Why is Billboard Writer Defending Pandora Radio On Anti-Gay Politician Contributions?

glenn peoples billboard

 

You can see the whole conversation here. 

Why is Billboard writer defending Pandora Radio on Founder, CEO, 1/2 the Board and other top executives giving money to anti-gay politician Jason Chaffetz.  You know the guy that tried to nullify a bunch of same sex marriages in Washington DC?  I really don’t’ understand why the writer is “helping” me or Pandora Radio on this one.  The Billboard writer could easily go on record and explain the “nuances” of why Pandora apparently chose a well known anti-gay demagogue to sponsor their Orwellian named  Internet Radio Fairness Act. How does this soomehow this makes the $13,000 dollars they gave this politician ok.   And why is Billboard demanding that I soften this story?

Just saying…

UPDATE Pandora Radio’s Gay Marriage Problem Just Got Worse: CEO and 1/2 Board of directors also supported radical anti-gay politician

 

Looks like Pandora’s anti-gay marriage problem just got  much much bigger.  This is no longer just a Tim Westergren problem.  Looks like it’s a company wide problem. Pandora’s Founder, 2013 CEO and HALF the board of directors donated money to a radical anti-gay congressman from Utah,  Jason Chaffetz.

This looks bigger than the Mozilla scandal. Not just a single executive, this is five key executives and directors.

 

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These guys can’t claim they didn’t know this politician’s views as Chaffetz is quite famous for grand standing on this issue.  Among other things Chaffetz is the guy that sought to have the federal government step in and nullify the votes of citizens of Washington DC and have gay marriages banned in the city.  Essentially he wanted to un-marry same sex married couples in Washington DC.

In 2013 CEO Joseph Kennedy donated money to Chaffetz (Kennedy has since stepped down).   Pandora board members Peter Gotcher, David Sze and Westergren also donated money to this demagogue. And tellingly Rena Shapiro Pandora’s political ad director donated to the anti-gay Chaffetz. I think with this many high level Pandora insiders donating money to this candidate it’s a reasonable question to ask whether the company has an anti-gay bias.

And this revelation could not come at a worse time for Pandora.   For Pandora has recently and very publicly embraced Rev Jesse Jacksons PUSH campaign to increase diversity in Silicon Valley. And diversity includes sexual orientation.  Silicon Valley’s brogrammers  are well known for their misogyny and homophobia.   The fact that McAndrews embraced Rev Jackson’s campaign so quickly and readily brings Hamlet  to mind.  The lady doth protest too much, methinks.  

As SF Bay View reported:

 CEO Brian McAndrews of Pandora said in his letter to Rev. Jackson, “Thank you for reaching out. We were excited to hear from you because we have been discussing our own path towards transparency and amplifying our efforts around building a more diverse workforce….. We hear your urge for data transparency . . .There is no doubt that knowledge leads to awareness, and to actions.”

Well Mr McAndrews? Here is my contribution to your quest for “transparency.”  The upper management of your company apparently supports a radical anti-gay politician.  What does that say about your attitude towards diversity?

Gentlemen we’d love to hear from you.  So would many of your listeners.

kennedy

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Westergren Chaffetz

Pandora’s Tim Westergren Supports Radical Anti-Gay Politician Jason Chaffetz UT.

Tim Westergren David Shankbone 2010 NYC.jpg
Tim Westergren David Shankbone 2010 NYC” by David ShankboneOwn work. Licensed under CC BY 3.0 via Wikimedia Commons.

Forget Mozilla’s anti-gay CEO.  We have confirmed that Pandora’s Tim Westergren contributed  funds to radical anti-gay politician Jason Chaffetz  for his 2014 race.   This is the guy that among other things tried to legislate away Washington DC’s same sex marriages.

Wow.  I guess Pandora not only has no R E S P E C T for Aretha Franklin,  they must not think much of their gay subscribers and employees either!

You’d think that in the wake of the Mozilla scandal companies like Pandora would know better.

But first a little backstory cause this is not just simple homophobia or ignorance .  It’s a very nasty story of anti-gay demagoguery, political corruption, corporate skullduggery and pay-to-play politics.

Last year Pandora pushed the Orewellian-named Internet Radio Fairness Act.  The way that Pandora presented the bill was that it would level the playing field for internet broadcasters against those “bad” terrestrial broadcasters.  The problem with this characterization is that the bill did no such thing. It was a sharks belly stew of gifts for the broadcast industry.  Internet and Terrestrial. Why else would Clear Channel support a bill that would help internet radio “compete with it’s 840 terrestrial stations?  The real reason the internet radio AND terrestrial  broadcast industry supported this bill is that it would have used the awesome power of the federal government to mandate lower performer royalties by 80 percent!

Wow. I wish I could go to congress and have them mandate that my suppliers  charge me 80% less for everything they sell me.  But I digress.

Those of us outside Washington have come to expect this sort of pay-to-play nonsense from Washington, and so it’s not really a surprise that these politically connected firms could get this into a bill and then get it seriously considered by congress.

What was surprising is that Pandora was pushing a bill  sponsored by a well known anti-gay demagogue, Utah politician Jason Chaffetz.

Now we didn’t’ make a big deal about it before because it could have just as easily been the National Association of Broadcasters, Clear Channel any of the other ethics impaired corporations that had a relationship with this politician.  Surely the “progressive” leaders of an internet radio station based in Oakland a city that Rev. Jesse Jackson recently called the “rainbow city”  would never support an anti-gay politician!

Think again.

Below is a screenshot from opensecrets.org clearly indicating that Tim Westergren founder and spokesperson for Pandora personally gave money to this anti-gay demagogue. Apparently a thank you for sponsoring the bill Westergren pushed so strongly.  That is Westergren personally supports this anti-gay demagogue.

 

Westergren Chaffetz

 

Now remember this  is for this upcoming 2014 election.This is not a long time ago. This is long after Chaffetz’s  various anti-gay outbursts were known.  This is after Chaffetz famously sought to overturn the will of the voters in Washington DC, essentially nullify their votes and institute a federally mandated ban on gay marriage in Washington DC.   That’s right Chaffetz wanted to impose his religious (?) views on 650 thousand citizens of a city 2000 miles from his home district in Utah. Imagine if you were a same sex couple in DC, and you had your marriage nullified because a Utah politician wanted to grandstand for voters back home?

Tim Westergren had to know what this guy stood for and yet he personally donated money to him.

This revelation could not come at a worse time for Pandora.   For Pandora has recently and very publicly embraced Rev Jesse Jacksons PUSH campaign to increase diversity in Silicon Valley. Diversity includes sexual orientation as well fellas.   Silicon Valley’s embarrassingly misogynistic and homophobic brogrammers have started to become a liability for these companies. Notably Pandora embraced the effort so quickly and readily that Hamlet comes to mind.  The lady doth protest too much, methinks. 

As SF Bay View reported:

 CEO Brian McAndrews of Pandora said in his letter to Rev. Jackson, “Thank you for reaching out. We were excited to hear from you because we have been discussing our own path towards transparency and amplifying our efforts around building a more diverse workforce….. We hear your urge for data transparency . . .There is no doubt that knowledge leads to awareness, and to actions.”

Well Mr McAndrews, here is my contribution to your quest for “transparency.”  Your companies founder apparently supports radical anti-gay politicians.  What does that say about your attitude towards diversity?

 

Chris Harrison: Please Explain Why Pandora Has No Respect For Aretha Franklin?

christopher-harrison

Songwriter Enemy #1 is also Performer Enemy #1?

 

Hello Chris:

Now I’m not 100% positive that you were the person at Pandora that made the decision not to pay royalties on pre-1972 master recordings, but given your history of screwing songwriters (multiple lawsuits, ASCAP, BMI, DMX legal trickery etc etc) it seems like the requisite set of skills required to repeatedly screw songwriters is the same set of skills required to screw performers.  So it seems likely it was you. But if in fact you weren’t in charge of this moral outrage I’m sure you were at the meeting. After all looks like you are in charge of Pandora’s legal team that will be defending this decision. And who better to explain this to the public. You seem eloquent.  You wrote this persuasive article for The Hill where you nearly had lawmakers and investors convinced you had actually purchased a terrestrial radio station (minus the actual broadcast license oops!).

So give it a shot.  What could possibly be Pandora’s moral and ethical rationale for not paying these performers while other internet radio stations and streaming services appear to pay these performers?  Please explain it to us. Why doesn’t Pandora R E S P E C T Aretha Franklin?

I Can Prove Songwriters Abused by Unscrupulous Webcasters. So Why Are Songwriters under DOJ Supervision?

We’ve heard a lot of misleading rhetoric by blowhard broadcasting/webcasting lobbyists on Capitol Hill.  Songwriters are somehow a threat to these multi-billion dollar corporations and so songwriters must be kept in the yoke of the DOJ consent decree.

Now let me give you some cold hard facts. Below is an actual example of the webcasters violating the terms under which they may receive a compulsory license.   This is a  “Notice of Intention” that they are legally required to file before playing one of my songs. It is outrageously deficient. Therefore they are illegally playing my music.

But this is not just an isolated example.  I have dozens of these NOI’s and  90% of them appear deficient as they are notices of intent to distribute songs that have been made available for years. I have spoken to many other music publishers and songwriters. All of them agree that the majority of the NOI’s they receive are deficient.  Usually because they are sent after the music service uses the songs.  This appears to be mass copyright infringement.  Mass copyright infringement is a RICO predicate. So why the hell am I the one under DOJ supervision?

Virtually all the digital media companies (except Apple) do it this way. I’m telling you, these people make Morris Levy look downright honest.

So why am I forced by the DOJ to let these mass infringers use my songs?  Why does the federal government force me into a contract but then does not allow me to audit these companies. That’s right the federally proscribed compulsory license does not allow for an audit.  I’m supposed to take these companies at their word. Companies that I can demonstrate are lying?

Yet industry groups representing these abusive web casters held a semi-secret “hearing” on Capitol Hill to urge Congress and the DOJ to not only keep songwriters under the consent decree but expand it!!  This is essentially the bad guys running a protection racket with the DOJ as their muscle.

That’s why I protested this panel and gave the actual shirts off the backs of three songwriters to these lying and theft-enabling lobbyists.

http://thetrichordist.com/2014/07/21/why-i-gave-the-national-association-of-broadcasters-dima-and-ccia-the-shirt-off-my-back-during-congressional-panel/

This is songwriters “I’m as mad as hell and I’m not gonna take it anymore” moment.  Let the DOJ know that you aren’t gonna take it anymore.   They’ve asked for comments.   Click here for instructions.

 

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Let me explain specifically how this notice is deficient and therefore invalid. I also intend to send a more detailed report to DOJ.

First this notice was mailed on July 14th.  So I received this notice before the listed date of distribution (July 23rd).   So on  July 22nd I checked to see if these songs were available on this service.  They were.  I even played the two newest.   The other songs were released in the late 1980s. These songs were from a major label album that has long been available on this service.  Yet they are only now getting around to sending the “Notice of Intention” to distribute these songs?

Finally since the service is exercising the compulsory license they are required to send me accounting statements monthly.  Where are my statements?  That’s another violation of the law!

Again it’s the webcasters that need DOJ supervision not Songwriters.  I have dozens of these notices.

MRI bad NOI  redacted 2

 

MRI bad NOI  redacted 1

 

 

The Revolution Will Be Webcast But Gil Scott Heron’s Estate Will Not Be Paid for Use of Recording.

Pandora has stopped paying performers who recorded before 1972. A bizarre interpretation of copyright law by Pandora, Sirius and Clear Channel has led these companies to seemingly collude and simultaneously stop paying artists on all pre-1972 sound recordings.  We suspect this is likely the work of Artist Enemy #1 Chris Harrison of Pandora.  That means the Estate  of Gil Scott Heron will not be paid  performer royalties for Pandora’s commercial exploitation of this song. It should be noted that as much as we criticize Spotify they at least ask permission and then pay for the right to use this song. Pandora does neither.

 

Contact Pandora and ask them why they have stopped paying artists like Gil Scot Heron on Pre-1972 recordings.

You can find their main office phone number and other contact info on this page:

http://www.pandora.com/contact

 

Did Pandora’s Chris Harrison Intentionally Mislead Congress and Investors When He Claimed Pandora Purchased Radio Station?

christopher-harrison

Pandora’s Publicity Stunt: Pandora bought  South Dakota terrestrial radio station minus the broadcast license.

Back in June of 2013 Pandoras Associate Chief Counsel Chris Harrison (Songwriter Enemy #1) wrote an article for The Hill that implied that Pandora had purchased a radio station in South Dakota. The idea was that they were somehow now equivalent to Clear Channel and deserved the same percentage of revenue deal for sound recordings that Clear Channel receives.  Never mind that much of Clear Channel’s content IS NOT MUSIC and terrestrial broadcast has enormous capital costs so percentages of revenues are not comparable.  THE REAL PROBLEM and why this is misleading is that Pandora did not own the broadcast license of this station.   Transfer of this license requires FCC approval and as far as we can tell it appears Pandora had not even filed for transfer of this license at the time of this announcement (we could be wrong but we can’t find evidence, glad to correct if we are wrong).  Do you really own a radio station without a broadcast license? It’s not really clear what it is that Pandora actually purchased.

A year later this broadcast license is not in the hands of Pandora. And indeed the foxes in the henhouse over at the  FCC (much to our surprise) rejected Pandora’s license.  There is a rule that a company must demonstrate it has less than 25% foreign ownership to own a radio station broadcast license and Pandora could not demonstrate this. However silly this rule may be, it’s still a rule, and Chris Harrison as an attorney with long experience in radio surely knew this.  Right?  So shouldn’t Congress and the SEC ask Pandora and Harrison if they intentionally misled Congress and investors?

Maybe they didn’t mislead investors and they really didn’t understand the requirements for purchasing a broadcast license.  But this implies that the top legal staff of Pandora is incompetent.  What does that say to investors?

 

Why I gave the National Association of Broadcasters, DiMA and CCIA the Shirt off my Back during Congressional Panel

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Diverse group of Washington DC lobbyists.

 

The major webcasters and broadcasters decided to convene a nearly secret last minute congressional panel to urge Congress and the DOJ to keep in place the 73 year old “temporary” consent decree that forces songwriters to let companies like Clear Channel, YouTube, Sirius, Pandora, Amazon and Spotify use our songs without any negotiation whatsoever.  The consent decree also empowers a single appointed-for-life federal judge to arbitrarily decide what a “reasonable” rate  is for songwriters.   In effect we have been forced by federal courts to provide  subsidy to corporations that have a combined market cap of more than a trillion dollars.

As I demonstrated in this an earlier post  as a songwriter I received less than $17 dollars from Pandora for over a million spins of my song Low. 

http://thetrichordist.com/2013/06/24/my-song-got-played-on-pandora-1-million-times-and-all-i-got-was-16-89-less-than-what-i-make-from-a-single-t-shirt-sale/

How is this a “Reasonable” rate?

The panel was hosted by Greg Barnes of DiMA.  Other panelists included David Oxenford National Association of Broadcasters and  Mathew Schruers from the  CCIA.   The companies represented by these lobbying outfits (Amazon, Clear Channel, YouTube/Google, Spotify, Pandora, Microsoft, Yahoo have a combined market cap of over a trillion dollars.  YET THERE WAS NOT A SINGLE REPRESENTATIVE OF SONGWRITERS ON THE PANEL.   This is particularly appalling considering that songwriters are the ones living and working under the consent decree.

I had prepared a short set of comments detailing my experience as a songwriter, especially the financial  effects of the consent decree on my digital royalties.    I parked myself in the second row and waited for the moderator Greg Barnes to start taking questions from the audience.  Mine was the first hand up and Barnes indicated that he would call on me but first he wanted one more comment from Oxenford.  It was during Oxenford’s comment that I noticed the lobbyist (?) seated directly in front of me pulled out her smartphone and started frantically texting something.  Curious I leaned forward and could clearly read my name and then the  phrase “watch out”.   Funny stuff.  I wanted to say “Hey dumbass, I’m sitting right behind you.” But I resisted.

Curiously it was immediately after this that Barnes suddenly announced that they would only be taking comments from “Staff” members and I would have to wait “til the vey end and time permitting only.”  He then proceeded to call upon a college student from GW.

SERIOUSLY? The Digital Media Association is in the business of selling songwriters music but their chief DC lobbyist is afraid of having a songwriter speak.  Spineless coward.  If that’s not clear, Yes, Greg Barnes, I am calling you a spineless coward. And I’m standing by it.

When the college student finished his comments I raised my hand again.  Once again Barnes told me that they were only taking questions from staffers despite the fact he had just demonstrated that they were in fact taking questions from anyone.

This went on for a while and I realize that Barnes clearly intended to not let me ask a question.  For amusement I started to stare down the not-quite-slimey representative of the National Association of Broadcasters.  He suddenly found something in his lap extremely interesting and wouldn’t look up.  If I was absolutely certain that he was not suddenly transfixed by the unexpected appearance of  a colony of miniature unicorns dancing on his lap I’d call him a spineless coward as well.  But as I actually couldn’t see his lap, I can’t rule out the possibility of miniature unicorns, and so for now I’ll give him a pass.

The night before this event I had been warned that it was likely that I would be blocked from asking any questions or making any comments.  Considering the fact I was gonna have to get up at 5:45 am to make it to the panel I wasn’t really in the mood to go to all this effort for nothing.  I had to have a plan B.

A few days before a songwriter friend remarked that the current licensing system for songs and digital services was so fucked up that songwriters really had nothing left to lose except “the shirts off our backs.”    I remembered this.  I went across the street to the local grocery store bought some gift bags and wrapping paper and proceeded to gift wrap  three shirts that had been worn by me and my bandmates  as “gifts” for the  NAB, CCIA and DiMA.  I figured that at the very least I could present them with the shirts off our backs and eke out a photo op.

Of course it didn’t go that way.   Clearly Barnes was terrified of having an actual songwriter air a viewpoint that was contrary to the party line.   When he asked for questions again,  I asked that as the only person in the room forced against their will to live and work under the consent decree I be allowed to speak.  He refused.

So shit, I did what I had to do. I marched up to the panelists and presented each of them with a gift wrapped “shirt off of a songwriters back”.    They looked like they were gonna pee their pants.  It was priceless.

“I got less than $17 dollars for a million spins on Pandora, that’s your consent decree at work.”   I told the room and walked out.

The whole thing was so fucking stupid on the broadcasters/webcasters’ part.  If they’d just let me speak they could have spent the final 15 minutes to counter my questions and statements with measured doses of non-sensical legalese and mock concern for the plight of the independent songwriters.    But by acting like spineless cowards they totally screwed themselves.  Just goes to show that if you  put on a “Show trial?” you very well may end up with a show you didn’t expect.

Welcome to Washington gentlemen.

For those of you keeping score it’s now

Scooby Doo Gang 2

Broadcasters 0

 

 

 

 

 

 

 

 

 

 

Why Some Mangers and Agents Love Streaming and Piracy.

Seems like every six months or so I have friends  forward me an article or interview with a manager or agent extolling the virtues of streaming (and sometimes even piracy.)  Usually this comes with some note that reads something like this “Agent/Manager  X thinks streaming/piracy is a good thing, Why don’t you?”  I am always  perplexed by this.   Of course some managers and agents love streaming and piracy! Less revenue from recorded music means their artists must play more and more live shows to make up the difference.  I thought everyone knew this.

You see managers and agents make virtually all their money from an artist’s live performance not from the artist’s recorded music.    However screwed up it might seem from an artist’s perspective it makes perfect financial sense (at least in the short term) for managers and agents to turn a blind eye to piracy and low payouts for streaming. Precisely because  it seems to result in more touring.  You can’t really blame them for this can you?

I teach a class on the finance and economics of the music business at the  University of Georgia.  I usually spend at least one lecture on the differing financial incentives for artists, managers and agents, and in particular how managers and agents are often incentivized to work against the artists long term interest.  Let me try to summarize that lecture here.  Especially how it relates to streaming and piracy.

First , have artists resorted to playing more shows to make up for declining revenues from their recordings?   In my case? Yes, absolutely. So have virtually all my friends.   There are plenty of  anecdotal stories of artists touring into their old age because recorded music royalties have dropped off.  Levon Helm of The Band is one tragic case and here’s Robert Hunter from The Grateful Dead spelling it out clearly.    But you don’t have to rely on anecdotal data as it is clearly reflected in the records kept by companies like Pollstar.  It depends on how you interpret the data but even the most conservative reading suggests there has been a 200%  rise in the number of shows since the advent of Napster.  Now this would all be great news except that average attendance has fallen and any gains in revenue appear to have gone to the top 1% of acts.

So why is this good news for managers and agents but not artists?   You have to consider the order in which people are compensated.   Managers and agents are paid first and off the top before expenses.  Artists are paid last and after expenses. Let me explain.

Agents.

An agent’s only source of revenue is commissions on live performance.  So if artists play more shows this is generally good for agents.  But dig a little deeper. Specifically agents usually receive 10% of gross.   Not net, but gross.  You get what that means, right?  Whether the artist makes a profit or loss on the show the agents commission comes off the top.  The agent always gets paid.

Example: a baby band gets a $500 club show but it costs them $465 dollars, in hotels, gas, rental vehicle, meals etc.   The agent still get’s his/her 50 bucks.   Off the top. Before expenses.  So the band would actually lose $15 dollars on that show.

A more subtle example is to examine what happens when a  band that normally plays 75 shows a year  suddenly starts playing 150 shows a year to make up for lost recording revenue. My wife is a concert promoter and books hundreds of shows every  year.  We see this situation all the time.  We are very familiar with what happens.    In order to accomplish this an artist may needs to play smaller rooms;  go into smaller markets and overplay and hence saturate some major markets.  The artists annual gross for live shows will not double as the result of playing twice as many shows. If the band is lucky they will see a rise in revenue of around 50%.   But unfortunately for the band, expenses may come close to doubling! As a result the artist usually only sees a small increase in their income since they get paid after expenses.  In some cases I’ve seen artists actually earn less by doing more shows!  I think this was the case for my band  in 2007! Regardless the 50% rise in gross revenues never turns into 50% rise in income to the artist.  But the agent DOES see a 50% increase in income.   As a result the agent has a much bigger financial incentive to see an artist play more shows even if the artists doesn’t see a substantial increase in income.

Managers.

Unlike agents, a manager typically does make money from recorded music revenue.  So you would think a manager might be more concerned about piracy and low payouts from streaming services.   But as it turns out managers make such a small percentage from recorded music revenues when compared to live revenues their financial incentives are no different than agents.   Again let me lay it out for you.

Like agents, managers are paid a gross percentage on their artists live revenues.  Typically a manager will get between 15%-20% of gross from concerts.  But it is customary that a manager take their cut of all other income after all expenses have been deducted,  i.e. they get paid when the artist (finally) gets paid.

So for instance if a band receives a recording advance of $70,000 and the band spends $50,000 recording the album, the manager only gets 20% of $20,000 not $70,000!

Similarly an artist is typically compensated for recorded music with an “Artist Royalty” of 10-20% of the wholesale price of a download, “stream”  or CD.  So a manager’s 15-20% of that means a manager only  nets 1.5%-4% of recorded music revenue.  And these royalties are only payable  after the artist has recouped it’s recording and promotion costs.  So in practice a manager receives very little money from these sources.

Finally a time-tested way for a manager to generate additional revenue is to get the label to pay for “tour support” and send the artist out on an otherwise unprofitable tour.  Stick with me  on this one cause this is brilliant scam.

Let’s say band X is planning a  tour and they have gross guarantees of $50,000 dollars but they have $60,000 in expenses.   The band would normally cancel this tour and the manager would get nothing.  Instead the manager requests 10k in tour support from the record label.   The record label hoping to generate sales agrees. The band then goes out on a break even tour but the manager still  pockets 20% of $50,000 which is $10,000.   Now where does that $10,000 in tour support really come from?  Does it really come from the label?  No.   It’s almost always configured as an advance against the artist’s royalties.   So in effect the manager has traded  20% cut of $10,000 in future artist royalties for 20% cut of $50,000 in live revenues.   The manager turned $2,000 potential commission into $10,000 actual bird-in-the-hand commission.

There are a zillion of these clever tricks that managers have dreamed up over the years, but that’s not really the point of this post.  The point is that managers and agents don’t really make anything off of recorded music revenues at least when you compare it to the amount they make off of live concerts.  Managers and agents have never really cared about revenue from recorded music and they have even less incentive to care about it now that streaming has obliterated what little revenue there was.

So managers and agents are free to say whatever they want about streaming and piracy.  But just remember  what’s good for managers and agents is not necessarily what is good for artists.  Keep that in mind next time you see an agent or manager extoll the “virtues” of streaming or piracy.   Heck some managers even own pieces of these low paying streaming services or worse unlicensed services that pay nothing to artists. No wonder they love  streaming and piracy.

 

 

 

 

 

 

 

In China Digital Music Services Go After Ad Supported Piracy and Illegal Services.

I’m in China for the next two weeks performing and doing a series of IP and Music Industry events.   I will be occasionally updating readers on my activities. 

Congress Should Ask Digital Music Services Why They Don’t Go After Ad Supported Piracy.

Why don’t services like Spotify go after unlicensed competitors like Grooveshark? Why didn’t Apple or Amazon complain about unfair competition from the likes of MegaUpload? Why don’t the ad supported services like Pandora or Spotify complain about the ad supported piracy that directly competes with their advertising dollars?  This is something that has always puzzled us here at The Trichordist.  Why would otherwise rational business people who are obligated to protect their shareholders interest allow unlicensed competitors to get away with it?   Hell I’ve watched them cozy right up to unlicensed competitors. I’m not gonna name names here but a little people watching at SF Music Tech is quite instructive.  (The FTC or DOJ should try it sometime).

Well we gave these services the benefit of the doubt.  “Maybe no one has really thought this through? So we  back-channelled to one of these companies and asked them to join us in our campaign against ad supported piracy.  They declined.  Why?  Because they claimed they didn’t want to be seen as “anti-consumer.”  Huh?!

While it’s tempting to just call the entire digital music distribution business a bunch of glassy eyed free-culture Kool-Aid drinkers who’ve never grown up and actually  turned a profit, I won’t.  Cause while they’ve never made a profit they aren’t totally stupid.   In fact I believe they are consciously (and perhaps illegally) running a fairly sophisticated racket.

I believe that the digital services have specifically used the threat of piracy to negotiate exploitative deals with artists and rights holders.  Now they can’t come right out and say “That’s a real nice album you got there, I’d hate for it to get torrented” cause that would be illegal.  But they can create a fake scientific corporate study that says the same thing and here it is.

But as a regular reader you know this is just business as usual for these guys. This isn’t really news. What is news, is that in China the services and the content owners have come together to fight the illegal services.  As  China Music Business reports

It is impossible to make a concerted switch into a paying model when there are hundreds of sites with freely available music. While there are definitely fierce rivalries at play here, the key stakeholders are making an aligned move towards addressing this, including setting up bodies like the Alliance of the Digital Music Industry (ADMI), representing both content and service providers.

Holy shit.  Why don’t the western services get this? It’s a no brainer.  Maybe it’s time for Shareholders to ask some questions.

Read the rest here: http://www.chinamusicbusiness.com/article/china-great-digital-music-leap-forward/