Artists Rights Advocates Make Gains in 2015… Web/Tech Admissions Laid Bare.

So many of the issues we’ve been talking about for years are finally becoming part of the larger and more mainstream conversations about artists rights and an ethical internet.

Seems like there is a little bit more than a slight draft blowing on house of cards that Silicon Valley has built. Here’s a quick recap.

FREE, UNLIMTED, AD-SUPPORTED, ON DEMAND STREAMING IS UNSUSTAINABLE.

Pandora CEO Mike McAndrews first started teasing this talking point during an earnings call in October. You can read those comments at Re/Code. But it was the more direct article McAndrew’s authored for Business Insider that really cemented what we’ve been saying all along…

“This gray market is unsustainable. If consumers can legally listen to free on-demand music permanently without converting to paying models, the value of music will continue to spiral downward to the benefit of no one.”

There is no turning back from this admission.

It’s funny how in years past so many in the music and tech communities could not and would not admit to this simple fundamental truth often telling musicians the true value of their platform was “exposure” so artists could “tour and sell t-shirts”. Well it now looks like the wheels have been run off that nonsense for good.

What would be really great is to see Pandora join the fight with artists against Ad-Funded Piracy. Pandora, Spotify, YouTube and every other Ad-Supported music platform must be aware of the fact that the downward pressure from these infringing pirate sites not only diminishes the value of music, but also the value of advertising on legitimate and licensed paltforms.

WINDOWING WORKS. ASK ADELE, TAYLOR SWIFT AND THE MOVIE BUSINESS.

Taylor Swift, Adele, Beyonce, Prince, Coldplay, The Black Keys, Thom Yorke and other artists have proved that Hits Don’t Need Spotify, but rather Spotify Needs Hits. The Wall Street Journal reports that Spotify is caving in on windowing.

Now, the service is caving in, according to people familiar with the matter.

In private talks, Spotify has told music executives that it is considering allowing some artists to start releasing albums only to its 20 million-plus subscribers, who pay $10 a month, while withholding the music temporarily from its 80 million free users. The company is only interested in withholding albums that can be kept off of other free music sites, such as Alphabet Inc.’s YouTube, for the same amount of time, one of these people said.

There is no turning back from this admission.

This means that Spotify has admitted that it is NOT a discovery medium, it is a retail outlet. Spotify is the digital cut-out bin offering the lowest amount of value to artists. The big problem for Spotify now is who decides who is a lessor or greater artist? Who is going to have that conversation with artists and managers that they are a lessor artist and not worthy of Spotify’s stamp of approval to only be streamed to paying subscribers? Ironically, but predictably the new boss is worse than the old boss.

As with Pandora’s admission about unlimited free streaming being unsustainable, Spotify also recognizes that Ad-Funded Piracy, particularly of the YouTube variety (and mentioned by name) must be managed effectively for windowing to work.

YOUTUBER’S GET PIRATED ON FACEBOOK EXACTLY HOW MUSICIANS GET PIRATED ON YOUTUBE, AND THEY DON’T LIKE IT.

Here’s a shocker. YouTuber’s who create original content through their own investment of time, money and resources are outraged when Facebook users “Freeboot” (aka Pirate) those videos depriving the original creator of the revenue. Hank Green writes a post on Medium that breaks it down.

According to a recent report from Ogilvy and Tubular Labs, of the 1000 most popular Facebook videos of Q1 2015, 725 were stolen re-uploads. Just these 725 “freebooted” videos were responsible for around 17 BILLION views last quarter. This is not insignificant, it’s the vast majority of Facebook’s high volume traffic.

There is no turning back from this admission.

Every argument that has been used against musicians, filmmakers and other creators for using the DMCA to protect their work suddenly takes on new dimensions when the tables are turned.

Larry Lessig had convinced a generation that they we’re being criminalized because musicians were “out of touch” with the “sharing economy”. When musicians issued DMCA notices to YouTube they were vilified, taunted and publicly shamed “Sorry that video is no long available due to a copyright claim by the artist.

THE DMCA IS NOT A “LICENSE” FOR INFRINGEMENT, COX LOSES SAFE HARBOR IN JURY VERDICT. 

Perhaps the single greatest ruling of the year involves Cox Communications losing it’s safe harbor under the DMCA. Digital Music News reports on the jury verdict.

Ultimately, the court found the situation to be more complicated than that, with Cox now ruled guilty of both contributory and willful contributory copyright infringement by a federal jury.  The jury award is $25 million, though that probably represents a small prelude to damages that could ultimately push into the hundreds of millions.

There is no turning back from this verdict.

For those of you keeping score at home it is the DMCA abuse that has been used as a shield against copyright infringement liability by the internet and web/tech communities. Many businesses including many ISP’s and content hosting platforms such as YouTube have used the DMCA to build massively profitable businesses that are largely comprised of infringing works, otherwise known as User Pirated Content. That may be about to change thanks to this ruling.

THE PIRATE / FREE CULTURE MOVEMENT HAS FAILED. 

In a recent interview Peter Sunde, the founder of The Pirate Bay, the flagship of the free culture movement admitted he had failed and was giving up. The most interesting admission by Sunde is at the end of the interview where he echoes what we and other’s have been saying for years.

So, is there like a concrete thing we should focus on? Or do we need to aim for a new way of thinking? A new ideology?

Well, I think the focus needs to be that the internet is exactly the same as society.

There is no turning back from this admission.

There is an excellent open letter in response to Sunde by David Newhoff at The Illusion of More that is well worth reading with a detailed look at why Sunde has failed. But it is Sunde himself who makes the most profound admission.

We have centuries of rule of law for civilized societies that respect and protect individual creators rights in the authorship of their work. The United Nations Universal Declaration of Human Rights, Article 27, part 2 states “Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.”

The greatest irony here is that Sunde set up The Pirate Bay as an attack on capitalism, but he started by attacking artist’s and creator’s moral rights firsts. The paradox of “pirate logic” expands when one recognizes that The Pirate Bay was said to be making over four million dollars year. Yeah, that’s the way to fight capitalism, attack the ability for artists to survive and pocket four million a year. We couldn’t make this up if we tried.

SO LETS CHECK THE MATH HERE AT THE END OF 2015

  • Pandora attacks Spotify stating the Unlimited, Ad-Supported, On Demand, Free Streaming is Unsustainble.
  • Spotify attacks YouTube stating that Windowing Can Only Work If Windows Can Be Enforced.
  • YouTuber’s attack Facebook stating that Stealing and Monetizing their work Without Permission is bad.
  • Cox Communications attacked the DMCA stating “F*ck The DMCA” and lost.
  • Peter Sunde attacks Capitalism stating that… oh well, forget it… it’s nonsense.

There is a lot of work to be done, however these admissions set the framework for the future of these conversations going forward.

jean michael jarre IRM 1

[NOTE : THIS ARTICLE WAS UPDATED ON SATURDAY DEC 19 TO ADD THE PARAGRAPH ABOUT COX COMMUNICATIONS]

An Open Response to Peter Sunde | David Newhoff @ TIOM

The Pirate Bay’s Peter Sunde has recently stated he’s given up. His interview can be read here. David Newhoff at the Illusion Of More responds to Sunde in a brilliant open letter that is required reading.

This is what comes of evangelizing the idea that it’s okay to exploit other people’s investment of real labor and real capital in goods and services that would otherwise have regenerative value. And exploiting these types of investments is precisely what you and your colleagues did with The Pirate Bay.

At least part of the Internet you don’t like is what comes of preaching to a whole generation that they can have whatever they want, free of charge, as long as it’s just a mouse click away.  And indeed, we are lately seeing the wheels come off that naive (and frankly predatory) idea. As the leaders of Pandora and Spotify begin to see that “freemium” isn’t a business model; as Facebook’s video service “freeboots” the promised ad-share value out of the pockets of YouTube creators; and as the global network of pirate sites is revealed to be a malware-infested and sophisticated black market that preys on individual consumers, you seem to have missed the point, Peter. The “fight” you lost is not with the MPAA and the principles of real capitalism—but with the unfettered greed you helped foster on the Internet you asked for.

READ THE ENTIRE POST AT THE ILLUSION OF MORE:
http://illusionofmore.com/an-open-response-to-peter-sunde/

Pirate Bay Founder: ‘I Have Given Up’ | Motherboard.Vice

This interview is fascinating on so many levels and deserving of it’s own in depth post to explore Sunde’s comments.  Here is just a teaser…

What is it exactly that you have given up?

Well, I have given up the idea that we can win this fight for the internet.

The situation is not going to be any different, because apparently that is something people are not interested in fixing. Or we can’t get people to care enough. Maybe it’s a mixture, but this is kind of the situation we are in, so its useless to do anything about it.

We have become somehow the Black Knight from Monty Python’s Holy Grail. We have maybe half of our head left and we are still fighting, we still think we have a chance of winning this battle.

So what can people do to change this?

Nothing.

PLEASE READ THE FULL POST AT VICE-MOTHERBOARD:
http://motherboard.vice.com/read/pirate-bay-founder-peter-sunde-i-have-given-up

Mike Doughty Responds to John Seabrook at The New Yorker about Adele Doing Windows…

Musician Mike Doughty takes on the New Yorker’s anti-artist editorial “Who Is Really Paying for Adele?”. Seabrook argues that somehow Adele is cheating fans by not giving away her new, historical, record breaking album.

Seabrook’s piece reads like it was written by the Spotify PR dept with lines like this “Could it be possible that the record business, pursuing a strategy of inflating sales by keeping an album off Spotify, Apple Music, or Deezer, is choosing short-term profits over long-term growth?” No. It’s actually long term growth that is the goal of windowing. Variable pricing and pricing elasticity works for most business and has historically worked well for the record industry as well (see below).

Doughty’s response from Facebook can be seen here. You can share it directly via this link:
https://www.facebook.com/mikedoughty/posts/10154544998845200

 

DoughtyVSNYTimes

What is of particular interest is that it is people like Seabrook who chastise artists and the music industry even in the the light of Rdio going defunct and owing $220m to creditors and labels! Somehow the bad bubble math of Silicon Valley is what artists should be striving for? No. Enough.

WINDOWING THAT WORKS FOR EVERYONE

So what does this mean for the non-superstar artists? Very simply, windowing works. Windowing works better when there is a reasonable amount of consistency. Our friends in the film business have been highly effective at windowing for decades and there’s no reason why it can’t work similarly well for the record business.

Every new release should have the option to determine the release windows when the record is being set up. For example the default could be 0,30,60,90 day option for transactional sales, followed by 0,30,60,90 day option for Subscription Streaming prior to being available for Free Streaming.

Windowing is not new for the record business. The industry has never had pricing ubiquity across all releases, genres and catalogs. There has always been strategic and flexible pricing strategies to differentiate developing artists, hits, mid-line catalog, and deep catalog. An industry wide initiative to re-allign time proven price elasticity is the key to growing the business and developing a broad based sustainable ecosystem for more artists.

  • Windowing allows for Free Streaming to exist as a strategic price point.
  • Windowing allows for Subscription Streaming to exist as a strategic price point.
  • Windowing allows for Transactional Downloads to exist as a strategic price point.
  • Windowing allows for artists and rights holders to determine the best and most mutually beneficial way to engage with their fans.

Windowing is the key (as it always has been) in rebuilding a sustainable and robust professional middle class that will inevitably lead to more artists ascending to the ranks of stars. Some will become superstars and legends capable of creating the types of sales and revenues currently achieved by Adele, Taylor Swift and Beyonce’. To get there however we need to abandon Stockholm Syndrome and embrace windowing that works for everyone.

 

 

Lessig Defends Dotcom as Extradition Hearing Begins | Copyhype

Required reading regarding Larry Lessig’s pitch to help Kim Dotcom…

The second thing about Lessig’s declaration that jumps out is an apparent contradiction between Lessig and Dotcom’s defense team regarding the applicability of the DMCA safe harbors to Megaupload.

In the white paper, Dotcom’s defense team says

Even if the U.S. government’s wishful expansion of the criminal copyright law into the realm of secondary infringement were tenable (which it is not), Megaupload is shielded from criminal liability by specific “safe harbor” provisions in the Digital Millennium Copyright Act (DMCA), included in the law to protect companies like Megaupload that make efforts to remove infringing material in response to “take-down” notices issued by copyright holders

But in his declaration, Lessig asserts “The DMCA is only a defense in the civil context”. The reversal is notable.

READ THE FULL POST AT COPYHYPE:
http://www.copyhype.com/2015/09/lessig-defends-dotcom-as-extradition-hearing-begins/


 

 

Larry Lessig is Wrong, and should “Get Over It”

“I Ain’t Gonna Work On Google’s Farm No More” | Creators are Forced Labor* On The Ad-Funded Piracy Fields Of The Advertnet

Advertising is killing internet. Soon most online advertising will be forced pre-rolls of TV commercials. You finally have a DVR to skip commercials, and soon there will be no way to avoid them. Do you really think this is what what the internet’s founding founders had envisioned? One great big inescapable advertising machine? No, we didn’t think so either.

Creators are now forced labor* on the digital fields of the AdvertNet, where the Borg like overlords of internet advertising have forced us into being unwilling participants on their digital plantations against our will. We have no defense against the advertising funded, illegal exploitation of our labor.

Now we want to be clear, we’re not opposed to advertising in general, the advertising industry overall or the many highly talented creatives who work in advertising. We all love those Superbowl ads, right? And let’s not forget that many a band in recent history has found fortune from a well placed song in a high profile commercial (Hello, Phoenix).

No, we’re talking about the highly invasive, privacy invading, personal data tracking, internet advertising slathered on pirate sites that illegally distribute copyrighted works and destroy the livelihoods of professional artists and creators against their will.

Digital Advertising Agencies are on the wrong side of artists rights. They have sold us out.

Here’s the elephant in the room. The internet as a business has a math problem and it goes something like this. There are only a few ways to make money on the online. First is transactional sales where the company can take a margin on each transaction (Amazon, Itunes, Etc). Second is a transactional service where the company can take a margin on each transaction (Uber, AirBnB, etc). Third is subscription based access to content and software (Netflix and Adobe respectively). Fourth is advertising for pretty much everything else including the big categories of Software As Service or SAAS. SAAS models including everything from Google, Facebook, Twitter and Instagram to newspapers, blogs and community based bulletin boards like Reddit, etc.

The fundamental problem here is attempting to transform all businesses to advertising supported models. This is because the largest most successful internet company ever (Google) just happens to work under that model. But the economics at large don’t generate enough revenue to pay for the cost of labor for the production of art, photography, music, movies, book, etc being distributed.

Think about it. How could it be possible that everything that once required transactional revenues to be sustainable can now be paid for with just advertising revenue? It can’t. Not under current models that do not allow for scarcity and exclusivity.

Scarcity and exclusivity are what make broadcasting models work. Television networks invest in creating exclusive content that is scarce. The scarcity and exclusivity allows for maximum monetization of that asset. The Superbowl and the Academy Awards are two of the highest grossing advertising based products specifically because they are scarce.

Take the above one step further. Imagine that everything on the internet, every single site that is not selling merchandise, a service or a subscription has to be self supporting on advertising revenue alone. Do you really think that’s possible? No, it is not. This is simply because to the cost of production of professional content can not be created at the cost that internet advertising provides.

The work around this math problem is to steal the labor of professional creators and monetize it against their will.

No budgets to pay for production, no problem. Steal It. 

Just make the margin on the cost of running the business without paying for content production. A business that does not have to pay for its inventory or cost of goods is far more profitable than one that does pay those costs. This is exactly how pirate sites and Google’s YouTube operate.

The creators of YouTube admitted as much in private emails that were exposed during the lawsuit with Viacom:

• A July 29 email conversation about competing video sites laid out the importance to YouTube of continuing to use the copyrighted material. “Steal it!” Chen said , and got a reply from Hurley, “hmmm, steal the movies?” Chen’s answer: “we have to keep in mind that we need to attract traffic. how much traffic will we get from personal videos? remember, the only reason our traffic surged was due to a video of this type.”

And here’s what it looks like… Lou Reed Exploited By American Express, AT&T, Chevrolet, Chili’s, Lysol, Pottery Barn, Vons, Domino’s Pizza, Netflix, Galaxy Nexus and Ron Jeremy!

LouReedGoogleSearch

LouReedAMEX

LouReedNETFLIX

LouReedDOMINOS

LouReedGalaxyNexus

LouReedVONS

LouReedPOTTERYBARN

LouReedLYSOL

LouReedCHILI'S

LouReedCHEVY

LouReedATT

LouReedTPBPORN

* Forced Labor? Hyperbole? With no ability to opt out, without being granted choice, consent or the ability to negotiate our wages, what else is it?

The 1 Percent: Income Inequality Has Never Been Worse Among Touring Musicians… | Digital Music News

One of the mantra’s that we always hear about the internet and musicians is that the revenue has shifted from recording sales to live ticket sales. So the great accomplishment of the internet according to Silicon Valley wisdom (and Steven Johnson of the NY Times Mag) is that artists can hit the road. “The dream of the 90s is alive, the 1890s…”

Well, if you’re not an established hit artist, here’s how that is working out in the post-napster era. Oh, and by the way, songwriters don’t tour, record producers don’t tour, recording engineers don’t tour… well, you get the point. Here’s the stat as reported by Digital Music News.

Note that in 1982 almost 40% of the revenue was divided between the “bottom” 95% of artists, while in 2003 they received only 15% of all revenue.

Could it be that these top-grossing artists benefited from launching in an era when artists didn’t have to be in the top 1% to develop a healthy live following over years of touring?

READ THE FULL POST AT DIGITAL MUSIC NEWS:
http://www.digitalmusicnews.com/2013/07/05/onepct/

Social Passivity Resulting in Current Invasive/Spying Technology | Jon Taplin @ USC

Social Passivity Resulting in Current Invasive/Spying Technology

Read The Blog Post Here:
https://medium.com/@jonathantaplin/sleeping-through-a-revolution-8c4b147463e5

Watch the Full Lecture Here:

The Technology Revolution Impacts and Reduces the Workforce | Jon Taplin @ USC

The Technology Revolution Impacts and Reduces the Workforce

Read The Blog Post Here:
https://medium.com/@jonathantaplin/sleeping-through-a-revolution-8c4b147463e5

Watch the Full Lecture Here: