Andrew Keen on the false idealism of the internet [video]

Trichordist Editor:

Insightful Observations from Andrew Keen.

Originally posted on The Trichordist:

In this interview with the BBC for the show “The Digital Revolution,” Andrew Keen describes how artists have been exploited by the tech and internet industries.

“What would I say to the people that are sitting in front of their computers–believing in revolution–I would tell them that they are subjects or victims of false consciousness, that they’re wrong— that they’re believing in something that doesn’t really exist–that they’re dupes–they’re exploited, particularly those that give away their labor for free so that young men in Silicone Valley can become infinitely rich.” – Andrew Keen

If you enjoyed this video, you may also like to read:
Loser Generated Content : From Participation to Exploitation by Mork Petersen

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[ THE 101 ] [NEW BOSS / OLD BOSS ] [ SPOTIFY ] [GROOVESHARK ] [ LARRY LESSIG ]
[ JOHN PERRY BARLOW ] [ HUMAN RIGHTS OF ARTISTS ] [

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U2 Exploited by United Airlines, Jet Blue, HP, State Farm, Westin, Urban Outfitters, Sprint, AT&T, Amazon, Disney Resorts, Crate and Barrel

Trichordist Editor:

If we’re going to have a real conversation about what’s really devaluing music let’s start here… http://thetrichordist.com/2013/02/07/google-advertising-money-and-piracy-a-history-of-wrongdoing-exposed/

Originally posted on The Trichordist:

We completely agree with what Bono said in USA Today,

“…somebody should fight for fellow artists, because this is madness. Music has become tap water, a utility, where for me it’s a sacred thing, so I’m a little offended. The Internet has emasculated rather than liberated artists…”

We couldn’t agree more and we’ve been happy to see more artists speaking out publicly.

The situation is effecting artists at all levels like Aimee Mann, Neko Case, Talib Kweli, Ben Gibbard and Death Cab For Cutie, Jared Leto and 30 Seconds to Mars, Neil Young and Tom Waits to name just a few. These artists represent a wide spectrum of diversity and all are effected by the illegal exploitation of their work.

Let’s be clear about this. It’s about money. A lot of advertising money supporting the people ripping off artists to further their own…

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

Trichordist Editor:

Still… The Elephant In The Room… The downstream economics from zero dollars doesn’t appear to be getting any better…

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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Spotify Doesn’t Kill Music Sales like Smoking Doesn’t Cause Cancer…

This just in from Digital Music News, we’re not surprised. The death spiral towards the $3b annual record business is accelerating… One word to artists and music executives reading this post… “WINDOWING”…

May 10th, 2013:

“We have data that’s proving and demonstrating the fact that streaming revenue is additional to actual unit download consumption or physical music sales…”

Katie Schlosser, Spotify Account Manager of Label Relations, speaking at NARM.

September 12th, 2014:

“Streaming consumers are buying few albums.  30 percent of consumers are music streamers and a fifth of these consumers pay to stream.  Streaming has driven new market growth in countries such as Sweden but in larger markets such as the US it is denting digital music buying.

READ THE FULL STORY AT DIGITAL MUSIC NEWS:
http://www.digitalmusicnews.com/permalink/2014/09/12/research-now-shows-streaming-kills-download-sales

RELATED:

Why Spotify is not Netflix (But Maybe It Should Be)

Spotify’s Daniel Ek is Really Bad At Simple Math

Merchants Of Doubt in Silicon Valley : What Every Musician Needs to Know About Ad Funded Piracy

Record Labels Invest $4.5 Billion Annually In Artists… Pirates, $0… Any Questions?

trichordist:

We must have missed those advances and royalty statements from the pirate bay…

Originally posted on The Trichordist:

So record labels invest in the careers of artists about $4.5 Billion annually in A&R and Marketing. Meanwhile, there are 200,000 infringing sites exploiting artists work and paying them nothing that we can see from the looks of the Google transparency report.

To be precise at the time of the writing of this post there are 281,340 infringing sites on the report with the #1 offender having received over 7.5 Million DMCA takedown notices! Seriously, 7.5 Million… and Google can’t determine that this is a site “dedicated or primarily used for infringement.” Wow.

FIRST DISCLAIMER:

Now look, we don’t always like record labels, but when we do, it’s because they are actually paying artists and investing capital into developing careers (hello Trent Reznor returning to a major label). Ninety percent of new releases financed by labels don’t recoup or break even, but the bands still gain the marketing and PR…

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LouFest 2014: Cake’s John McCrea Talks | MusicTimes

“As much as I hated major labels and indie labels, probably more than anyone I know, one thing you can say for them is that they were able to translate the success of one band and invest in a new band that no one knew about. And there is nothing currently that is actually doing that anymore. So that’s a structural problem. But you know who is going to fight to keep the current status quo are the tech companies that have grease running down their faces and hands from the fat of their plunder.”

READ THE FULL INTERVIEW AT MUSICTIMES:
http://www.musictimes.com/articles/9699/20140905/cake-john-mccrea-talks-follow-up-showroom-compassion-loufest-2014-distance-music-industry-tech-companies.htm

‘Piracy sites don’t love music – they love money’ | Music Week

“A pilot scheme saw a 12% drop in advertising [on piracy sites] from major household brands, the kind of big names that lend legitimacy to illegal sites,” said Javid. “It’s a small first step. But over time the list, along with action taken by payment facilitators, will provide a valuable tool for making copyright infringement a much less lucrative business.

“And that’s the best way to stop the career copyright criminals… Copyright crooks don’t love music – they love money, and they’ve been attracted to the industry solely by its potential to make them rich. Take away their profits and you take away their reason for being.”

Read the Full Story at Music Week:
http://www.musicweek.com/news/read/piracy-sites-don-t-love-music-they-love-money/059475

Sons of Anarchy’s Kurt Sutter Is A Rock Star for Creators Rights

We love Kurt Sutter’s unapologetic response to Google and Silicon Valley’s assault on creators. Below are links to Kurt’s two editorials that are essential reading for all creators to understand what the “internet economy” means for artists of all disciplines.

Kurt Sutter Attacks Google: Stop Profiting from Piracy (Guest Column) | Variety

Google is in the process of systematically destroying our artistic future, and more importantly, the future of our children and grandchildren. They’re spending tens of millions of dollars each year on eroding creative copyright laws. I believe that if the creative community doesn’t intervene now, and by now, I mean, fucking now — we will be bound to a multigenerational clusterfuck that will take 40 to 50 years to unravel.

The last time this happened was in the 1950s, when the tobacco industry spent millions to hide the truth, and convince everyone that smoking cigarettes wasn’t really dangerous to your health.

Earlier this year, Kurt took to writing a response in Slate to an editorial by Google Lobbyist Marvin Ammori (which lead to a later editorial disclosure of Mr. Ammori’s relationships).

Not-So-Zen and the Art of Voluntary Agreements | Slate

Every writer, producer, actor, musician, director, tech wizard, and fine artist working today needs to be aware of what this all means for our future—we will lose the ability to protect and profit from our own work. Every kid out there who aspires to be an actor or musician or artist: This is your future that’s at stake. More importantly, everyone who enjoys quality entertainment: This impacts you most of all. Content excellence cannot sustain itself if it loses its capacity to reward the talent that creates it. Consider this clunky analogy: If your local car dealership started selling your favorite luxury car for $1,000, then $100, then started giving it away, what do you think would happen to the quality of that vehicle? Before long, the manufacturer would be forced to let go of the skilled laborer, the artisan, and the craftsman, and eventually cut back on everything in the production process. And before long, that fabulous, high-end car you so enjoyed will be a sheet of warped plywood on top of two rusty cans.

Yep, it’s cheap, and it’s shit.

Among the arguments that Kurt brings to light are the use of Merchants Of Doubt tactics by Silicon Valley interests, the mechanics employed by Google and YouTube detailed by The Digital Citizens Alliance and the ability for creatives of all disciplines to join Creative Future for a unified voice against these forces of exploitation.

The Future Of Music According to Gene Simmons and Jaron Lanier…

Gene Simmons may not be the most sympathetic figure in conversations about artists rights in the digital age but there is something to be said when he and Jaron Lanier make essentially the same observations about the future of music and artist revenue streams.

Simmons is quoted in a new interview in Esquire Magazine, “Rock Is Finally Dead”:

“The masses do not recognize file-sharing and downloading as stealing because there’s a copy left behind for you — it’s not that copy that’s the problem, it’s the other one that someone received but didn’t pay for. The problem is that nobody will pay you for the 10,000 hours you put in to create what you created. I can only imagine the frustration of all that work, and having no one value it enough to pay you for it.

It’s very sad for new bands. My heart goes out to them. They just don’t have a chance. If you play guitar, it’s almost impossible. You’re better off not even learning how to play guitar or write songs, and just singing in the shower and auditioning for The X Factor. And I’m not slamming The X Factor, or pop singers. But where’s the next Bob Dylan? Where’s the next Beatles? Where are the songwriters? Where are the creators? Many of them now have to work behind the scenes, to prop up pop acts and write their stuff for them.”

Simmons goes on to state that music and culture have stagnated.  He asks what great bands and artists have emerged in the post internet era?

Jaron Lanier made essentially the same observation back in 2010 in an interview with The New York Times, “The Madness of Crowds and an Internet Delusion.

“…authors, journalists, musicians and artists are encouraged to treat the fruits of their intellects and imaginations as fragments to be given without pay to the hive mind. Reciprocity takes the form of self-promotion. Culture is to become precisely nothing but advertising.

It’s as if culture froze just before it became digitally open, and all we can do now is mine the past like salvagers picking over a garbage dump,” Mr. Lanier writes. Or, to use another of his grim metaphors: “Creative people — the new peasants — come to resemble animals converging on shrinking oases of old media in a depleted desert.”

It speaks volumes when two people of such different backgrounds and perspectives make the same observation.

Are Pandora’s Disclosures Deficient Regarding pre-72 Exposure to a Music Genome Shut Off?

Some readers noticed that we spotted an interesting defect in Pandora’s most recent quarterly filing with the Securities and Exchange Commission and asked how big a deal is this defect.  Our understanding is that Pandora has been paying royalties on pre-72 recordings since its inception, but recently stopped, following which they were sued in NY state court by a group of record companies.  (Remember The Turtles are suing Sirius for much the same reasons.)

The pre-72 lawsuit challenges Pandora’s use of pre-72 recordings without compensation or a license.  (If you are unfamiliar with the “pre-72″ issue, it is essentially that federal copyright protection only covers sound recordings released after 1972.  Based on Pandora’s use of these recordings in its service without a license or compensation, you might get the impression that the pre-72 recordings had fallen into the pubic domain.  Nothing is further from the truth as the recordings are protected by common law copyright and a variety of state unfair competition statutes.)

Not only is Pandora using these recordings as part of its service in violation of the copyright owners’ exclusive reproduction right and public performance right, there is a question as to whether the music genome itself misappropriates each featured artist’s right of publicity by marketing the Pandora service based on channels created using the artist’s name, an issue that recently came up in the lawsuit brought by Goldieblox against the Beastie Boys and by the Ministry of Sound against Spotify in the UK.  Not unlike a fingerprint, the music genome is a copy of the underlying sound recording in a mathematical expression as we understand it, and to our knowledge no aspect of the music genome has ever been licensed.  It certainly is not covered by the compulsory license in 17 USC Sec. 114 (the webcasting compulsory license).

So the pre-72 litigation against Pandora is important not only because of the alleged violations of state law, common law copyright and unfair competition statutes, but also because it could draw attention to potential artist-related violations may go to the heart of Pandora’s business for both pre 72 and post 72 recordings.

What Are Pandora’s Disclosure Obligations under SEC Regulations?

A public company such as Pandora is required to make a variety of filings with the Securities and Exchange Commission so that the Commission, the company’s stockholders and the public (including the financial press) can have an idea of how the company is doing and how to assess the risk of owning the company’s shares.  The way that this assessment is communicated to the company, at least in part, is in the company’s share price.  If stockholders rely on the company to properly disclose risk, especially downside risk, then they may not look beyond these disclosures such as finding a copy of the copyright owners’ complaint.

Relying solely on these disclosures instead of doing your own research is not something we would recommend for reasons that will become apparent.  Pandora is a good example of why it’s good to drill down on the company’s disclosures (and in the case of the SEC, we’re a bit surprised that the examiners at the Commission didn’t catch this).

One of the risk factors that the SEC requires public companies to disclose is pending litigation brought against the company.  This should come as no surprise, as litigation can be an existential threat to a company and to the value of stockholder’s investment.  The SEC has very specific requirements about what is to be disclosed about litigation, and those requirements can be found in Regulation S-K (17 CFR Sec. 229.103):

§ 229.103 (Item 103) Legal proceedings.

Describe briefly any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the registrant or any of its subsidiaries is a party or of which any of their property is the subject. Include the name of the court or agency in which the proceedings are pending, the date instituted, the principal parties thereto, a description of the factual basis alleged to underlie the proceeding and the relief sought. Include similar information as to any such proceedings known to be contemplated by governmental authorities.

The “Instructions” for Item 103 provide guidance for materiality regarding legal disclosures:

2. No information need be given with respect to any proceeding that involves primarily a claim for damages if the amount involved, exclusive of interest and costs, does not exceed 10 percent of the current assets of the registrant and its subsidiaries on a consolidated basis. However, if any proceeding presents in large degree the same legal and factual issues as other proceedings pending or known to be contemplated, the amount involved in such other proceedings shall be included in computing such percentage.

Given the scope of the pre-72 litigation, it is easy to understand why Pandora would have an obligation to disclose the claim based on materiality alone.  Then the question is did they?

Did Pandora’s Disclosure Comply With Its SEC Disclosure Obligations?

Here’s Pandora’s disclosure in its 10Q:

On April 17, 2014, UMG Recordings, Inc., Sony Music Entertainment, Capitol Records, LLC, Warner Music Group Corp., and ABKCO Music and Records, Inc. filed suit against Pandora Media Inc. in the Supreme Court of the State of New York. The complaint claims common law copyright infringement and unfair competition arising from allegations that Pandora owes royalties for the performance of sound recordings recorded prior to February 15, 1972.

Pandora’s disclosure does not seem to comply with the requirements of Regulation S-K because the company does not disclose, or does not disclose fully, “the relief sought” in the lawsuit.  There is a claim for money–“allegations that Pandora owes royalties”–and also a request for injunctive relief–not addressed in Pandora’s disclosure at all.  The injunction would order Pandora to stop using the pre-72 recordings.  The claim for money relates to both the public performance of sound recordings–“for the public performance of sound recordings recorded prior to February 15, 1972″–and also to the reproduction of those sound recordings as part of Pandora’s operations–not addressed in Pandora’s disclosure at all.

Pandora makes only a minimal disclosure of “the factual basis alleged to underlie the proceeding,” some might say a flimsy and self consciously limited disclosure.  Given the historic nature of this litigation, one would think that Pandora would spend time getting a little closer to the requirements of Regulation S-K and erring on the side of more disclosure than less.

So–Pandora seems to be treading in the grey area of its disclosure requirements at a minimum.  One can be ambivalent about whether Pandora met its obligations for discussion of the facts.  But what is clear is that Pandora did not disclose the copyright owners’ request for injunctive relief and a court order blocking Pandora’s use of the recordings.  One could read the disclosure and come away thinking that it’s just a dispute about money.  It certainly is that, but it’s not only that.

Maybe Pandora’s senior management team (including their CFO as CFOs are very involved with SEC filings) didn’t think there was anything material about the injunctive relief.  If successful, an injunction could have some obvious and not so obvious effects on Pandora’s business.  We view the injunction as the relief that is most likely to succeed because of Pandora’s untenable position that it does not have to pay royalties but gets to keep reproducing and performing the pre-72 recordings.  Even if you believe that there’s no performance right in pre-72 sound recordings, there’s a serious question of whether Pandora is reselling unauthorized reproductions.

Shutting off pre-72 recordings would have the obvious result of blocking Pandora’s use of the recordings. Given that Pandora’s music genome relies on looking up music that sounds like other music to build their barely compliant channels, if Pandora suddenly lost the ability to use all music genomes for pre-72 recordings that might seriously affect its business.  No mention of that, either.

Why Didn’t Pandora Fully Disclose?

You can attribute any manner of motives to Pandora for treating their filing obligations like a press release that they can shade and spin the way they do so many other communications.  You can also wonder about what the senior management team was thinking when they approved the risk factor.  One thing seems clear though–they wrote it they way they wrote because they thought they would get away with it.