riches celebrity by Forbes.
A new report examined the state of the audio production industry in the U.S. Also, cellist Zoë Keating once again shared her earnings and analyzed the benefits different recorded music platforms bring to modern artists. And a lawsuit filed by the Electronic Frontier Foundation (EFF) against an independent Australian called questioned the meaning of “fair use.”
Audio Production Affected by Industry Growing Pains
The audio recording industry in the U.S. has undergone drastic changes in the past five years, according to an updated market study, “Audio Production Studies in the US,” conducted by research firm IBISWorld. The study examined the recording side of the industry between 2008 and 2013, said the Digital Journal.
The internet has changed the way recorded music and other media is recorded, distributed and consumed, and IBISWorld analyst James Crompton said, “Alongside new mediums for distribution, technological improvements in recording equipment allows musicians and artists to take more control over their content than ever before.”
During the past five years, industry revenue for U.S. audio production studios has experienced .3 percent annual growth and now is worth $887.4 million. The audio production market has been made up of many small companies for many years. However, since 2008, there has been a shift away from large, fully-equipped studios towards private home studios. Recording technology has become more accessible and affordable than ever before, allowing individuals to make recordings and for the creation of many new, small postproduction companies.
A major challenge facing recording operations in the U.S. is the increased availability of Internet distribution platforms and easy-to-use recording equipment. Inexpensive recording tools have increased in quality and decreased in price, and musicians can release home-produced music online.
But Crompton stressed that recording in a professional studio has become in many cases too expensive for artists: “There is still great value added to productions made in a professional studio, however, as these studios have equipment that is typically out of the price range for an average amateur artist.” But the average artist does often underestimate the difference in quality of work done by highly-trained, professional producers and engineers: “The skill required to master and edit recorded content takes years of experience to develop, and there is no substitute available for this expertise.”
The report predicted that professional audio production studios will never become obsolete. Labels will keep going to fully-equipped studios for the expertise of experienced producers that can help them keep the quality as high as possible for recordings done by large catalogs of artists.
Still, because of shifts within the major label system and the overall U.S. economic recession, the IBISWorld study showed that demand for major label music production has decreased annually by 2.8 percent. The report also forecasted that despite an average annual seven-percent decline in album sales since 2008, audio production studio revenue will increase in the next five years.
The Real Value of Streaming Music Artists
New statistics shared by indie cellist Zoë Keating via a Google Doc show how musician’s 0.4 cents-per Spotify stream compare to payments from iTunes Match, Amazon Cloud Drive and Xbox Music. The Guardian reported that from January to June 2013, Keating earned $808 from 201,412 Spotify streams of tracks from two of her older releases distributed by CDBaby. This spreadsheet provided an update on sales figures she previously released in an effort to spotlight streaming music and whether it will ever contribute to a sustainable income for musicians.
After Keating gave CDBaby its nine-percent cut of her earnings, the 201,412 Spotify plays of songs from the One Cello x 16 EP and her One Cello x 16: Natoma full-length album brought her .4 cents per stream. In comparison, she earned $54.40 from 7,908 plays on Rhapsody (.69 cents per stream), although also factored into these figures were mechanical royalties payments she earned for writing and performing the songs. And she received just $13.38 from 387 plays of the same songs on Microsoft’s Xbox Music Service (3.5 cents per stream).
The released spreadsheet also offered up payment information from Apple’s iTunes Match and Amazon’s Cloud Drive, which earned Keating .2 and .05 cents, respectively. However, because these services let people stream music they already own from cloud lockers, licensing deals are different and thus artists get different percentages.
The EP and album earned Keating $1,617 via SoundExchange (representing Pandora, iHeartRadio and Sirius XM) and $930.26 from YouTube, although data for play numbers cannot be determined.
Total streaming payments for these two releases were $3,454.28 from January to June. Keating’s most recent album Into the Trees, released in 2010 is currently not available via streaming.
Keating explained in 2012 why she continues to be open about her personal earnings: “If we are going to discuss the ideal structure of the new music industry, we need to know how recording artists make a living today or we’re just spouting hyperbole … So in the interest of evolving the discussion, I am making myself into a data point. I encourage other artists, if they are able, to do the same.”
The first Google Doc she released in 2012 showed that 97 percent of her income came from sales of her music on iTunes, Amazon and Bandcamp. In six months, she earned just shy of $47,000 from iTunes, $25,000 from Bandcamp and almost $11,200 from Amazon but under $300 from Spotify. Her most recent spreadsheet will likely continue to be discussed as part of the streaming royalties debate, which heated up again when Atoms for Peace (Thom Yorke and Nigel Godrich) pulled albums from Spotify and other streaming services saying the business models for streaming companies were anti new and emerging artists.
However, Keating is considered an established but not mainstream artist and has been touted as the perfect example of a DIY artist, releasing her music completely on her own. Despite low earnings from streaming services, she has still expressed hope in their potential: “I think Spotify is awesome as a listening platform. In my opinion artists should view it as a discovery service rather than a source of income … The income of a non-mainstream artist like me is a patchwork quilt and streaming is currently one tiny square in that quilt. Streaming is not yet a replacement for digital sales, and to conflate the two is a mistake. I do not see streaming as a threat to my income, just like I’ve never regarded file-sharing as a threat but as a convenient way to hear music.”
When discussing previous spreadsheets, she also expressed her belief that digital music services need to share more data with musicians in order to help them understand how to make money through other methods, like touring: “I want my data and in 2012 I see absolutely no reason why I shouldn’t own it. It seems like everyone has it, and exploits it…everyone but the creators providing the content that services are built on. I wish I could make this demand: stream my music, but in exchange give me my listener data. But the law doesn’t give me that power.”
In early 2013, Keating also started working with Songkick’s Detour, a service that gets fans to crowdfund concerts by musicians by pledging to buy tickets until enough people sign up to make the gig worthwhile for performers.
The Electronic Frontier Foundation Suing indie Label for Misuse of Copyright
A lawsuit has been filed by The Electronic Frontier Foundation (EFF) against Austrlian indie label Liberation Music for “misusing copyright law” to take down a music business lecture by Harvard Law School professor and co-founder of Creative Commons Lawrence Lessig, according to Billboard.
The video was of a lecture delivered in 2010 called “Open,” taken from a Creative Commons conference in South Korea. A few clips of amateur dance videos set to Phoenix’s song “Lisztomania” were part of the lecture, which prompted the removal of the video.
The EFF said that this video falls under the “fair use” law, which allows for fair use of works for criticism, comment, teaching and scholarship. The argument is that Lessig’s use of “Lisztomania” represented a “classic example of fair use” and thus is not against copyright laws.
The EFF alleges that Melbourne-based label Liberation, who has the license to distribute the Phoenix recording in Australia and New Zealand initiated the process to block the video. Once the company offered up the DMCA takedown notice, Lessig filed a counter-notice proving the clips fell under “fair use.” Once Liberation Music threatened a lawsuit against Lessig, the professor withdrew and turned to the EFF to start legal action.
Lessig stated, “The rise of extremist enforcement tactics makes it increasingly difficult for creators to use the freedoms copyright law gives them … I have the opportunity, with the help of EFF, to challenge this particular attack. I am hopeful the precedent this case will set will help others avoid such a need to fight.”
Record Store Day 2013 sparked a major rise in vinyl sales. Also, a New York State judge ruled that the 1998 federal Digital Millennium Copyright Act does not fully protect online music-sharing services. And author, entrepreneur and Listen.com/Rhapsody founder Rob Reid announced he will be giving a talk this week to celebrate the release of his comic musical novel Year Zero in paperback.
Record Store Day and the Vinyl Boom
Record Store Day on April 20 caused weekly vinyl album sales in the U.S. for the week ending April 21 to spike considerably, according to Neilsen SoundScan and Billboard.biz.
Retailers sold 244,000 LPs, the largest number vinyl albums sold during one week since Nielsen implemented tracking techniques in1991. The previous record was 213,000, for the week ending December 23 of last year.
Many artists release special vinyl versions of their music for Record Store Day to independent record stores, so a slight increase in sales is expected during this time. Independent music stores sold 544,000 albums across the board the week of 2013 Record Store Day, which is three percent more than the same week in 2012.
Retailers said they credit the jump in sales to the fact that more artists created special releases in celebration of this year’s event than they created last year. Record Store Day co-founder Michael Kurtz admitted, “Record Store Day increased the number of special releases we did this year to over 400 titles, as compared to about 300 last year … This was done mainly to accommodate regional releases and small runs from independently owned labels.”
Billboard charts were also affected by the event. The “Tastemakers Albums chart” ranking the top 25-selling albums at indie retailers included Mumford & Sons’ new EP “Live at Bull Moose.” The Record Store Day exclusive album sold almost a third of the 10,000 total copies manufactured. It also charted on Billboard at 174. Several other debuts – not Record Store Day exclusives – hit the Tastemakers chart, including the Yeah Yeah Yeahs “Mosquito” and the Flaming Lips “The Terror.”
Record Store Day exclusive vinyl singles also hit the 25-position chart, including “No Fun” at No. 1, featuring the Stooges’ original song and a 2002 Black Keys cover, which sold 2,000 copies of the 7,000 produced.
1998 Millennium Copyright Act: No Defense for Online Music
A New York state appeals court ruled on April 23, the 1998 federal Digital Millennium Copyright Act does not cover online music-sharing services from copyright infringement as far as recordings created prior to 1972.
Reuters reported, the Appellate Division, First Department ruled against Grooveshark, sued by Universal Music Group because it allowed users to share recordings created before 1972, including Chuck Berry’s “Johnny B. Goode” and The Temptations’ “My Girl.”
Grooveshark enables users to upload files to its servers in order to share it via streaming with friends. Universal originally filed a suit against the service for copyright infringement in 2010. A decision on the entire lawsuit between the two companies has still not been made.
The court’s decision to not apply the DMCA “safe harbor” provision to these recordings marks a major win for labels, who have often claimed online file-sharing companies are in violation of U.S. Copyright Law. DMCA was designed as an amendment to the Copyright Act and states that all sound recordings made prior to 1972 were not subject to federal copyright law. These recordings are, instead, protected by state or common-law copyright protections.
“Safe harbor” also protects online services as long as they do not know infringement is taking place and immediately remove infringing items from their service. Escape Media, owner of Grooveshark confessed in court that it cannot guarantee every song uploaded is in line with copyright law.
The lawyer for Escape Media Group announced an impending appeal: “The court’s decision, if it stands, will significantly undermine the safe harbor protections of the Digital Millennium Copyright Act and may severely disrupt the operations of all Internet service providers who, like Grooveshark, permit access to user-generated music content.”
Last year, Manhattan Supreme Court Justice Barbara Kapnick did not agree with Universal’s claim last year that the DMCA should not apply to pre-1972 recordings in the case of Grooveshark. Kapnick said she found “no indication in the text of the DMCA that Congress intended to limit the reach of the safe harbors provided by the statute to just post-1972 recordings.”
The ruling on Tuesday reversed the original ruling. Justice Angela Mazzarelli stated, “It is clear to us that the DMCA, if interpreted in the manner favored by defendant, would directly violate section 301(c) of the Copyright Act.” She added that the U.S. Copyright Office decided in a 2011 report to members of Congress on extending the Copyright Act, the DMCA is not applicable to pre-1972 recordings and that the DMCA would need to be amended before any different ruling could be made, so Congress could “clarify its intent.”
Grooveshark is also being sued for copyright infringement in Manhattan federal court by Universal, Sony Music Entertainment and Atlantic Recording Corp. together as a group.
Rob Reid Talking about Copyright Law and Year Zero
L.A.-based author, entrepreneur and the founder of Listen.com/Rhapsody Rob Reid’s comic music copyright law-related novel Year Zero is coming out on paperback. In celebration, he will be giving a talk at 6 p.m. on April 30, 2012 in New York City at the NYU School of Law based largely on his now-infamous “Copyright Math” TED conference talk in 2012. Reid will be taking a unique look at the institution of copyright law and signing his book. He will also be joined by David Pashman (General Counsel, Meetup and adjunct professor at NYU Law).
“Copyright Math” is the term Reid uses to explain the often confusing and intangible numbers cited by the two major organizations within the entertainment industry – the Motion Picture Association of America (MPAA) and the Recording Industry Association of America (RIAA) – in an effort to get others to rally against piracy. Reid has written pieces and features for various magazines and websites, including Wired and The Wall Street Journal. His first novel, Year Zero is closely tied to the “Copyright Math” theory and was released on July 10, 2012 via Random House/Del Rey. It is a comedic science fiction story set mainly in present-day New York City about a society of highly-advanced aliens who are so enamored of American pop music that they accidentally commit the biggest copyright infraction of all time, thereby bankrupting the entire universe.
More about Rob Reid and his thoughts on copyright law can be found in his Musician Coaching interviews from last summer: “How to Connect with an Audience” and “Effects of Music Piracy on the New Music Industry.”
Jon LaCroix is the Founder of VTown Cartel Music, a custom music production house with a boutique music production library consisting of over 13,000 copyrights. He got his start in the music business as a pianist and drummer, eventually going on to study music at Cal State Northridge. While attending college, he picked up work scoring student films and also scoring and producing for a music library. He has collaborated with artists and companies such as American Idol, Dweezil Zappa, Megatrax, Sound Adventures, Klangwolke, Volvo, Saab and more. Also an experienced touring and studio musician, as both a keyboardist and a drummer, he has traveled with well-known acts like Colin Hay and Blues Saraceno. Jon started VTown Cartel Music in 2007. Since its inception, the library has provided music for a wide range of TV shows, films, networks and companies, including Nurse Jackie, Big Bang Theory, Real Steel, The Mentalist, Smallville, Vizio, 90210, UFC, Ikea, Warner Brothers, McDonald’s, CBS, A&E, MTV and many more.
I talked to Jon about his extensive experience in the music industry and how he built up the VTown Cartel Music library. He also shared some insights on the major challenges artists are facing as they try to collect missing royalties for their music and outlined some of the extensive work he has done with TuneSat to try to solve this problem for his own work.
Thanks so much for taking some time to share your experiences, Jon. How did you get into the music business?
Music was in my family, and I just jumped in. My dad, Lenny LaCroix is a brilliant professional musician from the East Coast and moved out to L.A. and worked on a bunch of TV specials and productions as a writer, arranger and composer back in the day. He worked on award shows like the Academy Awards, and a lot of television specials and variety type shows.
I started playing piano when I was five or six, but got kind of sick of it. So, when I was 10 I started playing drums, and then picked up piano again in college. I wouldn’t say I’m classically trained, but I do read music. Besides, most of the things I do are by ear at this point, but if I have to do any real orchestration or arranging, I can make it happen.
I played in different groups throughout high school and then ended up going to Cal State Northridge, playing in the A-Band there for four years. During that time I was also doing some scoring for student films and playing drums in a fusion band, Raw Fungus, with these guys from Boston. One of the band members was scoring a lot of reality TV and asked me to audition by scoring a segment for magazine clip show. I found out he was auditioning a few guys and was giving everyone the same clip to work with. I think he said there was one of Hans Zimmer’s guys as well as someone from James Newton Howard’s camp. I think even a guy from Snuffy’s team. Basically, there were a bunch of guys auditioning. In the end, he actually chose my version. And that was the beginning of my real education in writing, also how I made some money while I was in school. I worked for this person for many years handling a lot of his overflow.
Years later, the first writers’ strike halted a lot of television production. And I got a call to go on a road with Blues Saraceno playing keyboards – since television production basically stopped and we weren’t going to be working over the summer, I thought this would be fun and grabbed the opportunity to play out. It was the first time I’d ever done that with a rock band, and we played at motocross shows, X Games-type events, though this was before the X Games existed. Since Blues was sponsored by Ernie Ball at the time, we also had to do some music clinics and additional concerts along the way. It was a very tightly budgeted indie tour – new city every day, so the joke was that we could stay at any motel with a “6” or an “8” in the title. Either way, I had a blast. We were playing out everyday and we even got to play the Hendrix Museum in Seattle.
The same summer, I also got the call to play drums with on of my childhood idols, Colin Hay from Men at Work. I think I had a couple days off in between those two tours. This one was a much different tour, staying at nice hotels and playing festivals for thousands of people, so it was really fun. My best friend was playing keyboards for that leg of the tour and it was just awesome. It was a really great experience on so many levels with so many great memories. Colin’s an incredible guy I’m really grateful for that experience.
When I got back, I started doing more record production work – not scoring, but actual song production. I did some work for Blues, who was working a lot with Dweezil Zappa and Extreme Music, and then I got to work with Dweezil on this show called “On the Spot” for Warner Brothers. I also did quite a bit of writing and session work with Megatrax, Sound Adventures, and a bunch others doing themes, commercials, songs; whatever would come up.
Eventually, I just hit a point where I realized I needed to do something different. I remember we were working on this network promo, and I was called in to do some orchestral programming, and I realized it heading creatively down the wrong direction and there wasn’t really anything I could do about it. That was really frustrating and it was at that time that I realized it was time to branch off and do my own thing. So, I decided to build my own library. I had 200 tracks of my own sitting around and with the help from friends, who also had their own music lying around. They were making tracks at their studios, but were also on tour with huge bands, so they weren’t home long enough to really do anything with those tracks. They offered them to the collection, and that’s how the VTown Cartel library got started.
You’ve had a colorful career. You’ve been a performing musician, you’ve done professional scoring, production and have also been a library owner and operator. In terms of touring, specifically, you were able to get involved with people who had established touring routes. What advice would you give someone just starting out as a touring musician?
In high school, I had this band director who was really brilliant. There are certain elements of his work ethic and the way he approaches music that have really stuck with me: the way you should be practice; showing up on time; delivering on time; having a good attitude. Because, regardless of whether you’re working as a producer or as a performing musician or anything else, your success is greatly based on referrals. You really need to do the things necessary so that people want to refer you to their friends and colleagues.
A few times, I got called by the music directors or tour managers of great acts like Ben Harper, Gwen Stefani, or The Neptunes, Morsey, inquiring about playing keyboards for the tour. It really made me think because these tours were long. And I didn’t really know how to respond because it felt like a fork in the road for my career. The more I thought about it, the truth was, I really didn’t want to leave town for extended period of time. I knew that if I started touring, I would get stuck out on the road for long periods of time. And I didn’t want that. I really wanted to try and build things up in town.
But in the end, being successful at touring, especially if you’re a hired gun, is more about how well you get along with the other people in the band. It’s not necessarily about your skills as a musician. You don’t have to be a musical prodigy to tour; but it’s more about executing the material and how you interact with people; how well you get along with everyone on a daily basis that really matters in my opinion.
So, my advice would be to try and be easy going and get along. Show up on time and prepared.
You mentioned showing up on time. I’m a hobbyist, but I’ve gotten gigs above those far more talented simply because I showed up sober and on time.
That is true. And you also have to come prepared. And I’m talking about diving into the details.
Another example of this: I’m working on the Stanley Kubrick project that is set to be an exhibit at the L.A. County Museum of Art. There is one piece in particular that needed to be redone, a Strauss piece, The Blue Danube Waltz. It’s not that it’s complicated, but there are certain details with the voice leading and harmony that needed to be executed properly. I get a little tweaky sometimes with that stuff.
You’re a guy who runs a music library, places your own music and also places other people’s music. What advice would you give other musicians that want to place their music in film and TV? Is there a science to that?
I think it’s really about the relationships you have with people and whether or not they like you and trust you. I present music in our library always from the other person’s perspective and objectives. At the end of the day, music supervisors are working for other people too. And I just try to help make their jobs easier and get them what they need. The reality is, everyone is pitching. We’re pitching to music supervisors, and they’re pitching to their colleagues. And sometimes those people are then pitching to the client. There’s a lot of people involved trying to do what’s best for the project. I always just try to assist that process and make it easier. Not sure if there’s a science, but that’s the approach I take.
I think artists often misunderstand that. They think there is one music supervisor out there who can change their entire career, and that’s not really the case.
Yeah. And a lot of times it’s hard to get around a deal that’s in place especially if you’re an independent artist or band. That has been one of the challenges, especially in the U.S. for us. We’ll have an editor love our catalog and want to use it, but there’s some deal that’s in place with the network or the production company that actually stops them from using the music they really want to use and that they think is best for the project.
That type of situation is very different in other countries. We have a network of great publishers and distributors overseas and we frequently get together to discuss what’s going on in the industry usually at conventions. Internationally, there are territories where there is a pre-cleared blanket license with the providers. What that means is the rates are set and the deal is essentially already in place. You’re not negotiating clearance rates or even if it will clear. They are allowed to use anything for television programing and there is a statutory rate in place for the synch. So, in the end, if you’re music provider, all you have to do is have great sounding music. Theoretically, there is nothing beyond the quality swaying someone to go with another provider. We like that.
In the U.S., it’s a little different. It’s almost like you have to get the deal in place ahead of time before you can even get something placed in certain areas. I was fortunate when we first started VTown, because I got a break: I had a friend who made a call to one of the major studios here in L.A. and put a pre-cleared needle-drop deal in place. It opened up a lot of doors and gave us some real credibility. I am still really appreciative!
Do you actively look for people to contribute to your library?
We don’t really seek people out, but we do keep our options open. I will get a few emails a week about it. A lot of the stuff we do, we make in house. I work with a couple of our producers, and then I also have some people that I am mentoring. I try to teach them how we do things and the level it needs to be at – for example, how the vocals are tuned, the beat detection and editing on the drums – so it’s all solid and consistent. It’s really all about the quality at this point, and that’s what I focus on.
I’m very cautious about working with composers, bands, or producers we don’t know. The reason is that right now there are so many composers and publishers who are retitling music which legally exposes the client and is killing the production music industry in my opinion. My take on it – is that it’s illegal to have multiple SR copyright claims on the same piece of music. And not knowing the person makes me nervous, because we don’t necessarily know if they are participating in this practice. There are too many variables. We’ve always been low risk, and I like to keep it that way. Our contract is exclusive, with a full copyright transfer. But a lot of artists don’t realize that a publishing agreement with us, or anyone else for that matter, means that someone essentially owns their master now. I know it sounds on the surface like it’s unethical from the artist’s perspective, but the upside is that we’ll be able to enter it into some third-party deals and distribute it through our network worldwide with no legal issues.
I found you because of my relationship with the folks at TuneSat, who said you are an avid user of their service. How have you worked with them?
I could probably write a book on the ways I have worked with them to recover royalties, not to mention the many ways the royalty and copyright system is broken. When I explain to people what I do, the conversation ends with the same question – What if your music is used and you don’t know about it? It’s an honest and valid. TuneSat is my answer.
The way I found TuneSat provides some real insight into the problems within the industry when it comes to copyright. After we started our library, I got a break and had a meeting for a miniseries on A&E called The Jackson Dynasty. It featured the Jackson family and also focused on the recent passing of Michael.
We were really excited about this project, because it really allowed us to really service the show in a few ways. We were asked to provide our catalog as well as produce custom tracks in a really short amount of time. The other part of it was that there were clearance issues relative to Michael’s catalog. We were providing the library, but also had to do a bunch of tracks in a specific style or era. Imagine if they someone went to license one of Michael’s tunes and could only get TV rights, but no web rights. That’s another place where we were able to step up. We also did the cue sheets for the show, and told them that we would take care of it, since it was all our music anyway; we would make sure the proper writers were attributed, etc. So that’s what we did and we knew everything had been done correctly. We put together the cue sheets and then turned that back over to production.
About nine months later we got our first performance statement, which is how far behind everyone is. And there was nothing on the statements with respect to the series – not one, single thing. I couldn’t imagine how it was possible, since the series had run and rerun. We had hundreds of tracks involved.
That incident is the single thing that landed me on TuneSat’s doorstep. I hadn’t really heard of them prior. Before, I was looking at this part of the industry because I was interested in the technology and in seeing where technology and the industry was headed. And I did some research and thought this company looked exciting and innovative. It reminded me a lot of Shazam for my iPhone, but specific to broadcast. I thought it was amazing, and it really did look like a solid solution without compromising the master – straight waveform and audio recognition with no frequency or code injected into the track.
I talked to Chris Woods, the TuneSat president, and I explained the situation and asked for his help. To be honest, at the time, I didn’t really know what to do. Chris asked me if I knew how many times it aired, and I realized at that moment, I didn’t. In fact, I didn’t have any information. Before I signed up for the service, he took me through the back end, because I said I really like to know all of the nuts and bolts of how things are put together. His demo really showed me how detailed and flexible the back end of the system is. Right away, I saw the potential and the advantage in having this setup ahead of time.
The really cool thing about this service is that all the shows and music are saved on the TuneSat server. Since BMI, ASCAP and Sesac pay out three-quarters after air dates. By the time you figure out you’re missing something on your statement, it’s almost a year later and almost impossible to recover any information. Even TV schedules, like Yahoo TV, posted online don’t give you any information anymore. So, TuneSat has everything recorded on server and were able to go back retroactively and rescan everything almost a year later. It was a huge relief.
So, when you got the information from TuneSat, did you go directly to your performance rights organizations and audit them?
Not exactly, only because we weren’t sure where the breakdown actually occurred. We went to audit everything in the chain and learned a lot about the process through this experience. Using the Dynasty series as an example, it didn’t show up on ASCAP, BMI or Sesac. I couldn’t figure out how that was possible or what happened. You just have to keep digging deeper and deeper. When you go through this process, you realize that there are just so many ways the system can break down and that no one is supervising it. You really have to be your own advocate. Because TuneSat was able to go back an entire year and rescan the airings, we were able to find out all the air dates which gave us a leg to stand on as well as the tools to sort everything out with the PROs.
I have a theory about PROs: Because so many things have been lost in the system, I firmly believe that if they had to pay out everything that has broadcast, they would not have the float to remain in business. I realize they are non-profit, but I don’t think they would be able to sustain themselves at their current level if they had to pay off all these debts.
Yeah, that could be true. My take on it is that because a lot of the networks pay blanket performance rights licenses, it’s really not in their best interest to discover and pay out on every performance.
Of course it isn’t.
The networks are paying a lump sum, and the PRO is dividing that money out based on their own criteria like type of usage, channel or network, time, whether it’s prime time or not, ratings, etc. They’ve already got their money, so I think they don’t really care what goes missing.
A missing cue sheet is completely irrelevant to a network, but also to a PRO in many cases.
Yes. And to this day, we still have problems related to Dynasty series. Internationally, we’ll see the series pop up, and our international statement will show that they only showed one episode, like five minutes of Episode 3, which is not likely.
Do you have any advice for people trying to recover their missing royalties? I see this situation a lot: Musicians will say, “I know for a fact it was spun, and I have nothing on my report reflecting that.” How do you take it to the point where you get paid?
There have been multiple cases where TuneSat has discovered performances, and we discovered they just went missing due to human error. We do a lot of stuff for one of the popular music channels. We’ve realized that sometimes when people make the cue sheets, tracks go missing. The good news is that TuneSat actually records mp3s in the context of the show. So, you get an mp3 of your track within the context of the show for every single detection. And I can send this to the supervisor or coordinator and ask them to double check the cue sheet. And the coordinator will get back to me and say that they just missed it and update the cue sheet. Problem solved.
Another perfect example, and the latest thing that’s happening over here is that there are a bunch of sports promos we did. And these promos run over multiple networks and channels. So, we’ll find out three quarters later that these performances aren’t on a PRO statement. We have to go back and figure out what happened.
When these types of royalties go missing, ASCAP has refered us to their promo checklist. And we give them everything: the first air date; the first line spoken; product; track, etc. Can you imagine trying to go back in time and get the first air date and first line spoken a year after it aired? We can find this out through TuneSat pretty quickly. It’s just another way we use their service. We can then send a spread sheet to Ascap with the entire airing schedule including all of the dates, times and channels where it ran. Without TuneSat, I might have to write the production team attached to these spots and ask “Can you send us a copy of the promo?” which would be a nightmare for everyone. But TuneSat provides us with mp3s – hundreds of them.
Not only does TuneSat give you a spreadsheet, so you can see which country, channel, etc. it aired on, but they also send you an mp3 with a 10-second buffer on it, which is killer. Because, a lot of times you need to listen to the track really carefully in context to make sure you’re taking credit for the right track, and it’s not just an Stylus loop that’s triggering the detection.
If we didn’t have TuneSat, we wouldn’t be able to even attempt to recover some of these missing pieces. I actually was just writing to my admin Karyn, who is overseeing a large portion of this process. And I said to her, “How we do this without TuneSat?” If we didn’t have this as a tool, we wouldn’t have any chance of figuring out the answers to the questions ASCAP and the other PROs ask us. In this case, they were asking for all the air dates of this promo that is appearing over multiple networks. In a lot of ways, through this process, it feels like you’re being asked to do their job for them. It’s insane.
At the same time, I feel like I’ve just hit the tip of the iceberg. As I get deeper and deeper in the process, I discover more issues and points at which the system breaks down.
At the end, I don’t know how everything will work out. But we’re pursuing thousands and thousands of dollars right now in missed royalties, just on the performance side. This is just from promos and television shows that have run hundreds and hundreds of times and just slipped through the cracks.
So, here’s our process. First, find out if a cue sheet or promo form was filed. ASCAP will post these directly to your writer’s member access account, and I believe BMI will be doing the same thing very soon. If not, then check with the production company and get a hold of the cue sheet. Make sure your track is on there and the information is correct the same way it is registered with your PRO. Then, make sure that cue sheet is filed with your PRO. We always open a claim to have them then recalculate royalties based on the new cue sheet submission or the revised cue sheet. And be patient, because this process can take a while.
Analysts examined how Microsoft’s long-anticipated streaming music service could affect the overall industry this past week. And the entertainment industry teams up with Internet Service Providers (ISPs) to fight digital piracy. Also, a legal dispute over the rights to Ray Charles hits could change royalty payments for other artists.
Microsoft and Xbox Music
On October 14, Microsoft announced the launch of a new streaming music service, Xbox Music. It will be available for Android, iOS, Windows 8, Xbox 360 and a few other operating systems and according to an article in PCWorld is a reboot of the company’s expensive Zune project, which emerged and flickered out when iTunes first exploded.
News of the new service came days before the anticipated release of Windows 8 Pro and Microsoft Surface tablet, products which will be part of Microsoft’s new mobile-heavy business strategy. It also was timed right after reports that Microsoft Office would soon be available for both Android and iOS.
Xbox will present free streaming music as well as a subscription option for those that want to download individual tracks or hear music devoid of advertisements. It will also feature a full music store. It will be a direct competitor with companies like Spotify, Pandora, Google Music, iTunes and Amazon Music.
Xbox Music will also offer a special deal: Those that purchase a Windows 8-run tablet will be able to stream millions of songs for free, unlike Spotify, which charges $10 monthly for use on tablets.
Microsoft’s new music service will allegedly offer free access to 18 million songs for those in the U.S., with ads run every 15 minutes. Then, for $9.99 per month or $99.99 annually, consumers can listen without interruption. Music fans will also get the Microsoft Music store, which will have MP3 versions of songs for download at around $.99 per track. A “Smart DJ” tool will also serve as a music discovery system that will play new music for music lovers based on their favorite bands and artists.
How do analysts feel Xbox Music will impact the industry? Opinions are varied, said a piece in the International Digital Times. Some experts stated they feel that a shift to mobile could alienate many Microsoft fans; others feel it is a smart move that will draw in different types of users. Industry analysts and ZDNet contributor Steven J. Vaughan-Nichols declared, “No matter when Microsoft delivers the Android and iOS goods, Microsoft’s support of any version of Office on a non-Windows smartphone or tablet strikes me as an odd move. In a shareholder letter, Microsoft CEO Steve Ballmer said that Microsoft is shifting its model to focus on devices and services. This is a radical and dangerous shift for a company that’s always made it money from software licensing. And, now, instead of using Office as a crowbar to pry users from iPad and Android tablets to its Surface tablets, Microsoft is going to offer Office 2013 on its device rivals?”
Microsoft is giving up some of its market share with this latest move by creating cross-platform software. However, this could be a move to create more sustainable revenue in light of the fact that Windows has become a much smaller part of the company’s annual income. Microsoft’s 2012 revenue reports show that Windows only brings in the third-largest revenue for the company, behind Microsoft Office and its Server and Tools department.
The Xbox branding could help the company rev up its entertainment division, though it will not likely save the music industry. Xbox Music will be the default music application on every Windows 8 PC’s Start screen. And it is one of the first apps built for touch. The Windows 8 app – the best entry into the Xbox storefront – will ship on October 26. Spokespeople for Microsoft said it will expand the regions where Xbox Music is offered in the coming months.
“Six Strikes, You’re Out” to Combat Piracy
The Center for Copyright Information (CCI) will soon join together with ISPs such as Comcast, Verizon and a few others in order to establish a new “Six Strikes and You’re Out” system to fight digital music piracy and provide much-needed education to music fans, according to a report offered by CBS News last Wednesday. While news of this new program was first reported in September by both PC World and Ars Technica, more details and exact dates have recently emerged.
CCI Director Jill Lesser stressed, “It’s not a six strikes program. This is an educational program …There are a series of educational alerts that will be sent out to subscribers.” And it will be officially known as the Copyright Alert System.
Rob D’Ovidio, associate professor of criminal justice at Drexel University stated that this program is meant to help people understand that committing copyright infringement online is no different from stealing anything else: “Under the eyes of the law, downloading a piece of music from one of these file-sharing sites without authorization is no different than walking into a store and stealing a physical good.”
Five ISPs will begin to go after infringers in November, as exposed by leaked AT&T U-Verse training materials received by TorrentFreak. The program will give violators five chances via written warnings that detail violations and potential consequences.
D’Ovidio said the outline of the program supports the idea that education is a priority for both the entertainment companies and ISPs: “It’s definitely not a zero-tolerance type of approach … They’re working with the customer, recognizing there’s still a lot of misinformation out there – especially among the younger users They don’t know what’s acceptable and what’s not. Copyright law is a confusing thing for lawyers, let alone teenagers.”
Information about the program does not suggest cutting off pirates from their ISPs or other services. It will, however, require them to go through educational tutorials online before being allowed access to certain sites. But six strikes could result in a lawsuit from copyright holders. D’Ovidio continued, “The Internet Service Providers don’t want to lose customers; at the same time, they do have a responsibility … [But] the fact that someone is watching, and somebody knows where you’re going, hopefully that can serve as a deterrent.”
The program will put file-swapping users at the mercy of ISPs and content owners after the sixth strike. During the process of the program, no personal information about Internet subscribers will be offered to content owners without due legal process and the subscribers’ consent.
D’Ovidio added that content creators have to take more responsibility: “It’s been shown if the industry can put out alternatives that are low-cost, easy to use, where consumers can get access to those files very quickly, people do shy away from the use of illegal services.”
Lesser said in September that the “softer language” is an extension of the new approach the CCI has taken in the wake of the controversial Stop Online Piracy Act (SOPA). This latest initiative will team up the MPAA, RIAA with a handful of ISPs.
How Ray Charles Could Further Change the Music Industry
Music producers are on the edge of their seats as a legal fight over the rights to many of Ray Charles’ hits – including “I Got a Woman, “A Fool for You” and “Mary Ann” – rages on between his surviving family members and his charitable foundation. An article on The Hollywood Reporter site showed how the lawsuit is testing important issues regarding song terminations.
Charles’ children, whom he mostly cut out of his will, are trying to terminate a copyright grant on the songs to Warner/Chappell Music. If the songs go back to the children, the Ray Charles Foundation will no longer receive royalty checks.
The foundation sued his children in late March, saying that the termination notices they offered are invalid because the songs were created while Charles was employed by a record label and music publisher. Thus, the songs are “works made for hire, ‘authored’ by the predecessor to Warner/Chappell,” meaning his offspring have no legal rights to terminate.
A judge determined that the songs were not made for hire in late September, leaving the door shut for a potential lawsuit to be filed by Warner/Chappell. However, the Ray Charles Foundation recently decided to argue the side opposite to its original complaint. The foundation said earlier this month that the songs were not made for hire.
This statement is setting up a lawsuit directly related to termination rights, which has recently become a hot topic in on-going copyright law debates, especially since Bob Dylan, Tom Waits and Tom Petty have all just sent their own termination rights notices. And the industry now waits to see whether a court will feel that artists do their work as “employees” of record labels and publishers, thus giving them no right to some royalties.
This issue was broached earlier this year as Victor Willis of the Village People won a lawsuit and was able to get a federal judge to deny publishers the right over his works. However, this particular decision did not take into account the “made for hire” defense, because the music publisher dropped the claim before that particular component was decided.
In the lawsuit begun by the Ray Charles Foundation, the decision made by Judge Audrey Collins ruled that if “the works were not works made for hire and the foundation were receiving royalties from simple assignments, [then] it would be a ‘beneficial owner’ in the copyrights and would have standing to assert an infringement claim.” However, the judge was not sure if the foundation would be able to challenge the terminations and ordered more evidence to be presented.
The foundation’s response on October 2 was that Congress has not been clear about who can challenge terminations. The “if” was not well defined in Collins’ ruling. Howver, the foundation does admit that Charles is the author who assigned the work to someone else. And this left an opening for Charles’ children to try to get Charles’ songs back from the label, which they began to do on October 9.
If the judge decides that the foundation’s claims have merit and lets the case to continue, it could change the outcome for industry players like record producers to challenge termination notices.
And the judge will likely address whether or not the Ray Charles songs are “made or hire,” a distinction that could represent a critical change for record labels and publishers that find themselves inundated with termination notices.
Barry Heyman is an entertainment attorney with a focus in the areas of entertainment, intellectual property (copyrights and trademarks), and new media law. He has helped me out in the past by answering some important questions regarding Copyright Law (and even answered a question that had me stumped about how to license a cover song here on Musician Coaching last fall). He has worked in the Copyright Administration department at PolyGram and Universal Records and was in-house counsel for Eagle Rock Entertainment (producer, publisher, and distributor of music programming for television and DVD, comprising live concerts and documentaries). He has also consulted clients such as MTV and Razorfish. Barry currently runs his own practice out of New York and was an adjunct professor at NYU where he taught a graduate course entitled Law and the Music Industry.
Copyright law and artists’ rights are topics that come up quite a bit around here. And Barry was kind enough to share an article he published recently entitled “Termination Rights in Sound Recordings” about some big changes that are in store for copyright law in the next year that will directly affect the music industry.
Starting in 2013, for the first time in history, authors of sound recordings might be able to regain ownership of their sound recordings based on rights they originally granted to the record companies during and after 1978. Works by legendary artists such as Bob Dylan, Billy Joel, Bruce Springsteen, Tom Petty and many, many others will be some of the first to be eligible for this termination process. And chances are good this will cause recording artists and record companies to clash, as many artists will start the process of taking over ownership of their own recordings so they can start commercially exploiting them, while record companies fight to keep their ownership interest so they can continue to freely exploit and profit from these recordings.
So, how exactly will this shift look, and how might it affect musicians and other industry professionals? As Barry states, “The Copyright Act grants an author termination rights in all types of copyrighted works including books, photographs, and musical compositions (as may be embodied in the sound recordings). Since Federal copyright law protection was more recently extended to sound recordings in 1972, 2013 marks the first time a grant of rights in sound recordings under copyright law may be terminated.” This termination right was originally created so the “author” (which, in the music industry would be the recording artist) and the “entity to which the copyrighted works (sound recordings) were transferred” (aka, a record label/company) would be on more equal footing.
As Barry outlines, usually artists – especially emerging artists and those at the beginning of their careers – tend to not be in the best bargaining positions and then end up not necessarily getting the best deals from labels at this point. And of course, it’s never easy to predict how valuable a sound recording is going to be before it’s officially out in the marketplace. So, in simple terms, the new “termination right” lets either reclaim ownership interests in the sound recordings in order to try their hand at marketing and selling them, or re-negotiate their original contract. And, this could inevitably lead to quite a bit of litigation, as those on all sides of the industry work to interpret the law and protect their own best interests.
You can read Barry’s full article here. In it, he clearly explains the many different moving pieces of this aspect of copyright law as it relates to the music and entertainment industries, the impending potential complications, and what can be done to ensure that Congress’ original intention with this law – to “create balance and fairness for artists and record companies” – is upheld.
You can also read more about the work he does as well as find a variety of other useful articles and resources about various aspects of the music and entertainment businesses on the Heyman Law website.
This past week in music, industry analysts highlighted trends that have emerged during the Digital Age as experts claimed January is the best month for artists at all levels to release an album, and a study of the Billboard chart system showed that artists who show up on these charts only spend about five years there. Also, the file-sharing giant MegaUpload was finally shut down by the U.S. Department of Justice and labeled a “mega conspiracy.”
Want to Make it Big? Release Something in January
January has long been labeled a “dead month” in the music industry. But a study of artist releases – both major label and independent – conducted by the Independent showed it could actually be the perfect time for particularly emerging or lesser-known bands to sell more albums and register on the charts. And scoring a #1 hit is a good move for any band, as it increases sales, radio airplay and can garner better spots at live music festivals.
Since 2006, January releases have catapulted quite a few independent bands and artists to #1 on the charts, including The Arctic Monkeys in 2006 (Whatever People Say I Am, That’s What I’m Not) and The View in 2007 (Hats off to the Buskers). And Adele’s #1 success in January, 2008, 19 inspired her to release her album 21 in January 2011, an album which sold 200,000 copies in its first week and made her the best-selling artist of last year.
What is the advantage for artists of a January release? The biggest benefit is that sales of just 30,000 albums can earn them a #1 spot, whereas in other months, that sales figure would have to be about three-times that much.
This year, new artist Lana Del Rey is hoping to replicate Adele’s formula for success by releasing her debut album at the end of this month. However, in competition with her will be Adele herself as well as more established artists Bruno Mars and London indie band The Maccabees, all releasing their third albums the same week.
Experts say the real reason January can be such a prime month for new artists in particular to get noticed is because it is during this time of year that the media and music fans are hungriest for something new. According to John Hirst from HMV, there has typically been six weeks of silence after Christmas and “…When no one’s released a record for two months the public’s appetite is for something new. It’s easier to get media attention and positive reviews so an album can over-perform.”
How Long is the Career of a Billboard Artist?
Artists who make Billboard charts are there for only about five years on average, according to a study spend on average only about five years A recently-released professional study conducted by Storm Gloor, MBA at the University of Denver’s College of Arts and Media (CAM) and published in the 2011 Music and Entertainment Industry Educators Association (MEIEA) Journal. And according to Gloor, more than one-third who make the charts will be “one-hit wonders.”
This study is based on analysis of Billboard charts and other pop music data and is phase one of a research project designed to figure out how artists’ popularity and the length of their careers have been impacted by the huge music industry shift brought on by the digital revolution and other major events of the past 15 years. This first part of the study analyzed over 50 years of Billboard music charts.
The official results were that artists stay on Billboard charts in some capacity from 3.95-6.16 years and that 34-percent of those whose debut albums – of any genre –hit the charts only appear there once. However, with pop artists, that figure is 50 percent.
Gloor said the results of this study will be particularly important to aspiring artists who want to plot out real, long-lasting careers in music: “The research is important to aspiring artists in understanding their own long-term planning in light of such realities. They need to know what they are facing as they start planning for their careers and beyond.” He also said this information could help labels, as they will be able to use it to create more effective promotional strategies for their artists going forward.
The second part of Gloor’s study will involve an examination of music business trends and how they affect the popularity of artists who make the charts. According to Gloor, his initial findings have been that artists who chart might gain national popularity faster, but will not likely stay in the spotlight for long.
MegaUpload Shut Down by Feds
One of the world’s most formidable file-sharing websites MegaUpload finally bit the dust on Thursday as it was shut down by the U.S. Department of Justice for violation of piracy and copyright laws. The feds issued an indictment declaring that MegaUpload was a “mega conspiracy” and labeled it a global criminal organization stating its members “engaged in criminal copyright infringement and money laundering on a massive scale.”
The indictment also charges MegaUpload executives with earning $175 million through subscription fees and advertisements and taking $500 million in royalties from movie producers, authors, musicians and other copyright holders.
According to an article in The Washington Post, prosecutors stated that the company attempted to hide the fact that they were paying users to upload illegal movies and music and used the financial windfall this practice created for a “lavish lifestyle.” Federal agents confiscated dozens of luxury autos, including site founder Kim Schmitz’s, aka “Kim Dotcom”’s Rolls-Royce, which sported the license plate “GOD.”
Of course, MegaUpload is just one of a number of services that provide file sharing online. Sites such as Mediafire and Rapidshare and also cloud storage services like Box.net and Dropbox also offer easy ways to share content. This shutdown and the potentially impending SOPA and PIPA bills – which brought about internet-wide protests by Craigslist, Wikipedia and Google last week – has many running legitimate services concerned about their future and whether or not the government has the right, even in the absence of a passed bill, to shut sites down for hosting pirated content without allowing the companies to defend themselves in court first. As Eric Goldman, a professor of intellectual property law at Santa Clara University said, “They will wonder if they have done anything different from MegaUpload, and does that mean the Feds will come through their door?”
One detail that made MegaUpload different was that it managed to get celebrities on board to support it with its online marketing campaign featuring Kanye West, Lil’ Jon, Sean “Diddy” Combs as well as Russell Simmons and director Brett Ratner, who all professed their love for the site in a series of promotional videos.
The indictment against MegaUpload was unsealed Thursday, but was issued by a federal court in Virginia on January 5. The Justice Department released a statement with the indictment: “This action is among the largest criminal copyright cases ever brought by the United States and directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime.”
Authorities were dispatched last week to arrest three MegaUpload executives employed by its two companies Megaupload Ltd. and Vestor Ltd. in New Zealand, including the site’s founder, Schmitz. The indictment also charged the two companies with running a “racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement.”
In retaliation for the shutdown on Thursday, a hacker group named “Anonymous,” linked to the Twitter accounts @YourAnonNews and @AnonOps took down the websites for the Department of Justice and Universal Music as well as for the Recording Industry of America and the Motion Picture Association of America.
The Justice Department also seized 18 additional domain names linked to the case.
Big changes in the music industry took the spotlight this past week as the music industry filed suit against the Irish government and Billboard changed the format of its Top 200 for the first time in almost 60 years. Also, Dave Grohl talked candidly about the state of rock and why he believes record sales have been down.
Irish Government Embroiled in Music Industry Lawsuit
The Irish government is currently being sued by the music industry for failing to comply with the new SOPA-like EU copyright law that requires websites suspected of illegal file sharing to be blocked, according to an article on the TechEye website. And if the industry wins, Ireland will be the first country sued into insolvency over music piracy.
The suit has its roots in a 2010 lawsuit brought about by EMI that claimed Irish law did not hold up an order against an ISP for a music piracy site. The music industry stated that since the State had not held up copyright law, it could be held responsible for all the file sharing that goes on in Ireland, worth several trillion dollars.
Ireland has agreed to put a “statutory instrument” that would block websites and help them comply with EU copyright law as soon as possible. However, the music industry is planning to use the legal principle – already used in Italy – that allows a government to be sued for damages for failing to follow an EU directive.
Getting a conviction will be difficult, however, because the industry would have to prove that blocking websites actually stops piracy, then also show that the Irish government did not implement a system fast enough.
The New Billboard Top 200
2012 will mark the year Billboard finally made changes to its Top 200 list, which has had the same format since its inception in the mid 1950s. Now, deeply-discounted albums will not be counted, which could make promotion more difficult for labels, according to an article in the Los Angeles Times.
As an example, Lady Gaga’s Born This Way song hit U.S. pop charts last June, selling 1.1-million albums in its first week, marking the best debut sales since 2005. However, 440,000 copies of the song were sold by Amazon for 99 cents to promote its online storage service. And according to the new chart set up, these would not count as regular sales.
On January 13, Billboard posted an article about chart changes, stating that albums sold for less than $3.49 – selected because it represents half the wholesale cost of an album – will no longer be included as sales.
Billboard is a 117-year old institution and first began its “Billboard 200” chart in 1991, when it started using sales data from Nielsen SoundScan. And since its inception, this chart has been the most reliable music-purchase-tracking system in the U.S., providing an inside, “hype-free” look at sales and giving consumers and retailers raw numbers about an album’s popularity.
Of course, digital music has entirely changed the landscape of the industry, as album sales began their decline with Napster and then iTunes, which drove fans further online. And now, there are many more factors to consider besides just sales when gauging a band’s popularity, including YouTube views and Facebook friends. However, until this past week. Billboard has continued to present the raw sales numbers, digital and physical.
One of Billboard’s arguments for changing its system is inherent in the question of how inexpensive an album can be before it counts as essentially free and thus cannot really be called a real “sale.” However, the policy of not counting albums below $3.49 is only in effect for the first four weeks of their release. Proponents of this new system have noted that finding a new album for under $3.49 is uncommon, though Amazon has been known to offer new albums for under $2.99 in order to improve site traffic.
Because this new chart rule will alter the way album sales are calculated, it could actually change marketing. If the rule had been enacted in 2011, there would not have been a million-selling album debut. Lady Gaga would’ve only sold 660,000. Of course, no real money will be lost by artists or labels, because any money lost through deep discounting is lost by retailers. However, the new system could change the way emerging artists use digital and lower price points to increase sales and gain traction in the industry.
While some artists, managers and labels have had harsh words to say about the new system, others agree with Billboard when it claims to just be trying to accurately represent the changed the industry. Small label head Jeremy DeVine said, “I’ve been waiting for Billboard to crack down on these Amazon sales since they were first introduced …the sales are great for consumers and the artists, but from a chart perspective it treats a $10 album and a $1 with equal legitimacy … These kinds of quick sales paint unrealistic pictures of success for everyone involved.”
Dave Grohl, on the Loss of the “Good” Record
In a recent Q&A with Billboard, music innovator Dave Grohl of the Foo Fighters talked about the current music climate and what he believes to be the real reason behind low music industry sales: a majority of the music just isn’t good enough.
The Foo Fighters had a great year in 2011, releasing their critically-acclaimed seventh album Wasting Light, earning six Grammy nominations and embarking on a successful worldwide tour. And while Grohl admitted to having “the best year of his life,” he did have some choice words to say about why the music industry might be failing:
“Someone asked me recently, ‘What do you think the problem with the music industry is?’ I said, take the Adele record, for example. It’s an amazing record and everybody’s so shocked that it’s such a phenomenon. I’m not … You know why that record’s huge? Because it’s f–king good and it’s real. Now imagine if all records were that good. Do you think only one of them would sell? F—k no! All of them would. If all records were that good the music business would be on fire, but they’re not.”
But the focal point of the interview was a question has been cropping up for decades: “Is rock dead?” And Grohl’s response was that, while he believes most rock is not making the cut, he is not going to be joining so many other of the world’s best musicians by answering that question “yes:” For years, usually about once a year, you have a rock band that comes out and says, ‘We’re gonna save rock’n’roll,’ and then you’ll read an article asking, ‘Is Rock Dead?’
Grohl adds, “There’s always gonna be rock’n’roll bands, there’s always gonna be kids that love rock’n’roll records, and there will always be rock’n’roll. I travel all over the world and play music, and it’s easy to think rock’n’roll has gone away when you’re in a country like America. We just got back from a trip Down Under, we did a tour of Australia and New Zealand where we were pulling 40,000-50,000 people a night, selling out stadiums. To me, that means rock’n’roll is alive and well. The thing that will never go away is that connection you make with a band or a song where you’re moved by the fact that it’s real people making music.”