Tag Archive for 'The Register'

IFPI Chairman Speaks About the Music Business

Published on February 26, 2008 in Blog. 0 Comments Tags: , , , , , , , , , , , .

Spotted on: The Register
A fascinating interview with IFPI chairman John Kennedy about the future of music for independent labels in the digital realm

Here are some of tasty quotes :

“it’s always very difficult going from something that’s free to an industry to something that has a cost to the industry.”

“I think what we have to do is far more flexible about price. The industry has been very bizarre over the years – it’s essentially a one price industry.”

“I don’t want to destroy physical sales … We find physical and digital are both viable markets that people enjoy using. But clearly, there’s an opportunity for music on tap, and as a service, and it’s something we should explore.”

“I would like to see copyright modernized in 2008, with people enabled to do what they want to do, and those who profit from it allowing the practice [third parties] to be monetized. I’d like to see barriers taken away from the enjoyment of music.”

“I think P2P does have a discovery element to it, and it you may discover something on P2P that makes you buy a product. CD burning is much more domestic piracy, and is much more somebody avoiding paying for something.”

“I think the whole “DRM as a policeman” policy was doomed to failure – the independent companies never supported it to any extent whatsoever. We have never believed in putting obstacles into what the consumer wants to do.”

“We inhabit a mature industry that’s grown on a multi-territorial basis. And, frankly ,if you were reinventing it today you’d reinvent it way differently. It would be global, not territorial.”

“…[T]he market is in the control of one or two parties, and we don’t think that’s healthy.”

“The patrons are going to be largely commercial so brands that see an advantage to a certain kind of artist, and that is putting art far to close to commerce. That would mean marginal music wouldn’t exist, you’d only have music that had a commercial upside for sponsors. That’s a world none of us really want to see.”

Major Labels Facing Antitrust Investigation?

Published on February 11, 2008 in Blog. 0 Comments Tags: , , , , , , , , , , , , .

Spotted on: Techdirt

Although the details are sketchy, the US Justice Department is looking into whether a subscription for the Big Four labels is an antitrust violation. Back in 2001, there was an antitrust investigation against the major labels for…. a subscription service. According to The Register, the Big Four have already been served notice this time around. Although the details are sketchy, it is apparent that the Dept. of Justice has an eye turned toward the industry (again).

Investigations around “Big Music” have been ongoing for the last few years. In 2000, the Federal Trade Commission settled with the major labels on price fixing and unlawful advertising practices relating to “Minimum Advertised Price” policies.

Super producer Rick Rubin has said “The subscription model is the only way to save the music business. If music is easily available at a price of five or six dollars a month, then nobody will steal it.” He also said, “Until a new model is agreed upon and rolling, we can be the best at the existing paradigm, but until the paradigm shifts, it’s going to be a declining business. This model is done.”

While a subscription service may stem the tide of file sharing, will it provide any kind of sustainability for artists? CD sales are falling end over end, but digital sales are brisk, and touring and merchandising are still viable revenue streams.

Everyone agrees it’s time for a new model, and noone seems to know what the new model will be. The sky may be falling, but music is still a multi-billion dollar business. The future lies in creating a model that generates positive public perception, convenience, and collectibility. The platform may be shifting wholly to digital music, but that doesn’t necessarily mean people won’t buy music anymore. The advent of the “360 deal” shows that the industry is embracing a new kind of marketing, where the band is the brand, not the content. At the end of the day, it’s all about the music, and people will pay for convenience and for music that they love.

Bottom Line: The paradigm shift at the heart of the music industry is upon us.

Throttling Bit Torrent:

Published on November 28, 2007 in Blog. 0 Comments Tags: , , , , , , , , , , , , , , , , , , , .

Spotted on: Half Life Source

Bit Torrent throttling is becoming a real issue. Although it has not yet seen much mainstream attention, controlling users access to internet bandwidth is a disturbing precedent to flow of free information. Seemingly an effort to control the illegal sharing of files, the impact of throttling can be far reaching.

Somewhere around a third of all web traffic is Bit Torrent File Sharing. Keep in mind that a significant amount of Bit Torrent traffic is legitimate, such as file backups for large companies, or as a tool for academic research. A neurocognitive scientist posted on the DSLReports forum how bandwidth throttling is hindering scientific research in a field where leading researchers live great distances from each other. In other words, limiting people’s ability to use their internet waves affects more than porn and Britney Spears.

People transferring large files across the internet can affect other uses online experience negatvely. However, if the uses are legal (and more and more users of Bit Torrent are using it for legal purposes), what legal right do ISPs have to limit our uses of their service? As Slashdot elegantly posed the question in February, “Do they want to irritate their BitTorrent-using contingent, or let BitTorrent flow unhindered at the risk degrading the experience of those who don’t download torrents?’”

Comcast, the # 2 internet provider in the United States, is being served a class action suit for limiting the bandwidth of Bit Torrent users. The suit alleges that it is a breach of contract for a user’s bandwidth to be limited. “The filing asserts that Hart upgraded his internet service to Comcast’s high-speed internet… package in September 2007 to gain faster speeds specifically for the blocked applications in question. In the subscriber agreement… none of the terms stated that Comcast would impede or limit the blocked applications.” (quoted from the Half Life Source article).

According to the The Consumerist, A recent internal ComCast memo gave call senter emplyees a strict script to deliver if customers had questions. Any employee who says anything not in the script would be subject to immediate termination. Adding oddness to the issue is a recent MSNBC article that shows tests confirm the throttling is happening.

Recently, a major Canadian ISP admitted they have been throttling Bit Torrent traffic for months, even going as far as to refuse service to users that consume large amount of bandwidth. An analysis on Bell Sympatico’s tactics can be seen on p2pnet.net.

The CEO of Bit Torrent, Ashwin Navin, said in an interview that throttling is “a symptom of a larger problem”.

Net Neutrality – Not just a fancy term

Network neutrality “…refers to a principle that is applied to residential broadband networks, and potentially to all networks. Precise definitions vary, but a broadband network free of restrictions on the kinds of equipment that may be attached and the modes of communication allowed…” (quoted from Wikipedia).

Simply put, once companies can set limits on our ability to use the internet, where will it stop? Once the door cracks open, how do we close it?

I can sympathize with broadband companies that are concerned with Bit Torrent users sucking up all their bandwidth. It can get quite expensive to have to conitnually upgrade internet servers to meet capacity. The same thing happens in grocery stores when they have to open another checkout line. In capitalism, we often refer to this as “the cost of doing business”.

Bottom Line: Bit Torrent is the biggest single use of internet traffic. ISPs can save lots of money by throttling our use of bandwidth, or charging us if we pass monthly limits. To do so based on what we are doing violates network neutrality, and sets a precedent for controlling the internet.

Unbundling Albums – The Silent Killer

Published on November 14, 2007 in Blog. 5 Comments Tags: , , , , , , , , , , , , , , , , .

Spotted on: The Register

Capgemini? recently broke down album sales in Britain since 2004.? While the report is still confidential, The Register reported on a few details.? And what is the reported main source of lost revenue in the British recording industry?? Album Unbundling.? (Files sharing came in at 18% of the projection).

The iTunes music store was originally launched with the blessing and backing of the four major record labels, who thought unbundling albums would be a boon to business.? it wasn’t until the major labels unbundled their catalogs that the idea was popularized. In unbundling albums, audiences have lost the incentive to buy a whole musical work.

Considering that the major labels are upset over their falling revenue, it doesn’t seem like a shining moment when they devalued the recordings in their catalogs.

Would you buy part of a painting?? As Jim Griffin pointed out in 2004, would you unbundle books of poetry?

It is valid that many albums only have a couple of good tracks, and are mostly filler.? However, most albums are created and put together as a total piece.? Ciccone Youth released an album quite a while back titled “The Whitey Album”.? The second track is “Silence”, and consisted of a little over a minute of… silence.? Admittedly, this is not the first track of its kind (the band joked that the track was a speeded up version of John Cage’s 4:44).? This track sold for 99 cents on the iTunes store, until stories started popping up in the media.? Artistic visions are undermined through unbundling, and shorter or more experimental tracks are not always as valuable as stand alone.

What do fans lose from unbundled albums?? When I think of some of my favorite albums, I can see that I would miss some gems through album unbundling.? Polyvibe artist Zoltan Dobi has several tracks of under a minute each.? Many Pink Floyd albums are meant to be listened to as a continuous piece.? Primus‘ (Primus’s?) early albums contain many short interludes that I love, but wouldn’t buy as a single.? What about artists that put experimental ramblings or noise tracks in their albums?? Clearly these tracks are intended to be part of those musical experiences.

Does it serve artists to have their musical works picked apart?? While the single is still a viable format, it has a specific design.? A track meant to generate interest in an album, and often the best track (sometimes colloquially referred to as the “money track”).? By unbundling albums, all tracks become singles, and fans often miss the gold in favor of a single serving mentality.? Radiohead’s In Rainbows is not available on iTunes for this very reason.? The album can only be obtained the way it was created: as an album.

I’m a proponent of freedom of choice, and I believe that audiences have the right to buy the music they want, and how they want it. I’m a believer that if a song is a hit, don’t withhold the single.? When you buy your tracks in single servings, the overall cost is higher.? It costs between $2,000-$10,000 to fill a 40GB iPod, depending on whether you buy the music as albums or singles.

However, as an artist, I want my vision to be experienced.? When my albums are split apart, listeners do not get the full scope of my musical vision.? As as a lesser-known artist, the incentive for people to buy a single track over the album is apparent.? While it’s an honor to have people tune in at all, is there an incentive in creating a full album if people only buy one or two tracks?

The Bottom Line:? Album unbundling has the potential to eliminate the art of the album entirely, although it does provide an opportunity for fans to expand their musical tastes in low cost increments.

Free the Internet Airwaves!

Published on May 3, 2007 in Blog. 1 Comment Tags: , , , , , , , , , , , , , , , , , , , , , , .

Spotted: Everywhere

You probably already know that the US Copyright Royalty Board is finalizing royalty rates for internet radio for the period 2006-2010. The premise seems noble: Raise royalty rates on the internet, so artists can make more money. The practical result of this royalty hike is most small internet radio broadcasters will be pushed to bankruptcy, leaving only the largest (and mostly consolidated) broadcasters left. Before we take a look at how this has gone down, here’s my take on this:

This is not about royalty money. Money is one of the most powerful tools of distraction in our society. The issue here is who will have the power to broadcast on the internet. Deregulation of media ownership is moving online, and by limiting who will have the legal right to broadcast music, the RIAA is attempting to control our tastes, and therefore protect their flopping sales.

According to the Copyright Royalty Board’s Final Determination – Docket No. 2005-1 CRB DTRA, Page 71, “SoundExchange was…an unincorporated division of the Recording Industry Association of America.” SoundExchange’s argument during these proceedings: “it would be inefficient for the Copyright Royalty Judges to select more than one agent to receive and distribute royalties.” “Only one party in this proceeding, SoundExchange, proposes that Noncommercial Webcasters should be subject to a rate structure incorporating a revenue-based metric… SoundExchange specifically proposes that Noncommercial Webcasters pay according to the same structure and rates applicable to Commercial Webcasters.”

SoundExchange has a summary of this ruling on their site. On page 4, it states, “Upon review of the evidence…the CRJs concluded that ‘selection of a single Collective represents the most economically and administratively efficient system for collecting royalties…’ The CRJs also found ‘no credible evidence that demonstrates that copyright owners and performers suffer increased costs from a system with a single Collective.’” (Check out this summary to see all the great reasons for establishing a monopoly).

In the songwriting realm, we have freedom of choice with Collection Societies, mainly ASCAP, BMI, or SESAC. This competition allows artists to have leverage in how they are treated, and the rates they pay. So why would the CRB rule in favor of a single royalty collection entity for internet broadcasting? And why choose an entity that started as an extension of the RIAA?

Back in 2004, The Register reported that thousands of artists unclaimed royalties would be kept by the RIAA unless claimed by the end of the year. Here’s a couple of articles from Techdirt, Slashdot, and Daily Kos from late April ’07 dissecting the CRB ruling. it turns out that SoundExchange is actually the recipient of all internet royalty payments, whether RIAA members or not.

Here’s a quote from the SoundExchange Site:
“What about webcasting? The recent U.S. Copyright Office ruling regarding webcasting designated SoundExchange to collect and distribute to all nonmembers as well as its members. The Librarian of Congress issued his decision with rates and terms to govern the compulsory license for webcasters (Internet-only radio) and simulcastors (retransmissions).”

Let’s take the Polyvibe team as our example. We are not affiliated with the RIAA in any way. Our first priority is having the music heard, royalties or not. We are required to register with SoundExchange and pay their fees to get our royalties. We haven’t made their unpaid label list yet.

If they know who they are collecting money for, and they have a meticulously cataloged list of unpaid labels and artists, isn’t it easy to send out a form letter? Here’s a recent post from Wired’s blog, “SoundExchange Distributed Only 60% of Collected Royalties in Q1 2006” (SoundExchange is only required to keep records for three years, ain’t that a kicker).

The most recent ruling by the CRB is in the Federal Register on May 1 (The ruling was March 2). Our last hope is HR 2060, which will overrule the CRB ruling. The bill is sponsored by Don Manzullo and Jay Inslee.

Free the Airwaves!
Save Net Radio!

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