“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’s head, Cary Sherman, wants to put encryption on our computer that will force us to decrypt music before listening to it. In other words, the filter will scan all your incoming data and then either allow or deny your ability to listen to it. since this idea likely won’t be popular (who’s going to willingly put a filter on their computer that blocks the files they are downloading?), the next suggestion is to put the filters in our modems.

Despite the predictable public backlash against these tactics (in an environment where the RIAA already has public approval that rivals the US Congress), some ISPs are moving ahead with these filters. The technical specifics are a bit thick, suffice it to say that various file encryptions can bypass these filters unless entire protocols are blocked.

Here’s a video of Mr. Sherman lauding the glories of filtering:

Bottom Line: Being out of touch with your consumers’ needs does not improve your financial picture, or your credibility.

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.

Although still unconfirmed, rumor has it that EMI is seriously considering pulling their funding from the RIAA.? According to a recent Variety article, EMI has taken early steps to exit from the IFPI, the international version of the RIAA.? Part of the move is a demand by EMI that the RIAA and IFPA produce a proposal on restructuring by March 31.

Citing the massive cost of participation in these trade organizations, it seems EMI is very unhappy with the results being produced by the RIAA and IFPI.? The public relations nightmares these organizations have created has been a major contributor the devaluation of music.? If file sharing wasn’t labelled an almost terrorist act, it could have a huge impact on the perceived value of music.

More as this develops….

The record industry is at it again, seeking to further limit our use of our catalogs of recorded music. In a current Arizona case, Atlantic vs. Howell, RIAA is now claiming that ripping our own CDs onto our computers for our own use is copyright infringement.

We already have DRM, which limits our enjoyment of music to a platform (iTunes and Windows Media Player are the prime examples of this). This new motion would force us to buy the same song over and over again, to listen to it in our car, on our stereo, on our computer, and on our portable MP3 player.

Is it any wonder that record sales are crashing and burning? Music is not a necessity, and people buy it because they want to enjoy it. The more we are backed into a corner, told that we cannot copy or back up our own music, the greater the backlash toward the record business and the faster album sales slump.

Maybe there’s a totally different angle we’re missing. If the RIAA and the big labels see that their model has failed perhaps all of this litigation is an attempt to squeeze every last penny they can out of us before they collapse under their own weight. All the claims of protecting copyrights and artists may be a sham. The more ridiculous the legal environment about copyright infringement becomes, the more damage is done to artists.

Within five to seven years, there won’t be major labels like there are now, and we will be free to buy the music we want one time and convert it to any format we choose.
However, the resentment that the RIAA is generating toward buying music may be around far longer. Mainstream media outlets tend to only trumpet the loudest voices (in this case the RIAA), and most of the alternative opinions and methods of distributing music are relatively unheard.

Without all of the DRM, root kits, and legal controls of our music catalogs, music will continue to be made and bought. The more restricted our music catalogs become, the less willing we will be to buy it. And who loses is the artist. Musicians make a living off their music. If people are unwilling to buy it, musician will not be viable career. And this backlash hits independent artists even harder. As music loses its value at the mainstream level, it loses it on the underground as well. Artists and labels that do not believe in DRM or controlling the use of their music suffer from the same public opinion that people have toward major labels. The only difference is the major labels positions are available on the newsstand, and to lobby for laws. In fact, indie labels are the second largest entity selling music, and are left with the same restrictions and laws set by the RIAA and the Big Four.

Bottom Line: The continued attempts to regulate music is the biggest source of the current collapse we see in music sales, and the devaluation of music as a commodity.

The RIAA is funded by the big four record labels, to the tune of around $130 million per year for each label. EMI was recently bought by a private group, and are now considering drastically cutting their investment to the lobbying and enforcement arm of the music industry.

Given that the RIAA’s legal moves over the last few years have been disastrous at best, it’s a great sign for artists that the RIAA’s financial base may diminish significantly. The amount of money that the RIAA has spent suing mothers and college students as been astronomical, and has led to a severe loss of credibility toward the record business in the public eye. Let’s take a moment to look at what a world without the RIAA might look like.

Without constant legal pressure to buy, audiences would begin to feel confident that albums they buy are supporting artists’ careers (this is part of consumer confidence). File sharing would continue, but people would be more willing to buy music they love knowing that they aren’t labeled as criminals anymore. The business model of turning artists into products, overcharging for albums, and using hype instead of quality would fail.

The music industry would become a free market, where any artist with great music and dedication could create a viable career. Rather than a few mega platinum artists, we would begin to see a massive amount of artists selling between 50,000 – 200,000 units on releases. This level of sales can cause an artist to be dropped from a major, but on an indie label, this is a great living for an artist, and a massive success for the label. Royalty rates for artists would also become much higher. Some artists already see similar profits selling 200,000 units with an indie label that they would see selling a million on a major.

New contracts would become the industry standard, similar to Polyvibe’s practice of leasing artist’s copyrights rather than owning them. Artists would have freedom to call the shots in their careers. The industry would shift to artists owning their masters, with labels existing to empower artists rather than to exploit them. Album advances would shrink; the amount of money owed to labels would shrink, too. In the major label world, an artist owes almost every penny the label spends on them. Label investment in artists would become the cost of doing business, rather than a loan.

The practice of shelving albums would become non-existent, as artists would have the ability to have promises for release dates in their contracts. Polyvibe currently includes release dates in our contracts, with a provision that if deadlines are not met, we will set a new release date. We even promise in our contracts that if we do not release an album within a set span of time after receiving masters, the artists is free to go elsewhere with their album. This type of provision would be standard fare, as well as other artist protection clauses.

Marketing, promotion, and booking companies would become the major players in breaking artists. The media will flock to what people want instead of what the Big Four tell them to promote. New and far reaching models and methods of grass roots promotion will become the norm. Music quality will again become the primary factor in an artist’s success; promotion and hype will be a second tier service. Radio will begin to offer a wider variety.

Without the ability to force legislation in their favor, major labels would become the victim of a music economy they no longer control. Consider that what allows major labels to force low quality music down our throats at high prices is their ability to grab politicians ears, to threaten us with lawsuits, and their near domination of media exposure and radio. We are now at the tail end of a 60 year monopoly on the music business. Rats swarm off of sinking ships, a perfect analogy for the exodus of mega-artists from major labels (getting off the ship, not the rats). In this new music environment, there will be dozens (maybe hundreds) of popular labels, and everyone will have the opportunity to create success.

Bottom Line: Without the RIAA, the major label business model will be obsolete, and a new paradigm and renaissance for music will appear within five years.

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!

Folks, this has gone too far! $222,000 for 24 songs? Please read this article:

*****

By David Kravets | October 04, 2007
(Repost from WIRED Magazine)

DULUTH, Minnesota — Jammie Thomas, a single mother of two, was found liable Thursday for copyright infringement in the nation’s first file-sharing case to go before a jury.

Twelve jurors here said the Minnesota woman must pay $9,250 for each of 24 shared songs that were the subject of the lawsuit, amounting to $222,000 in penalties.

They could have dinged her for up to $3.6 million in damages, or awarded as little as $18,000. She was found liable for infringing songs from bands such as Journey, Green Day, Aerosmith and others.

After the verdict was read, Thomas and her attorney left the courthouse without comment. The jurors also declined to talk to reporters.

The verdict, coming after two days of testimony and about five hours of deliberations, was a mixed victory for the RIAA, which has brought more than 20,000 lawsuits in the last four years as part of its zero-tolerance policy against pirating. The outcome is likely to embolden the RIAA, which began targeting individuals in lawsuits after concluding the legal system could not keep pace with the ever growing number of file-sharing sites and services.

“This is what can happen if you don’t settle,” RIAA attorney Richard Gabriel told reporters outside the courthouse. “I think we have sent a message we are willing to go to trial.”

Still, it’s unlikely the RIAA’s courtroom victory will translate into a financial windfall or stop piracy, which the industry claims costs it billions in lost sales. Despite the thousands of lawsuits — the majority of them settling while others have been dismissed or are pending — the RIAA’s litigation war on internet piracy has neither dented illegal, peer-to-peer file sharing or put much fear in the hearts of music swappers.

According to BigChampagne, an online measuring service, the number of peer-to-peer users unlawfully trading goods has nearly tripled since 2003, when the RIAA began legal onslaught targeting individuals.

At the time, BigChampagne says, there were about 3.8 million file sharers trading over the internet at a given moment. Now, the group has measured a record 9 million users trading at the same time. Roughly 70 percent of trading involves digital music, according to BigChampagne.

The case, however, did set legal precedents favoring the industry.

In proving liability, the industry did not have to demonstrate that the defendant’s computer had a file-sharing program installed at the time that they inspected her hard drive. And the RIAA did not have to show that the defendant was at the keyboard when RIAA investigators accessed Thomas’ share folder.

Also, the judge in the case ruled that jurors may find copyright infringement liability against somebody solely for sharing files on the internet. The RIAA did not have to prove that others downloaded the files. That was a big bone of contention that U.S. District Judge Michael Davis settled in favor of the industry.

Thomas, 30, maintained that she was not the Kazaa user “Tereastarr,” whose files were detected by RIAA’s investigators. Her attorney speculated to jurors that she could have been the victim of a spoof, cracker, zombie, drone and other attacks.

The jury found her liable after receiving evidence her internet protocol address and cable modem identifier were used to share some 1,700 files. The hard drive linked to Kazaa on Feb. 21, 2005 — the evening in question — did not become evidence in the case.

According to testimony, Thomas replaced her hard drive weeks after RIAA investigators accessed her share file and discovered 1,702 files. The industry sued on just 24 of those files.

(Courtroom sketch: Wired News/ Cate Whittemore)

*****
Ok, now lets be honest. Songs have always been “free” on the radio. This is because you are forced to listen to advertisements which undoubtedly sway a percentage of the captive audience to go buy the products represented in said advertising.

The idea that downloading hurts CD sales has been disproven. In Fact, there have even been several cases where a song breaks on the internet and causes a landslide of physical sales. Shitty music is hurting physical sales. Ask anyone on the street, Mr. RIAA. What we are witnessing here is a truly EVIL organization that is not operating in the best interests of the people it was designed to protect.

Let’s go back to this quote: “This is what can happen if you don’t settle.” That is a direct threat from the RIAA, telling us to conform to their standard, or else be disciplined by their heavily funded hand. I have a response for you, Mr. RIAA Lawyer Prick…

…This is what happens when you don’t Settle:

The revolution, the birth of a free nation, the creation of epic works of art, the birth of new technologies and the absolute free and unfettered exchange of information.

RIAA, your #1 client base is who you are attacking. Everyone is watching you, and thinks you are stupid. You will NEVER stop the free trading of music on the internet. You do not control the flow of information, nor are you operating in the best interests of those you claim to represent

Black markets flourish when consumer demands arent met by governments or corporations (look at prostitution or the war on drugs). We will always share music! We used to do it with cassette tapes, we used to do it with burned CD’s, We will do it by singing at each other if we have to.

This is for everyone:
STEAL MY MUSIC.
SHARE IT.
ENJOY IT.

After all, I wrote it for you.
-r