As we have recently noted, we are all pro-digital, it’s just some of us do the math, while others seem to believe in magic unicorns.

The digital news site Gigaom has spent the last several years scolding songwriters, musicians and the rest of the entertainment industry for its “antiquated” business models.   These complaints seemed to largely center around around what they regarded as a quaint notion: payment for content.

Not to spike the ball in the end zone, but I’m still in business and Gigaom is not. Maybe they should have sold T-shirts?

Well actually that is spiking the ball in the end zone.  But hey, they deserve it.  Just google “piracy” and “Gigaom” if you don’t believe me.

My bands have been web-enabled businesses since 1993 (Mosaic).  They’ve been web-based since 1999 (Napster).  Artists like myself know as much (if not more) about the digital economy than your average tech journalist. We’ve lived it for over 20 years.  Yet we are often portrayed as technophobes or luddites.  Or portrayed as too stupid to understand the “new economy” which doesn’t rely on revenues but is instead somehow powered by Magic Unicorn Dust™  and TED Talks™.   I can’t tell you how tired I am of hearing this bullshit from people who have never made a profit.

The New York Times has an uncharacteristically sloppy article which tries (and fails) to make the case that somehow Gigaom went out of business because they had 4 extra employees in the research division, and that it’s downfall isn’t a bad omen for other tech oriented news blogs.

The New York Times may be right, however as a profitable tech entrepreneur, I really don’t see many tech blogs like Gigaom surviving without ongoing underwriting provided by silicon valley venture funds.   I could be wrong.  But just to be safe  I suggest that these blogs begin to transition to other revenue streams like merchandise and T-shirts.

( a reader noted this was relevant:  Here is a recent article from Gigaom chiding the NYTimes for taking so long to “get” digital.  They were out of business three weeks later.)

As we reported over the weekend, big broadcasters are now asking the FCC for a “payola” waiver on terrestrial and digital broadcast.  “Payola Lanes” if you will.

But now we realize that this push likely started in a 2012 with a very under the radar meeting between four clear channel executives and FCC chief.

Matthew Lasar at Radio Survivor reported the meeting  March 12 2012.  He also uncovered a summary of the meeting with a paragraph that made him as he says scratch his head:

“In addition, Mr. Pittman discussed several ways in which the FCC can help radio to improve its competitive position by increasing the flexibility that it has to enter into strategic partnerships that will enhance the listening experience, while ensuring that audiences receive sponsorship information appropriate to today’s digital environment.”

Matthew Lasar went  on to state:

“My rough guess is that it could have something to do with iHeart Radio and the FCC’s sponsorship identification (or payola) rules, which require broadcasters to let the public know when some kind of “valuable consideration” has been given to a station in exchange for air time.”

Now we know Lasar guessed right. We now know that the Broadcaster are looking for an exemption to the rules that require immediate disclosure of “payola.”  Looks like the push started in 2012.  What other documents are out there?

It just keeps getting uglier and uglier.  See FCC document below:

08-90 03-08-2012 Clear Channel Communications, Inc. 7021899350

Project Music looks to be a joint venture between The Country Music Association, Nashville Entrepreneur Center, Google and others. 

I’m not a lawyer but isn’t Project Music’s use of these classic album covers  “implied endorsement?”  Since this is some sort of music endeavor you might think these artists are lending their name to this commercial music oriented endeavor.  I mean I’m sure most of the artists here don’t need the money, but still it’s nice to be asked right?

I’m probably overthinking this. I’m sure this was cleared first with KISS, Led Zeppelin, The Beatles, Tom Petty, Booker T and the MGs, Pink Floyd, Sex Pistols, Daft Punk etc etc.

You think internet “fast lanes” were problematic? How about “payola lanes”  on terrestrial radio and webcasting? Payola is back! And it wants to go Legit this time.  That’s right, broadcasters are proposing a payola waiver from the FCC.  Here is the document they filed with the FCC.  Read it for yourself. It freaking unbelievable.  PDF below or you can read it on the FCC website here.

DA-15-325A2

Paying for airplay is not actually illegal.  As long as a radio station announces to its audience that the track you are about to play (or just played) is”sponsored” and who has “sponsored” it, no penalty.

Although this requirement is weak,  it has largely ended (blatant) payola**.  Having to announce this puts label, artist and radio station in awkward and unflattering position.

So big broadcasters are asking for a waiver that would change the way this rule works.  They propose phasing out this requirement in two steps.  First they want to lump all the “we accepted payola” announcements into a single announcement broadcast 3 times a day.  The idea here is you wouldn’t really know you were listening to a payola song. Even if you heard the announcement you wouldn’t necessarily be able to put the sponsorship with the song.

The broadcasters helpfully provide an example announcement:

After a transition period  they would only do a single block announcement once a day.

If for some reason you might think I’m exaggerating and  you think that there must be some logical explanation for this waiver request? Check out the totally hilarious and lame reason the broadcasters give for moving the disclosure to their website.  No one with good or honest intentions would ever provide an excuse this lame:

Car horns?  Well if you are trying to look  at the Sponsor ID page on the radio station website while driving I imagine there will be a lot of car horns.

You see what’s happening here, right?  They are making it so it’s palatable for radio stations to accept payola and for labels to pay to have their artists promoted.  If you’ve read your popular music history you know that we’ve had several periods of widespread payola and it’s negative consequences. The net effect was that large established record labels were able to block independents and startups from getting radio play.  We already know how this story ends.

This is a very dangerous.  Don’t let history repeat itself.  All indie artists and labels should be very concerned by this.   Fortunately the FCC is forced to ask for public comments on waivers like this.  We dug up the comment page. Unfortunately they’ve only given a curiously short period for comments. 30 days.   Let’s all chime in.  Let’s make a lot of racket.  Let’s not let the bastards get away with this.

http://www.fcc.gov/document/media-bureau-seeks-comment-waiver-petition-re-sponsorship-id-rules

While you are at it.  The President seems to have taken a keen interest in the affairs of the FCC.  Tell the President what you think about this payola proposal.

https://www.whitehouse.gov/contact/submit-questions-and-comments

** Payola has never gone away. Currently it works in an indirect and convoluted manner. Things like contests for radio station staff or record label artists play for free at event sponsored by radio stations, record companies pay above market rates for advertising their artists, etc etc.  And it’s virtually impossible to get on the radio unless you hire “indie promoters.” I wouldn’t be surprised if  money is still changes hands directly but under the table.

New Jargon:  Math Doers & Magic Unicorn Lovers

There is no digital divide in the music business.  There is no pro-digital music business and anti-digital music business.  This is the real divide, it’s between  those that do the math on the revenues, and those that believe in magic unicorns.

I’m in a band. Like virtually every performer, I’m pro-digital.   I’ve been running a profitable web enabled business since 1993 (built our first website).  A profitable web-based business since 1999 (Napster). And managing a transmedia brand campaign since 2005 (YouTube + WordPress).  Bands were the early adopters of social media, crowd funding and just about everything that the digital gurus think was just invented (and need to desperately explain back to the pioneers for a fee).

Ever heard of  The Well and the Grateful Dead?  Anyone remember the pre www days of AOL? The most popular “boards” were hosted by bands to interact with their fans. Yeah we had acoustic dial up modem cradles sloshing around in the back of the van. Websites?  I know we had a website before Coca-Cola.  It’s fun to laugh at this now but Friendster was revolutionary, and it really took off when bands discovered they could convert their email lists to networks of friends.   Myspace specifically killed Friendster because they offered band pages and music players to bands.  Overnight bands moved their interactions with fans to MySpace.  And yes that’s funny to think about now but remember in 2005 people in Silicon Valley AND Hollywood were proclaiming it the future of the music business.   YouTube?  to this day half their top 50 videos are music videos.  We wrote the rules on social networking and social marketing.   We took the old Grateful Dead/DIY/indie-rock/punk rock grassroots techniques and applied them online.  In 2003 the big players in Silicon Valley and Holly wood they were still thinking top down.  Thinking about how they could use the web to “broadcast” out to fans.  I think that’s why bands identified with the early social media startups and self publishing entrepreneurs.  We immediately saw that they could help us get around the gatekeepers. They were helping us stick it to the man.

I can’t tell you how many talented coders, web-designers, and generally tech savvy people I know that play semi-professionally or professionally in bands. I believe bands are quicker to adapt new technologies and more efficient at using these technologies than practically any other business.

And because of our long experience in the music business we have serious bullshit detectors.  We have spent our lives dealing with crooks, charlatans, shysters, snake oil salesman and people that promise us ever elusive riches if first we do them this one little favor….

Our skepticism towards the new digital services may be confusing to some outsiders and consumers, but it’s almost always grounded in reality.  Remember we get the royalty statements, we see the contracts and terms of service. We could tell the moment it changed.  Meet the New Boss, Worse Than The Old Boss.  Bloggers and journalists?  Not so much. They just see the press releases from the digital platforms or glowing statements from some manager who coincidentally is an investor in DigitalSnakeOil.com.   (Although this sounds like I’m talking about ScooterBraun and Troy Carter,  I’m not.)

So let’s all say this together.  Everyone in the music business is pro-digital.  There’s just those of us who do the math.  And there are those who believe in Magic Unicorns.

Or profit on the IPO.

Founding father James Madison weighs in on the songwriter consent decree:

“[government] interference is but the first link of a long chain of repetitions, every subsequent interference being naturally produced by the effects of the preceding.”

Respectfully, I suggest that Madison could have been describing the Kafka-esque rate courts.  Remember the NAB and PANDORA are the repeat petitioners in the rate court/consent decree. Not Songwriters.  I suggest you admonish the wrongdoers not the victims of this process.

& NAB is lying about data, most television shows come with music cue sheets. Isn’t it illegal to lie to Senate?