Content Creators Coalition Responds To Rep. Zoe Lofgren’s Attack on Goodlatte and Conyers

This may seem down in the weeds, but it’s worth the read. Basically Rep Zoe Lofgren the congresswoman from Silicon Valley, tried to suggest that race/gender is playing a role in efforts to split the Copyright Office from the Library of Congress. Dr Carla Hayden the Librarian is black.

However this has prompted a sharp response from the Content Creators Coalition to the Congressional Black Caucus:

“As artists of color, we find it deeply offensive that opponents of this bill have attempted to recast their anti-creators’ rights goals into a smear campaign against its sponsors and supporters, insinuating that the legislation is about the race and gender of the current Librarian of Congress. ”

Read more below.

MUSIC • TECHNOLOGY • POLICY

[Cross posted from Artist Rights Watch]

I want to call your attention to a letter by members of the Content Creators Coalition regarding the Copyright Office.  First, a little context.

In case you missed it, Rep. Zoe Lofgren (D-Google) has been on a tear to oppose a bill in the House of Representatives (HR 1695) to both widen the pool of potential candidates to head the Copyright Office (called the “Register of Copyrights” for historical reasons) and elevate the office to a presidential appointment like the head of the Patent & Trademark Office.  (By the way, support HR 1695 by signing the CreativeFuture petition if you haven’t already.)

The bipartisan bill, authored by Chairman Bob Goodlatte and Ranking Member John Conyers and passed by the House Judiciary Committee 27-1 by its very nature increases the level of transparency in the appointment of the Register of Copyrights and maintains…

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#irespectmusic and #savesoho Join Forces in London, Tuesday, April 18!

This is fantastic. Blake Morgan #IRespectMusic and Tim Arnold Founder of #SaveSoho join forces in Soho (London) for panel hosted by BBC 6’s Matt Everitt.

MUSIC • TECHNOLOGY • POLICY

IRM London

BBC 6 Music’s Matt Everitt hosts this very special event.

The Save Soho pop-up venue returns to The Union Club for a special meeting bewteen two artists, both well known for their activism in the music sector. Blake Morgan, from New York – founder of #IRespectMusic and Tim Arnold from London – founder of Save Soho.

This will be a chance to hear both artists perform as well as hear each of them discuss their passion for protecting the rights and freedoms of the creative communities in the UK and the U.S with their campaigns.

The Reservation continues the Soho tradition to support emerging artists.. For this event we are delighted to welcome singer Sara Strudwick in her debut London show.

Make your reservation now….

http://www.seetickets.com/event/save-soho-the-reservation/the-union-club/1064413

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What Would Asset Bubble Theorist Hyman Minsky Say About Spotify’s Unique IPO Plans?

 

The Wall Street Journal is reporting that Spotify is taking a unique approach towards a potential IPO:

“Spotify is seriously considering a direct listing, in which the company would simply register its shares on a public exchange and let them trade freely, according to people familiar with the matter. The company wouldn’t raise any new money or use underwriters to place new blocks of stock.

That would mark a departure from the typical IPO, in which new investors buy shares from the company or its early investors, or both, the night before they start trading. The initial price is set by underwriters following extensive meetings with potential new investors.”

While this will save the company underwriting fees and on the surface it appears “cooler” and more innovative matching the young company’s style,  it also raises some serious questions.

First and foremost the article states clearly “In direct listings, early investors would be subject to less stringent lockups governing the sale of insiders’ shares.”  In typical IPOs most insiders can’t sell their shares for 90 days or more.   This prevents unscrupulous companies from dumping their shares to unsophisticated investors before problems with the company become apparent to outsiders.

Second, while the underwriting system may often give an unfair advantage to institutional investors,  it also helps everyday investors by vetting the company (at least in theory).   Banks and other financial experts examine the financials of the company before they agree to buy large blocks of shares.  This is something retail investors can’t do.  For instance, analysts working for institutional investors might evaluate: the effect that the convertible debt (a fairly nasty way of borrowing money) has on the long term price of the shares; risks associated with contingent liabilities (lawsuits, patent infringement claims or tax penalties);  content licensing agreements with the large multinational labels; tax penalties; and the EXACT number of paid subscribers and how those subscribers are counted.

What happens with these rare direct listings is that the financials of  a company and associated risk are not likely to be evaluated by third parties, or if they are, not with the same level of scrutiny.  Sure Spotify will have to disclose all financials as well as financial risks, but it’s unlikely that ordinary retail investor will read these disclosures.  So it seems fair to say that some significant portion of the public buying the stock will be unsophisticated investors.  This is likely to exacerbate  “information asymmetry” between retail investors and insiders.   It’s a recipe for trouble.

So what does this have to do with the late Washington University economist Hyman Minsky? Minsky is known for his theories about the unavoidable tendency for markets to develop bubbles (specifically debt bubbles) and become unstable.   Indeed the collapse of debt markets and subsequent collapse of asset bubbles is sometimes referred to as a “Minsky Moment.”  The question as to whether financial bubbles can be predicted has long vexed economists and been a serious topic of debate for decades.  Minksy made a stab at identifying irrationally priced debt supporting asset bubbles before they collapsed.  His theories are unique in that instead of looking at the underlying assets themselves he looked at the participants in the market and the market structure.  For instance in the case of debt he identified three kinds of borrowers. When those three kinds of borrows are present and active in the market you may have a bubble.  From wikipedia:

Minsky argued that a key mechanism that pushes an economy towards a crisis is the accumulation of debt by the non-government sector. He identified three types of borrowers that contribute to the accumulation of insolvent debt: hedge borrowers, speculative borrowers, and Ponzi borrowers.

This is all very technical and it requires complex explanation to directly apply this theory to the Spotify non-IPO situation, and ponder the true value of Spotify stock.   Fortunately professional traders have provided us with a much simpler (and vulgar) heuristic, informally known as “The 3 I s”  Innovators, Imitators and Idiots.    The idea is that a stock is first favored by the innovators;  then sophisticated imitators follow them into the trade, and then finally unsophisticated investors who have no business investing in risky stocks pile into the trade.   Proponents of this heuristic argue that as soon as the third set of investors (idiots) start buying you should start selling, because the stock is overpriced.  It’s really the same idea that Minsky put forward. It’s just applied directly to the stock rather than the underlying debt. 

Honestly, I bet a lot of people don’t buy the explanation for the “non-IPO” that has been put forward by the unidentified sources in the WSJ.   I certainly don’t think it makes sense.  Something else is going on here.
Regardless, insiders and current shareholders (including major labels) should be asking themselves “is this really just a not-so-clever way to sell shares to the idiots?”  Dark thoughts yes, but you can never be too careful.   I mean what happens if this whole thing blows up?  Is someone with a badge gonna come around asking “what did you know and when?”

 

 

 

 

Is Google Violating US Treasury Department Terror Fundraising Sanctions?

Google and the slippery slope of advertising on rogue sites:  It may have started with “a little” funding of organized copyright infringement but it’s gonna end with investigations into violations of terror funding laws.  There is no other way around it.  This time governments can not turn a blind eye to Google misdeeds.  

As many of the readers of the Trichordist are aware, we have spent the last 5 years chronicling how the Google advertising ecosystem funds the for profit music and film piracy business.  Along the way we discovered that Google advertising appeared to be supporting all kinds of other illegal activities.  The biggest problem for Google so far was the “Canadian Pharmacy”criminal drug investigation. These so-called “Canadian Pharmacies” are not necessarily in Canada nor are they legitimate pharmacies.  They are sophisticated professional drug trafficking operations.  That’s why it was a criminal not civil investigation conducted by a US attorney.   Google was caught red handed advertising these “Canadian Pharmacies” and paid a $500,000,000 fine to settle the matter.   That’s right 1/2 a billion dollars.  But IMHO someone should have gone to jail. . Prosecutors routinely prosecute the drug dealer’s accountants and bankers, why should advertising company executives be treated any differently?

Last week the Times of London reported that Google was slinging advertising onto terror affiliated YouTube channels.  We noted last night that Google was advertising its own products on a YouTube video channel that seemed to be operated by Hezbollah or a group that supports Hezbollah. The Register in the UK verified our story and asked Google if funds were going to the operators of this channel.  Google did not reply but the YouTube channel disappeared within the hour.

  The important thing to understand is that with pre-roll video advertising there is often some kind of revenue share agreement between the operators of the video channel and Google.  The Times of London  reports “The practice is likely to generate tens of thousands of pounds a month for extremists.”

So did Google pay money to the operators of these YouTube channels?  Yes or No?  The anti-terror treasury sanctions are complex.  But this seems to be exactly the sort of case for which they were designed. Certainly the UK’s Solicitor General warned that Google could face criminal probe:

‘There is an offence of recklessly disseminating this material, and the criminal law is there is a clear boundary beyond which they should not stray.

‘I think the legislation is clear. It is my hope and expectation that these organisations will indeed come to heel and obey the law but the law is there if necessary.’

Even without the money, isn’t hosting a channel that distributes propaganda for ISIS, Hezbollah or other terrorist groups  material support for those groups?  Google should be investigated.

Timely Reprint: Do You Want Your Music Alongside Hate Rock Songs? Artist Face YouTube Music Dilemma

I light of the Google/YouTube boycott by brands whose ads have appeared next to hate speech.  We thought we’d reprint this piece from November 2014!!

Forget exploitative pay from Spotify! Do you want your music on YouTube Music? Will you be alongside Hate rock songs? Jihadi Recruitment Music Videos? Probably.  YouTube is full of this vile stuff.  And we let our kids watch YouTube?  Why do artist work such an amoral company?  Should artists ask their labels to pull videos from YouTube.  Or will we be complicit?

Walmart, Pepsi, Coca Cola, Procter and Gamble and GM Are All Now Boycotting Google Over Extremist Videos

The Wall Street Journal is now reporting that Walmart, Pepsi and GM have joined the Google advertising boycott over extremist videos and hate speech.

See story:

https://www.wsj.com/articles/googles-youtube-has-continued-showing-brands-ads-with-racist-and-other-objectionable-videos-1490380551

 

Following the Money: Solutions for Google’s Problems with Defrauded Advertisers

Music Tech Solutions makes a good point. Where does the money go? And shouldn’t the advertisers be entitled to a full refund? And what about the shadowy groups that distribute this content? What sort of laws are violated going into business with these groups?

Music Tech Solutions

Americans are freedom loving people, and nothing says freedom like getting away with it…

From Long, Long Time written by Guy Forsyth

Google’s UK Policy Manager Theo Bertram advised in 2012–“Follow the Money to Fight Online Piracy“.  Google’s copyright lawyer Katherine Oyama endorsed this approach on behalf of Google before the U.S. Congress in 2011 (“We would publicly support legislation like what I described, the follow the money approach…”).

Several UK banks and other advertisers are now doing just that according to the London Times (“Banks pull Google ads in row over hate videos“):

Three of Britain’s biggest banks have pulled advertising from Google after their marketing appeared alongside extremist YouTube videos.

HSBC, Lloyds and Royal Bank of Scotland acted over fears that chunks of their advertising budgets have in­advertently ended up in the pockets of banned hate preachers and anti-semites. The lenders join a growing…

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Google Can’t Even Keep Their Own Ads off Hezbollah YouTube Channel

This is your brand.  This is your brand on YouTube violating the patriot act.  Screenshot courtesy GIPEC

Google can’t even keep its own ads off of the Hezbollah channel.  The UN and US Government list Hezbollah as a terrorist organization.  Is the usual YouTube ad rev split going on?  If so isn’t Google providing funds to groups that support terror and isn’t that  a violation of the patriot act?

AT&T and Verizon Join YouTube Advertising Boycott, Is Fiat-Chrysler Next? @auto_alliance

 

Ali Barakat is like the Justin Bieber of Hezbollah.  Last I checked Hezbollah (or Hizballah) were still listed as a terrorist organization by the US Government.  Is Fiat-Chrysler helping Google fund Hezbollah or its supporters?  This screenshot was provided to us by GIPEC. It appears to show a Dodge Ram Truck ad being shown along side an Ali Barakat video depicting Hezbollah fighters in action.   The video is currently live on YouTube. 

For nearly 5 years the Trichordist has been reporting on Google’s practice of supplying advertising to less than reputable sites.  We were at first focused on how advertising was funding the music and movie piracy ecosystem and thus undermining artists ability to make a living.  But as we dug deeper we noticed that Google was pretty much willing to advertise on anything.  We wondered if brands really cared their money was going to illegal pornographers,  fake news sites, neo-nazis and terrorist sympathizers.  Certainly Google doesn’t care cause here we are 5 years later and they are still doing it.

Last week the Marks and Spencer, The BBC and The UK Government all announced they were boycotting YouTube for placing their ads against extremist content.  Later Bloomberg reported:

“France’s Havas SA, the world’s sixth-largest advertising and marketing company, pulled its U.K. clients’ ads from Google and YouTube on Friday after failing to get assurances from Google that the ads wouldn’t appear next to offensive material. Those clients include wireless carrier O2, Royal Mail Plc, government-owned British Broadcasting Corp., Domino’s Pizza and Hyundai Kia, Havas said in a statement”

Today we find out the boycott has spread to the US. According to USA Today  AT&T and Verizon have now joined the boycott:

AT&T said that it is halting all ad spending on Google except for search ads. That means AT&T ads will not run on YouTube or two million websites that take part in Google’s ad network.

An AT&T company statement said:

“We are deeply concerned that our ads may have appeared alongside YouTube content promoting terrorism and hate,” the company said in an emailed statement. “Until Google can ensure this won’t happen again, we are removing our ads from Google’s non-search platforms.”

Look at screenshot above. Will Fiat Chrysler be next?