Why I Was Banned From Speaking At San Francisco Music Tech #SFMUSICTECH

this photo says it all

“This says It all”

I was supposed to speak at the SF Music Tech Summit Feb 19th 2013.   A few days before my scheduled appearance I received a call from  SF Music Tech and Fututre of Music Coalition co-founder Brian Zisk explaining that I would not be allowed to speak because I tweeted/blogged the above picture with the following caption “this says it all.”   Further he noted that “certain sponsors” would not “appreciate” me speaking at this event.

I love the hypocrisy of the Silicon Valley. They are all for free speech until they aren’t.

The fundamental American right is Free Speech. SF Music Tech (and Silicon Valley in general) do not really respect this right. Especially when it begins to interfere with their bottom line.

So what do you say we just end the charade? SF Music Tech Summit is biased against creators/musicians and their rights. It’s a pro-tech industry event.  It’s held in the Kabuki Hotel in San Francisco.  Because it is a giant Kabuki.

Three times a year  you find Tech Industry “entrepreneurs” who’ve never turned a profit “debate” un-elected artists rights advocates who as it turns out work for opaque 501C  foundations and organizations  that are funded by technology companies like Google.

If it’s not clear I’m talking about you, Future of Music Coalition and Cash Music.  Sorry guys/gals you had your chance to do the right thing and  speak out publicly against me being banned and you didn’t.  That makes you at best quislings and at worst shills.

SF Music Tech and Brian Zisk have every right to do whatever they want with their #SFMUSICTECH summit but I just ask them to stop pretending it reperesents anything other than the technologists that wish to exploit artists.

Have a good SF Music Tech.  I’ll be off touring the UK.

Getting Copyrights, Right. David Lowery at Politico

Our own David Lowery makes a lot of compelling arguments in Politico on Monday morning, but this one in particular regarding a copyright registry and orphan works should be of interests to all consumers and individuals as well as all creators. Copyright effects everyone, not just musicians.

Register Your Family Albums

Both conservatives and liberals should be frightened by the “Principles’” attempt to “reformalize” effective copyright protection by encouraging Goodlatte to take away “rights and remedies” for those who do not register their works. Especially those works that the report deems to have “no commercial value”—as decided by the elites rather than the market, apparently.

So if one of the “users” the principles seem to think they represent — like me — posts a photo of my children on my Facebook page but I don’t register it, and somehow a company or individual then uses this picture commercially, or in some other vile manner, this report explicitly states that I would not have the same “rights and remedies” that I currently enjoy. In fact my reading of this report says I would have no remedies unless I were to win an argument that my family photos have commercial value — full employment for lawyers.

So are we all gonna have to register our family photos with Big Brother in order to keep control of them?

Read the full article here at Politico:
http://www.politico.com/story/2013/05/building-a-real-copyright-consensus-91231.html

Streaming Services Ranked By “Artist Friendliness”

There is a lot of debate concerning the amounts paid to artists by streaming services.  It’s often very confusing because what an artist sees in royalties on their statements is highly dependent on a number of factors including whether they have a record deal, publishing deal or whether they are a solo performer or a band.  From an artists perspective royalties may accumulate from multiple sources. The other problem is that in general royalties are based on a percentage of the streaming services revenue.  So the amount may vary month to month and year to year.

Still one good  way to compare services is to look at statements for a moderately sized catalogue and calculate the revenue per stream they pay to “the rightsholders” (label/publisher/performer/songwriter) over a period of months.   This would also be the same amount that a completely independent artist that owns 100% if their own recordings and songwriting receives.

But this is not the only way to look at these streaming services from an “artist friendly” viewpoint.   We also need to look at whether these services respect artists rights. That is, whether these services respect the Artists right to choose how to monetize their music.   When you look at it in those terms the picture is a little different.  Here I’ve ranked the 7 most common services.

1. Rhapsody (Napster/Zune).  These three “on demand” services allow you access to virtually any song at any time. From an artist’s perspective they are identical.   These all work on a paid subscription model.  Like Spotify these services pay a percentage of revenue to rights holders.   But because they do not offer an ad based free service they have more revenue and pay more per stream to each artist than Spotify.  All these services  (like Spotify) operate under a private license.  They do not rely on a government imposed compulsory licenses or rates.  This also means rightsholders can theoretically “opt out” of this service if they think it doesn’t pay well enough. Or better yet negotiate a better deal.

I’m not opposed to compulsory licenses and rates in certain situations. But as  an artist I have to note that these rates are set by political appointees.  Broadcasters generally have a lot more money than artists and are thus better positioned  to influence the political process.  This is not some sort of tin foil hat paranoia.   If you were paying attention this fall you will note  that this is exactly  what happened  with the Orwellian-named Internet Radio Fairness Act.  Pandora fronting for Clear Channel,  Sirius XM and various Silicon Valley firms tried to use their lobbying money and influence to force the government to reduce those compulsory license rates!  Artists could have got an 85% pay cut!  So in general private blanket licensing is better for the artist.  Compulsory federal government imposed rates benefit the politically connected.

As previously noted have access to the streaming royalty payments for a moderately sized catalogue. Here are the average per stream rates paid by these three services Jul-Dec 2011.

Zune 2.8 cents

Napster  1.6 cents

Rhapsody 1.3 cents

These are close to being a sustainable* rate for artists.  (See footnote at end for an explanation.)

As a consumer I enjoy Rhapsody’s  256k mp3s.  As a consumer I prefer Spotify’s interface. I’ve never tried Zune or Napster.

2. Spotify.  #2 ?!! This surprises many of you.  Right? Let me explain.

Currently Spotify appears to be paying rightsholders about .5 -.7  cents a stream.  Considerably lower than the three services above.     While my colleagues here believe this is not a sustainable rate and that it may never become a sustainable rate we can’t know for sure.   It  is unclear how much streaming services  “cannibalize” or displace traditional sales. If streaming services  displace 20% of sales Spotify’s per stream rate could be sustainable.  If they displaces 80% of sales? Probably not.

Spotify  relies heavily on it’s free streaming service that is ad supported.  Spotify pays 70% of revenue to rightsholders.  If Spotify manages to convert more users to it’s premium subscription services revenues will rise.  As a result  rightsholder’s revenues rise.  If the ratio of paying subscribers to free subscribers rises substantially the per stream rate rises to something  sustainable.

What we  like about Spotify:  It operates (mostly?**) under  private licenses which means that rightsholders can withdraw from the service if they wish.  More importantly Spotify  has quietly allowed individual artists to “window” their releases and limit which singles or albums are available in the free service.  This is very important. For instance my band Cracker which has had four top ten rock tracks might find it’s revenues from Spotify acceptable.  But a niche artist like Zoe Keating might find she is losing sales to streaming services. She might chose to have only some or none of her catalogue available.  Choice is the foundation of free markets. Allowing artists to experiment with how to use streaming services, and how to monetize their songs is good for everyone. It will eventually be clear the best way to balance revenue and access.

I also should note that Spotify is being unfairly blamed for the knock on effects of disintermediation.  Disintermediation creates winner-take-all markets, and in an industry that was already winner take almost all, the small and middle class artists have gotten clobbered.  On a positive note, in these kind of markets there are usually countervailing market forces at work that nudge us towards  risk and revenue sharing. Or in Layman’s terms: It usually gets better.    The explanation is kind of complex so I’ll skip it for now.  Suffice it to say that right now it’s not so much Spotify taking artists’ royalties but the superstars taking everyone else’s royalties.

Finally Spotify has gone out of it’s way to engage artists, even critics like myself.  The fact that they were willing to sit down with me and discuss my issues with  their service is encouraging.

#3 Pandora.   Oh how the mighty have fallen.    Once they were our favorite.  Look at early Trichordist blogs and note our enthusiastic tone whenever we speak of Pandora!

For those of you that don’t know Pandora is NOT an on-demand streaming service.  I call it a “virtually on demand streaming service.”  If I type in a song title and artist name, I dont’ get that song.  But I usually get a song by that artist.  Pandora is a music discovery service.  It’s not a replacement for owning an album.  As a result Pandora gets and should get a lower rate than on demand services.

What we don’t like about Pandora:

They operate under a compulsory license so artists can not opt out of the service if they do not like the rates!! But what is worse is they have adopted the tactics of Silicon Valley’s hardball monopolists.  Proudly on display are  lobbyists, fake bloggers, planted stories, paid mouthpieces  and all the usual Kabuki Theatre bullshit we’ve come to expect from the “innovators” of Wall Street- er I mean Silicon Valley.  As I mentioned previously  Pandora fronted for the Internet Radio Fairness Coalition and pushed the Orwellian-named Internet Radio Fairness Act. The bill had nothing to do with Internet radio or fairness and everything to do with screwing artists out of 85% of their royalties.

Curiously the Internet Radio Fairness Coalition which supports the bill  has a lot of traditional broadcasters like Clear Channel and Sirius XM. Kind of odd for an organization with the publicized  purpose of leveling the playing field between Internet broadcasters and traditional broadcasters. The CCIA and CEA are also  inexplicably members of the IRFC.  Well maybe not inexplicably.  Just as the Four Horsemen herald the Apocalypse,   The CCIA  and CEA seem to always herald  La Chingada of someone, somewhere by Google.

So for participating in this rapacious anti-artist skullduggery we move Pandora from the top of the list  to #3.   We would put it at the bottom of the list but the other two lower ranking  services in my humble opinion are not even completely legal.

#4.   YouTube/Google.   YouTube is the biggest on demand streaming service. I know people think of it as a video service but it turns out that it’s the most popular music streaming service.  The main problem is that a lot of the music is uploaded and monetized by people that have no right to the music in the first place.  For example here is one of my recordings:  All Her Favorite Fruit. The problem is I didn’t authorize this person to upload this song, nor did I authorize YouTube to sell advertising or sponsored videos against this song.  It’s possible that the record label did but as I am also the songwriter and legally I should have been consulted.  Worse, the person who uploaded the static image can receive advertising revenues  since they “own” the video.  This is no different than Kim Dotcomm/MegaUpload paying people to upload the most popular movies and songs.  Further I have no idea where the money goes since you can’t audit YouTube without signing an agreement with them that basically says you can’t audit them!  YouTube is like the exploitative 1950’s music business but even worse, as  the artist does not receive the occasional Cadillac in lieu of royalties.

Now consider this:  This track is competing with legitimate authorized  streams of my track on other services.  These services generate some revenue for me.  So say I find it in my financial interests  to take this down?  I have to file what’s called a  DMCA notice.  When I do this Google can place my DMCA notice  on this website to try to publicly shame me into not doing this anymore.  I don’t file DMCA notices with YouTube/Google because I don’t want some deranged Freehadists showing up at my  home or office. This is not a far fetched idea, many of us in the vanguard arguing for artists rights and the preservation of copyright receive constant threats from seriously deranged free culture nutbags.  So the result is I don’t file a notice and I let YouTube/Google get away with this. This website is a tool of intimidation. It is my belief that this is exactly what Google intended when it launched this site.

If Google and UC Berkeley (which hosts the site and lends it intellectual legitimacy) had any common decency they would stop this practice cause someone is gonna get hurt one day. Now while  I don’t hold out hope for Google developing any common sense anytime soon (they are still allowing advertising for no prescription Oxycontin despite a half a billion dollar fine and threat of jail time)  maybe the Chancellor of UC Berkeley will recognize how screwed up this is.  You should ask Chancellor Birgeneau yourself: “Why is UC Berkeley supporting Googles intimidation scheme?”  chancellor AT berkeley.edu.

My friend East Bay Ray of The Dead Kennedys  told me he recently got an “offer” from YouTube/Google to let him claim  his own songs and start receiving royalties.(“Really you’re letting me have control over my own songs? Gee thanks how nice!”).  All he had to do was sign away most of his rights and in return the band would get about .1 cents a view.   Considering your typical banner ad on a shitty pirate website gets 1.5 cents an impression,  this is not even a joke.  It’s an insult.   Honestly I can’t understand how artists can complain about Spotify when YouTube/Google is so much worse and certifiably evil.  As I’ve said before “Don’t be Evil” is not their corporate slogan, It’s their widely ignored corporate reminder. 

#5 Grooveshark.   Many young people I run across seem to think this is a legitimate streaming service. It’s not.  My entire catalogue is on this service. No license, no permission and not a dime ever from these guys.   The sooner these guys go to jail the better.  I’m tempted to have a conversation with Ted Nugent. You think he’s mad about Obama raising his taxes and restricting his gun rights?  Wait till he finds out that Grooveshark is not paying him royalties.

* “Sustainable Rate” is my attempt to figure out a streaming rate that compensates artists well enough to continue to write (and especially) record albums.   I’ve examined a lot of iTunes libraries and “most played” lists.   A typical 20 year old college student seems to play a track they have purchased around 25-30 times before they seem to tire of the track.   So if on demand streaming replaces all album sales a stream should pay about 2.3-2.8 cents to be the equivalent of the 69 cents net received from iTunes on a 99cent download.  But if on-demand streaming only replaces 50% of album sales it could be half that rate.  You see?

But a  word of caution.  First this assumes that 99 cents a track is the right price for all songs.  Not necessarily true.   This is a price that iTunes essentially imposed on the record business, against a backdrop of mass piracy.  You can make an argument that this artificially lowered the price of music.

Second the music business has always worked on a revenue sharing model that assumes the “winners” subsidize the “losers” through record companies, publishing companies and their advances.   If you have total disintermediation in the streaming market even with high per stream rates  niche artists like Zoe Keating and Camper Van Beethoven would never generate enough revenue to record albums.  Music sales exhibit a “wild” variation and with total disintermediation almost all the revenue goes to the winners.   So this “sustainable rate” is not necessarily sustainable at all.  It is only one piece in the puzzle.  Eventually the revenue and risk sharing roles once assumed by record labels will need to be assumed by the record labels again, or other mechanisms need to be developed.

Other’s have suggested non market based  mechanisms which  include “crowd funding” government subsidies and corporate patronage.  I am uncomfortable with all of these.   Government and Corporate funding allow powerful elites to decide what music is made.   Crowd funding works for the most extroverted and popular personalities.   While crowdfunding comes closest to market based incentivizing  I don’t believe crowd funding would have ever given us  important artists  like Jimmy Hendrix, Captain Beefheart, Frank Zappa,  NWA,  Black Flag or Nirvana.   Can you imagine Kurt Cobain or Jimmy Hendrix offering a premium support package that includes the artist coming to your house and cooking dinner for you and 4 of your friends? No crowdfunding works for people like me who already have a career or extremely extroverted self promoting personalities like Amanda Palmer (no offense intended). 

One day I hope that all my musician and digital utopists friends wake up and see that the West’s private market based system for creating culture  has produced some extraordinarily profound and non-mainstream work.   No other system can match it. Why are some so  hell bent on throwing it away?  

** My understanding is that there is a compulsory on demand rate for songwriters (song in abstract) not performers.  It’s not clear to me whether Spotify uses this rate.   And I can’t two experts that agree.  But certainly the bulk (if not all) the revenues Spotify pays our are under the private license not compulsory license.

Reading Between The Lines Google Tells The Truth On Ad Supported Piracy, Now Let Markets Do Their Work.

An Elegant Non-Denial And It’s Implications.

We previously noted that USC’s Annenberg Innovation Lab released a report detailing their initial observations regarding the top online advertising networks that appear to facilitate the payment of advertising revenue to sites that exploit artists without compensation, i.e., pirate sites.

In the 1950s, record labels (often controlled by shady figures of legend and myth) exploited songwriters and artists without compensation.  When artists complained, the label might give the artist a Cadillac in lieu of their royalties. When we hear these stories about how some of the music moguls from those days exploited artists we are rightly outraged.

Today, sites like The Pirate Bay, Hotfile and Isohunt exploit artists in a similar way except the artists don’t even get the occasional  Cadillac.  And not many people seem outraged.  In fact journalists (like this Spin Magazine writer ) seem to want to romanticize the operators of these sites as folk heroes. Instead of portraying them as they truly are: sleazy opportunists and scam artists waving the banner of “freedom” while they rob artists blind.   The really sad part is “respectable” Fortune 500 companies seem to be complicit in this racket.   By advertising on these sites, these otherwise respectable companies fund these illegal operations that exploit artists.

But there is good news.  At least one company, Google has accidentally admitted to being complicit in this racket.  Well maybe that’s not quite right.   Perhaps a better way of phrasing it is they simply didn’t categorically deny their involvement and invited us to read between the lines.   Still I’m taking this as an admission the industry has a problem.  And admitting you have a problem is the first step to recovery. Even if it’s only a read-between-the-lines kind of admission.

The reason I say this is because Google issued a curious and very carefully worded response to the USC report. I am quoting from the LA Times reporting on the study.

“To the extent [the study] suggests that Google ads are a major source of funds for major pirate sites, we believe it is mistaken,” a Google spokesperson said. “Over the past several years, we’ve taken a leadership role in this fight. The complexity of online advertising has led some to conclude, incorrectly, that the mere presence of any Google code on a site means financial support from Google.”

I don’t know-perhaps I’m crazy but I think they did this purposely. There is almost a deconstructed  free jazz beauty to this statement.  It’s like they hired the Ornette Coleman of press releases. The melody is there, but it’s in the omissions, the implied notes,  the silences and the negative spaces.  And using a little mathematical logic you can reconstruct that melody.  You can clearly deduce the statements that they specifically intended to not deny.  Probably just so they couldn’t be accused of lying later.  You follow my logic?

The four read-between-the-lines admissions are as follows.

1. Google is a source of some funding for some pirate sites.

“To the extent the study suggests that Google ads are a major source of funds for major pirate sites, we believe they are mistaken.”

Google  is not denying that it is a source of funds for pirate sites.  They are simply proclaiming (without evidence) that they are something less than a major source of funding.  So they are a moderate source of funding?  A minor source of funding? Just shy of being a major source of funding?  Left unexplained is how Google can measure major versus minor funding and how Google has knowledge of the revenues generated by these illegal and mostly offshore sites.

2. Google funds pirate sites, just not the top 8 sites.

“To the extent the study suggests that Google ads are a major source of funds for major pirate sites, we believe they are mistaken.”

Read this sentence again.  They are denying funding the “major” sites. But they are not denying they may be funding sites that they don’t (arbitrarily) consider major.  Now in this case we were able to do a little reverse engineering to figure out the cut-off between major and non-major websites.  As noted before on the Trichordist we have caught Google providing ads (and we can only assume revenue)  to http://www.filestube.com.  They admitted that filestube had an account and have since disabled it (thank you).  According to web traffic analysis site http://www.Alexa.com there are only 8 file-sharing/cyberlocker type sites that rank higher than filestube!  Google’s own transparency report names http://www.filestube.com as the #1 recipient of valid notices of copyright infringement.

Since Google is basically an engineering operation, you should consider  it significant that it has implicitly  created 4 quadrants for their involvement:

A.  Major Funding For Major Sites

B. Less Than Major Funding For Major Sites

C. Major Funding For Less Than Major Sites

D. Less Than Major Funding For Less Than Major Sites.

They are specifically not denying that they may be operating in quadrants B, C and D. They are only denying that they are in quadrant A.

3. Google lacks sufficient corporate oversight to really know if they are providing funds to illegal sites or not.  

“…we believe it to be mistaken.”

Note the use of the word “believe.”   They are hedging their bets.  They don’t really know.  Google claims its mission is to “organize the world’s information” (whether the world likes it or not).  How can a company that can organize the world’s information lack sufficient knowledge of their own data to know where they are sending revenue? Don’t they issue 1099s in accordance with tax laws?  We can only assume that they are specifically not denying a lack of corporate oversight.   Because the other possibilities are terrifying.

What are the other  possibilities?

A.  The online advertising network has grown so complex it is actually a sentient being.  And like Skynet in Terminator movies, Google has lost control of it and it is now trying to kill us all.  (I’d assign this a low probability, Google’s fascination with The Singularity notwithstanding.)

B. They do know where they are sending revenue.  And if this is the case, Google shareholders may be in for another $500 million dollar fine, like the one they got in the illegal online pharmacy settlement.

For the sake of Google stockholders, lets just hope they are merely disorganized.

4. Google is not denying that their source code on pirate sites means that they have a financial relationship with these sites.

“The complexity of online advertising has led some to conclude, incorrectly, that the mere presence of any Google code on a site means financial support from Google.”

Read this very carefully.  This is very, very clever. Or to keep using the Ornette Coleman analogy this is like the Science Fiction of  this press release.  It’s explosive, wild and takes a while to understand.  No one is really clear why there is a recording of a baby crying in the middle of the saxophone solo.   I’m sure it will confuse a lot of overworked underpaid journalists.

Note the words “some” and “any Google code”.  By using the word “some” Google has set up a hypothetical “straw man” to knock down.  For this statement to be true all they need is ONE example in which a pirate site  contained any Google code (Google Plus, Google Analytics) and someone  mistakenly thought Google was serving ads on the site.  It’s a beautiful hypothetical and that seems to “explain” everything.   When it really doesn’t.  That’s a wild bit of science fiction.  Or as one of my colleagues puts it  “a totally unrelated story that cross-dresses as a reasonable explanation.”

So once again Google cleverly DOES NOT deny that when we see Google or DoubleClick ad code or publisher IDs on rogue websites this confirms a financial relationship with Google.

But perhaps most telling of all is Google’s description of the ad networks as “complex.” And I heartily agree.   In the financial world there is an old adage “complexity is fraud.”   That is honest markets and financial products tend towards simplicity. But in the online advertising world you have ever increasing complexity. This usually indicates there is some fraudulent aspect to the market.  I believe that much of this “complexity” is there to simply insulate the big firms from illegal and unethical practices up and down the chain.  Because complexity has a useful byproduct: deniability.

To be fair, it should be noted that the online advertising ecosystem was not created by Google alone.  Other networks and the Madison Avenue agencies had a hand in creating this system.  I find it very interesting that not one of the Madison Avenue agencies has anything to say about this report.  Why the silence?

+++++++++++++++++++++++++++++++++++++++++

Transparency + Markets.

So my conclusion from all of this is probably not what you expect.   I think Google and the other ad networks are unreachable on this matter and we artists  shouldn’t waste time engaging them in a public relations battle.  They would love to confuse us with sideshows about ad exchanges, open protocols, “self-serve accounts”  and the complexity of the system.  None of that really matters.  What matters is that companies like State Farm and Amex show up on these sites.  We artists need to focus on the brands that are advertising on the these sites and nothing else.

The other thing to consider.  It is becoming ever more apparent that Google gets a form of “celebrity” justice when it comes to their wrongdoing.  A minuscule $25,000 dollar fine in the Google WiFi snooping case? How did that happen?   Or Friday’s mysterious  FTC announcement that the Obama Administration won’t be pursuing an anti-trust investigation of Google.  Google has too much clout in the political system.  While it’s reported that Google’s PAC may have divided its contributions between Republicans and Democrats, its employees and executives overwhelmingly supported Democrats and Obama.  The technology sector is one of the few industries that Democrats can rely upon to counter the Republicans’ advantage in corporate political donations.  This gives me little hope that Washington will ever punish Google or any other tech company involved in the online advertising cesspool.

Now I’m not in favor of this sort of cronyism, I’d love to see Congress investigate these ad networks, especially Google.   But ultimately I think it doesn’t matter.  What matters more is that we shine a light onto these practices. This is the best way to attack the problem.

The silver lining is that companies like Google are  helping us.   Their protestations are inadvertently providing transparency into how the online advertising ecosystem truly functions:   It’s out of control, un-reliable, and does not work as advertised.  It may actually do harm to some brands.  To paraphrase Chris Castle at Music Tech Policy: Online ad networks are Silicon Valley’s exploding Pinto. The mother of all product liability cases.  I believe that as this information becomes widely known  market forces will correct much of the problem, for there are clear financial incentives.

This will happen in two distinct but interrelated ways.  Downward pressure on share prices and lower revenues.

The money starts with the Fortune 500 brands.  We don’t need to know every single place where it ends up. We can see it in the screen captures.  We don’t need to follow the money to every Vladmir and Constantin running a pirate site.  We just need to cut off  funds at the source. And transparency is the most effective AND easiest way to do this.

As Fortune 500 firms become aware of how these ad networks really work, brands will abandon the “bad” networks reducing their revenue, or force the “bad” networks to change their practices. Either way funding for these sites should drop.

Part of the reason I’m so optimistic is that I’ve discovered that it’s really pretty easy to get a bad network in trouble with its clients. Let me demonstrate.   Virtually every illegal file-sharing and/or “cyber locker site”  will auto-suggest “recently downloaded” or “popular files”.  Every once in a while they suggest files that appear to be illegal pornography.  The site http://www.stopfilelockers.com  explains this  in detail.  But as an example even this innocuous search for “camper van beethoven pictures of matchstick men” on a site like http://www.filestube.com immediately autosuggested some very sketchy links at the bottom of the screen.

Screen Shot 2013-01-03 at 4.49.45 PM

And because these sites are completely unregulated eventually something really embarrassing happens to a major brand.  Like this real screenshot I captured earlier this fall:

“Bestiality brought to you by Lexus.”  For their “The Golden (Retriever) Opportunity Sales Event” advertising campaign

lexus and bestiality

And the same thing happened to  Urban Outfitters.  Although honestly I really can’t be 100% sure this isn’t intentional.  You follow me? This  may be some high level extreme branding. You never can be sure with a brand that uses  a litter box with cat poop spelling out “2013” for it’s web catalogue.  Not kidding.

urban outfitters and bestiality

Transparency + Markets is quite a wonderful thing.  Isn’t there now a high probability that  someone at an ad agency or an entire ad network somewhere gets fired over these two screenshots?  The ultimate effect is that it reduces revenue to http://www.filestube.com.

But even more interesting is that the  publicly traded companies that operate ad networks,  like Google, Microsoft, Yahoo and ValueClick expose themselves to civil and criminal liability by doing business with these websites. What happens if one of these networks get caught up in a RICO investigation? What happens to the share price?

Many of these websites pay “affiliates” money for  uploading popular files.  In the case of MegaUpload I’d imagine many of these affiliates are in the US.  Do you really think MegaUpload sent 1099’s to these people? Do you think these affiliates declared this income on their taxes?  What happens to one of these ad networks when they get caught up in a US tax evasion investigation?  You do realize that the US Government is likely in possession of this data?

What happens when a major brand like Ford that doesn’t want their ads on these sites sues the ad network for a refund?  What happens if  hundreds  of brands sue the same ad network for a refund?  what will happen to the share price? I’m told that at least the big ad agencies require the ad network to submit to a compliance audit that could allow some brands to receive refunds on commissions if their ads end up in the wrong places.

And finally for finance geeks:

None of these things even has to actually happen for share prices to plunge.  The mere possibility that this could happen, the mere possibility that these companies have exposed themselves  to large  unpredictable downsides can drive the share price down. Influential stock analysts may notice these dangers  and issue bearish warnings.  But the more  likely scenario in my mind is a large hedge fund may make a big bet that these dangers are “underpriced” and start buying puts on one or all of these companies.  If it’s a large enough bet option market makers will have to sell short the stock to hedge potential losses.  This drives prices down.  Then “momentum” players  begin short selling further depressing shares.  Soon you have a vicious cycle.

Google, Yahoo and ValueClick are particularly vulnerable in this scenario since more than 90% of their revenue comes from advertising. Watch out when analysts start to ask the question “what percentage of their revenue is from rogue sites?”

So instead of arguing tit for tat with Google and their many paid bloggers and sock puppets, we artists should direct our energies elsewhere.   Let me humbly suggest that all artists should start searching these sites for their own music and observing which brands are financially supporting these sites.  Take screenshots and send them to us here  at the Trichordist.  We will then publicize these and notify the brands.  But by all means post them to your own facebook and twitter accounts.  You never know who’s gonna see them.

Remember : Transparency + Markets is usually a good thing.  The online advertising ecosystem is in desperate need of transparency. But we don’t have to wait for “the grownups” to get their shit together.  We can do this now!

I’ll get us started. It’s easy.  Here is Traveler’s Insurance, Metlife and Quickbooks  helping fund the massively infringing site http://www.weblagu.com.  And since they are ripping me off.  I get to say:

SCREW YOU QUICKBOOKS/INTUIT.   GNUCASH IS JUST AS GOOD AND IT’S SHAREWARE! DOWNLOAD HERE.

Try it yourself.  http://www.weblagu.com/index.php?search=camper+van+beethoven.  See which advertisers pop up for you. Put in your own band name.

(Since I’m speaking to musicians I’m gonna assume you are on a mac .  So you can select an area for a screenshot by pressing Command+Shift+4. Your cursor turns into a sort of gunsight.  Click and drag  until you get a box the correct shape and area.  When you “let go” you will hear a snapshot sound and there  will be a .png file on your desktop. It’s name will reflect the date and time. 

If you have a PC you  probably already know how to do this 50 ways and  I don’t need to tell you how to do this.

Oh and those of you who are even more advanced,  use firefox and install the firebug plugin so you can capture the served source code in your screenshots.  Even better get a packet logger.  If you don’t understand what I’m talking about you won’t know how to do this anyway.)

Screen Shot 2013-01-03 at 12.48.41 PM

The Most Important Fact Academics and The Copyleft Neglect to Mention: Copyright is Optional.

This started as a quick response to a piece that Paul Resnikoff ran on his excellent Digital Music News blog.   I realized later that I really had a more general point to address.  There is a large contingent of people in the Copyleft (especially academics) that don’t seem to realize that eliminating copyright actually reduces choices and empowers rich and powerful corporations. 

++++++++++++++++++++++++++++++++++++++

A few years ago I had the pleasure of seeing comedian Patton Oswalt at my wife’s venerable DIY/indie music venue The 40 Watt club.

Patton opened with an apology to the largely liberal academic and college students in audience.

“I want to sincerely apologize for my opposition to gay marriage, I realize I may have offended many of you. But no one told me  gay marriage wasn’t mandatory”.

This is what is so incredibly stupid about the copyright debate. The tech lobby has created an army of ignorant academics, tech public policy apparatchiks and paid bloggers that seem to not understand that copyright is not mandatory.  Anyone is free to enter into a creative commons like licensing agreement or even just give away their music by fiat if they chose.  The hybrid/sharing economy is here and it’s thriving.

In fact that is what I do with some of my repertoire.  Cracker and Camper Van Beethoven have had a Grateful Dead inspired taping/sharing policy since our inception in the the early 1980’s.  We have thousands of live tracks on the internet music archives I unequivocally support an artist’s right to monetize his/her songs however they see fit. Or not to monetize those songs.

Eliminating Copyright protections does not increase choice by artists but limits them.  It does the opposite. We would no longer be able to choose how we monetize songs.  We could not chose with whom we do business. Eliminating copyright is mandatory collectivization, it’s closer to something that totalitarian regimes impose than the kind of free choice we provide in our democratic societies.

If this had been the public policy in the 1950’s and 1960’s the mafia connected Morris Levy wouldn’t have even had to buy those R&B singers the occasional Cadillac. He could have paid them nothing.  Most of the digital shysters arguing that they they want to “help” artists by “promoting” their music and paying them nothing are making the exact same arguments that Morris Levy made to artists in the 1950s and 1960’s when artists came to him asking for money.

Those calling for the abolition of copyright protections would simply be allowing multinational corporations like Universal Music, Google, Apple and BitTorrent  to exploit artists without little or no compensation.   It would make the most exploitative practices of the old music business look like childs play.

While it may seem revolutionary to many academics and bloggers to sit behind a computer and post invectives against copyright and the major record labels it’s not. It’s actually a regressive pro-corporate activity.  The truth is the rights of millions of individual artists (not record labels) would be destroyed in the process.  While mostly large multinational corporations would benefit.

The ideals of western civilization are ultimately designed to protect the rights of the weak, poor and powerless against the strong rich and powerful.  It may seem stupid in this age of cynicism and greed to measure policies against the fundamental principles of western civilization.  But it is not.  Especially if you believe in leaving behind a better and fairer world. If academics and intellectuals have time and energy for “fair trade” coffee isn’t it hypocritical that they don’t want to ensure that artists (the vast majority of which are in the developing world) are also fairly compensated and not exploited?

In an age when we are obsessed with advancing the rights of formerly persecuted minorities  and generally making the world a kinder place.  It is startling to see so many people arguing to make the world less fair and less civilized place for the milions of individual artists on the planet.  I can’t help but wondering if these generally progressive academics and intellectuals have really thought through their opposition to copyright.

Google’s Serial Obfuscation: Music Canada,BPI, Billboard Question Whether Google Has Really Lowered Pirate Sites Search Rankings

Back in August Google announce it would push down search rankings for pirate sites.  This was greeted with a lot of hoopla by both opponents and proponents of illegal piracy.  But it now appears that this announcement was just newspeak from the GOOrwell Ministry of Truth.

Graham Henderson at Music Canada has just posted an article that puts Google’s claims into question.   In the article Still Searching for Results in Google’s Wasteland of Illegal Sites and Takedown Notices  Henderson details the emptiness of Google’s claims.  A search for Carly Rae Jespersen’s Call Me Maybe  results in zero legitimate music sites on the first page.  The lone exception is the Google owned YouTube.  It’s not till the second page of results that  the 800lb gorilla of the digital retail, iTunes shows up!   Not only does this illustrate the difficulties facing artists it illustrates how tough it is for the legitimate music tech companies to reach their customers.  It’s odd that the myopic music tech companies like Pandora still seem to think it’s the artists that are the enemy.  They refuse to acknowledge that Google is eating their lunch.

It get’s even worse.  We looked at every single link on the first page of search results for “Call Me Maybe Download”.  Google has no incentive to push these infringing links down.   Every link except one apparently generates revenue for Google!!   How?  either directly through Youtube,  by (illegally?) selling advertising on the site hosting the infringing links, or using one of googles many other tools to generate revenue.   We give you the evidence here:

Here is the first page of search results.

Clicking through to the links reveals Google’s DoubleClick serving advertising directly on each these sites or evidence that they have in the past. 5 of these links definitely generate revenue for Google.  Two other  links resulted in queries to Google for ads  but in this case didn’t directly receive ads.  The last two use other google tools to generate revenue    Just like the online pharmacy case Google is complicit in what appears to be illegal activity.  Maybe now the election is over the Obama administration will pursue this.

BeeMP3’s ad traffic has been decimated of late, but google is still selling their android app.

Mellencamp Character Assassination. The New Republic Bravely Stands Up For Corporations and Criminal Groups That Exploit Artists.

I’m sort of delighted by this. I mean I went to a very liberal college and there’s a certain kind elitist and dim knee jerk liberal I really dislike.  Dorm room revolutionaries who end up unwittingly doing the work of the man.  The kind that end up blogging for The New Republic.

Recently John Cougar Mellancamp wrote a piece in which he criticized the music business.  In particular he criticized them and his fellow artists  for not standing up to  large corporations like Google who have monetized illegal file-sharing by selling advertising against illegal download search results and also by providing advertising directly to file infringing sites.

The New Republic-always the class act-decided to respond with a character assassination piece.   They sent the remarkably ignorant Lydia DePillis (on twitter @lydiadepillis)  a 3 year real estate journalism veteran to “School” the 40 year music business veteran John  Mellencamp on the history and future of the music business.  It’s freaking hilarious.  Not only does this “professional” journalist not understand that  the main point is that Mellencamp is criticizing the music business for not protecting artists she wanders completely off topic and makes historical claims that have no basis in fact. Further she incorrectly disputes Mellencamp’s facts.

I’m just gonna give you one example.  The 3 year journalism veteran claims that search engines don’t make money off the searches for illegal downloads.   it took exactly 3.2 seconds for me to disprove this…

That is Google advertising against a set of infringing links.

Also she then dismisses and mocks Mellencamp’s correct claim that Google makes plenty of money serving ads on sites that it knows are infringing.

Here is Google’s Doubleclick serving an ad for Jeep on the that same site http://www.dilandau.eu   A site that Google’s own transparency report ranks as the 24th most copyright infringing site in the world.  Isn’t knowingly providing money to an illegal enterprise a RICO predicate?

It is sad but not surprising to see The New Republic standing up for the right of giant corporations and criminal groups to make money by exploiting artists songs.  The New Republic has totally lost it’s way.  They are now for the big corporations and against the little guy.

If The New Republic has any journalistic integrity left it  needs to correct the falsehoods in this article.  Further they should apologize to Mellencamp for the nasty tone of this article.  I’m sure they won’t but it’s worth a try.   Maybe tweeting at the author will work better @lydiadepillis .

Untruth in Advertising: Pandora’s Misleading Plea To Listeners On Behalf Of The Internet Radio “Fairness” Act.

For those of you that have not been following closely.  The “Internet Fairness Rado Act” is a bill  that is being championed by Pandora Radio.  Pandora radio has been pushing it’s listeners to write their congressmen on behalf of Pandora and in support of this bill.

But Pandora has not honestly explained the bill to their listeners.  They portray the bill as a fix to “discrimination” that internet radio suffers in comparison to traditional broadcasters.  This is simply not true. In addition there are all kinds of nasty things  in this bill that don’t really have anything to do with Pandora.

Here’s how you know you aren’t being told the whole story: The bill is also backed by Clear Channel and other traditional broadcasters.  This is not poor little Pandora vs the other big broadcasters.  They are on the same side. It’s big media vs the artists.   Feel duped?  Write Pandora. Click Here.

So for a little bit of fun we have decided to make an honest and fair version of the Pandora’s plea on behalf of the Orwellian named Internet Radio Fairness Act.

++++++++++++++++++++++++++++++++++++++++++++++++

From the Pandora website

Their text is in black.  Our  more “truthy” text is in red.

INTERNET RADIO FAIRNESS ACT

An important piece of legislation has been introduced in Congress to help end the long-standing discrimination against internet radio fire the copyright royalty board judges.  These judges have made rulings that Pandora did not like in  the past.  This bill also muzzles any group that acts on behalf of  “rightsholders” (artists) by threatening prosecution under The Sherman act for “impeding” any direct licensing between broadcasters and record labels.  Direct licensing deals  often allow record labels to take artists performance royalties and apply it to un-recouped balances. As it stands now these royalties must be  paid directly to artists.  This effectively muzzles artists,songwriters and their unions. This bill infringes free speech!   We’re asking that you contact your representative today to urge them to NOT support the Internet Radio Fairness Act.

This bipartisan bill will  NOT end royalty rate discrimination against internet radio and bring greater fairness to our industry. Because such discrimination does not exist.  It may however keep Pandora’s stock price high while insiders sell  millions of dollars of shares amonth. Today, the discrimination disinformation is extraordinary. In 2011, Pandora paid over 50% of revenues in performance royalties, while SiriusXM paid less than 10%.  But comparing shares of revenue is extremely misleading.

This is because

1) Pandora chooses to play one commercial an hour whereas Sirius plays approximately 13.

 2) Sirius relies on subscription (lots of revenue) while Pandora relies more on advertising (much less revenue)

3) Sirius airs a lot of non music programming.  

Internet radio brings millions of listeners back to music, plays the songs of tens of thousands of promising working artists, enabling them to build their audience while receiving fair compensation. That’s why we want to pay artists 85% less. We would like artists to be unfairly compensated so we can profit more. 

+++++++++++++++++++++++++++++++

If you are a pandora listener,  and you received this very misleading communication from Pandora and you now feel duped?  Write Pandora and ask them some hard questions.  Ask them why they failed to mention the bill fires the copyright  judges.  Ask them why they failed to mention  the Sherman Act is in the bill?  Ask them why they failed to mention they want to muzzle artists groups during direct licensing negotiations? Ask them why they never mentioned that Clear Channel is also behind this bill.  Write them  Click here.

You can also write the congressmen and senators who introduced this bill:

Representatives Jason Chaffetz (R-UT) and Jared Polis (D-CO) along with Senator Ron Wyden (D-OR).