Google’s Guide to RICO

trichordist:

well… just because… the more you know…

Originally posted on MUSIC • TECHNOLOGY • POLICY:

PRS For Music recently released a report entitled the “Six Business Models of Copyright Infringement.”  This report was co-sponsored by Google.  The company’s European Policy Blog had a suitably Googlely statement (if you know what I mean) announcing the release of the report.  (http://googlepolicyeurope.blogspot.com/2012/07/follow-money-to-fight-online-piracy.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EuropeanPublicPolicyBlog+%28European+Public+Policy+Blog%29) Well, it wasn’t entirely Googley because it didn’t contain any of the usual “Joe Camel” semiotics.

No references to children’s foods, candy, or toys, and it didn’t say “goo goo ga ga”.  Maybe they take the report seriously.

The blog said in part:

How best to combat this danger [of massive copyright infringement]? Instead of imposing blocks or filters that might damage fundamental freedoms, governments should construct coalitions with reputable advertising networks, payment processors and rightsholders. Together, these coalitions can crack down and squeeze the financing behind online infringement.

Good point.  Yes, indeed, Google has made an excellent point.  And you know, here in the United States…

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MegaUpload (MegaVideo) Smoking Gun? Did the site illegally charge for Streaming Movies?

trichordist:

As the SONY HACK unravels, keep this in mind. It’s about the money.

Originally posted on The Trichordist:

These screen shots appear to show that Kim Dotcom’s Megaupload was selling streaming movies that it did not have the rights to sell.

Megaupload was allegedly paid uploaders per stream from files they uploaded to Megaupload. That is why there were so many links that Google autopopulated Megavideo after you entered Star Wars in the search field.

Then Google estimated that there were 4.3 million web pages that had the words “star wars megavideo” on them.  Legitimate file locker sites like Dropbox, don’t allow any public links to copyrighted content.  In fact Dropbox just banned Boxopus, a torrent tool from using its API.

Megavideo let you play the first 45 minutes of Star Wars and thousands of other movies for free (after they had served you and profited from dozens ads) . . .

But then, to watch past 45 minutes, you had to enter your credit card and pay…

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Zero Dark Thirty, Best Picture Academy Award Nominee, Exploited by AT&T, Verizon, MetroPCS, Nissan, H&R Block, British Airways, Progresso, and more…

trichordist:

Zero Dark Thirty was also a SONY PICTURES release – this is how piracy is a FOR PROFIT business. The latest hack is intended to create financial harm…

Originally posted on The Trichordist:

We spend most of our time here focused on artists rights as it applies to music and musicians. But we wanted to see if the film industry was having the same challenges as music. We believe in the rights of all creators to consent and compensation for their work (ethical internet principles numbers two and four, respectively).

With the upcoming Academy Awards we wondered if it would be possible to find pirated versions of Zero Dark Thirty. It is  the most talked about film of the year which is nominated for five Academy Awards including Best Picture. But it could easily be any of the other nominated films, in any of the categories as well. We just picked Zero Dark Thirty. It’s also been widely reported that most of the nominated films have already been pirated and are online.

We were also curious what major brands might…

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Artists, Know Thy Enemy – Who’s Ripping You Off and How…

trichordist:

With all the talk about Spotify and YouTube Music Key, let’s remember the source of the real problem…

Originally posted on The Trichordist:

Musicians have been getting the short end of the stick for a long time. There are no shortage of stories about the wrong doings of managers, booking agents, etc and of course record labels.

But today we find ourselves in a battle with an enemy few of us understand. If we were to believe the writings and ramblings of the tech blogosphere, than they would have us believe that our enemy is our fans. This is simply not true.

The enemy are the for profit businesses making money from our recordings and songwriting illegally. Let’s be clear about this, our battle is with businesses ripping us off by illegally exploiting our work for profit. This is not about our fans. It is about commercial companies in the businesses of profiting from our work, paying us nothing and then telling us to blame our fans. That is the ultimate in cowardice…

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#irespectmusic Turtles Win in New York pre-72 Case Against SiriusXM

trichordist:

Have a Great Weekend!

Originally posted on MUSIC • TECHNOLOGY • POLICY:

More to follow, but the Turtles win another one for all pre-72 artists in federal court in New York applying New York state copyright law.

Turtles NY Memorandum and Order Denying Defendant’s Motion for Summary Judgement

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Apple Announces Itunes One Dollar Albums and Ten Cent Song Downloads | Sillycon Daily News

Satire – but not by much.

Apple Computer announced today that for it’s Itunes Music Store to remain competitive in the digital distribution marketplace for music they would be changing their retail pricing of album downloads to one dollar and song downloads to 10 cents each. The pricing change will be effective on black Friday for this holiday season. “Since we purchased Beats music and are competing directly with Spotify we recognized the need for more competitive pricing structures based on what consumers may be willing to pay”, an Apple spokesman said. He continued, “Spotify has proven that as long as we’re paying 70% of gross, the retail pricing is irrelevant, irrelevant! We are even contemplating 10 cent albums and one cent songs to further achieve parity with music streaming services!”

Record label executives rejoiced in the move as one source exclaimed,” I don’t know why we didn’t think of reducing the retail price of downloads by 90% years ago. It’s still money, right? It’s so simple that this is really the only way to grow the business to $100b annually while competing with piracy.”

 

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Music Streaming, New Money Vs. Old and the Market Cap of All Music… | The Cynical Musican

A must read post from The Cynical Musician:

“In a hypothetical future that is nothing but streaming (a depressingly real possibility, given that everything but streaming is going down the drain), the size of the industry is capped at 70% of streaming service revenue. There’s no way to grow the industry, because there’s no new money coming in. The subscription revenue pays for all present and future consumption, it doesn’t matter how many (or few) hot new releases there are. In fact, it doesn’t even matter what music is on the service or how popular it is. The size of the pie is fixed from the start.”

READ THE FULL POST HERE:
http://thecynicalmusician.com/2014/11/new-money/

Jay Frank’s Magical Mystery Streaming Math… Or, Brotha Can Ya Spare A Calculator?

Music industry exec and blogger Jay Frank commented on our post BUT SPOTIFY IS PAYING 70% OF GROSS TO ARTISTS, ISN’T THAT FAIR? NO, AND HERE’S WHY…. Jay’s comment is typical of the thinking that has landed the record industry where it is today (losing money and in trouble).

It’s hard to tell from the comment whether Jay actually believes what he’s saying in the same way someone who bought a million dollar house with no money down, on a zero percent, 5 year ARM convinced themselves there was no housing bubble…

If they [Spotify] go from 10m to 100m free users, they’ll be able to charge much larger premium rates, and may even strike deals with some acts. That could easily result in $1b in artist royalties, given some other media models. This now puts Spotify at $3.5b in artist royalties per year. Pretty good.

To your point, though, that’s still half of the $7b number you put out there.

Right, no kidding “that’s still half of the $7b number”. To be fair to Jay, you should read his whole comment in context at the link above.

However, by his own admission he is still coming up short by $3.5b. If you factor that in with the analysis of the projected revenue losses from YouTube’s Music Key that’s another estimated $2.3b in the hole. But the simple truth is much easier to see, revenue keeps dropping as it has for the past 13 years while piracy apologists and digital music snake oil salesmen have yet to show any increase in actual overall net revenue from recorded music sales.

YouTube’s MusicKey Will Cause $2.3 Billion In Music Industry Losses… | Digital Music News
http://www.digitalmusicnews.com/permalink/2014/11/03/youtubes-musickey-will-cause-2-3-billion-music-industry-losses

By Jay’s logic, digital albums would sell for one dollar not ten while digital song downloads would be priced at ten cents and not one dollar. That’s not the case for good reason and illustrates quickly and effectively why Spotify paying 70% of gross is moot. We don’t think labels would agree to getting paid 70% on one dollar album albums and ten cent songs. Of course the labels don’t have 18% equity in Itunes either…

The larger truth and common sense is that Spotify economics don’t work in the same way $1 album downloads and $.10 song downloads don’t work – there’s not enough scale to make the economics sustainable. If Jay truly thinks you can more than double the revenue from transactional downloads by reducing the price by 90% we’ve got a bridge in Brooklyn we’d like to sell him very cheap.

In terms of “highly selective math” Jay continues his comment from above:

To your point, though, that’s still half of the $7b number you put out there. True, but that presumes that Spotify is the only player in town. While they may be a major force, there will also be other internet radio, satellite radio, video streaming, other streaming competitors and probably still physical and digital retail sales. Add to that greater ubiquity in tracking usage with increasing penetration of smart mobile devices combined with declining mobile data cost…and I feel like we’re starting to approach $10b a year.

And that’s just the U.S.

Ok, so let’s see that $10b a year in revenue streams plotted out and lets take a closer look at it. Here’s what subscription based services look like right now. Netflix only has 36m subscribers in the US, no free tier, and massive limitations on available titles of both catalog and new releases. Sirius XM, 26.3m in the US as a non-interactive curated service installed in homes, cars and accessible online. Premium Cable has 56m subscribers in the US paying much more than $10 a month and also with many limitations. Spotify… 3m paid subscribers in the US after four years.

Tell us again about this strategy of “waiting for scale.” Spotify is Three Million PaidThree… Oh, and that’s just the U.S.

* 3m Spotify Subs Screen Shot
* 26.3m Sirius XM Subs Screen Shot
* 36m Netflix Subs Screen Shot
* 56m Premium Cable Subs Screen Shot
* $7b Music Business Screen Shot

Hey, it’s just math… but in the meantime Jay, you may want to look at this:

Streaming Isn’t Saving the Music Industry After All, Data Shows… | Digital Music News
http://www.digitalmusicnews.com/permalink/2014/06/26/streaming-isnt-saving-music-industry-new-data-shows

A Detailed Explanation on Why Streaming Has Failed… | Digital Music News
http://www.digitalmusicnews.com/permalink/2014/10/02/detailed-explanation-streaming-failed

You can email Paul Resnikoff at paul@digitalmusicnews.com

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RELATED:

Streaming Is the Future, Spotify Is Not. Let’s talk Solutions.

Music Streaming Math, Can It All Add Up?

Who will be the First Fired Label Execs over Spotify Fiasco & Cannibalization?

 

BUT SPOTIFY IS PAYING 70% OF GROSS TO ARTISTS, ISN’T THAT FAIR? NO, AND HERE’S WHY…

Spotify is not paying sustainable rates for the cost of goods. Look – it’s like this, if something cost you $100 to make, and someone else sells it for $10… it doesn’t matter that you are getting 70% of the gross, you’re still over 90% unrecouped on a per unit basis. This is the problem with Spotify, is that it undervalues the true cost of goods (including R&D, etc).

Artists agreeing to streaming their music on Spotify are essentially agreeing to sell albums for One Dollar and Songs for Ten Cents… Oh Wait, Spotfiy actually pays way less than that… (calculated on a per stream basis).

This is why arguments about marginal percentages miss the point completely. It’s about simple math and simple economics.

The cost of music is not in the distribution of music (which is cheap). The cost of music is in the human labor of the CREATION of music (which is expensive).

The cost of goods is greater than the marginal cost to distribute those goods. Stop confusing the product with the container.

The CREATION of music is also more than the cost of RECORDING music. The cost of music is in the sustainable needs of the human labor for food, shelter, clothing, etc.

Spotify can not scale and work at current economics… One More Time…

SPOTIFY MATH FOR THOSE OF YOU AT HOME WITH CALCULATORS:

Just show us the math where streaming scales, we’ll wait. Spotify has 3m paid in the US at $10 each.

$10 x 12 mos = $120 per year. Pay out 70% that’s a gross of $84 per year per subscriber. Simple Math.

That $84 per sub is in revenue to all artists in rights holders. Times that by 3m and you get a whopping $252m a year in a $7b business.

Multiple that by 10, to get 30m subs @ $10a month and that’s only $2.5b a year… and that’s a big IF Spotify ever gets to 30m paid in the USA… and IF they do, that’s ONLY 2.5b in revenue against the $7b now…

So you effectively cut the revenue to everyone by 1/2 to 2/3rds… how does this math work without raising the price of subscriptions? It doesn’t.

It’s just math.

 

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RELATED:

Music Streaming Math, Can It All Add Up?

Who will be the First Fired Label Execs over Spotify Fiasco & Cannibalization?

Streaming Is the Future, Spotify Is Not. Let’s talk Solutions.

RIP NARM

trichordist:

…Of Foxes and Hen Houses…

Originally posted on MUSIC • TECHNOLOGY • POLICY:

There used to be a great organization called the National Association of Recording Merchandisers or “NARM.”  A few years ago, we watched them invaded by “digital retailers”.  (Check the board of directors photographs–you can spot them the same way you can pick out talent agents–especially the guys who drove BMWs when they were in the mailroom.  You know what I’m talking about.)  Now it is called the “Music Business Association.”

So now I get this crap in my email today:

NARM RIP

The idea that these people are buying into Google’s bullshit shakedown demotion scheme based on “preliminary results are in” just check Torrentfreak is such obvious shillery that it’s nauseating.  The answer to piracy?  Search engine optimization.

“Now would be a great time to refocus your efforts on SEO so your licensed offerings appear ahead of new and smaller infringing sites who will be working hard to improve their own rankings.”

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