Questions for the International Music Managers Forum

Billboard reports that the International Music Managers Forum has more than the usual helping of sanctimony about the terms of Spotify’s deal with Sony (and by inference all other major labels).  Curiously, Billboard doesn’t seem to question the credentials of managers to speak on behalf of all artists.  We do.

Ask yourself this–how many managers have screwed artists to the wall?  Want to talk about sunset clauses?  Commissioning income the manager had nothing to do with producing?  Expense charges for first class tickets to MIDEM and $1000 dinners that suddenly appear when the artist wants to leave the manager?  Charging cars for the manager’s mistress to the artist’s credit card so the wife doesn’t catch him?  Sure, there are plenty of great managers who would take a bullet for their artists or dangle an offending promoter out of a window, but let’s not pretend that managers as a class are without sin.

Let’s also not pretend that artists feel like they can question their manager’s transparency or conflicts of interest.

Speaking of sin and the sanctimony of transparency–here’s a few questions for those in the glass house of the IMMF.

1.  How much money do you get from Google, directly or indirectly?  There have been rumors for years that IMMF is in Google’s pocket, so how about publishing your books online?  Anything to hide?

2.  Did any of your members get stock from Spotify, Bit Torrent or any tech company your organization promotes?  Were you given the opportunity to invest or did you get the stock for service rendered?

3.  Any IMMF members been hired as consultants by Google?  Spotify? Bit Torrent?

4.  Do your members have an obligation in their management contracts to disclose all sources of their income to their artists (like Spotify stock)?

5.  Who gets to decide whether the manager has a conflict of interest?  The manager?  Or the artist?

6.  How many of your members knew about the Spotify major label terms before the Verge leak?

7.  If your member got stock from a tech company what was it for?  Their wisdom or their access?

We’re reminded of a story about a manager who made a fortune managing a particular superstar and then wanted to sell his management company (and the superstar’s contract) for a bundle.  The artist wished him well and had just one question:

Where’s my 80%?

Google Proxies Double Down on Piracy AND Child Prostitution

Where do we even begin?

Google anti-copyright proxies Electronic Frontier Foundation and Center For Democracy and Technology file amicus briefs in support of defendants in Backpages Child Prostitution case. Wow.

http://www.theregister.co.uk/2015/05/21/backpage_ruling_dismisses_child_prostitution_allegations/ 

Meanwhile down in Florida a very modest bill aimed at pirate websites gets the hysterical “break the internet” treatment from other Google proxies.

Center For Democracy and Technology has a busy week, by also opposing this  bill.  I guess because it’s important to be able to buy music from anonymous pirate websites on the internet?    And artists really want their music sold and distributed by anonymous websites because it’s so much easier to get paid when we don’t know who it is that is selling our music.  Right?

Not to be outdone Fight for the Future the biggest fake-grassroots-internet-corporation-ass-kissing organization of all time weighs in as well.   Fight for the Future does its usual routine of making up the most far fetched interpretation of the bill (what most reasonable people would term “a total lie”) and tries to whip up the old “censorship” hysteria.

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Did Holmes Wilson and Tiffiniy Cheng dream  “One day I’m gonna grow up to totally manipulate the public by demagoguing on behalf multi billion dollar internet corporations and get paid for doing it.”  Because if they did it would appear they have succeeded beyond their wildest dreams.  There’s a special place in…. er… uh… Mountain View for these two.

And in case you are just joining us.  Why does Google care?  Google is an advertising company. And they are still advertising on many sites like these. They’ll apparently advertise on anything. Including ISIS training videos.  Report here.

PROXY:  Acting on behalf of another party. For instance filing an amicus brief on behalf of the other party. Like here, here. herehere, here and here.

You still don’t think these groups are Google Proxies?   Have you been sniffing glue?

http://voxindie.org/google-funded-interest-groups-come-defense-sugar-daddy/

https://musictechpolicy.files.wordpress.com/2014/09/cy-pres.jpg

http://www.washingtonpost.com/Politics/How-Google-Is-Transforming-Power-And-Politicsgoogle-Once-Disdainful-Of-Lobbying-Now-A-Master-Of-Washington-Influence/2014/04/12/51648b92-B4d3-11e3-8cb6-284052554d74_Story.html

Media Democracy Fund gave over a million dollars to Fight For the Future.  Google at the very least indirectly funds the Media Democracy Fund.  They may directly fund  MDF but no one knows for sure because they don’t fully disclose their funding.   Certainly there is significant overlap between Google Public Policy Fellowships and grants made by MDF. I’ll come to your house and wash your car if it turns out they aren’t funding MDF.  Regardless FFTF is right there with Google on every single issue.

 

UN Airlifts Calculators, Clues to The Verge: $25 Million is Tiny Advance and @Verge Missed Real Story

Evstafiev-bosnia-sarajevo-un-holds-head

 

Norwegian UN Peacekeeper reacts to news that The Verge thinks $25 million dollar advance for streaming rights to 25% of music market is a lot of money. Photo by Русский: Фото: Михаил Евстафьев English: Photo: Mikhail Evstafiev (Mikhail Evstafiev).

 

The UN announced today that it is airlifting calculators, music industry textbooks and clues to Silicon Valley tabloid tech blog The Verge.   This was prompted by an article published by The Verge that seemed to completely misunderstand the scale of revenues generated by the recorded music business (even with widespread piracy). As a result The Verge missed the real story contained in the leaked Spotify-Sony contract: Sony gave away streaming rights to our music for (pardon the pun) a song!

Sony represents about 25% of worldwide recorded music revenue. In 2011 (the date of contract) recorded music revenue was around 16 billion dollars.   Sony’s share was actually higher then but we can safely assume they were responsible for approximately $4 billion dollars.   So the $25 million over 2 years (or $43 million if you optimistically interpret the contract like The Verge) is a pittance for these rights.   The Verge then made a big fuss about whether this advance was likely to be properly credited to artist accounts.   But that’s missing the point because everyone knows the real payout was probably in the Spotify stock that Sony, key managers, artists and executives received. Now, that’s the story. How is the equity to be credited to artists? Not the $25 million. That’s chump change.

Now I understand how The Verge may have missed this.   They consulted the MySpace of music industry experts, Rich Bengloff for comment.  Bengloff who is highly unlikely to look kindly on his former employer Sony Music,  piled on saying that Sony artists were unlikely to receive any of this advance. What Bengloff didn’t note was that the “indie” labels that he represents are also unlikely to share these advances with artists either.

Pot,kettle,black.

Finally here is another clue for The Verge: Does Sony Entertainment CEO Michael Lynton (not Sony Music chief Doug Morris) have some sort of special (investor?) relationship with Spotify’s Daniel Ek? Might this have something to do with what looks like a remarkably good Sony catalogue deal for Spotify?

I mean I’m just guessing here but has anyone bothered to search the Wikileaks archive for some keywords?  I dunno… different combinations of  “Spotify, Lynton, Daniel, wife, manuscript?”

Did Spotify Leak Their Own Contract With Sony?

Just think about this.

This document was scanned 13 days ago?!  If The Verge scanned this document why did they wait so long to “break” the story?

So it seems likely The Verge did not scan this contract and this is the original leak.

Only two parties had access to this agreement before The Verge got a copy:   Spotify and Sony.

Sony clearly does not benefit from the leak. This is a disaster for Sony. Now it could be a disgruntled employee.  But it would have to be quite a high level employee to have access to this contract.  My understanding is that contracts like this are stored in highly secure locations.

My bet is on Spotify.  Why? Because they benefit from this leak in two ways:

1) It helps Spotify with their complaint to EU against Apple and major record labels over the new Apple streaming service. Especially the disclosures about “Most Favored Nations” clauses, which UMG is forbidden to use.

2) The leak happened a day before Spotify’s big press event announcing new partnerships.   This event was coincidentally live streamed by The Verge.  (hmm….was The Verge in on it?)

But my speculation doesn’t really matter.  Both Spotify and Sony could review their internal network traffic.  They probably already have.  It’s a simple question who was using a Canon imageRUNNER ADVANCE C5051 at 10:41:36 Am on May 7th 2015? Who was using the Cannon iR-ADV C5051 App on a relatively new Mac?   Does Sony even use Macs?

Sony already knows whether this was an internal leak or if Spotify leaked it.

Things are about to get very, very interesting.

 

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Verge Leak Shows How Sony Let Spotify Get Off Cheap

More on this later, but The Verge leaked the 2011 license between Spotify and Sony Music.  Considering the source, we have to assume that the Verge intended to make Sony look bad, but here’s the reality:  The total advances for 3 years that Spotify committed to pay to Sony was $42.5 million.  Given Sony’s huge market share and strong artist roster, this isn’t exactly chump change, but it’s pretty low.  Reasonable, in fact.

Given all the braying that’s come from Spotify about how many millions they have paid to the “music industry”, we have to imagine that these advances actually recouped.  Here’s a hot tip for the Verge–an “advance” is a prepayment of royalties.  The fact that you got an advance on your catalog doesn’t excuse the label getting the advance from paying royalties on streams or sales.

The label may “keep” the advance, but they turn around and pay it out as they get royalty statements from Spotify.  An advance only becomes “breakage” (i.e., an overpayment) if the advance is greater than the sales at the end of the contract, not at the beginning.  Given the relatively low advances in the Sony deal, it doesn’t reek of the contrived breakage where the label gets an advance that is clearly going to result in a grotesque overpayment.  (We think all the goodies should be shared, but what you would want shared in this case is the overpayment at the end of the contract term, not the total advance paid at the beginning of the term before it’s reduced by royalty payments.)

Granted there were some other goodies thrown in like discounted advertising inventory available to Sony, but in a sourceless article (very Googlely) the Verge has no evidence that Sony ever used any of that inventory.  Or if they did, whether they “sold” it to a third party rather than advertising their own records.  Since Sony’s not in the advertising business–unlike Spotify–it seems unlikely that Sony would be selling that inventory to a third party.  The Verge really needs to come up with some better facts–probably from the same person who was in a position to leak the Sony contract.

We would imagine that thanks to the Verge, Sony artists are hoping that their label isn’t quite so generous to Spotify in their renegotiation.

But here’s the other thing.  Now that we know that Spotify was making deals with major labels with significant advances and all kinds of goodies thrown in presumably to justify a lower royalty rate, how did Spotify stand there with a straight face and ask independent artists to take an even lower royalty with no goodies?  Why should we get the hillbilly deal?

Who are these people?

Hello, European Commission: Spotify admits to dominating global music subscriptions

Spotify’s A Dominant Player in the Relevant Market

There’s all kinds of rumors going around about the European Commission investigating whether major labels have somehow conspired with Apple to hurt Spotify and YouTube (owned by Spotify board member Google).  How?  By offering a music service without a free service based on the crack model.  This theory has to do with Apple and the major labels having dominant market positions, and the EC’s alleged desire to protect Sweden-based Spotify.

Or so the narrative goes.  There’s scant documentation of any such “probe” aside from a couple unattributed news reports based on “people familiar with the case“.

But if the European Commission is looking into Apple to protect Spotify, maybe they should be looking at Spotify itself.  According to a Billboard report, a Spotify executive told the Google-dominated Music Biz Association (formerly NARM) that Spotify has 50% of the global music subscription market:

[Spotify executive Will] Page also pointed out that Spotify is half of the $1.5 billion global subscription streaming market. In the U.S. market, Spotify made up approximately 90 percent of last year’s growth in subscription revenue, according to Page.

Isn’t that special?  So Spotify is at least a dominant company if not a monopolist in a very relevant market to the EC’s rumored investigations.  Maybe while the EC is looking into the major label deals with Apple they could also look at Spotify’s behavior toward independent artists and control over the trickle of royalties from subscription?

And before Spotify tries to change the subject–we’re not talking about royalties paid by labels, we’re talking about royalties paid by Spotify to independent artists with no label.  And if the royalties suck for independent artists, they must really bite for signed artists who have to share the revenue with their labels.

Why Do We Want Out of the Ad Supported Tier?

Here’s an alternative and non-conspiratorial explanation of why people want out of the free streaming tier–maybe it just sucks.  How about that?  And who is hurt by cutting out an ad supported tier?  Advertising networks serving ads to Spotify, like, oh say Google Adsense.  You know–Google, the Spotify board member.

The Google connection is actually very interesting.  For all the bitching and moaning that Spotify does about YouTube, why would they put Google on their board of directors?  A “freemium frenemy” perhaps?  Maybe because Google has a strong interest in seeing that Spotify stays an ad supported business for a long time?

The reaction against the free tier is not just a reaction to Spotify, it’s also a reaction to YouTube and it’s mainly a reaction against ad supported streaming, a business model that is supposed to be a defense to ad supported piracy.  You know, the ad supported sites that Google drives traffic to.  Remember 350 million take down notices to Google search last year?

Frenemies Creating Another Compulsory “License”

Maybe the Spotify narrative is wrong.  Maybe the real story is that the fight is between those who profit from the advertising model through a bunch of crappy deals with Spotify and YouTube that should never have gotten done in the first place.  Maybe everyone is realizing that now and want out.  Maybe Apple is taking advantage of that realization and is innovating and competing.  Maybe Spotify is trying to use its dominant position in music subscription to throw its weight around in its “freemium” business and its “frenemy” and board member Google is in the background doing what Google does best:  jacking artists around.

What is troubling about Spotify’s antics is that they don’t get a compulsory license for recordings, so they can’t quite screw us as hard as Pandora or SiriusXM do with the power of the federal government behind them.

But if Spotify can force the major labels to license to them for the free tier by manipulating the antitrust law, that means that Taylor Swift will not be able to withdraw from either Spotify or YouTube.  And we suspect that’s the object of the exercise.

Don’t regulate the Internet except for the artists and the songwriters.

Stockholm Syndrome: Do DC and LA Insiders Really Think Artists Need to Demonstrate They Can Work With Google?

We’ve now heard this rumor from multiple sources and we believe it to be accurate:

There is an idea going around in Washington DC (and LA) that somehow “the music industry” (whoever that is) needs to find a project to work on with Google to show congress that we can all get along.

Huh?

This is an idea that manages to be both hysterically funny (as a joke) and highly offensive (wait, you’re serious!?) at the same time.  It’s not like we performers and songwriters  are remotely capable of doing anything to a company with a market cap of $360 billion.  Especially Google which  seems to enjoy the complete political protection of the executive branch. Nor have we performers ever done anything to Google. Quite the opposite, any rational and sensible person would look at this situation and reasonably conclude that it is the performers and songwriters that are abused by Google. There are no two sides to this situation.   Perhaps the most accurate way to view the situation is to imagine Google as the schoolyard bully, sitting on the chest of the skinniest kid on the playground (performers and songwriters), slapping them silly with their own fists and DC and LA insiders are chanting:

“Stop hitting yourself, stop hitting yourself, stop hitting yourself!”

Is everybody now smoking weed up there in DC? On what planet are songwriters and performers required to demonstrate that we can work together with our serial abuser?  Who’s insane idea is this?

However to demonstrate we have a sense of humor and are willing to play along,we’ve come up with some specific ideas for how Google and “the music industry” could work together.  Google could demonstrate it will “stop hitting us”  by doing the following:

 

1.  Fix the Defects in Google’s Search Algorithm to get DMCA Notices below 100 million a Year:  Google gets over 350 million take down notices a year now.  This is mostly due to ad supported pirate sites that Google not only drives traffic to but for which Google may also be serving advertising or using Google Wallet to fulfill transferring revenue to publishers.  How much longer must this charade go on?  Did any sitting Member of Congress who drafted the DMCA really think that their handiwork would produce hundreds of millions of notices to one search service?  Does anyone really believe that Google is not running their search algorithm exactly the way they want it to perform?

Google Trans

2.  Fix ContentID Rights Registration:  Every rights holder who’s both honest and can afford it will tell you that they spend extraordinary amounts of time fixing the broken ContentID system on YouTube.  Before trusting Google to do anything like creating a rights database, they really need to fix the absurd ContentID system.

3.  Provide Independent Artists the Same Tools that Taylor Swift Has:  Taylor Swift showed everyone what happens to sales when you can control your rights on YouTube and bless her for showing everyone it can be done.  But it also must be said that it takes an expensive effort to use those tools the way she did.  YouTube needs to make these same tools available to everyone.

4.  Stop Threatening Independent Labels and Artists:  As we saw with Zoë Keating and the indie labels, Google will use whatever leverage they have as a monopolist and strong arm goon to try to force their will on anyone who can’t push back hard–which is essentially everyone.  Before doing anything that gives Google even more leverage, they need to demonstrate that they can be trusted.

And no one trusts them.

5.  Audit Rights for Songwriters:  Google routinely denies independent songwriters (and we hear independent publishers as well) the right to audit royalty payments.  This is something they could change overnight but they haven’t and have given no indication that they ever intend to do so.

So like the man said, trust but verify.  If the Congress wants to see us work with Google, then the Congress needs to level the playing field because they’re the only ones who might–might–be able to stand up to Google.

We see little indication that the Congress has the stomach to do so.

#howgoogleworks: Must Read Buzzfeed Story on Google’s Sleazy Relationship with FTC

thetrichordist:

Imagine if this were the Copyright Office?

Originally posted on MUSIC • TECHNOLOGY • POLICY:

A must read Buzzfeed article gives you one of those rare insights into how Google actually works at the highest levels of government with merely the flick of an email at a huge Federal bureaucracy–the Federal Trade Commission.  Remember them?  The FTC are the ones that punted on their antitrust investigation of Google for mysterious reasons.

Courageous Wall Street Journal reporter Brody Mullins & team came up with an internal FTC staff report proving that the unanimous decision of the FTC’s political appointees not to prosecute Google for antitrust violations was expressly taken against the advice of the professional legal staff.  Mullins’ reporting called into question an entire series of decisions by the U.S. Government not to look too hard at Google’s high handed business practices or its monopoly behaviors.  The Wall Street Journal team put that story in context by publishing another expose of Google’s influence peddling in Washington.

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Pandora Demands Lower Rates From Artists While Playing “Bro Ball”

These are the people that are demanding the government bail out their bad business model by lowering performer and songwriter royalties.

These are the people that refuse to pay royalties on pre-1972 recordings.

How ’bout y’all try making money the old fashioned way?   You know, by working for it.

(Just in case the video has been deleted, below is a static screenshot)

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#irespectmusic and Follow the Money: Ask WNYC how did NPR afford the membership fees for the McCoalition?

As we were told last week by a whistleblower, National Public Radio’s in-house lobby shop decided that it was in NPRs best interests to align themselves with the so-called “Mic Coalition” (or as some call it, the “McCoalition”).

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The McCoalition is not only National Public Radio, but also includes the National Association of Broadcasters–an extraordinarily powerful special interest group long devoted to protecting crony capitalism and the Clear Channel no-royalty loophole.  Yes, in a move worthy of Pandora’s Chris Harrison (aka “Mr. $50 Handshake”), the McCoalition also includes a couple other trillion-dollar babies: Google, Amazon, Pandora, the Digital Media Association (of which Google/YouTube, Amazon and Pandora are members), the Computer & Communications Industry Association (of which Google, Amazon, Pandora are members) Cox Media Group, iHeartMedia (formerly Clear Channel), Salem Media Group, the National Association of Broadcasters (of which Cox, iHeart, Salem and Pandora are members), the Music Licensing Committee (of which Cox and Clear Channel are members), the Consumer Electronics Association (of which Amazon, Google and Pandora are members), the National Restaurant Association (which fought the performance royalty for songwriters whose music is performed in restaurants), the American Hotel and Lodging Association (which also fought the performance royalty for songwriters).

As the leaked email told NPR stations:

NPR is participating in the Music, Innovation & Consumers (MIC) Coalition to ensure that public radio’s voice is heard in future policy decisions involving copyright law. Changes to copyright law may have a direct impact on public radio stations’ abilities to bring music to listeners nationwide.

Our participation in this coalition is not an endorsement of the business plans or activities of other members.

Really?  What is it then?  Pandora has spent millions trying to screw legacy artists who recorded prior to 1972.  The NAB has spent millions lobbying against artists to continue getting a free ride on the music they broadcast, something they’ve fought for decades.  The rest of the world accepts artist pay for radio play–just not the National Association of Broadcasters, North Korea and Iran.

And NPR.

Google, the CCIA and the CEA routinely try to screw artists for a host of reasons and are some of the principal sources of propaganda and lobbying hustle to hurt all of us.  If you include songwriters–all of the above, plus the National Restaurant Association.  The National Restaurant Association is so greedy they managed to get the U.S. taxpayer to subsidize their last play at crony capitalism called the Fairness in Music Licensing Act.   That special interest legislation violated international law and wound up in an international trade arbitration that cost the U.S. taxpayer $3.8 million in fines and potentially more to come.  Maybe the restaurateurs would like to cut the taxpayer a check?

Yes, that’s right.  The U.S. taxpayer is subsidizing music in U.S. restaurants–not for American songwriters, because we don’t have a right to that money.  The restaurants outsourced their royalty payments to the World Trade Organization.

And there is NPR.  And the suits in the NPR lobby shop think this is all OK because NPR doesn’t “endorse the business plans or activities of other members.”

This is pretty pricey company for NPR–poor old public radio that always seems to be strapped for cash.  These “coalitions” usually charge membership fees–big ones.  Here’s the problem:  Is the McCoalition being sponsored by “listeners like you”?  Or by “taxpayers like you”?  Or is it just plain old corporate sponsorship?  Or is it a “free membership”?  Because to paraphrase John Perry Barlow, just like information, loyalty wants to be free, too.

The problem is that when NPR lies down with these dogs, those fleas don’t come off.

If you call in for WNYC’s current pledge drive, you might ask them how that mange treatment is coming along.