Kim Dotcom declares he is ‘broke’ because of legal fight | BBC

Kim Dotcom, the founder of the seized file-sharing site Megaupload, has declared himself “broke”.

The entrepreneur said he had spent $10m (£6.4m) on legal costs since being arrested in New Zealand in 2012 and accused of internet piracy.

Mr Dotcom had employed a local law firm to fight the US’s attempt to extradite him, but his defence team stepped down a fortnight ago without explaining why.

READ THE FULL STORY AT THE BBC:
http://www.bbc.com/news/technology-30209067

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A Tale of Two Pirates? Daniel Ek (uTorrent) and Kim Dotcom (Megaupload)

A Tale of Two Pirates? Daniel Ek (uTorrent) and Kim Dotcom (Megaupload)

Perhaps it is ironic that Kim Dotcom is the arch nemesis of the record industry while Spotify CEO Daniel Ek is celebrated as the former Co-Founder and CEO of uTorrent. uTorrent is described as “the world’s most popular BitTorrent client with more than 100 million downloads” on Mr. Ek’s Wikipedia page.

This week the embattled Dotcom is said to have given up his stake (and shares) in his much ballyhooed digital music company Baboom.

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In the screen shot below from the TechCrunch, “CrunchBase” we see the BitTorrent cast of characters we’ve gotten to know so well sharing duties at uTorrent.  Here we have Bram Cohen, Matt Mason and of course former uTorrent Co-Founder and CEO Daniel Ek (still prominently displayed).

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In many ways both Ek and Dotcom represent the same devaluation and destruction of the arts by building personal fortunes as the result of monetizing the work of creators, without paying those creators for their work.

The cost of music is not in the distribution of music, the cost of music is in the creation of music.

Megaupload and uTorrent have monetized the mass scale distribution of infringing works for profit. In other words, infringement as a business model where the cost of goods goes unpaid and creators are uncompensated. uTorrent is self described as “a free-of-charge, ad-supported, closed source BitTorrent Client.” Megaupload and uTorrent have both relied heavily on advertising for revenue.

Mr. Ek like his previous cohorts Bram Cohen and Matt Mason would like to say that BitTorrent is not a piracy platform, however multiple independent studies have repeatedly concluded that 99% or more of the files being distributed via BitTorrent are in fact, infringing.

All of this of course points to the fact that Megaupload and BitTorrent have hidden behind  the DMCA, which has failed at it’s intent to protect artists. It could be argued that uTorrent and Megaupload have participated in business models enabling one of the largest transfers of wealth in history from individual creators to Silicon Valley companies and operatives.

Daniel Ek is reported to have a net personal wealth valued at $400 Million Dollars. Kim Dotcom’s fortune has been recently estimated to be $200 Million Dollars.

“The main reason music streaming services are winning over millions of consumers is the fact that they require no payment unless the user desires to pay.” – Music Streaming vs. Music Piracy | Medium.Com

Right now there is little functional difference to most musicians between music streaming and music piracy. This realization should not come as a surprise to musicians when they learn that the CEO of the largest and most used on demand streaming company was both the Co-Founder and CEO of uTorrent, “the world’s most popular BitTorrent client with more than 100 million downloads.”

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If Spotify wants musicians to take it seriously, perhaps it’s time for a CEO musicians can respect. The record industry might also want to reconsider who it chooses as friend and foe as well. More on that later…

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Spotify’s Daniel Ek is Really Bad At Simple Math, “Artists Will Make a Decent Living Off Streaming In Just a Few Years”

The future of music for artist revenue streams seems more uncertain than ever. Digital Music News is reporting a quote from Spotify’s Daniel Ek on CNN Money which appears to show the failure of the companies CEO to perform simple math.

It should be noted that Daniel Ek was also the CEO of uTorrent, “the world’s most popular Bit-Torrent client” which is advertising funded.

Spotify CEO: “Artists Will Make a Decent Living Off Streaming In Just a Few Years” | Digital Music News

CNN: At what point can an artist survive on a Spotify income?

Ek: Well, I mean, the interesting thing here is that we’re just in its infancy when it comes to streaming. And we just last week had an artist announcement where we basically said if there would be 40 million subscribers paying for a service like Spotify, it would be more than anything else in the entire music industry, including iTunes.

We don’t want to say Mr.Ek is lying, but he does appear to be very bad at simple math and to be misinformed about the actual size of the record business and the revenue being generated by Apple’s Itunes.

Is anyone actually capable of doing simple math in a spreadsheet? Here goes. 40m Spotify Subs at $10 a month is only $3.3b in annual revenue to artists and rights holders at paying out 70% of gross. How is $3.3b “more than” the current $15b total annual global revenue or the $7b in domestic revenue in the US?

Here’s the simple math…

40,000,000 * $84 = $3,360,000,000

$84 dollars per subscriber annually is calculated at $10 per month per subscriber paying out 70% to Artists & Rights Holders or, $7 per month. $7 per month, multiplied by 12 months equals $84 per year, per subscriber payable to Artists and Rights Holders.

40m Subscribers x’s $84 per year = $3.3b in annual global revenue to artists and rights holders (assuming they really are paying out 70% of gross).

Simple math.

If you are an artist you might also read these links below:

Music Streaming Math, Can It All Add Up?

Venture Capitalist Admits Artists Can Not Make A Living On Streaming Royalties…

The Internet Empowered Artist? What 1 Million Streams Means To You!

Streaming Price Index : Now with YouTube pay rates!

It appears to us that music streaming can only truly be profitable to those with participating equity in the streaming company itself. Those with equity are leveraging their catalogs of assets against the potential revenue of an IPO (in which the catalog of assets is being leveraged for that equity). Thus far however, it appears that the artists and songwriters who have created those assets as the basis for that equity leverage do not participate in any profit sharing that the equity shares may earn.

So it’s not that music streaming can not be profitable, it’s just that it can not be profitable (or equitable) to artists.

Please tell us which artists are being compensated from the $3b sale of Beats music to Apple? Let’s see a show of hands… Bueller… Bueller… Bueller…

Remember when we were told that in countries where music streaming was the most successful that transactional sales also increased? We’ve got a bridge in Brooklyn to sell you too, and cheap. More food for thought below.

Streaming Isn’t Saving the Music Industry After All, Data Shows… | Digital Music News

Album Sales Hit A New Low | Billboard

No Surprise Here: Spotify Streams Soar While Track Sales Fall | Billboard