ReDigi bills itself as “The World’s First Online Marketplace For Used Digital Music,” but the RIAA is not impressed. Categorically rejecting the “first sale” doctrine as a safe harbor, the Recording Industry Association of America has sent the ReDigi digital music resale site a letter (PDF, hat tip: Cnet) that effectively demands that the company abandon its business and open its sales records to RIAA’s lawyers. Cease and desist your “infringing activities,” the missive warns. But that’s the least of it.

via RIAA wants ReDigi out of the business of selling “used” iTunes tracks.

In 2011, art and culture exist as DIGITAL MEDIA, and it is naive to think it will not be leaked or downloaded or shared or “stolen” repeatedly. It is just a fact of life. People need to decide for themselves if they want to steal or not. And if they DO then they can decide if and how to follow up with support. If you download leaked music, and you enjoy it, why not go buy an official copy? It seems fair. You are not obligated to do this, it is just a choice. Do you enjoy the artist? IF YOU ENJOY, THEN SUPPORT. If not, then simply carry on. It takes a LOT of time and energy for artists to create their craft, and even more time and energy for them to prepare a release, and to distribute it. You can support what you love in many ways, and in a sense you vote with your dollar.

via Dubstep Producer Bassnectar Talks Piracy, Leaks And Making It Easy For Your Fans To Support You | Techdirt.

“Myself and a few friends were very angry that certain people only seem to want to profit from recordings like the Toy album, so when we saw the eBay auction and heard of someone else selling discs for $55, I decide to upload it and give it away,” Brigstow told TorrentFreak.

via Unreleased Bowie on BitTorrent: Pirate Sabotage Turned Cultural Blessing | TorrentFreak.

The injunction was the result of a lengthy and ongoing litigation process which dates back to 2006, and soon after it was awarded the record labels filed a claim to recoup damages said to have been caused by LimeWire. The labels calculated that the company behind the popular file-sharing client owes them up to a billion dollars.

The case dragged on and in recent weeks dozens of documents were submitted to the court in a noteworthy side-battle. To get to the bottom of how the music industry sets up licensing deals with other Internet companies, LimeWire subpoenaed internal emails from Apple, Amazon, Yahoo, Google, MySpace and others.

Thus far a quarter million pages of emails have been collected, leading LimeWire to draw some interesting conclusions. Among other things, they found that unauthorized downloads actually boosted the revenue of music labels, and that their income took a dive when LimeWire shut down.

via LimeWire Settles With Record Labels, Still Faces $1 Billion Claim | TorrentFreak.

http://www.itworld.com/%5Bprimary-term%5D/138187/music-execs-stressed-over-free-streaming

Free streaming services are replacing piracy as the chief culprit of music industry revenue loss in the minds of fiscally frustrated executives, if a number of panel discussions at a New York digital music conference are any indication.

People are listening to more music than ever before, but they are paying less for it, noted Russ Crupnick, a president at the analyst firm NPD Group, speaking at the Digital Music Forum East conference, held Thursday in New York.

Crupnick noted that the average consumer listened to music 19.7 hours a week in 2010, up from 18.5 hours per week in 2009. But at the same time, consumers have been buying less music. In 2010, only 50 percent of consumers purchased music, by either buying a CD or paying for a downloadable music track, down from 70 percent in 2006.

“We have lost 20 million buyers in just five years,” Crupnick said. Moreover, only about 14 percent of buyers account for 56 percent of revenue for the recording industry.

“Consumers have flipped us the bird,” Crupnick concluded, adding that the lost sales has thus far not been made up yet by other forms of revenue, such as concerts or merchandise sales.

The music industry has long expected that sales of music CDs would decline, as consumers move their libraries to computers and portable listening devices. Digital sales, however, have not made up for the shortfall on CD sales over the past decade. Last year, digital sales accounted for about 23 percent of all music sales, which is up only modestly from 14 percent in 2006, Crupnick said.

“We never really made the digital transformation,” he said.

The reasons behind this sales decline have been routinely debated at this conference over the past decade, the panelists noted. In years past, music executives put the blame on digital music piracy — the easy and free sharing of music with Internet software like BitTorrent — for eroding sales of recorded music.

At this year's conference, however, concern centered on the growing influence of free streaming Internet services, such as Pandora, MySpace, Spotify and even YouTube. Music listeners deploy YouTube as a streaming service, picking the songs they want to hear and minimizing the browser window, noted Eric Garland, who is the CEO and founder of BigChampagne, a media tracking company.

via Music execs stressed over free streaming | ITworld.

Slashdot

“The Guardian reports that Britain’s two biggest record labels, Sony and Universal, plan to beat music piracy by making new singles available for sale on the day they first hit the airwaves hoping the effort will encourage young people to buy songs they can listen to immediately rather than copying from radio broadcasts online. Songs used to receive up to six weeks radio airplay before they were released for sale, a practice known as ‘setting up’ a record. ‘What we were finding under the old system was the searches for songs on Google or iTunes were peaking two weeks before they actually became available to buy, meaning that the public was bored of — or had already pirated — new singles,’ says David Joseph. Sony, which will start the ‘on air, on sale’ policy simultaneously with Universal next month, agreed that the old approach was no longer relevant in an age where, according to a spokesman for the music major, ‘people want instant gratification.’”

WSJ.com

“We don’t have to rush out records that don’t work for the sake of making money,”

[origo]

 

- Becslése szerint mekkora bevételtől eshet el az illegális letöltések miatt?

- A  Fehér Sólyom nevű kiadóm csak a saját kiadványaimat jelenteti meg, ennél kisebb, egyszerűbb vállalkozás aligha létezik. Négy év munkája van A katona imája című új albumban, sok érzelmi és anyagi ráfordítás: vonóskari felvételek, nagy stúdió, rengeteg munka, aki akarja, csaknem kétórányi werkfilmben ellenőrizheti le a videómegosztókon vagy a CD-hez adott ajándék DVD-n. Ha a saját munkát nem számolom, a konkrét anyagi ráfordítás valahol hatezer példánynál térülne meg. Viszonylag egyszerű belátni, hogy nem ez a világ legnagyobb biznisze. Nem lehet megmondani, hányan töltik le hobbiból, esetleg kifejezetten károkozási szándékkal az anyagot. Mindenesetre biztos, hogy potenciális vásárlók is töltenek: nem lehet nem észrevenni, hogy milyen észvesztő mértékben zsugorodik évről-évre a lemezpiac. Ebben a torrentezés szerepe letagadhatatlan, baromi nagy kárt okoz, elsősorban olyan kis országok zenészeinek, előadóinak, mint Magyarország. Pásztor László, a Neoton gitárosa és az mTon kiadó vezetője ezt úgy fogalmazta meg, hogy a torrentezés elvégezte itthon azt a piszkos munkát, amit a kilencvenes évek kazetta- és CD-hamisítóinak nem sikerült.

- Ön követi az új technológiákat, Blu-ray-en is jelent meg koncertfelvétele, zenéi elérhetők a Songo.hu online zeneáruházban is. A hagyományos lemezekhez képest milyen eladásokat hoz a legális online zenebolt? Milyen ütemezés szerint kerülnek fel a zenéi a szájtra, ahol ez az új album még nem elérhető?

- Valóban mi adtuk ki az első magyar zenei Blu-ray-t, de részemről nem lesz folytatás, mert rengeteg pénzt költöttünk rá, és egyszerűen nem érte meg: nagyon nem! A legális zeneboltokból elenyésző, szinte mikroszkopikus a bevétel, mert esélyük sincs versenyezni a torrentezéssel. Ha ötszáz forint lenne egy album, a letöltő akkor se venné meg, mert az pont ötszázzal drágább, mint a torrent.

- A ProArt az ön albumát jelölte meg tömeges szerzőijog-sértést elkövető magyar torrentoldalak ellen tett feljelentésében. Egyes szájtokon a lefoglalások hatására olyan belső szabályzatot hoztak, hogy tilos magyar zenéket megosztani, a külföldi kiadványok terjesztése azonban továbbra is rendben van. Mit gondol, egy ilyen lépés segíthet valamelyest a hazai előadók helyzetén?

A fájlcserélők világával foglalkozó Asva.info blog a hétvégén számolt be arról, hogy pénteken lefoglalták két hazai, Bittorrent technológiát használó letöltőoldal, a Deathlord és a BitBarát szervereit. A ProArt szerzőijog-védő szervezet igazgatójától, Horváth Pétertől megtudtuk, hogy a múlt héten valóban feljelentést tettek három hazai Bittorrent-oldal, a fent említett két szájt, illetve egy BigTorrent nevű, péntek óta ugyancsak nem elérhető oldal ellen. Horváth Péter szerint a szövetség folyamatosan figyeli a magyar letöltőoldalakat, és jelzi ezek üzemeltetőinek a jogsértéseket. A múlt héten perbe fogott oldalakon hosszú ideje tapasztalják ezeket. Bár a feljelentésben Ákos múlt héten megjelent A katona imája című albumát hozták fel példaként, a ProArt igazgatója szerint ez csupán egy volt az oldalakon elérhető számtalan jogsértő tartalom közül. Miután az Asva.info még szombaton hírül adta, hogy valószínűleg az új Ákos-album miatt zajlott a szerverek lefoglalása, a hétvégén a warezoldalak fórumain sokan kígyót-békát kiáltottak az énekesre az állítólagosan tőle eredeztethető rendőrségi akció miatt: egyes torrentoldalakon “csak azért is” elkezdték terjeszteni Ákos új albumát. Érdekes módon másutt tiltólistára került a lemez digitális kópiája, bizonyos letöltőoldalakra pedig a hétvége óta nem szabad feltölteni magyar előadó zenéit.

- Azt beszélik, hogy a torrentoldalak, ha levelet kapnak egy magyar előadótól, akkor kérésre leveszi az anyagait. Ehhez persze állandóan ezeken az oldalakon kéne lógniuk a zenészeknek. Ehelyett a legtöbb magyar előadó a kicsiktől a nagyokig felhatalmazza a ProArtot, hogy ha a tartalmaikat megosztva látja a szervezet a torrentoldalakon, akkor azokat távolíttassa el azokról. Amikor megkérdeztem a szervezetet, hogy miért az én albumomra való hivatkozással koboztak el szervereket, azt a választ kaptam, hogy ezeket az oldalakat még augusztusban felszólítottákl a jogsértések megszüntetésére, azok pedig nagy ívben tettek az egészre. A feljelentést is úgy írták meg, hogy több zenei tartalom érhető el az oldalon az én albumomon kívül is. A ProArt is örül, ha megoszthatja a felelősséget és egy széles körben ismert előadó lemezére hivatkozhat egy feljelentésben. Az igazsághoz hozzátartozik, hogy egyes szájtokon valóban leállították a magyar zenék megosztását. Más szájtokon meg engem kiáltottak ki első számú közellenségnek, arra a népmesei egyszerűségű kitalációra hivatkozva, hogy én feljelentettem, elkoboztam a torrentoldalakat. Úgy tűnik, nem sok embert érdekel, hogy ez kamu, és hogy sem szándékom, sem hatalmam nincs ilyesmire – viszont újra lehet böködni az Ákos-alakú vudubabát. Ezeken a fájlmegosztókon dollármilliókért készült filmek Blu-ray-kiadásait tölthetik le az emberek ingyen. Éppen az én 3990 forintos CD-m miatt tiltottak le szervereket? Ez komoly? Aki ezt beveszi, az azt is elhiszi, hogy Gyurcsány Ferenc gyerekeket talál az utcán. Ami ezután következett, az a hazai torrentezésben egy egészen új, figyelemreméltó elem. Egy magyar produkcióval szemben szervezetten, direkt károkozási szándékkal lépett fel a torrentezők egy csoportja (akik a lefoglalásokat követően szándékosan kezdték terjeszteni Ákos új albumát – a szerk.): ezt egyértelműen megfogalmazták. Az csak ráadás, hogy hamis vád alapján tették-teszik mindezt. Ezzel sajnos vége az “ártatlan fájlmegoszás” imidzsének.

- Ön min hallgat zenét? Előfordult már, hogy egy számot, albumot nem tudott beszerezni semmilyen legális formában, ezért letöltötte mondjuk torrentről?

- Nincs különbség, csak jobban indokolható. Ódivatú srác vagyok, CD-n hallgatok zenét, ha mp3-at töltöttem le, akkor is CD-re írtam ki. Ritkaságokat régen a lemezboltból lehetett beszerezni: ma azért nem lehet, mert a lemezboltok bezártak és a nagyobb műszaki boltok lemezosztályai is egyre kisebbek. A minden képzeletet meghaladó fájlmegosztás miatt néha már az sem tud lemezt venni, aki szeretne, mert egyszerűen nincsen hol.

- Nem jogilag, erkölcsileg kérdezzük ezt is: elítélendőnek tartod, hogy ha megvannak az albumaid kazettán vagy cd-n, és letöltöm őket warezszájtról mp3-ban?

- Teljesen hipotetikus kérdés. Minek töltenéd le azt, ami már megvan? Aki ma letölt, az nem vásárol. Nem olyan bonyolult ez.

- Ön szerint megoldaná a hazai lemezipar problémáját, ha nem lehetne torrentezni?

- Ha nem lehetne ingyen letölteni azt, ami az alkotóknak pénzbe kerül, az elég sok mindent megoldana, igen.

 

Music Ally | Blog Archive

Brindley from Music Ally now (I feel like Paxman on University Challenge). He talks about where should the crackdown on piracy come – suing your own consumers hasn’t worked in markets like the US. “When you start taking action against them, that tends to lead to some pretty bad PR,” he says. And he points out that taking action against the file-sharing sites hasn’t worked well either. Yet pressuring the intermediary – ISPs – is dangerous. “When you start playing around with people’s connections… that’s a pretty severe intervention.” He thinks that actually cutting people off from accessing the internet in their own homes – “when that’s going to become just like electricity, water – a basic human right… I’m not sure it’s worth that battle

GIGAOM

There are still significant gaps in the catalog.
I still can’t merge things I own with things I just want to stream.
Ownership of music still provides a smoother listening experience.
I can only share music with fellow subscribers.
I can still hear things that I don’t already own without paying for them.

Google shuts down music blogs without warning | Music | guardian.co.uk

In what critics are calling “musicblogocide 2010″, Google has deleted at least six popular music blogs that it claims violated copyright law. These sites, hosted by Google’s Blogger and Blogspot services, received notices only after their sites – and years of archives – were wiped from the internet.

“We’d like to inform you that we’ve received another complaint regarding your blog,” begins the cheerful letter received by each of the owners of Pop Tarts, Masala, I Rock Cleveland, To Die By Your Side, It’s a Rap and Living Ears. All of these are music-blogs – sites that write about music and post MP3s of what they are discussing. “Upon review of your account, we’ve noted that your blog has repeatedly violated Blogger’s Terms of Service … [and] we’ve been forced to remove your blog. Thank you for your understanding.”

TorrentFreak

Lawyers have presented their final arguments in the trial of Alan Ellis. The prosecution slammed the ex-OiNK admin, saying that the site was set up with dishonest and profiteering intentions right from the start. The defense tore into IFPI and countered by calling Ellis an innovator with talents to be nurtured. Today the jury returned a unanimous verdict of not guilty, and Ellis walked free.

After a very long wait of more than two years, last week the OiNK trial got underway with the prosecution making their case against Alan Ellis. This week it was the turn of the defense and yesterday both sides had the opportunity to summarize their positions by submitting their closing arguments to the jury at Teesside Crown Court.

Peter Makepeace, prosecuting, naturally painted an extremely negative picture, labeling the Pink Palace as a place designed from the ground up as a personal money-making machine for Ellis.

“21 million downloads. 600,000-plus albums. £300,000. This was a cash cow, it was perfectly designed to profit him and it was as dishonest as the day is long,” said Makepeace.

It is common sense to come to the conclusion that Oink was dishonest, claimed the prosecution lawyer, adding that Ellis knows that it’s dishonest “to promote, encourage and facilitate criminal activity,” and accusing him of telling the jury “persistent, cunning, calculated lies.”

It would, of course, be dishonest to promote “criminal activity”, but Mr Makepeace should be very well aware that the activity engaged in by OiNK’s users is covered under civil law.

Switching momentarily from criticism to praise and then back again, Makepeace said that the OiNK website was a “wonderful machine” for sharing music but noted that while the site had a really good brand name, it was a brand synonymous with “ripping off music.”

University of London professor Birgitte Andersenok gave evidence earlier in the trial, stating that file-sharing didn’t hurt the music industry and led to more sales. Mr Makepeace trashed her evidence.

“It’s nonsense, it’s flannel, it’s verbiage, it’s garbage,” he told the Court.

For the defense, Alex Stein said that Ellis had never knowingly acted dishonestly and that in 2004 when OiNK was launched, it was a “brave new world” on the Internet.

“In many societies he’d be an innovator, a creator, a Richard Branson. His talent would be moulded, not crushed by some sort of media organization,” he said.

The media organization being referred to by Stein was the IFPI, who he said had never requested that OiNK be shut down, and had instead “sat and watched.”

Gazette Live reports that Stein went on to launch a scathing attack on the IFPI.

“They used this site. Their own members used this site to promote their own music and now they’re crushing him. Maybe he grew too big for them, maybe they’ve taken a different marketing approach. I don’t know. But it was decided that this site should be taken down.

“All of us here are being manipulated to some sort of marketing strategy by the IFPI. If anybody’s acting dishonestly it’s them,” he said.

At the end of the two week trial the jury returned a unanimous verdict (12 to 0). Alan Ellis is not guilty of Conspiracy to Defraud the music industry. He walked out of Teesside Crown Court a free man today, his name cleared.

The verdict cannot be appealed and Ellis can finally put the past behind him and move on.

ArsTechnica

Is Sweden, the only country to have sent a member of the Pirate Party
to the European Parliament, finally giving up its swashbuckling ways?

When Sweden’s IPRED anti-piracy law
went into effect earlier this year, Internet traffic across the country
plummeted overnight—a sign that P2P users, fearing exposure at last,
were abandoning their existing copyright infringement tools. The Pirate
Bay defendants were found guilty by a Swedish court earlier this year, and the site’s ISP are now under assault by the music and movie industries.

The music business insists that the measure are working. Music’s major
labels say that sales of digital downloads are up 18 percent in the
first nine months of 2009 in Sweden.

Ludvig Werner, head of the trade group IFPI Sweden, told the UK’s Guardian newspaper
that it didn’t matter if people still wanted to pirate; the point was,
they were doing less of it. “It’s like speeding, put up cameras and
people will start to ease off the gas pedal. Even if it doesn’t change
the attitudes, they find legal alternatives because they don’t want to
get caught,” said Werner.

Dueling explanations

As with most statistics in the Copyright Wars, these are hard to
evaluate. Digital music sales are up, but has copyright infringement
also dropped? IFPI doesn’t know.

In fact, there are reasons to suspect that legal actions like IPRED
aren’t the only drivers of Sweden’s uptick in music sales. As we reported yesterday,
UK-based music label EMI has reported a worldwide revenue increase of
4.6 percent in its recorded music business through 2009 to date; surely
this can’t just be chalked up to tougher antipiracy laws in small
countries like Sweden and South Korea?

And Swedish Internet traffic data bounced back soon after the IPRED law came into force and now exceeds the level from the beginning of 2009.

Credit also has to go the music industry for licensing its music far
more widely, often to innovative Scandinavian companies like Spotify
and Nokia, which is offering the Comes With Music plan on selected
phones.

But who knows? Perhaps IPRED and The Pirate Bay prosecution
were real drivers of the change in Sweden; we’ve certainly seen surveys
in the UK that suggest online infringers will alter their behavior once
the veil of anonymity is stripped away (which was the point of IPRED).

If true, the data could help prove a music industry mantra: tougher enforcement can yield results (i.e., battling the pirates is not a hopeless endeavor).

On the other hand, it seems to suggest that only minimal legal
tools are needed. IPRED made it possible for rightsholders to subpoena
ISPs and get subscriber names and information; The Pirate Bay case was
brought under copyright law. New Internet disconnection laws, ISP
filtering schemes, and similar invasive measures weren’t required.

 thestar.com

Chet Baker was a leading jazz musician in the 1950s, playing trumpet and providing vocals. Baker died in 1988, yet he is about to add a new claim to fame as the lead plaintiff in possibly the largest copyright infringement case in Canadian history. His estate, which still owns the copyright in more than 50 of his works, is part of a massive class-action lawsuit that has been underway for the past year.

The infringer has effectively already admitted owing at least $50 million and the full claim could exceed $60 billion. If the dollars don’t shock, the target of the lawsuit undoubtedly will: The defendants in the case are Warner Music Canada, Sony BMG Music Canada, EMI Music Canada, and Universal Music Canada, the four primary members of the Canadian Recording Industry Association.

The CRIA members were hit with the lawsuit in October 2008 after artists decided to turn to the courts following decades of frustration with the rampant infringement (I am adviser to the Canadian Internet Policy and Public Interest Clinic, which is co-counsel, but have had no involvement in the case).

The claims arise from a longstanding practice of the recording industry in Canada, described in the lawsuit as “exploit now, pay later if at all.” It involves the use of works that are often included in compilation CDs (ie. the top dance tracks of 2009) or live recordings. The record labels create, press, distribute and sell the CDs, but do not obtain the necessary copyright licences.

Instead, the names of the songs on the CDs are placed on a “pending list,” which signifies that approval and payment is pending. The pending list dates back to the late 1980s, when Canada changed its copyright law by replacing a compulsory licence with the need for specific authorization for each use. It is perhaps better characterized as a copyright infringement admission list, however, since for each use of the work, the record label openly admits that it has not obtained copyright permission and not paid any royalty or fee.

Over the years, the size of the pending list has grown dramatically, now containing more than 300,000 songs.

From Beyonce to Bruce Springsteen, the artists waiting for payment are far from obscure, as thousands of Canadian and foreign artists have seen their copyrights used without permission and payment.

It is difficult to understand why the industry has been so reluctant to pay its bills. Some works may be in the public domain or belong to a copyright owner difficult to ascertain or locate, yet the likes of Sarah McLachlan, Bruce Cockburn, Sloan, or the Watchmen are not hidden from view.

The more likely reason is that the record labels have had little motivation to pay up. As the balance has grown, David Basskin, the president and CEO of the Canadian Musical Reproduction Rights Agency Ltd., notes in his affidavit that “the record labels have devoted insufficient resources for identifying and paying the owners of musical works on the pending lists.” The CRIA members now face the prospect of far greater liability.

The class action seeks the option of statutory damages for each infringement. At $20,000 per infringement, potential liability exceeds $60 billion.

These numbers may sound outrageous, yet they are based on the same rules that led the recording industry to claim a single file sharer is liable for millions in damages.

After years of claiming Canadian consumers disrespect copyright, the irony of having the recording industry face a massive lawsuit will not be lost on anyone, least of all the artists still waiting to be paid. Indeed, they are also seeking punitive damages, arguing “the conduct of the defendant record companies is aggravated by their strict and unremitting approach to the enforcement of their copyright interests against consumers.”

The Problem With Music

The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month. The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never “recouped,” the band will have no leverage, and will oblige. The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, won’t have earned any royalties from their T-shirts yet. Maybe the T-shirt guys have figured out how to count money like record company guys. Some of your friends are probably already this fucked.

Steve Albini is an independent and corporate rock record producer most widely known for having produced Nirvana’s “In Utero”.

Major Labels – Gizmodo

Tim Quirk was the singer of punk-pop outfit Too Much Joy, signed by Warner Bros. in 1990. Now he’s an executive at an online music service, giving him insight on digital sales data and just how labels fudge their numbers.

I got something in the mail last week I’d been wanting for years: a Too Much Joy royalty statement from Warner Brothers that finally included our digital earnings. Though our catalog has been out of print physically since the late-1990s, the three albums we released on Giant/WB have been available digitally for about five years. Yet the royalty statements I received every six months kept insisting we had zero income, and our unrecouped balance ($395,277.18!)* stubbornly remained the same.

Now, I don’t ever expect that unrecouped balance to turn into a positive number, but since the band had been seeing thousands of dollars in digital royalties each year from IODA for the four indie albums we control ourselves, I figured five years’ worth of digital income from our far more popular major label albums would at least make a small dent in the figure. Our IODA royalties during that time had totaled about $12,000 – not a princely sum, but enough to suggest that the total haul over the same period from our major label material should be at least that much, if not two to five times more. Even with the band receiving only a percentage of the major label take, getting our unrecouped balance below $375,000 seemed reasonable, and knocking it closer to -$350,000 wasn’t out of the question.

So I was naively excited when I opened the envelope. And my answer was right there on the first page. In five years, our three albums earned us a grand total of… $62.47.

What the fuck?

I mean, we all know that major labels are supposed to be venal masters of hiding money from artists, but they’re also supposed to be good at it, right? This figure wasn’t insulting because it was so small, it was insulting because it was so stupid.

Why It Was So Stupid

Here’s the thing: I work at Rhapsody. I know what we pay Warner Bros. for every stream and download, and I can look up exactly how many plays and downloads we’ve paid them for each TMJ tune that Warner controls. Moreover, Warner Bros. knows this, as my gig at Rhapsody is the only reason I was able to get them to add my digital royalties to my statement in the first place. For years I’d been pestering the label, but I hadn’t gotten anywhere till I was on a panel with a reasonably big wig in Warner Music Group’s business affairs team about a year ago

The panel took place at a legal conference, and focused on digital music and the crisis facing the record industry**. As you do at these things, the other panelists and I gathered for breakfast a couple hours before our session began, to discuss what topics we should address. Peter Jenner, who manages Billy Bragg and has been a needed gadfly for many years at events like these, wanted to discuss the little-understood fact that digital music services frequently pay labels advances in the tens of millions of dollars for access to their catalogs, and it’s unclear how (or if) that money is ever shared with artists.

I agreed that was a big issue, but said I had more immediate and mundane concerns, such as the fact that Warner wouldn’t even report my band’s iTunes sales to me.

The business affairs guy (who I am calling “the business affairs guy” rather than naming because he did me a favor by finally getting the digital royalties added to my statement, and I am grateful for that and don’t want this to sound like I’m attacking him personally, even though it’s about to seem like I am) said that it was complicated connecting Warner’s digital royalty payments to their existing accounting mechanisms, and that since my band was unrecouped they had “to take care of R.E.M. and the Red Hot Chili Peppers first.”

That kind of pissed me off. On the one hand, yeah, my band’s unrecouped and is unlikely ever to reach the point where Warner actually has to cut us a royalty check. On the other hand, though, they are contractually obligated to report what revenue they receive in our name, and, having helped build a database that tracks how much Rhapsody owes whom for what music gets played, I’m well aware of what is and isn’t complicated about doing so. It’s not something you have to build over and over again for each artist. It’s something you build once. It takes a while, and it can be expensive, and sometimes you make honest mistakes, but it’s not rocket science. Hell, it’s not even algebra! It’s just simple math.

I knew that each online service was reporting every download, and every play, for every track, to thousands of labels (more labels, I’m guessing, than Warner has artists to report to). And I also knew that IODA was able to tell me exactly how much money my band earned the previous month from Amazon ($11.05), Verizon (74 cents), Nokia (11 cents), MySpace (4 sad cents) and many more. I didn’t understand why Warner wasn’t reporting similar information back to my band – and if they weren’t doing it for Too Much Joy, I assumed they weren’t doing it for other artists.

To his credit, the business affairs guy told me he understood my point, and promised he’d pursue the matter internally on my behalf – which he did. It just took 13 months to get the results, which were (predictably, perhaps) ridiculous.

The sad thing is I don’t even think Warner is deliberately trying to screw TMJ and the hundreds of other also-rans and almost-weres they’ve signed over the years. The reality is more boring, but also more depressing. Like I said, they don’t actually owe us any money. But that’s what’s so weird about this, to me: they have the ability to tell the truth, and doing so won’t cost them anything.

They just can’t be bothered. They don’t care, because they don’t have to.

“$10,000 Is Nothing”

An interlude, here. Back in 1992, when TMJ was still a going concern and even the label thought maybe we’d join the hallowed company of recouped bands one day, Warner made a $10,000 accounting error on our statement (in their favor, naturally). When I caught this mistake, and brought it to the attention of someone with the power to correct it, he wasn’t just befuddled by my anger – he laughed at it. “$10,000 is nothing!” he chuckled.

If you’re like most people – especially people in unrecouped bands – “nothing” is not a word you ever use in conjunction with a figure like “$10,000,” but he seemed oblivious to that. “It’s a rounding error. It happens all the time. Why are you so worked up?”

These days I work for a reasonably large corporation myself, and, sadly, I understand exactly what the guy meant. When your revenues (and your expenses) are in the hundreds of millions of dollars, $10,000 mistakes are common, if undesirable.

I still think he was a jackass, though, and that sentence continues to haunt me. Because $10,000 might have been nothing to him, but it was clearly something to me. And his inability to take it seriously – to put himself in my place, just for the length of our phone call – suggested that people who care about $10,000 mistakes, and the principles of things, like, say, honoring contracts even when you don’t have to, are the real idiots.

As you may have divined by this point, I am conflicted about whether I am actually being a petty jerk by pursuing this, or whether labels just thrive on making fools like me feel like petty jerks. People in the record industry are very good at making bands believe they deserve the hundreds of thousands (or sometimes millions) of dollars labels advance the musicians when they’re first signed, and even better at convincing those same musicians it’s the bands’ fault when those advances aren’t recouped (the last thing $10,000-Is-Nothing-Man yelled at me before he hung up was, “Too Much Joy never earned us shit!”*** as though that fact somehow negated their obligation to account honestly).

I don’t want to live in $10,000-Is-Nothing-Man’s world. But I do. We all do. We have no choice.

The Boring Reality

Back to my ridiculous Warner Bros. statement. As I flipped through its ten pages (seriously, it took ten pages to detail the $62.47 of income), I realized that Warner wasn’t being evil, just careless and unconcerned – an impression I confirmed a few days later when I spoke to a guy in their Royalties and Licensing department I am going to call Danny.****

I asked Danny why there were no royalties at all listed from iTunes, and he said, “Huh. There are no domestic downloads on here at all. Only streams. And it has international downloads, but no international streams. I have no idea why.” I asked Danny why the statement only seemed to list tracks from two of the three albums Warner had released – an entire album was missing. He said they could only report back what the digital services had provided to them, and the services must not have reported any activity for those other songs. When I suggested that seemed unlikely – that having every track from two albums listed by over a dozen different services, but zero tracks from a third album listed by any seemed more like an error on Warner’s side, he said he’d look into it. As I asked more questions (Why do we get paid 50% of the income from all the tracks on one album, but only 35.7143% of the income from all the tracks on another? Why did 29 plays of a track on the late, lamented MusicMatch earn a total of 63 cents when 1,016 plays of the exact same track on MySpace earned only 23 cents?) he eventually got to the heart of the matter: “We don’t normally do this for unrecouped bands,” he said. “But, I was told you’d asked.”

It’s possible I’m projecting my own insecurities onto calm, patient Danny, but I’m pretty sure the subtext of that comment was the same thing I’d heard from $10,000-Is-Nothing-Man: all these figures were pointless, and I was kind of being a jerk by wasting their time asking about them. After all, they have the Red Hot Chili Peppers to deal with, and the label actually owes those guys money.

Danny may even be right. But there’s another possibility – one I don’t necessarily subscribe to, but one that could be avoided entirely by humoring pests like me. There’s a theory that labels and publishers deliberately avoid creating the transparent accounting systems today’s technology enables. Because accurately accounting to my silly little band would mean accurately accounting to the less silly bands that are recouped, and paying them more money as a result.

If that’s true (and I emphasize the if, because it’s equally possible that people everywhere, including major label accounting departments, are just dumb and lazy)*****, then there’s more than my pride and principles on the line when I ask Danny in Royalties and Licensing to answer my many questions. I don’t feel a burning need to make the Red Hot Chili Peppers any more money, but I wouldn’t mind doing my small part to get us all out of the sad world $10,000-Is-Nothing-Man inhabits.

So I will keep asking, even though I sometimes feel like a petty jerk for doing so.

---

* A word here about that unrecouped balance, for those uninitiated in the complex mechanics of major label accounting. While our royalty statement shows Too Much Joy in the red with Warner Bros. (now by only $395,214.71 after that $62.47 digital windfall), this doesn’t mean Warner “lost” nearly $400,000 on the band. That’s how much they spent on us, and we don’t see any royalty checks until it’s paid back, but it doesn’t get paid back out of the full price of every album sold. It gets paid back out of the band’s share of every album sold, which is roughly 10% of the retail price. So, using round numbers to make the math as easy as possible to understand, let’s say Warner Bros. spent something like $450,000 total on TMJ. If Warner sold 15,000 copies of each of the three TMJ records they released at a wholesale price of $10 each, they would have earned back the $450,000. But if those records were retailing for $15, TMJ would have only paid back $67,500, and our statement would show an unrecouped balance of $382,500.

I do not share this information out of a Steve Albini-esque desire to rail against the major label system (he already wrote the definitive rant, which you can find here if you want even more figures, and enjoy having those figures bracketed with cursing and insults). I’m simply explaining why I’m not embarrassed that I “owe” Warner Bros. almost $400,000. They didn’t make a lot of money off of Too Much Joy. But they didn’t lose any, either. So whenever you hear some label flak claiming 98% of the bands they sign lose money for the company, substitute the phrase “just don’t earn enough” for the word “lose.”

** The whole conference took place at a semi-swank hotel on the island of St. Thomas, which is a funny place to gather to talk about how to save the music business, but that would be a whole different diatribe.

*** This same dynamic works in reverse – I interviewed the Butthole Surfers for Raygun magazine back in the 1990s, and Gibby Haynes described the odd feeling of visiting Capitol records’ offices and hearing, “a bunch of people go, ‘Hey, man, be cool to these guys, they’re a recouped band.’ I heard that a bunch of times.”

**** Again, I am avoiding using his real name because he returned my call promptly, and patiently answered my many questions, which is behavior I want to encourage, so I have no desire to lambaste him publicly.

***** Of course, these two possibilities are not mutually exclusive – it is also possible that labels are evil and avaricious AND dumb and lazy, at the same time.

billboard

The great hope for digital music was that it would make the recording industry more egalitarian—that up-and-coming bands with pluck and a knack for promotion would be able to get their work to the masses without the backing of record labels. According to “The Long Tail: Why the Future of Business Is Selling Less of More”—a 2006 book by Wired magazine editor in chief Chris Anderson—hits dominated the market mostly because shelf space in stores was limited. Digital retail and online media would exponentially increase the choices available to consumers, who would then use online tools to discover products that appealed to them more than the biggest hits.Anderson’s “Long Tail” idea comes from a sales graph that looks like the letter “L” with a curve instead of a corner. On the left are the hits, the 5,000 best-selling titles that would typically be carried by a national chain; on the right, further down the curve, are less popular titles that sell fewer copies. In the physical world, few stores have space for these niche titles, which don’t sell well. But in the digital world, where space hardly matters, Anderson suggested, these titles would collectively account for a far greater percentage of music sales—and of movies, books and other consumer products. The ways we think about popular taste, he writes, “are actually artifacts of poor supply-and-demand matching—a market response to inefficient distribution.”

The Independent

People who illegally download music from the internet also spend more money on music than anyone else, according to a new study. The survey, published today, found that those who admit illegally downloading music spent an average of £77 a year on music – £33 more than those who claim that they never download music dishonestly.

The findings suggest that plans by the Secretary of State for Business, Peter Mandelson, to crack down on illegal downloaders by threatening to cut their internet connections with a “three strikes and you’re out” rule could harm the music industry by punishing its core customers.

An estimated seven million UK users download files illegally every year. The record industry’s trade association, the British Phonographic Industry (BPI), believes this copyright infringement will cost the industry £200m this year.

The poll, which surveyed 1,000 16- to 50-year-olds with internet access, found that one in 10 people admit to downloading music illegally.

Billy Bragg | Comment is free | guardian.co.uk

A better way to sink internet pirates

The only way to tackle illegal filesharing is not suppression, but to offer reliable, easy to use, fairly priced alternatives

Last week the Featured Artists Coalition (FAC) convened a meeting of artists at Air Studios in London with the intention of seeking common ground on the issue of what to do about illegal filesharing before the end of the government’s consultation period, which has now closed.

The statement that we produced is the first real sign that artists are ready and willing to become involved in the debate about the shape of the new digital music industry. There were many views in the room, from those who wished to disconnect illegal downloaders, to those who believed that there was no technical solution to the loss of revenue that the recording industry is experiencing.

Despite our differences of opinion, we were able to agree on bandwidth restriction as final sanction for egregious offenders. We held back from suspension of internet accounts because we felt it was disproportionate and punitive, but most of all, we held back because we didn’t believe it was in the best interests of our profession.

The suppression of illegal filesharing is a long-term, highly expensive, technologically fraught strategy with serious implications for personal privacy. It is questionable whether any of the money saved will ever find its way to the artists who have suffered loss of income.

While the recording industry continues to make threatening noises towards kids who swap music files among themselves, our real enemies, the illegal download sites that make money giving our music away for free, are disappearing off the radar into darknets.

This is a war that no one can win.

As the pirates always manage to stay one step ahead of the latest clampdown, the recording industry will continue to ask legislators for ever tighter sanctions, leading ultimately to an internet controlled by and for big business, which can only be accessed by those willing to pay.

The loss to the creative community would be catastrophic. The internet has made it possible for individual artists to make, distribute and promote their own works with the active support of P2P networks. For new artists to flourish, it is vital that the internet remain free to all.

We believe that this sense of freedom is the key to constructing a viable digital business model for the recording industry. The successful music sites such as MySpace, YouTube and Spotify all offer free access. The next step is to create “feels like free” services. We need legal networks licenced by record companies that give users access to all the music they want for a subscription fee. We need P2P communities that spread the word for new artists while offering advertising platforms so that an artist whose work is downloaded can receive reciprocal payment from advertising revenue.

Artists must be prepared to work with the record industry and with legislators on a programme of education aimed at increasing awareness of the damaging aspects of illegal downloading on the livelihoods of the creative community and those who work with us to produce our work.

However, we will not be able to marginalise the pirates until we can offer accessible, easy to use, fairly priced alternative business models that people will actually want to buy their music from. While we may never be able to sink The Pirate Bay, the challenge we face is to make it look boring, shoddy and unreliable.

Older Posts »