The major labels are very outspoken about the evils of piracy, and aggressively pursue those who chose to download music and not pay for it. That being the case, there is great ironyin the fact that up to 47% of Sony-BMG’s software is pirated.

Recently, a tech support call for a program called Ideal Migration (a Windows server management tool) was made by a Sony BMG employee, and the product code given was pirated.

The ensuing drama included a seizure of some of Sony-BMG’s assets.? Paul Henry, The CEO of the maker of the software, was quoted as saying “I think piracy is linked to the policy of a company. If the employee has the necessary funding to buy the software? he needs,? he will. If this is not the case, he will find alternative ways, as the work must be done in one way or another.”

Bottom Line: A company that is using pirated software should not be surprised when their products are pirated.

An interview with the Flashbulb about his recent calamity with iTunes, and putting his album up on BitTorrent. It turns out iTunes is selling his albums without permission, and not paying royalties.

The Flashbulb (Benn Jordan) has been releasing albums for 14 years, the last 5 have included various commercial endeavors. The label deal he has is a 50/50 split, but he hasn’t been seeing the money. Benn says he has no agreement with iTunes to sell his music, and many of his fans have told him they bought his music there. When he investigated the issue further, his label asked him to drop it, and his calls went unreturned.

Here’s a great quote from Benn: “Who’s the pirate I should go after? A kid who downloads my album because it isn’t available in non-DRM format and costs $30 on Amazon? Or a huge multi-billion dollar corporation that has been selling thousands of dollars worth of my music and not even acknowledging it?”

Benn is being labeled in the press as pro-piracy, but his true stand is that people buy what they like. “What I’m promoting is the artist’s freedom to choose what can and can’t be done with his/her music, and more importantly, the listener’s freedom to do what he/she wants with their own computer, MP3 player, or internet connection.”

Benn makes a poignant case that the RIAA has spent so long dictating people’s taste and choices that they are now threatened by the opportunity for people to choose the music they want. He suggests that “music will be judged by it’s content again and will be subjected to it’s own Darwinism.”

Bottom Line: Where are all those billions in album sales really going?

“Music publishers, the record labels and digital music distribution outlets began a three-way legal wrestling match Monday over just how much songwriters and the publishing houses should get paid for digitally delivered music.”

At stake in this debate is mechanical royalties for internet streams. Major labels, Apple, and Yahoo want the royalty rate for artists to be lowered. The big publishing houses are currently promised nine cents a song, a figure that often gets negotiated lower, and the consortium against them wants that rate moved to 8%. Apparently, publishing revenues are up, while major label revenues are down. The Digital Media Association is upping the ante, pushing for the royalty rate to be dropped to 4%.

On the other side of the fence, the National Music Publishers Association wants the rates raised to 12.5%.

The driving concern here is the financial ‘burden’ that paying these royalties puts on the large companies that offer music. The claim is that streaming media should be treated like terrestrial radio.

Bottom Line: Without content, there is nothing to stream.

The RIAA wants to expand copyright law, with the apparent intention of having more technicalities to prosecute.? The new law on the table is for album compilations.? Specifically, having each track count as separate count of infringement.

Goggle’s top copyright lawyer was quoted saying the parties pushing this bill have an “unslakable lust for more and more rights, longer terms of protection, draconian criminal provisions, and civil damages that bear no resemblance to the damages suffered”.

Bottom Line: Fining someone upward of $9,000 for a track with a value of a dollar may not be fair, but lawmakers still seem to align themselves with this kind of enforcement.

Our friends at The Seminal caught our attention with their take on the RIAA “victory”.? I put the word in quotes because the nature of a victory is that it advances your cause in some way.

I invite you to check this astute commentary. Here’s my favorite part:

“That’s right, the artists who slave for years to make records, pour out their souls into their CDs, and enrich our lives in a myriad of ways don’t actually get any of the money recovered through these ridiculous lawsuits. Not one red cent.”

The commentary on this case is already so powerful, there;s little left to add.

Over the next few weeks, we will begin to look at other ways artists and musicians can generate revenue besides signing their futures over to transnational behemoths, and the future of record labels.

This fantastic editorial by Tony Long is a powerful and accurate assessment of the fallout of the lawsuit against Jammie Thomas.? His analysis is so good that I have little to add.

Peep it for yourself.

Good show, Tony!

The RIAA finally got their first case in court over people who serve MP3s on file sharing platforms. So all bland arguments aside, here’s the bottom line.:

The new argument is that if we rip or download songs we already own, we’re stealing.
Let’s cut through all the fancy arguments and cogent dissections and get right to the nitty gritty of it all.

Major media companies complain people aren’t buying music (as if over 500 million album slaes is some kind of small number), so they try to force us to buy music by restricting our access to it. The general public (that’s us) then gets indignant that we are being limited in our ability to enjoy music, and we download everything we can. The major labels then raise the prices of CDs, and add malware to their products (with some benign name so we don’t make the connection that a rootkit is a kind of virus).

We are told that when we buy music online, it will include some form of control, so that we can only enjoy it on proprietary software or hardware (think about how cellphone companies have 400 different adaptors to their chargers). Now they want us to believe we have no right to backup our data.

Now they are finally in court with us for downloading and sharing content, and they accuse us of stealing from them if we rip music we already own. There are now record players that will turn your albums into MP3s as you play them. I own lots of vinyl, and some of it is hard or impossible to find, even as an MP3. Am I criminal if I want to preserve my record collection? Most of these albums can only be obtained second hand at this point, anyways.

Where does it stop? At what point will they sue for the right to audit every harddrive on the planet, or require us to carry some sort of permit to listen to the music we have? Are we all to be fined for singing Happy Birthday?

Let’s look at it another way. People still pay for HBO. People still buy CDs, and digital downloads are a robust market (just not robust enough to support the behemoth of major record labels). It’s possible that if people weren’t forced to buy music, and told that everything we did with our music was a crime, we would be more inclined to buy more. What would happen if everyone stopped using DRM, and file sharing was accepted as part of society? What if intellectual property wasn’t treated like another flavor of soda?

If major labels want to revive their fiscal bottom lines, perhaps they could invest in developing talent, instead of suing us into buying music. Perhaps the answer to selling music lies inside of the music itself (this might explain why artists like Jimi Hendrix and Pink Floyd never stop connecting with younger generations).

How does this give the RIAA a way to use pre-texting to go after file sharers… can you explain the process to me?

Here’s the reply:

This part is US Code Title 17 sentence two:

“For purposes of this chapter … any reference to copyright shall be deemed to include the rights conferred by section 106A(a)”

And here’s the proposed amendment: “except that the court in its discretion may determine that such parts are separate works if the court concludes that they are distinct works having independent economic value.”

This ambiguously termed and open ended amendment is not accidentally constructed. It allows sterilization of any argument against the proposition, because any use is speculative, and cannot be proved.? The only place this exception will show itself is in a courtroom, where the RIAA and MPAA are lobbying for stronger tactics in chasing file sharers.

If musical works and movies get deemed patents, intellectual property, or trade secrets instead of being covered under Copyright Law, then the RIAA and MPAA will push for the strongest possible protection of their intellectual property.? In an environment like this, they will be using any tactics (including pretexting) to pursue anyone who shares media.? Courts are becoming more concerned about invasion of privacy inside of copyrights.? They don’t have those concerns around giving Microsoft the right to protect source code, or Coca Cola’s formula.

My interpretation is that if a court finds a distinct (singular) musical work to have “independent economic value”, then the work is not necessarily covered by Copyright Law.? Major media companies would have a loophole to argue in court that the albums they own are not applicable to the particular rights of US Copyright Law.? They would then be able to argue for the legal protections that exist for other types of intellectual property.

Between positioning themselves as black box royalty collection for internet media and dismantling our right to share music, these major media companies are trying to to transform entertainment and art into a product.? As their catalogs of media are viewed as products instead of self expression, the right to pursue theft of their property grows.? It’s the same downward trend we see in freedom of speech.

The moral high ground stands with the public in a conversation about copyrights.? Once the conversation shifts into a more patent based or product based context, the legal arguments on how far companies can go to protect themselves shifts.? Altering the context of music and movies changes their legal existence.

Thanks for tuning in!

This is an absolute amazing interview with Peter Jenner. Peter is a world famous rock promoter and manager, who helped guide the careers of Pink Floyd, Billy Bragg, and a bunch of other awesome acts.

This interview is Peter’s take on what the future of the music industry looks like, and to him, it looks like a community.

He also goes into great detail about how royalties are dispersed. Basically, there’s a bunch of money paid to collection societies for licenses and performaces of music. Groups like ASCAP and BMI collect the money for their members, and then pay out the money quarterly.

So what happens to all the money that isn’t paid when artists can’t be found, or it’s unclear who the money goes to? Peter tells us about black boxes, or a big bucket where all that money sits. Now, in the real world, this has worked out fairly well for almost everyone. Plenty of artists are able to receive small check of less than dollar for what they’re owed. No one in the industry will admit these black boxes exist. Now that digital licensing is moving toward a post DRM (we hope) phase, the conversation is shifting toward how the money will be collected, and distributed.

The major news mongers report that major labels want to set up a structure for collection and disbursement of royalties through them, because they own so many copyrights. Where will that leave the independent musician, who has no right to audit a major label they’re not on?

Peter is an absolute genius, and if you haven’t seen his interview yet, check it out. His insights are profound, and he clearly knows what he’s talking about. My favorite insight form his article is his observation that unbundling albums online (selling singles) has ahd mroe of an impact on the death of record sales than any other factor. His thoughts on how major labels have “raped their own business model” are absolute genius.

So if you haven’t read it yet, check it out.