Spotify Hit With $150 Million Class Action Over Unpaid Royalties | Billboard

Vocal artist rights advocate David Lowery brings a massive action against the largest streaming service.

Camper Van Beethoven and Cracker frontman David Lowery, retaining the law firm of Michelman & Robinson, LLP, has filed a class action lawsuit seeking at least $150 million in damages against Spotify, alleging it knowingly, willingly, and unlawfully reproduces and distributes copyrighted compositions without obtaining mechanical licenses.

READ THE FULL STORY AT BILLBOARD:
http://www.billboard.com/articles/business/6828092/spotify-class-action-royalties-david-lowery-cracker-150-million

#irespectmusic

Karma Meets Irony. “Freebooted” YouTuber’s Feel The Sting Of Piracy…

Watch and learn… We can’t make this up. Seriously you have to watch this video.

If we had a nickle for every YouTuber or Tech Journalist that advised musicians that “YouTube” was the SOLUTION TO PIRACY we’d be rich. Really rich. I mean, really, really, really rich. We we’re told YouTube was “promotion” and “exposure” to make money other ways.

We were told how if you just “made stuff people wanted” and “connected with fans” then they would reward you with loyalty and support. Musicians were told they were “whining” about piracy and that they should “adapt and evolve” to the “new way” and just embrace all of this “awesome internet empowered promotion”.

Funny how it is when the shoe is on the other foot. See here’s the thing. All of these YouTuber’s make money from the advertising that runs on their YouTube videos. But when those videos are ripped from YouTube by fans and uploaded to Facebook guess who doesn’t get paid? Yup, you guessed it… the YouTuber’s are getting stiffed and they don’t like it.

Where is Larry Lessig to help these folks out? Remember kids, don’t break the internet! It’s “sharing economy” afterall. You do the work and silicon valley shares the profits.

Soooo… when a musician’s work is pirated on Napster, Grockster, Kazaa, Limewire, The Pirate Bay, oh and YouTube… Musicians should “get over it”. But when a YouTuber’s work, labor and creative output is devalued, or worse monetized by a third party (Facebook) who doesn’t pay them anything, well then, you know, that’s “bad”.

The issue gained national attention this year earning editorials and reports from the likes of Slate, “Facebook’s Piracy Problem” in July. Time followed with a story in August, “This Is Facebook’s Biggest Problem With Video Right Now.” And recently as November AdWeek chimed in, “Facebook’s ‘Freebooting’ Piracy Problem Just Cost Casey Neistat 20 Million Views“.

This quote from the AdWeek story above kind of says it all…

But then they ran into a problem known as “freebooting,” which entails republishing videos on social sites without the consent of the folks who made the clips. In essence, it’s a practice of intellectual-property theft that’s plagued Facebook more than other digital platforms—PR-wise, at least—in recent months thanks to a few whistle-blowers.

They go on…

“I spent roughly a week issuing take downs on Facebook—a convoluted process,” Neistat told Adweek. “I crowdsourced the process of finding the freebooters because there is no way to search Facebook. In all, I took down well over 50 different posts—[which was] not nearly all of them. I simply gave up after a while. I anecdotally kept track of the view counts—over 20 million views on the videos I took down.”

Here’s more to chew on from a post by Hank Green on Medium, “Theft, Lies and Facebook Video“.

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. And no wonder, when embedding a YouTube video on your company’s Facebook page is a sure way to see it die a sudden death, we shouldn’t be surprised when they rip it off YouTube and upload it natively.

Facebook’s algorithms encourage this theft.

Hmmmmm… where have we heard this story before? Maybe it was Daily Finance back in 2010, “Viacom vs. YouTube/Google: A Piracy Case in Their Own Words“.

• On July 19, Chen wrote to Hurley and Karim: “Jawed, please stop putting stolen videos on the site. We’re going to have a tough time defending the fact that we’re not liable for the copyrighted material on the site because we didn’t put it up when one of the co-founders is blatantly stealing content from from other sites and trying to get everyone to see it.” Four days later, Karim sent a link to the other founders, and Hurley told him that if they rejected it, they needed to reject all copyrighted material. Karim’s reply: “I say we reject this one but not the others. This one is totally blatant.”

• 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.”

Yup, Karma meets irony… How very interwebs… Ok, Ok, Ok… Sorry, just one more…

Everyone’s creativity deserves to be protected. All creators should be united against the illegal, infringing and exploitative uses of their work (especially for profit) without consent or compensation.

Three Simple Steps To Fix The Record Business in 2016… Windows, Windows, Windows…

windows

This time last year we correctly predicted the restructuring of at least one major label group when we asked the question, “Who will be the First Fired Label Execs over Spotify Fiasco & Cannibalization?“. It didn’t take long for us to find out, “It’s Just Math : Digital Music Execs Exit, But will the Pivot to Paid Subs Be Enough To Save The Record Biz?” We’re still not sure that even paid subscription streaming actually works in the long term, but we know for sure that unlimited free streaming does not!

What a difference a year makes. What a difference Taylor Swift makes. What a difference Adele makes.

Going into the next year our prediction is that the power of windows can not be overstated as the leading solution to the problems faced by the record industry. Effective windowing has always been a part of the economic life cycle of every album release. The physical singles sales business (ya’ll remember 45 prm records, right?) – well, that was largely a loss leader to boost singles chart positioning that combined retail and radio reports.

In every record store there was the “hit wall” of discounted new releases to encourage higher volume sales. Every store stocked a robust variety of titles across different genres and price points comprised of front line titles, mid-line titles, budget line titles, and at the end there was the cut-out bin. Also, let us not forget the “11 records for a penny” record clubs advertised in magazines.

Those, my friends, are windows. Those who are advocating against windows are probably too young to know better or have been lead around by the nose by some digital snake oil salesman protecting their own interests.

This is not a philosophical discussion. This is financial reality. Respected stock analyst Robert Tullo who is the Director Of Research at Albert Fried & Company says this:

Longer term IP Radio and Spotify are good annuity revenue streams and great promotional tools. However, we believe the system works better for everyone when artists have the right to distribute their Intellectual property how they see fit.

Ultimately we think windows for content will form around titles that look much like the Movie Windows and that will be great for investors and the industry as soon as all these so called experts get out of the way and spot trading fashionable digital dimes for real growth and earnings.

Mr. Tullo is correct. Not only will artist (and rights holders) do better when they have the freedom of choice but so will the partner platforms. This is how it works in the film business. Every month the “virtual inventory” on Netflix is rotated. New titles come in, old titles go out. If you really, really, really want to see something right now, you have to rent it or buy it via a transactional stream or download. The record business will benefit from the same models and strategies. Windowing works. Period.

See here’s the thing… If these new digital platforms are so great for artists, why wouldn’t artists want to participate on them?  The benefits would be self evident? If the product that Spotify, Pandora, YouTube (and others) are offering is so good for artists, why are these companies so afraid of artists and rights holders opting out? Maybe, just maybe these platforms are not offering the type of value that their suppliers find meaningful?

It really speaks volumes when a business model is so bad that one of  the essential features for survival of the company is to deny its suppliers the option to fairly negotiate their participation or have the ability to opt out. In the old neighborhoods that was known as a protection racket, or extortion.

Silicon Valley didn’t invent the freemium, they’re just doing it wrong. Really wrong. Horribly wrong.

Let those who want to give away their work freely do so, but also allow those who would rather opt out the ability to do so. If artists find value in the freemium tier, and they may well as they always have, then let them chose how to best utilize that option. Musicians pioneered the freemium model often using street teams to canvas concerts by giving away cassettes to fans of similar music.

If digital platforms allowed artists to use their technologies creatively, everyone might be pleasantly surprised how much better (and more profitable) things would work out.

Watching Pandora lose $5 billion in value in a year becomes a punch line when they believe they are better suited to dictate to artists how to best communicate with their own fans. It is indeed interesting to see Pandora admit what we’ve been saying for years, unlimited, ad-supported free streaming unsustainable. No Kidding. Here it is from Brian Andrews, CEO of Pandora:

“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.”

Of course what makes this comment most interesting is that Pandora is entering the crowded field of on demand streaming with it’s purchase of the failed Rdio. Pandora now has to compete with Spotify’s very large free tier of unpaid and entrenched users. Migrating those users to a new on-demand streaming platform will be a challenge (ask Apple and Tidal), and even more so as artists and labels grow tired of subsidizing these horribly flawed business models.

Here’s three uses of freemium streaming most artists (and rights holders) would probably embrace if given the choice.

1: The Hit Single

– Using the freemium platform to launch a single to gain ubiquitous awareness of a new album release. This is what both Taylor Swift and Adele did and the results speak for themselves. More artists would probably embrace releasing one or two songs or singles from an album on freemium tiers. With the artists support this becomes far more valuable than extorting the them into releasing their entire album on a platform they feel devalues their work.

BONUS: What if Adele made an official playlist of her favorite songs, leading with her new single? How much added value does an artist of this caliber bring to a platform when they feel they are being respected and valued? Answer, ALOT.

2: The Focus Track

– Not everyone has a hit single, but most artists have a focus track from their album. Like the hit single, these artists would embrace the opportunity to be discoverable and to build an audience of new fans. Developing artists are the most eager to try new opportunities because the have the most to gain. If digital streaming platforms worked with artists in a meaningful and respectful way, the mutual benefits could be huge for everyone.

3: Rotating Inventory Management

– By adopting a Netflix like inventory management of monthly rotating titles on the freemium (or even paid subscription) tier more artists might feel compelled to be more engaged. Rotating inventory management is a smart way to keep users and fans engaged as old titles rotate out and new ones in. This simple trick restores a great deal of the consumer engagement that is a part of discovery, and promotion.

Of course, the goal of every freemium model is to lead to more paid revenues in higher value products. Working together with artists and rights holders the future of streaming distribution could be very bright. But to get there we need to let go of Stockholm Syndrome. the old neighborhood protection rackets, bullying extortion threats and just plain bad business models.

There is a lot that can be done in the world of streaming. Streaming is not bad, it’s just a technology. Free streaming and subscription streaming both have their place in the ecosystem. What is bad are the exploitative business models, lack of transparency and devaluation of the artists work. These are fixable issues that have nothing to do with technology, just a lack of common and business sense.

Quoted: Pandora CEO says free on-demand music streaming is bad | Silicon Beat

“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.”

Brian McAndrews, CEO of Pandora, in an op-ed published by Business Insider Tuesday.

Where have we heard this before? Now we wonder how long it may be until they acknowledge that Ad Funded Piracy Is Big Business?

READ THE FULL STORY AT SILICON BEAT:
http://www.siliconbeat.com/2015/12/02/quoted-461/

 


 

 

Streaming Is the Future, Spotify Is Not. Let’s talk Solutions.

 

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

 

It’s Just Math : Digital Music Execs Exit, But will the Pivot to Paid Subs Be Enough To Save The Record Biz?

YouTube’s DMCA decision and the campaign to morph victims into villains | Vox Indie

YouTube will pay copyright court costs for a few users–not because it’s right–but to protect Google’s bottom line

According to a story in today’s NY Times, the folks at YouTube are ready to pony up cash to support some of its users “fair use” claims in court.

“YouTube said on Thursday that it would pick up the legal costs of a handful of video creators that the company thinks are the targets of unfair takedown demands. It said the creators it chose legally use third-party content under “fair use” provisions carved out for commentary, criticism, news and parody.”

You’ve probably read a lot about “fair use” lately.  It’s the Electronic Frontier Foundation’s mantra and if the folks there had their way, pretty much everything and anything would be considered “fair use.”  Fair use an important legal doctrine and when applied properly (criticism, comment, news reporting, teaching, scholarship, or research) is not an infringement of copyright.  However, these days, too often is used as a disingenuous defense for copyright theft.

READ THE FULL STORY AT VOX INDIE:
http://voxindie.org/youtube-covers-legal-costs-for-some-users/

The Truth About Vinyl And Streaming – And It Is Not Pretty…

vinylcu

There’s a romanticism about vinyl, and we share that enthusiasm of the format for obvious reasons. However it should be noted that the romanticism that surrounds vinyl, is largely that- romanticism. Below we’ve assembled a number of recent editorials and reports about the state of vinyl production to shed some light and much needed perspective on this subject.

There several important take-a-ways from our friends who are on the front lines of vinyl production that are also noted in the reports below.

1) Vinyl revenues are grossing more than free streaming receivables. This sounds impressive at first but said another way it means that free streaming is just not generating a lot of revenue in the aggregate of the total business (not a surprise, free streaming is a big problem).

Second, and more sadly is the fact that vinyl production is very expensive and miscalculations on selecting a title or the pressing quantity almost certainly will create a loss in thousands of dollars (if not tens of thousands) per title. In other words NET PROFITS on vinyl are pretty small in relationship to the GROSS REVENUE generated at retail due to the excessively high manufacturing costs.

2) Turn around times to make vinyl have been pushed out in excess of six to nine months on most indie label titles.  If the major labels want to dominate the presses then they should invest in helping to create more pressing plants and overall pressing volume. There are only so many titles that can survive a demand curve that extends more than half a year from when there was initial excitement. This means titles that could have sold through their pressings often end up as excess inventory.

3) Good test pressings are fewer and farther between. Many test discs are often inferior and unlistenable. Problems range from pops and clicks, and surface noise to outright skipping. Getting an acceptable pressing can often mean rejecting two or three test pressings before all sides of an album are approved. A CD length vinyl release requires four vinyl LP sides that must be approved before the album can be commercially pressed. Each rejected side adds four to six weeks to the overall production timeline.

4) Colored novelty vinyl sucks as a listening experience. So much of the custom vinyl being released on colored vinyl and specialty blends sound completely horrible. These are purchased by consumers more or less as merchandise (we hope) more than they are audio products. There are a lot of not great sounding new vinyl releases, but hey if it’s on rainbow splatter glow in the dark vinyl who cares, right?

All of this is to say that if anyone thinks that vinyl is the solution to the economic exploitation artists are facing from free streaming models, then they just don’t understand the mechanics of the contemporary vinyl marketplace.

Read on…

Pressed to the Edge: Why vinyl hype is destroying the record | FACT
“There are only two companies worldwide that produce lacquers. One of these companies is a one-man operation in Japan run by an old man who produces the lacquers in his garage. It’s excellent quality, but who knows how much longer he can and especially will want to continue to do this. When we are in contact with him, we attempt to order as many lacquers as we can in order to stock up as much as possible. You don’t really know when you will reach him again. The other company is in the USA and serves a large portion of the market. It is practically a monopoly. This is not good for business.”

How Independent Artists and Labels Are Getting Squeezed Out by the “Vinyl Revival” | Noisey – Vice
“But the law of supply and demand is not necessarily applicable in this case, as within the same time frame, the number of facilities producing vinyl has remained static, at roughly 20 active pressing plants nationwide. These facilities can in no way meet the current demand for vinyl. “

“I currently have a release at United [pressing plant] and it’s been over two months, and I still don’t even have a test pressing yet. I put in a re-order [a re-pressing of a previously pressed album, usually necessitating less turnaround time than a new release due to fewer steps in the production process to create the vinyl] for back catalog releases and I was told it would be at least 16 weeks. Sixteen weeks! Four months for a re-order!”

No, vinyl sales have not overtaken music streaming revenues | Telegraph UK
“A mid-year report from the Recording Industry Association of America (RIAA) found that US consumers spent $226m (£149m) on vinyl albums and singles in the first half of the year, surpassing $162.7m in revenues from ad-supported streaming.

What that means is that the amount Americans were willing to spend on vinyl records was higher than the amount the music industry made from the streaming services those consumers weren’t willing to pay for, such as Spotify’s free service and YouTube. “

Indie Labels Say Major Labels “Constipate” Pressing Plants for Record Store Day | Digital Music News
“There are currently no copies of Spectres’ album ‘Dying’ on vinyl in the shops because the repress is somewhere towards the back of the queue after some Foo Fighters studio scrapings, a host of EPs by The 1975 and about a million heavyweight ‘heritage rock’ reissues that no-one really needs.”

Hey Record Store Day, Face the Facts. You’re Hurting Indie Labels. | Digital Music News
“If the majors want to start pressing lots of records again they’re more than welcome to, but perhaps it would be better received if they invested some of their capital into building new pressing plants to lessen the strain.”

“It’s unfortunate, but it seems like every year our vinyl schedule gets delayed by months for some *limited* Dave Grohl or Jack White single.“

Have We Reached Peak Vinyl? | Stereogum
“Stewart Anderson has had enough. The frontman for noise-pop veterans Boyracer and head of likeminded label 555 Recordings has been releasing music on vinyl since 1991. But the well-documented manufacturing delays that have gone hand in hand with the format’s unlikely resurgence have finally pushed the artist/entrepreneur to the point of wanting to break it off with analog discs.

The problem is the music-streaming companies | The Hill – Paul Williams

Songwriters have a number of allies in the ongoing fight to update our nation’s horribly outdated music licensing laws. But after reading the recent post by CALInnovate’s Mike Montgomery (“Songwriters are fighting the wrong fight,” 10/5/15), it’s clear that he is not one of them. On what grounds can Montgomery, who represents technology industry interests, claim that he speaks on behalf of songwriters?

As a songwriter elected to represent the interests of ASCAP’s more than 550,000 music creator members, I find Montgomery’s arguments absurd and grossly misleading.

READ THE FULL STORY AT THE HILL:
http://thehill.com/blogs/congress-blog/technology/256247-the-problem-is-the-music-streaming-companies

Transparency Starts Upstream for Streaming Royalties | HuffPo – Chris Castle

We’ve often noted that if the economics at the top of the waterfall are near zero dollars (in microcents) then what trickles down will not get any better…

We’ve seen stories recently about various successes for artists in negotiations with major labels about “transparency” in the payment of the artist’s share of streaming royalties received by record companies. This is great news of course, but the new buzz word “transparency” should be understood in context. There is nothing the digital services would like more than to deflect the ire of artists and songwriters who are enraged about minuscule royalties away from the services and onto record companies or music publishers.

Creators need to be alert that they are not being duped into a false deflection because even in the best case, record companies can only pay on the royalties they receive from services.

READ THE FULL STORY AT THE HUFFINGTON POST:
http://www.huffingtonpost.com/chris-castle/transparency-starts-upstr_b_8238934.html

Jimmy Iovine says, “YouTube is 40% of music business volume and 4% of music business revenue. That’s a problem!” ‪#‎vfsummit‬

‘Freemium’ music streaming

“This whole thing about freemium, it’s a shell game. These companies are building an audience on the back of the artist, and it really bugs me.”

On YouTube and music

“Here’s a little statistic … they are 40% of consumption of music and 4% of the revenue. That’s a problem! … They know that doesn’t work. But do they care? I have no idea.”

READ THE FULL STORY AT THE LA TIMES:
http://www.latimes.com/business/technology/la-fi-tn-jimmy-iovine-20151007-story.html

95 Percent of Streaming Music Catalogs Are ‘Irrelevant’ to Consumers, Study Finds | Digital Music News

So about that long tail and digital empowerment for indie artists, hmmmmmm…

So why aren’t those numbers better?

Mulligan feels that a big part of the problem is that the average consumer simply doesn’t care about enormous selections and vast catalogs, and they’re definitely not willing to pay for it. “Most people aren’t interested in all the music in the world and most people aren’t interested in spending $9.99 (or the local market equivalent) a month for music,” Mulligan continued.

“Indeed, just 5% of streaming catalogues is regularly frequented. Most of the rest is irrelevant for most consumers.”

Surprise! Not all music is equal despite how much of it is being made.

Charge a premium for top shelf professional music and let everyone else give their music away if they want to. Stop exploiting professional artiss into free streaming schemes and scams.

As we reported in our post “Streaming Is The Future, Spotify Is Not Let’s Talk Solutions” we suggested consumer based tiered pricing based on value proposition. Glad to see this is starting to get some notice.

READ THE FULL POST AT DIGITAL MUSIC NEWS:
http://www.digitalmusicnews.com/2015/09/10/95-percent-of-streaming-music-catalogs-are-irrelevant-to-consumers-study-finds/