Parental Advisory News Report 9.20.09: Sex, Drugs, and Rock ‘n’ Roll!
Posted by Dan Haggerty on 09.20.2009
It’s a packed news week in the PANR: Record labels want royalties for 30 second sound samples, Coldplay settles with Satriani, Beyonce sued for not using her name, musicians don’t support the labels new disconnect law and Lilly Allen fires off on dissenters, the RIAA is funding “copyright education” in public schools, courts support tech sector in major blow to Viacom, Sirius XM bankruptcy threat, radio revenue down, how Monopoly helped win WWII, Cylons are NSFW, and the final word on Kanye West and the VMAs. Click the link if you dare!
The public has spoken, and it would seem that Skittles is still the favorite NSFW poster. I've got four more lined up and we'll take another poll in a month, and if I'm really motivated we'll get a readers choice at the end of the year. Either way this week is for the sci-fi crowd, of which I'm an old-school geek.
Otherwise, we're back at it with another column of industry news, dumb shit, fun shit, and just to shake things up some cool shit. Grab a drink and let's do this
Cover Story: The Package Deal – Sound Bites and Soundtracks
Sound samples are public broadcasts?
Ah yea, nothing is more pervasive is today's world of politics and ideas than what one famous philosopher called "The Package Deal." The Package Deal is when valid ideas get put together with bad ideas, then presented as a whole idea. The end result being that if you argue against the bullshit, you can be accused of not supporting the good thing. In a world of sound bites and bumper sticker philosophy, such a tactic is (sadly) successful. For example, in politics, if you don't support the "Patriot Act" because of concerns over unconstitutional surveillance, you can get called weak on security because of the good parts like better communication between law enforcement agencies. Here's one for the conservatives: Its also happening with the "Stimulus Package' where if you denounce uncontrolled spending, you get slammed for the small percent that goes to fund important highway programs (although, why they didn't just fund the nearly bankrupt Highway Fund that was due for renewal this year is beyond me, but that is a separate separate column).
In music, you get it with the copyright debate. You start out with the right idea: Making sure musicians don't get ripped off, but then marry it to the label's Government purchased multi-million dollar lawsuits against unemployed moms. You get the good stuck with the bad, and along the way nothing gets done because it becomes an all or nothing argument.
This got kicked up a notch this week with a real legitimate concern in the royalty's debate, but it was in turn married to one of the most preposterously stupid ideas I've heard yet.
The American Society of Composers, Authors, and Publishers (ASCAP), along with Broadcast Music (BMI) and other industry leaders have announced they will be taking action against online retailers for television and movie downloads, radio streaming, and 30 second sound samples (like the kind you get on iTunes to see if you want the song). All three targets are accused of being "public performances" and as such should pay for copyright use. Let's take that from the good to the bad:
Composers who write songs for TV and movies don't make a lot of money off of their music, unless they are John Williams or someone who scores a huge soundtrack. These guys make money when their music gets played on the TV show or aired in the theater. Many of these guys are minor players in the business, and to keep in the game they wave their royalties for outside use because the payday is in the broadcast of the show, while other uses usually amounts to nothing more than free advertising. The issue here is that the modern download age has created a loophole that if you download a movie online, these guys don't get anything because it's not a traditional broadcast.
I can see their point. Everyone else is making money on it, and these guys aren't millionaire actors or rock stars, so whatever small cut they get for movies or TV shows should also come from those sources now that the medium has moved online. It's not their fault technology is replacing the medium we watch shows on, and more so I'm sure other people in the movie and TV business are getting their cut. So I'm good with this and think the contracts should be re-written to help these guys out. This is the good idea that should be done. BUT, they went and stuck it with…
The next thing is the streaming radio and lists companies use apps to tap into from other sites. This, frankly, is a non issue. I don't know a person who uses them, and I'm sure if I polled you guys it's likely me a small minority. Frankly, if they do this the increased cost would just shut it down. They're idiots for thinking they can make money by taping this or the real intention is to shut it down.
Finally, and here is the really REALLY brilliant one: Sound samples.
Yes, the industry has come to the conclusion that going online and listening to a 30 second sound sample from a music store is a "public broadcast" and those sites should pay royalties every time someone listens to them. Evidently, if I go into my local Best Buy or FYI and listen to a sample in a public place that is fine, but if I decide to shop online that is a no-no.
What the beautiful people seem to forget, or ignore, is that it's the sound samples that act as advertisements for their product. My wife does this all the time; she'll hear a song then go through the storefront to find it so she can buy what she wants. These morons evidently think that is a bad thing, and either want iTunes to raise the price of downloads to compensate for giving the industry online advertising for free, or eliminate it and watch people buy less as they can't find the music they want.
Personally, I find it mind boggling just how stupid and unaware the leaders of the music industry have become. These clowns actually want to get rid of the most popular way people shop for their product.
This is the business equivalent of a car lot charging you to test drive a car to see if you like it.
HELLO! Anyone home? Earth to music business… Wave to Major Tom for me while you're out there. Holy shit this has to be one of the dumbest things I have heard yet, and I've read a lot of dumb shit since I started this News Report six weeks ago.
Anyway, the thing to take away is that composers should get a chance to renegotiate for royalties they legitimately earned, and are getting missed simply because the contracts were written for technology generations old now.
But this business of getting paid for 30 second sound samples that allow people to shop for your product is the epitome of stupidity. I'd call it a greedy cash grab, but the realty is that it would hurt the business in the long run, making it more like a heroin junky too occupied with getting a fix to realize they're now blindly grabbing for a dirty needle.
Shit, this business needs new minds stat before it completely implodes.
Not A Unified Front
Word has come down this week that musicians are not a unified front against downloading, especially with the steps the industry is taking to combat it. It has actually heated to the point of musicians and industry leaders taking shots at each other.
The issue is in the UK, and at the forefront of the push we reported in the PANR to pass laws that would force ISPs to disconnect downloader's from the internet. The organization that represents musicians, UK Music, has issued an updated statement regarding its stand on file-sharing and in it they removed their original support for the law. This has occurred because a vocal group of musicians from a group called the Featured Artist Coalition (FAC) have come out against it. In fact, the group has released an official statement to the press saying that suspending people's internet access for downloading would be "grossly disproportionate". With UK Music now remaining silent on the law, supporters can no longer claim that the music industry supports it – That is going to make it a lot hard to get approved.
Some of the groups most famous members publically speaking against the law would be members of Pink Floyd, Billy Gragg, and Annie Lennox. Dave Rowntree, an FAC board member and the drummer in Blur, says the proposals are akin to trying to "crack a nut with a sledgehammer" and "For the industry as a whole, the more people hear music the better… For a so-called creative industry we are being very uncreative in the way we approach this topic." He also added, "We have driven the problem underground and we are about to drive it into a place where we won't be able to find out what is going on. "Given that we have managed to monetise the playing of music in all other ways in the music industry, it's not beyond the greatest creative minds on the planet to monetise this one too."
The FAC's stance has polarized the industry with record labels, which strongly support the proposals, and they shot back by enlisting other artists to condemn the group. Although I'm not sure if Lilly Allen was the right choice, maybe it was the most popular musician they could grab on short notice. Either way, Allen is now shooting on her fellow musicians. In a blog this week which was widely circulated to the press, the singer wrote that "music piracy is having a dangerous effect on British music". She also said, and here is the real jewel in the war of words:
"Last week, in The Times, these guys from huge bands said file-sharing music is fine. It probably is fine for them. They do sell-out arena tours and have the biggest Ferrari collections in the world. For new talent, though, file-sharing is a disaster as it's making it harder and harder for new acts to emerge."
Evidently, the fact that statement also applies to the music bosses that paraded her out has escaped her notice. Now, she might have a valid point, maybe the people going against the law are so popular they're not affected by the whole copyright war. But to basically make a class-war shoot out of this is low and deceiving. Especially since she is talking smack about real musicians who earned their way in the business through years of winning fans over, versus being some pop-princess flavor of the moment whose only contribution to music has been keeping Perez Hilton employed and acting the stooge for people who also drive Ferraris.
Personally, I'd like to see NIN or Radiohead make official statements on this. THAT would blow this nonsense wide open.
Remember When Sex Education Was Controversial?
I couldn't make this up…
There is a new curriculum available at public screws these days, and it is being funded lock, stock, and barrel by the RIAA. Yes, the music industry is funding copyright education to children. The program is designed to teach kids about the new "Music Rules!" curriculum…
• That taking music without paying for it ("songlifting") is illegal and unfair to others (RIAA)
• Why illegally downloading music hurts more people than they think (ASCAP)
• How the DVD-sniffing dogs, Lucky and Flo, help uncover film piracy (MPAA)
• To use problem-solving approaches to investigate and understand film piracy (The Film Foundation)
• The importance of using legal software as well as the meaning of copyright laws and why it's essential to protect copyrighted works such as software (Business Software Alliance)
I am seriously not making this shit up. Again, one has to wonder if equal time was given to Trent Reznor, Radiohead, or other bands who give music away for free. How has that helped them? Hurt them? Is their an alternative business model out there? Hopefully, if a district uses this they will give equal time to the rest of the industry that can't payoff Washington to get "equal time". Good thing the internet is here to keep this straight.
Here is a list of the terms that Music First! introducers to teachers for educating children: Counterfeit recordings, DMCA notice, "Grokster" ruling, legal downloading, online piracy, peer-to-peer file sharing, pirate recordings, "songlifting", and US copyright law.
Notice that the other portion of the law, a little part called FAIR USE is absent. That is why I'm skeptical of this, as it is one sided. I'm not saying we should teach kids that illegal downloading is good, only that we present all sides of the argument and let them form their own opinion. If this was about abortion, and only one side of the argument was taught then unholy hell would break loose.
Additional exercises for children to help them understand what downloading does:
• Students calculate how much harm "songlifting" does to copyright owners. This is "educational" because, as the program notes, students "will be using their math skills to investigate "songlifting".
• Students "choose a realistic number of songs they would take if they could get them all for free." With a teacher's help, students then calculate how "big a problem" "songlifting" is—by multiplying the total number of songs by $0.99. The included worksheet calculation shows that 7,800,000 songs equate to $7,722,000.
• Students are also asked to pretend that they are entering a recording studio; one suggested "rap" they are to sing follows:
Music is worth it, if you're asking me
True words, new rhythms, sweet melody
Just tell me where to get it and I'll gladly pay
For a song that says what my heart wants to say.
But don't try to fool me with aphony [sic] copy,
‘Cause songlifting's wrong, and it's got to stop, see?
At the end comes a pledge that students can sign, in which they vow to "respect all forms of intellectual property," "obey the copyright laws that protect intellectual property," "always use computer technology responsibly," "always use Internet technology safely," "never accept illegal copies of songs online or on disc."
Yes, the industry offers a PLEDGE you can take, like some bastard abstinence pledge, to instruct kids on "proper" behavior.
If you'll excuse me, I have a sudden urge to go watch The Wall. The schoolyard scenes suddenly make a lot for sense.
Not All News Is Bad!
This week the recording industry got handed a serious setback in what is seen as a serious blow to the business, which is a insider way of saying some of their plans have temporarily blown up in their face.
Copyright owners in the film and music sectors were stunned this week when U.S. District Judge A. Howard Matz ruled that Veoh, an online-video service, is protected by the Digital Millennium Copyright Act's safe-harbor provision. This means they cannot be held liable for acts of copyright infringement committed by their users.
This is a major court victory for the tech sector, and the first time they have won a copyright lawsuit in some time.
Universal Music Group had filed suit against Veoh, but on Friday, the judge tossed the case out. Universal said it will file an appeal soon. Matz's decision isn't binding, but if allowed to stand, it could influence other courts, legal experts said. If YouTube decides to make use of this latest ruling, they could try to overturn a similar case the lost two years ago to the same company involved in this: Viacom. The two are very similar.
What has so spooked the entertainment industry is that Matz would require content creators to play a cat-and-mouse game with those that upload unauthorized copies of films, songs, music videos, and TV shows onto Web sites.
In order to have a piece of content removed from a site such as Veoh or YouTube, they must file what is commonly referred to as take-down notice. If they get one clip pulled, someone could conceivably post the same clip 30 seconds later, and a content owner would have to file yet another notice, says Chris Castle, an attorney and outspoken proponent of artist rights.
"According to some interpretations of this new law, copyright owners--from multinational corporations to independent songwriters--are required to stand at the ready on a 24-7 basis to police the Internet," said Chris Castle (an attorney). According to Castle, the ruling legitimizes the "catch me if you can" business models that he claims some companies create to avoid paying licensing fees… This is not the way forward for legitimate companies to come together with sustainable innovation in the digital society."
What his statement ignores however is the fact that companies what actually work with the industry now, for example YouTube and Veoh, who have filtering technologies in place that help keep infringing materials off the site. Fred von Lohmann, senior attorney at the Electronic Frontier Foundation, says there isn't any way for such services to determine what content is infringing and what isn't. The copyright owners, according to EFF, are in the best position to do that.
So YouTube and their ilk have actually been working with the industry for two years implementing the latest technology to filter the site, and as reported recently here they are also offering payments to allow music on their site; same thing with Veoh, despite being sued.
Mind you, YouTube was once less interested in to the industry than it is now. For the past couple of years, Google, which bought YouTube in 2006 for $1.65 billion, has wooed the film and music industries, and has signed all but one of the four major record labels and such studios as Disney, Sony Pictures, CBS (publisher of CNET News), and MGM.
And that is where this needs to go. The technology companies are trying to reach deals with the labels, and that is where the industry needs to focus its efforts. This case is a warning shot that they're going to have to work together instead of running to a courtroom to fix every little issue.
Sirius XM Bankruptcy Risk
On the ropes
Audit Integrity, a company that audits businesses for fiscal health, has released a study of 2,500 companies in the U.S. In doing so, they have released the names of those businesses that, in their opinion, are most likely to declare bankruptcy in the next year. Sirius XM Radio came in at #2 on that study. The study analyzed liquidity, debt levels, profitability, market prices and governance, and fraud risk measures. They found that Sirius XM has a nine percent risk of filing for bankruptcy in the next year. That may seem small, but ask yourself if you would want your job to be on 1 in 10 odds.
For those who are curious, drugstore Rite Aid was rated as the company most likely to file for bankruptcy, as it is struggling with debt problems after acquiring two of its competitors in 2007, and CBS Corp. made the top ten list at #8 with a 6.2 percent chance of bankruptcy.
What is more alarming, and not indicated in the study (they don't report or offer commentary, just opinions bases on hard data), is that the company is in better shape than earlier this year when industry insiders were predicting a collapse. Sirius was saved due to a cash infusion to balance it's books. Who invested in the company? It was a company called Liberty Media.
How is Liberty Media doing? Glad you asked. They also appear on Audit Integrity's top 10 list of possible bankruptcies (5.6% chance).
Now, Sirius has the money on their books so they're not effected by their donors business, but the fact that this company is still losing ground and the only help they received was from another company that nearly as bad off… well that just doesn't bode well. The fact is the only reason that Sirius is keeping afloat is that they have been able to replace debt by borrowing money at better rates during the recession, and have received a capital injection from an outside source.
I have nothing against Sirius and think they're product is fine, but the fact is this is this is not a company you want to own stock in. Between things going online, the economy, and possible business decisions, the future of Satellite radio is up in the air.
Radio Revenue Down
Several weeks ago I reported on how the music industry wants radio stations to pay additional royalties for every song they play, despite already receiving money under licensing agreements. The same story also reported on how the industry has ran to the FCC to force those stations to play artists. At the time I said this would be a one-two punch that could kill the business. This report popped up this week and it shows how bad off the business already is without music executives raising costs.
TNS Media Intelligence, a company that tracks things like ad revenue, has released its figures on U.S. ad spending for radio in the first half of 2009. Radio ad spending by companies is down for the industry by 24.6 percent compared to the first half of 2008. Local radio was down by 25.5 percent, with national spot radio dollars off by 29.2 percent and network radio off by 8.7 percent. Radio saw the largest overall decline of any media industry measured by TNS. Television was down ten percent in the first half of 2009, with magazines off by 20.9 percent, newspapers down by 24.2 percent and outdoor off by 15.7 percent. Internet display ads were the only overall category to go up, with a 6.5 percent growth in ad spending.
A lot of this has to do with the recession, as one reader/radio insider told me that this is common in downturns. The first thing companies hurting for sales do is cut, and promotions is an easy way to save money. But the reality is that, recession or no recession, the radio business is hurting like any other industry and the last thing it needs is to have it's costs jacked by Government fiat. It's a simple formula that should be taught in high-school: Lower Sales + Higher Costs = Bankruptcy. This shit isn't that hard.
And really, this will agtain hurt the music industry in the long run. It's estimated that radio stations reach 92% of people age 12 or older, some time during the week. Why would anyone in their right mind try to kill a business that reaches that size of a market?
Anyway, we'll keep an eye on this one and post news as we get it.
The Music Business Is Doing Just Fine
Two news stories hit this week. The first was that Warner Music Group (WMG) stock shares rose 11% this week. The second was WMG immediately spinning this news to say that the company didn't make that much money, but it comes about because Citigroup upgraded the company's stock two points to "BUY". Citigroup did that because WMG is set to purchase EMI Group, and the result will allow the business to consolidate operational costs for both companies. In other words, they're cutting costs which will increase profits. That is just fine and as a business that is there job.
The only thing I'm going to point out is that WMG is in a position to make such a purchase, which means they are doing fine as a business to convince creditors to loan them the capital. If the company wasn't so well off Citigroup would still not have increased their rating to investors. They might not have increased profits that high this year, but they're doing well enough to buy companies and despite the debt have their portfolio upgraded to other investors.
The music business is doing just fine folks. Don't listen to the hype about how they are losing money. They just need to learn how to turn the ability to make dollars into real musical results for a change, or maybe take that money and invest in the technology they love to hate
A Quiet End To A Noisy Feud
In a quiet story that crept into the news, at least nowhere as big as it was when it first started, British rock band Coldplay and Joe Satriani have settled their legal dispute. The guitarist dismissed the lawsuit this week. While details of the case remain sealed, legal sources said a financial settlement between the two parties is likely the reason a deal was reached. That would mean Coldplay avoids admitting to any wrongdoing, or a court spectacle, and Satriani gets covered for his allegations.
The truth? Well, unless Coldplay come out years from now and admits to it (unlikely), then we'll never know if the guitar legend was right or if the band just played business and moved on.
Satriani originally filed a lawsuit against the members of Coldplay and their Capitol Records label, alleging the band's song, "Viva La Vida," contained "substantial, original portions" of his 2004 track "If I Could Fly."Coldplay denied the allegations and all was set for court until this week, when the deal went down. No one is commenting of course, which was likely part of the deal.
Isn't it interesting how things like this are HUGE news when they are sensational, but when the cold hard reality of the end hits you have to dig for the news. Just saying.
Fierce Litigation?
Abercrombie & Fitch, the apparel chain has sued Beyonce Knowles to try and stop the singer from launching a new line of fragrances.
In a federal lawsuit filed on Tuesday in Columbus, Ohio, Abercrombie claims a fragrance under the singer's "Sasha Fierce" label "poses a likelihood of confusion" with the retailer's own "Fierce" brand. The company already has a "fragrance" (fancy way of saying male cologne) that they sell, the typical thing that if you wear it you'll be so sexy women will loose their freewill BS, and the shit hit the fan when they learned that Beyonce Knowles would also be releasing a "fragrance" under how own line. The issue being that Abercrombie & Fitch bought into an industry rumor that Beyonce was going to release this perfume under her "Sasha Fierce" moniker. Abercrombie said such confusion could deprive it of control over a trademark it has used since 2002, and perhaps cost it sales. The lawsuit seeks to stop trademark infringement, unfair competition, and deceptive trade practices.
The only problem is that she isn't doing that.
I'll repeat that: She is not releasing a perfume under that name.
Beyonce does plan a line of personally indorsed fragrances in 2010, nothing new for the typical pop star, and she has lined up Coty Inc (big perfume company) as partners. Coty Inc has publically this week claimed that there is no plan to use the name Sasha Fierce on any product, and Beyonce's people confirmed it. There seems to be a lot of confusion on her end as to how the story started, or why she would do that. Since this is coming out in 2010, it does reason that she wouldn't reference an album already several years old.
Evidently, because trademark suits take a while to get to court, companies sometimes file immediately so the actual offending product doesn't hit the shelf while the trial is going. In other words, they sometimes go off of industry insider information and not actual proof.
My only question is, before dumping a bunch of money into lawyers couldn't someone have used their head and called Beyonce and asked? I mean, calls these days are dirt cheap by comparison. What a bunch of dumb asses.
I swear common sense is now uncommon sense these days…
Get Out Of Jail For Free
Finally, in a story I'm telling only because I feel the urge to end this on a good fun note for a change, a more interesting side to the history of Monopoly came out this week. I am, of course, talking about the board game.
Turns out that the game played a key roll in World War II!
Evidently Winston Churchill and others reported that during World War I, POWs just sat in camps and a huge opportunity was missed. The idea was that with minimal effort the imprisoned soldiers could escape and not only rejoin the war effort, but since they were behind enemy lines they could cause all kinds of trouble.
The solution? To smuggle the tools to escape to those soldiers, and give them information of the region they were in. The means? German soldiers, like most armies, allow charity groups to deliver supplies to POWs, including non-offensive stuff from their homeland including board games. After all, POWs playing games are easier to deal with than bored soldiers. The British government contacted the people at the UK division of Hasbro and a secret group started hiding contraband into the game. See the picture for where they put this stuff.
If you got a "special edition" of the game marked with a dot on Free Parking, you actual got an escape kit with the following: A concealed compass, escape tools, silk maps (fold up easier, more durable, and makes no noise), real money for the region they were in hidden under the fake money.
Even people at the company didn't know of this, as it was feared that spies could find out easily and target civilians at the company. A special select group worked in secret with MI9 to put together Monopoly escape kits that were designed to have maps and money compatible with different regions of Europe. There was a code on the box where an extra period was placed so someone in shipping would know what part of Europe the box was suppose to go to.
It's estimated that over 10,000 prisoners of war escaped and used one of the secret Monopoly maps.
I have nothing to add. This is just an awesome story.
The Final Word On Kanye West And The VMAs
And that is the final word for September 20, 2009.
