The music industry may be streaming towards a cliff | Business Spectator

In August the cellist Zoe Keating published a spreadsheet of her earnings from various streaming sites. In the first half of 2013 she scored 232,000 streams, for which she was paid $906.41.

I used the word “legitimate” above because by far the biggest “publisher” of music is BitTorrent, which is simply the internet protocol for enabling peer to peer sharing of files, and the foundation of Napster’s many successors. Some people I know have zettabytes of music and movies they have downloaded; BitTorrent has been estimated to account for as much as 70 per cent of all global internet traffic.


Thom Yorke, Trent Reznor and a Chorus of Artists Speak Out For An Ethical and Sustainable Internet

Perhaps 2013 will be the year that we see as the tipping point in artists rights advocacy for an ethical and sustainable internet. There have been more artists speaking up vocally this year than we can remember over the last decade. The hangover from an excess of hope that the internet would empower musicians has begun to set in as the evidence of more, and worse exploitation becomes increasingly obvious every day.

Radiohead’s Thom Yorke noted his realization about Google and other big tech companies.

“[Big Tech] have to keep commodifying things to keep the share price up, but in doing so they have made all content, including music and newspapers, worthless, in order to make their billions. And this is what we want?

“We were so into the net around the time of Kid A,” he says. “Really thought it might be an amazing way of connecting and communicating. And then very quickly we started having meetings where people started talking about what we did as ‘content’. They would show us letters from big media companies offering us millions in some mobile phone deal or whatever it was, and they would say all they need is some content. I was like, what is this ‘content’ which you describe? Just a filling of time and space with stuff, emotion, so you can sell it?”

Nine Inch Nails frontman Trent Reznor has also been outspoken this year commenting first on streaming services, and then later on the value of music.

“I know that what we’re doing flies in the face of the Kickstarter Amanda-Palmer-Start-a-Revolution thing, which is fine for her, but I’m not super-comfortable with the idea of Ziggy Stardust shaking his cup for scraps. I’m not saying offering things for free or pay-what-you-can is wrong. I’m saying my personal feeling is that my album’s not a dime. It’s not a buck. I made it as well as I could, and it costs 10 bucks, or go fuck yourself.”

Jerry Cantrell of Alice In Chains refused to play new songs in the bands live set until the new album is released to protect the integrity of the bands work.

“Well, in the old days – if you start out with ‘in the old days,’ you’re totally an old f–k – you were able to play a lot more stuff live,” Cantrell tells Spin magazine. “But with the advent of the Internet and sharing and shit going everywhere, you can’t do that anymore. We really haven’t been playing anything off the new record that’s not out yet. We’ve been playing ‘Hollow‘ and ‘Stone,’ and now that it’s going to be released, we’re thinking about whipping out ‘Phantom Limb‘ and maybe a few more.”

Quincy Jones discussed his legacy and the challenges presented for new artists in an environment of unprecedented piracy.

What’s sad is that there is 98 percent music piracy everywhere on the planet. It’s just terrible. What if these kids (who download music illegally) worked for me for two months and then I said, “I’m not going to pay you.” That’s just not right.

Aimee Mann brought a lawsuit against a digital distributor.

Guy Marchais of the band Suffocation showed fans how to buy a CD and explained the importance of supporting artists with legal purchases.

Marc Ribot of Ceramic Dog (and sideman for Tom Waits) took up the battle against Ad Funded Piracy.

We don’t know what the ultimate solution is — but we know it isn’t the impoverishment of musicians and defunding music. And we know it isn’t pretending that no-one is being hurt. Corporations are making huge profits from the ads on ‘free’ sites, from selling the hard and software that make illegal downloading possible.

Austin band Quiet Company noted their disappointment after an internet marketing partnership experiment.

““After everything, I’m not sure there is a new model. The old model is still the model, it’s just that the Internet made it way worse.”

East Bay Ray of the Dead Kennedys noted who is making money and who is not at SF Music Tech.

“There’s opportunists on the Internet that have taken advantage of the artists, [they’re] giving a free ride on a carnival horse, but they’re starving the horse.”

Zoe Keating spoke to the NY Times about how artists in certain genre’s such as classic and jazz maybe condemmed to poverty in the new digital economy without better mechanisms in place.

“In certain types of music, like classical or jazz, we are condemning them to poverty if this is going to be the only way people consume music.”

Blake Morgan went public with an email exchange between him and Tim Westergren over Pandora’s attempts to reduced already low royalties to artists.

I hear you when you say you’re “seeking a balanced structure that allows musicians to generously participate in the business.” But respectfully –– and this is quite important –– musicians are what your business is built on.

Without us, you don’t have a business.

Victoria Aitken wrote about the effects of piracy on EDM artists.

“The Internet pirates have made me, and thousands of other musicians, walk the plank. We now have to swim in shark-infested waters where the big fish gobble up our dues and the pirates laugh their way to the bank.

I believe this basic injustice must be remedied – Internet pirates are white-collar criminals. They should pay the royalties they have stolen or be answerable to the law, like looters, burglars, and fraudsters.”

Pink Floyd expressed their feelings about Pandora and digital royalty rates for the next generation of musicians.

It’s a matter of principle for us. We hope that many online and mobile music services can give fans and artists the music they want, when they want it, at price points that work. But those same services should fairly pay the artists and creators who make the music at the core of their businesses.

Martha Reeves also explained the importance to continue to work towards fair royalties for artists in the new digital economy.

Musicians should be paid a fair value for their work and all digital services should play by the same rules. These are just common sense ideas, and once Congress adopts them as law, future generations will wonder why we ever struggled over them. But that’s why we must keep struggling – until justice is done.

Shawn Drover drummer for Megadeth responded to a question asking if the band had been effected by piracy.

Of course it is. We are certainly thrilled to have a #6 record on Billboard in America and #4 in Canada, but sales are way down for the entire music industry right across the board, which is a real drag. Internet piracy, torrent sites and all that are the reason why. Concert attendance for us is still great around the world, so we are definitely happy about that.

Band Quiet Company says Internet Has Made Things Worse for Artists “New Boss is Worse Than Old Boss”

A decade into the snake oil and lies of the empowered internet musician the truth bares itself out over and over again. In a recent case study the band Quiet Company said of their promotional experiment with Grooveshark in an interview with Digital Trends,

“I think for years now, as far as back as [Quiet Company] has been together, people have been talking about how different the music industry is and how the Internet has changed everything and how we’re all looking for a new model.”

“After everything, I’m not sure there is a new model. The old model is still the model, it’s just that the Internet made it way worse.”

We’re not surprised in the least as we’ve previously noted how Grooveshark’s infringement based business model could easily be described as “Notice and Shakedown.” Even tech progressive artists such as Zoë Keating have struggled with the service. Zoë could not get her music removed from the site after issuing at least six DMCA notices to Grooveshark.

So it’s strange to us despite there being near universal agreement on just how bad this service is for artists that some people still don’t get it. Of course these always seem to be the same people that defend every other service that rips off musicians and pays them nothing like The Pirate Bay.

One tech blog actually said after the Pirate Bay verdict, “The folks this will hurt the most are those content creators who actually do value The Pirate Bay.” But we doubt that as it’s not like there aren’t tons opportunities for artists to give away their work willing, with consent, should they so chose. What we find most disturbing is why the choice of consent to give away one’s work should be forcefully take from them by companies who are profiting from advertising revenue?

It’s all pretty simple. Artists need to get paid and so many of these so called “new models” seem to be built on the “new model” of not paying artists anything at all, or next to nothing at all. Again, from Digital Trends,

But now the contract is up and not being renewed, because – you guessed it – a monetization strategy couldn’t be found for Grooveshark. “We were the test monkeys,” says Osbon.

Once again we see that The New Boss is Worse Than The Old Boss, indeed. We’re not surprised, we know there’s a lot of money being made on the internet in music distribution, it’s just not being “shared” with musicians. So once again we ask where are all of these self empowered, independent new middle class musicians? The answer is, like most things where the truth is self evident, they just don’t exist.

Zoë Keating’s Request for Internet Transparency met w/ usual Hypocrisy

We’ve been following Zoë Keating’s blog for a while. Zoë represents (figuratively, not literally) a new generation of musicians whose careers have only really existed in the post-internet, pro-piracy environment. As such, the perspective of these artists who have little experience in the world prior to optional payment and virtually no artist control over the distribution of their work is somewhat different from those who have inhabited both environments.

We celebrate the Zoë Keatings of the world for their undying tenacity in their efforts to navigate the current music industry without having had the benefit of the pre-piracy era. Zoë’s made a few excellent observations and suggestions. One recent post has been to ponder the creation of a new artists rights coalition to represent the needs of contemporary indie and DIY artists. Another post has been soul searching on what might be the fair way to set appropriate royalty rates across the various terrestrial, satellite and internet streaming radio platforms.

But it is one of Zoë’s most recent posts which has really caught our attention, as Zoë has been “slashdotted” just for asking for transparency and data sharing from the internet companies profiting from the artists work.

In the case of a service like Pandora, when someone has taken the time to create a station around my music or given my songs a “thumbs up”… I’d rather know where in the world those particular listeners are than be paid the $0.0011 per play that is currently required by law. That was my point.

Now, we don’t think this should have to be a choice, and we think Zoë has an excellent point, especially given that the Declaration Of Internet Freedom specifically states transparency as one if it’s principles.

Declaration of Internet Freedom

We stand for a free and open Internet.

We support transparent and participatory processes for making Internet policy and the establishment of five basic principles:

Expression: Don’t censor the Internet.

Access: Promote universal access to fast and affordable networks.

Openness: Keep the Internet an open network where everyone is free to connect, communicate, write, read, watch, speak, listen, learn, create and innovate.

Innovation: Protect the freedom to innovate and create without permission. Don’t block new technologies, and don’t punish innovators for their users’ actions.

Privacy: Protect privacy and defend everyone’s ability to control how their data and devices are used.

As with many things we’ve seen from the tech sector, there always seems to be selective reasoning when it comes to them actually adhering to their own principles. This from the same people who want permissionless innovation, up and until, you are not asking them for permission as Google is illustrating with Doogle.

Of course the double standard and irrationality of the freehadist hive mind doesn’t stop there. Among the comments posted, this one is indicative of the faulty logic and thinking expressed by so many of the anti-artist maximalists.

“She got money, I got music. There was no agreement to get my data. 0% is hers.”

The point that should be emphasized is that there was no agreement period. Pandora gets a compulsory license. It gets the benefit of a “one-stop shop” for all sound recordings so long as it pays the rates, no questions asked. Congress took away from Zoe Keating the choice to make that agreement. So it’s also perfectly valid to say that Pandora should also turn over some data to artists in exchange for that – especially if the consumer is (and should be) given the choice to opt-in.

We are pro-choice and respect consent, and we believe that the internet and tech community should also as well.

Weekly Recap Sunday Nov 4, 2012

Grab the Coffee!

Recent Posts:
* Techdirt Is A Never Ending “Dumb Off”
* Untruth in Advertising: Pandora’s Misleading Plea To Listeners On Behalf Of The Internet Radio “Fairness” Act.
* Mellencamp Character Assassination. The New Republic Bravely Stands Up For Corporations and Criminal Groups That Exploit Artists.

From Around The Web:

Ars Technica
Artist who sued Twitter over copyright declares victory—via settlement
The Russian underground economy has democratized cybercrime
Google settles Rosetta Stone lawsuit, its last major dispute over AdWords

Friday’s Endnotes – 11/02/12

Music Producer Tunnidge via Facebook
Tunnidge Facebook Post
“I am going to try and be as obvious as possible. Without being able to make money from our music it effects greatly our ability to make the music, more often it stops us.”

Vox Indie
Where’s Our Outrage When Internet “Free Speech” is Really Under Attack?, a Bridge to Piracy?

The Illusion Of More
On Letting Foxes Mind Chicken Coops

The Register UK
The Big Debate: OK gloomsters, how can the music biz be FIXED?

Zoe Keating
Towards a manifesto
“We can’t just hope that the interests of music and technology companies will always magically align with ours. We have to participate in the process. Otherwise, we just have to accept that anachronistic legislation, policies and deals will continue to be written without our input. We need public policy that reflects us. We need fair royalty schemes. We need companies to build our interests into their business models.”

Popup Pirates
Theft is not “Free Speech”

Music Tech Policy
Mellencamp Is Right, Brand-Supported Piracy Screws Songwriters AGAIN: Snakes in the Grass, @McDonalds, Google and Other Species of Vermin

Digital Music News
It Gets Worse: Pandora Executives Have Dumped $63 Million In Stock In the Last Year…
13 Extremely Scary Things About the Music Industry Today…

Tape Op

Copyright Alliance
“Without free speech, copyright protection is meaningless. The two rights are critical to artists and combined have proven to be a powerful force for social justice around the world. That is why we consistently and openly advocate for a fair and open internet that champions free speech as well as respect for authorship.”

Torrent Freak
Piracy Topsite Operators Handed Suspended Jail Sentences
IMAGiNE BitTorrent Piracy Group Members Jailed
BitTorrent Pirate Ordered to Pay $1.5 Million Damages For Sharing 10 Movies
Link ‘Pirate’ Sentenced to Pay $13,000 to NBA, NFL, NHL, WWE and TNA

The trouble with Adsense – abusive porn ads on The Star news site [NSFW]

Musician’s POV: Five Things Spotify (and others) Could Do Today to Level the Playing Field for Independent Artists

Guest post by Chris Castle

We’ve talked about piracy, but now let’s change that conversation to talk about the “New Boss” licensed services.  One of the problems for artists selling their music, films or books in the legitimate digital space is getting a fair deal from the New Boss distributors.  And that is exactly what they are–digital distribution requires artists and labels to outsource what are essentially manufacturing and distribution functions.

That’s fine if it creates efficiencies, but what it also has done is create a huge dodge for the “New Boss” who tries to say that any problems that artists have with them is a problem with the “Old Boss” who made the deal the artists don’t like.

That gloss doesn’t work for independent artists, though, because there is no “Old Boss” to point the finger at.  Even if there were, the Old Boss is usually a union signatory under a collective bargaining agreement that allows a negotiation team to air grievances directly with the labels.  That doesn’t happen with the New Boss.  There’s a reason why Senator Rockefeller said that the big tech companies (pretty clearly meaning you know who) were worse than the monopolist Standard Oil (which was run by John D. Rockefeller, Senator Rockefeller’s great grandfather).

As far as we know, there is no New Boss who is a union signatory.  In fact, the old joke goes that tech companies know so little about unions that they think collective bargaining is venture capitalists setting a target’s valuation.   For example–YouTube refuses to be audited by independent publishers.  That would never happen at a record company–they might take an edge in other ways, but if they ever denied an audit right there would be a revolt.  In fact, the New York Attorney General sued major labels over “unclaimed” royalties and California has laws about transparency in record company statements thanks to Don Henley.  The sheer indifference and arrogance from the New Boss companies is startling and leads to one answer–they do it because they can get away with it.  And nothing says Internet Freedom like getting away with it, right?

Nowhere is this indifference to artists more apparent than in subscription services.  (We have some thoughts on a la carte download services, too, but that’s a subject for another day.)

We tried to think of five things that Spotify (and their competitors in the subscription business) could do today to level the playing field for independent artists.  These are things that wouldn’t cost them much, but that would be very helpful to artists making less than say $2500 a year from the service.  Leave a comment if you have other ideas or if you disagree.  (And you’re welcome, Spotify, Rhapsody, Napster, Google this is free market research for you.)

1.  Remember, nobody ever negotiated royalty terms with independent artists, it was just presented as take it or leave it.  Make the royalty rate more fair and transparent in two ways:  First, stop deducting out of pocket costs for advertising sales commissions (and all other advertising-related costs) off the top from independent artists.  Spotify and the others shoud eat those costs out of their revenue share rather than making independent artists bear 50% of these costs.  Second, pay artists a per-stream minimum across all your products.

2.  Spotify can start linking from Spotify’s internal artist profile page to places that actually might help the artist, like artist websites or tour information.  As Zoë Keating said “I wish Spotify would do more to facilitate the connection between listeners and artists — i.e show that the artist is playing nearby, or add links to buy music.”  We think she’s got a great point and we’re sure that most artists would be happy to reciprocate with a link to Spotify.

3.  Promise to pay each independent artist on the service a fixed amount of money as a bonus if Spotify goes public or is sold.  $5,000 each sounds good to us, and if Spotify has a $1 billion valuation now…. They will certainly be able to afford it if their valuation is high enough for a firm commitment underwriting (aka IPO).  This promise will not cost Spotify anything right now and won’t slow down its growth–which seems to be the most important thing to Daniel Ek.   Spotify would only pay it at the liquidity event, i.e., when they have the money.  Remember–sharing is caring.

4.  Let independent artists sign up for Spotify for free.  Either give the artists access to upload their music, or cover the costs of forcing artists to use an aggregator by grossing up their royalty split.  Please don’t charge us to make you rich.

5.  Contribute something to music education foundations, like Instruments A Comin’ (Tipitina’s Foundation) or to a musicians health care organization like the Health Alliance for Austin Musicians.  Would this really be so hard?  Start with 1% of revenue, even 1/2% of revenues.  And please don’t set up your own charity so you can have parties and give yourselves awards every year.  We already have those.  Save the money on the back patting and give it to people who are already doing the good works.  It would make a big difference in the lives of the next generation of artists and to families.  Good PR for Spotify, too, you could use some.

It feels good to do some good.  If that’s not enough reason, think of it as preserving your supply chain.

Grooveshark On The Hook : Notice and Shakedown

We salute Tunecore CEO Jeff Price who recently called for a boycott of Grooveshark on his company Blog. This after a series of articles from varied and respected media outlets such as Digital Music News, Hypebot, Billboard, and others who have been reporting on Grooveshark’s unethical practices against artists and the resulting lawsuit by the major labels.

But this isn’t just about major labels, it’s also about indie artists and labels who have been victim to Grooveshark’s practices for years. Just one example is from Helienne Lindvall who detailed her attempts to have her music removed from the site in painstaking detail, to no avail. Later we’ll show how other artists and labels experience is exactly the same as hers.

Grooveshark illustrates the failing of the DMCA by creating an incentive to build a business on infringement. Previously YouTube did it and that practice is now at the center of the recently appealed, billion dollar lawsuit with Viacom. At the heart of the matter is ethics.

The DMCA was designed to protect Internet Service Providers (ISPs) from liability if they had no knowledge of infringing material. The DMCA was also designed to provide protection for artists to have their work removed from an ISP (website, etc) if it was discovered to be there. In other words, the DMCA was drafted to give a little latitude to reasonable people acting reasonably and to empower artists to protect their rights without having to file a federal copyright lawsuit.

Grooveshark, like YouTube before it, has exploited this loophole in an attempt to build a business on infringement. The attraction of this business model is substantial as there are no licenses, fees or negotiations and no artist royalty payments, ever. All they have to do is plead ignorance, and wait for the DMCA notices to come in. And, once the notices come in, just wait for another user to upload the same material again. And so it goes on and on; the DMCA dance of death until artists are too exhausted or broke to continue.

The really insidious part of the Grooveshark model is representative of the old saying, “It’s better to ask for forgiveness later, than to ask for permission.” This is also known as “negotiation via lawsuit.” Grooveshark’s strategy appears to be: lure in artists as they seek to have their illegally exploited work removed, and then try to get the artist to sign a license agreement. This heavy handed approach has been aptly titled, “Notice and Shakedown.” Thankfully, a lot of artists are smart enough to question such shady practices.

We know of at least one indie label who when they contacted Grooveshark to take down offending material were met with the smarmy onslaught and the hard sell.  You can see the pitch here in the first sentence of a DMCA query on the site.

“If your music was posted up without your permission and you’d like to have it removed, please click here to access our DMCA takedown form — we highly recommend, however, that you contact us first to talk about ways that Grooveshark can fairly compensate you for your music!”

Ah, yeah right. Exploit my work, then try to negotiate with me (using fuzzy math based on Spotify model) about how much you are not going to pay! At least Spotify is legal, and I can actually remove my titles. But it doesn’t end there.

“You have full control over all songs in music catalogue. This includes the option of removing them all together. It only takes a minute just follow these steps:”

Uh, yeah, ok, but keep in mind at this point, Grooveshark is only helping me to “manage my catalog” which just happens to be on the site illegally. Also removing the songs via their “rights management” system avoids a DMCA takedown. The entire set up of Grooveshark is to engage artists and content owners in a conversation to negotiate with Grooveshark, on Grooveshark’s terms because guess what, they already have your music illegally, and they’re not paying you. But wait there’s more…

“Currently, songs can only be removed one at a time – we’re sorry if this is an inconvenience. Please let us know if you need any help along the way”

Yes, you can help me. You can remove my catalog from your site that I didn’t give you permission to profit from by monetizing it against advertising. And the way to do that is to click on the DMCA form for a proper take down. Of course, you’d hope this would be the case, but unfortunately not so as witnessed by this report on Digital Music News from famed guitar legend Robert Fripp which is nearly identical to that of Helienne Lindvall. Even classical indie artist Zoe Keating could not get her music removed from the site after issuing at least six DMCA notices to Grooveshark.

As if all this we’re not bad enough CNET reported on internal emails that show how Grooveshark was intentionally using the illegal exploitation of artists work as the basis for it’s business model. Unfortunately, not everyone sees this practice as deceitful and unethical; TechDirt has rallied to support Grooveshark despite serious complaints dating back to 2009 by indie label DashGo.

Ultimately we’re encouraged that one of the things the internet is really good at is sharing information. As more artists become educated about their rights, and how they are being exploited, we can see that they are speaking out against these unethical attacks to their livelihood.