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“Can I speak up here? I’d like to just add to what Zoe [Keating] was saying. There’s also – the other kind of general problem that I think we’re seeing that doesn’t really get addressed very much because it’s so big and possibly un-fixable is that as bad and clunky as the major label system was, you still had a constant influx of capital back from those giant, sometimes soul-sucking systems, back into content creation.
And one weird thing is that iTunes, Apple, Spotify, Google, whatever, all of the people who are profiting – [and] YouTube – who are profiting off the artists from the small level to the huge levels aren’t really feeding very much back into the creation of new content.
Eminem sent out a public service announcement to address online piracy in the wake of his latest album The Marshall Mathers LP 2.
The album leaked online earlier this week and the Shady Records machine quickly went to work to suppress the leak. Eminem and his management even went as far as making Rap Genius remove the lyrics to the songs:
The car industry gets decimated and people go into apoplexy. The recording industry gets destroyed and people seem to be sanguine or happy about it, almost, because they're getting everything for free. If somebody had come down from Silicon Valley 30 years ago and said "I've got this new technology, and you're gonna be able to see all around the world, transfer your stuff all over the world, you're gonna be able to send things, you'll be able to see your friends, you'll be able to hear music -- all you have to do is give up your privacy and your royalties," everybody would have said, "Get the f--- out of town! Right now! Get out of here!"
Instead, these guys came down with their shtick, and everybody went "Well, how can we make money from this great new technology?" "Oh, you're not gonna make money from it. Everything's gonna be free. Just give us the intellectual property we can send around in our pipes, everybody will subscribe, and then we'll be rich. Not you, though." [Laughs.] "Don't ask us what we're doing with the money. Just make the stuff and send it to us for free."
That's how much of a straight-up con it's been. People in Hollywood, we should go up there with pitchforks and torches to Silicon Valley now. Unfortunately, that's [how sophisticated] our response would be -- pitchforks and torches.
98.9% of all figital music tracks in existence in 2011 have solf fewer than 1000 copies. That's 7,931,408 out of 8,020,660 songs. This and other "fun" music industry facts from a new book by Harvard Business School Professor Anita Elberse's new book Blockbusters: Hit-making, Risk-taking, and the Big Business of Entertainment . Here are more (Aspiring artists, brace yourself...) :
73.9% of all digital music tracks sold fewer than 10 copies in 2011
97.1% of all albums available sold fewer than 1,000 copies in 2011
58.4% of all albums in existence sold fewer than 100 copies in 2011 - 513,146 out of 878,369
400 albums released in 2011 accounted for 35% of all music sales
514 songs out of 8,020,660 available in 2011 accounted for 40% of sales
The origin of the outrage is telling: Sweden is widely regarded as a model country for streaming and access, thanks to massive adoption and recovering recording revenues. The threatened suits suggest that not everyone is celebrating or, more importantly, enjoying the early spoils.
Recent financial figures show an unsustainable level of cash burn at Spotify, and potentially serious problems attracting more capital as a result. And after burning through hundreds of millions of dollars, Spotify is getting dangerously close to depleting its funding tranche.
Streaming services may be paying you pennies, but at least they’re lowering piracy. But what if that isn’t true?
So the piracy sites that we’ve focused on for this study are very much driven by profit: they are generating revenue from advertising, they are generating revenue sometimes from premium subscription fees. And obviously when enforcement shuts these sites down and or shuts down their payment processors, it’s hitting directly at their revenue streams.
“So obviously what we’ve seen over the last two years is a significant rise in the amount of pirated content, and the amount of infringement that is taking place across the internet.”
Total digital sales are down almost 1 percent so far this year, and some in the industry cite the rise of streaming music services like Spotify and Pandora.
So far this year, 1.01 billion track downloads have been sold in the United States, down 4 percent from the same time last year, according to the tracking service Nielsen SoundScan. Album downloads are up 2 percent, to 91.9 million; combining these results using the industry’s standard yardstick of 10 tracks to an album, total digital sales are down almost 1 percent.
The impact of streaming. Subscription services may finally be changing the buying patterns of the most active music fans. Word is that some music companies now believe streaming services -- namely on-demand subscription services -- are starting to impact sales. Until recently, executives did not see proof that streaming services were cannibalizing download sales.
The Motion Picture Association of America has announced that it has reached a settlement with the operators of IsoHunt, one of the larger BitTorrent indexers, which in its heyday was handling several million torrents for some 7.5 million unique visitors.*
The development comes in advance of a scheduled trial date next month; the MPAA had been aiming to collect hundreds of millions of dollars in damages.
It also occurs after a ruling last March by the 9th Circuit Court of Appeals to affirm the liability of IsoHunt for inducing users to infringe plaintiffs’ copyrighted material through the trading of popular movies and TV shows. The plaintiffs, led by Columbia Pictures, originally submitted 44 infringed works, but later said there were thousands of movies and TV shows being infringed by IsoHunt. The appeals court rejected Fung's contention that his service was just indexing what was out there, saying it had “red flag” knowledge of a broad range of infringing activity.
Copyright infringement is driven by a growing hunger for content. The first step in putting an end to it is by limiting the supply of content available.
In his paper, Keen presents three core conclusions:
1) Effective Action Requires Collaboration: Online intermediaries such as advertising networks, payment processors, search engines and social networks benefit benefit from the legitimate sale of online content but can also, in the short term, benefit from the illicit sale of content. The latter is a shortsighted view (as well as illegal) and by working together they can significantly reduce copyright infringement.
2) The Law is Not Enough: The law is at least several steps behind reality under the best circumstances. In the Digital Age, the lag is more like a mile. Voluntary measures and best practices adopted by online intermediaries will have a much more direct impact.
3) Competition Matters: Here Keen focuses on Google. He believes that Google, as the dominant force in online search, advertising and video, impedes the universal adoption of voluntary mechanisms. There’s no incentive for or market pressure on them to adopt the measures and there is, in fact, a continuing incentive, at least int he short term, for them to perpetuate the status quo.
As we noted last time, this debate certainly has advocates on both sides.
To be sure, it seems a bit unfair for Allen to start out by quoting the headline from Byrne's story as if Byrne himself had necessarily written it, rather than a click-hungry editor. And he might tip his own hand a little bit when he approvingly quotes professor Clay Shirky, a tireless Web evangelist.
Piracy apologists would have us believe that it's actually the*content creators*who are to blame when their movies, music and books are pirated. The rhetoric is always the same old, same old–a stale mantra of “outdated business models” and blame the victim verbiage.
Given Google’s link to the Mercatus Center’s funding (and its libertarian philosophy) is it any wonder their new astro-turf site blames big, bad Hollywood for piracy instead of the thieves who steal and monetize its movies. Piracy is flourishing not because of Hollywood’s failure, but because criminals can make money monetizing stolen content.
Piracydata.org’s data dump is clearly yet another attempt by Google, and its stealth lobbyists (dressed as academics) to muddy the debate and undermine the rights of content creators. Dueling “studies” created using lobbyist’s cash is nothing new—but please, at least be honest about who’s funding the research OK? That would really be “telling it like it is.”
There are many problems with Timothy B. Lee’s Washington Post blog post on Hollywood’s supposed culpability for the theft of its own movies, beginning with the morally unserious jujitsu deployed in arguing that Hollywood is culpable for the theft of its own movies.
The Mercatus- and Cato-connected editor of the Washington Post tech blog that aims “to be indispensable to telecom lobbyists and IT professionals alike, while also being compelling and provocative to the average iPhone-toting commuter” also had a major correction that undermines the entire premise of the piece and reveals its one-sided reporting.
Thought I'd share an interesting and somewhat depressing article I stumbled across recently. Here's my question then: What do you feel is the way forward for engineers and studios in this economic climate?
For those of you who haven’t heard about it, the London School of Economics allowed some lecturers to post a “study” on the LSE’s website that has some very questionable assumptions in it–not to mention overtly misquoting actual econometric studies.
If the LSE lecturers are interested in getting at the true cost of piracy, a fruitful area of research for them would be to investigate this advertising revenue. These are known numbers. Someone is paying the illegal sites and Google is one of those people by their own admission.
You don’t have to agree with my estimate–it may be high or, more likely, it may be low. But it is impossible to argue that the number doesn’t exist or relies on an estimate. This payment is taxable income–even in the UK Google does make some payment to Inland Revenue. It’s taxable to Google when it is paid by the advertiser, Google takes a deduction for the share paid to the pirate, and Google has an obligation on some level to report the corresponding income paid to the pirate to justify the tax deduction.
From the five panelists who participated in Billboard’s music and branding roundtable last week, to the eight executives who discussed additional issues with Billboard’s Andrew Hampp during an Advertising Week program dubbed “The Sellout,” here’s a look at what we might be talking about come next September.
The boom in digital streaming may generate profits for record labels and free content for consumers, but it spells disaster for today's artists, says David Byrne
"In the future, if artists have to rely almost exclusively on the income from these services, they'll be out of work within a year. Some of us have other sources of income, such as live concerts, and some of us have reached the point where we can play to decent numbers of people because a record label believed in us at some point in the past.
I can't deny that label-support gave me a leg up – though not every successful artist needs it. So, yes, I could conceivably survive, as I don't rely on the pittance that comes my way from music streaming, as could Yorke and some of the others.
But up-and-coming artists don't have that advantage – some haven't got to the point where they can make a living on live performances and licensing."
New clip from Unsound: Digital Music News' Paul Resnikoff discusses the myth that artists should just give away their music and sell Tshirts. If you ever hear someone say this, be sure to ask them why they don't work for free. Also ask them why they don't just sell Tshirts...
Most talk about the exploitative internet is focused on artists. But they’re just the headline. Artists may be the front-line, the visible face, but the effects go much deeper.
Think about everything that goes into making and releasing a record. Recording engineers, mixing engineers, mastering engineers, mixing desks, outboard, microphones, speakers, software, computers, pressing plants, their staff and equipment, blank stock manufacturers, distributors, warehouses, vans, drivers, PR agencies – the list goes on.
No one gets paid if no one buys the record.
I can’t count the number of times artists have promised to send a single/EP/album to me for mastering by a certain date only for that date to slip because they can’t get the money together. Very often it never materialises: they’ve given up and either forgone mastering, tried to do it themselves or got their hobbyist mate to do it. This isn’t good for me or the band.
Not only did the LSE lecturers fail to provide the proper context for the Danaher et al conclusions, they also missed what I believe to be the most important issue of all when it comes to ad supported pirate sites (which is all the big ones).
There are no lost sales. All sales are monetized. If they are going to analyze the economics of file barter, they should take a hint from Google’s UK policy manager: Ad supported piracy is big business.
And none of the money flows to the artists. Including the knighted ones who as a group probably added a zero to the UK GDP–and that is something that the London School of Economics should be able to actually measure accurately.
In case you were interested in what Professor Danaher actually said in his team’s study, you can watch this video from Canadian Music Week:
One of the key arguments the LSE paper makes is that the total music industry is in fact growing or is at least stable, primarily due to the impact of growing live income. The ‘artists can sell tickets and merchandize to make up for shrinking music sales’ argument is frequently wheeled out by the pro-piracy lobby but it is one riddled with problems (and of course doesn’t apply at all to songwriters):
Live revenues are over reported: as impressive as global live revenues may look, they are not accurate. Most often they include reseller revenue, which is income that does not go anywhere near the artists or any other part of the actual music industry. A scalper reselling tickets at extortionately high prices on eBay doesn’t benefit an artist in any way but at a macro level can look like booming revenue.
Price hikes drive revenue: Much of the live revenue growth is actually from increased ticket prices, both from venues and resellers. The average ticket price has increased by 34% in the last 10 years. Only a portion of this increase gets passed back to artists and their managers.
Live income is unevenly distributed: Live simply isn’t working for many artists, those that do best are those are heritage acts. According to Deloitte 60% of the 20 top-grossing US live acts are aged 60 or over. This is where promoters and venues focus their efforts and it leaves little oxygen for the emerging acts.
The live boom will suffer: The likes of Bon Jovi and the Rolling Stones sell out massive arenas because they sold so many albums in the glory days of the recorded music industry. What will happen when the generation of artists that do not sell millions get to the age where they hope live will pay the bills? The likelihood is that there will not be another era of heritage live acts such as we are seeing today.
“The creative industries represent one of the most important sectors in the UK economy providing 1.5 million jobs, many of them in small, independent companies or as freelance self-employed workers. Online copyright infringement is not a victimless crime, it denies these ordinary creators and workers their right to get paid for their work or to make a return on their creative investment. The Digital Economy Act is a vital tool for helping to educate ordinary consumers about the importance of respecting copyright online and about the numerous legal ways of getting digital entertainment content. We need the measures in this Act implemented as soon as possible and a failure to do so, as argued for in this report, would be a betrayal of all those whose livelihoods depend on the success of this sector.”
The National Association of Recording Merchandisers (NARM), the trade organization founded in 1958 which represents music retailers, distributors, and others involved in the sale of music and related merchandise, has announced it is restructuring and renaming its organization to more effectively operate within the new realities of the music business which have emerged over the last decade.
Singer-songwriter Eliza Doolittle will be performing at Wired 2013: Next Generation. In the run up to the event, Wired.co.uk spoke to her about school, social media and finding inspiration in a rainy Glastonbury car park
Many musicians understandably hate online music piracy but there's no evidence that it's turning them into starving artists. Timothy Lee at The Washington Post's Wonkblog has posted a chart using data from the London School of Economics showing that music industry revenues have remained largely flat...
The paper claims digital filesharing has not affected music industry profits.
"That is not an argument for relaxing copyright law! T-shirts and tickets are nothing to do with 'copyright and creation', which is the supposed subject of this document.
I hope the government sees how ridiculous this document seems to people who make records. The authors are 'pro piracy' and they wish to influence the UK government's upcoming review of digital copyright law. It's madness."
Claim: Creative industry revenues are not declining (…therefore piracy isn’t doing any harm).
Reality: This argument, while common, is unsophisticated and misleading. Apart from issues with whether the brief analyzes revenues correctly, from a scientific standpoint you cannot simply look at revenues either increasing or decreasing at the most general level and deduce the specific impact of piracy. So many factors go into determining an industry’s topline annual revenue; the most obvious example being which films were released that year and how well did they do? The success and popularity of creative content varies from year to year. In order to isolate the impact of piracy, more sophisticated analysis is required. You have to address the counterfactual question “what would sales have been in the absence of piracy?” The real question is not whether the creative industries’ sales are up or down in a given year, but what the industries would have achieved without the damaging effects of piracy.
The majority of objective academic studies – particularly those published in top peer reviewed journals – that specifically address this question have found that piracy harms media sales.
Ministry of Sound recently became part of one debate after beginning legal proceedings against Spotify over the protection of our intellectual property. However, notwithstanding our own battle, I'd argue that there are bigger, fundamental questions to ask about Spotify - questions which affect our industry as a whole.
Spotify needs cash. Having burnt through $206million since its launch in 2008, it's been reported in Sweden that the service is seeking a new round of funding, allegedly valuing the business at $5.3billion. To put that in perspective, that's nearly double what Universal Music Group paid for EMI, and nearly as much as Microsoft paid for Nokia.
Non-profitable business models are not unusual in the tech environment. Number of users and growth rate are equally compelling, sometimes even more so. If a business can demonstrate a rapidly growing and loyal customer base, the general principle is that it will eventually work out how to make money. In any event, if a business has hundreds of millions of users it may be an attractive prospect to someone - either as an acquisition or through an IPO where the public will be able to speculate and profit from its growth or sale. The tech industry is a modern day frontier, but instead of precious metal it's a gold rush for online customers.
The second biggest misconception I have run across about piracy is that it does not hurt sales.
The first question I have to ask people when they say this to me is, have you actually done a test to prove this hypotheses?
I have, and from what I have seen, from a small labels perspective is YES without a doubt it effects our sales. I can also say, being involved with a fairly recognizable Deep House producer, that when we take down illegal download sites for him, it can make all the difference between making it into the top 100 and not.
Maybe this does not hold true for all labels or artists, but I can certainly say for my label we have more lost revenue (my estimate would be about a third of what we could be making instead goes to piracy) then we get fans in return for this “free” promotion.
The London School of Economics and Political Science has released a new policy brief urging the UK Government to look beyond the lobbying efforts of the entertainment industry when it comes to future copyright policy. According to the report there is ample evidence that file-sharing is helping, rather than hurting the creative industries. The scholars call on the Government to look at more objective data when deciding on future copyright enforcement policies.
Comcast, along with AT&T, Verizon, Cablevision, and Time Warner, participates in the 'Six Strikes' program. This anti-piracy enforcement plan doles out a variety of punishments to repeat copyright offenders, but never included stipulations to terminate accounts.
In addition, Comcast has decided to punish outside of Six Strikes, by terminating the accounts of some infringers on their own. Most other ISPs wait for a court order, but Comcast has told TorrentFreak: "a court order is certainly not required," and that the company's "interpretation of the law is appropriate".
So record labels invest in the careers of artists about $4.5 Billion annually in A&R and Marketing. Meanwhile, there are 200,000 infringing sites exploiting artists work and paying them nothing that we can see from the looks of the Google transparency report. To be precise at the time of the writing of this post there…
David Lowery, leader of the bands Camper Van Beethoven and Cracker, is pressing for higher royalties for musicians.
In public appearances and no-holds-barred blog posts, Mr. Lowery, 53, has come to represent the anger of musicians in the digital age.
To his detractors, Mr. Lowery is a divisive ranter who pines for a lost, pre-Internet economy. But his knowledge of legal and technological minutiae — he is a lecturer at the University of Georgia’s music business program — make his arguments hard to dismiss.
“He’s telling his personal story and standing up to the big corporations who claim to support songwriters, even as they work to undermine our rights behind the scenes,” said Paul Williams, the songwriter and president of Ascap. “He hasn’t flinched, and I think that’s given courage to other artists.”
New research has shown that individuals who play an instrument are more capable at identifying errors and correcting mistakes, and that these benefits apply to amateur musicians as well as professionals.
The Free Market Royalty Act would let record companies and performing artists collect royalties when their songs are played on the radio.
Mr. Watt’s bill would establish a performance right for AM and FM radio. In an ambitious move, it would also eliminate the compulsory licensing process that lets services like Pandora and Sirius XM circumvent labels by paying a rate set by federal statute. Instead, under the system proposed by Mr. Watt’s bill, radio and online outlets alike would have to negotiate for rights through a market administered by SoundExchange, a nonprofit agency, giving labels and artists the right of refusal.
(The bill would not apply to on-demand digital services like Spotify and Rdio, which usually negotiate licenses directly with record companies and publishers.)
The bill still faces the same political obstacles that have stifled previous efforts. Music groups praised it; Neil Portnow, the president of the National Academy of Recording Arts and Sciences, portrayed it as something of a chess move. “After years of the radio lobby claiming they want the free market to resolve the royalty issue,” Mr. Portnow said in a statement, “Mr. Watt has granted their wish.”
So record labels invest in the careers of artists about $4.5 Billion annually in A&R and Marketing. Meanwhile, there are 200,000 infringing sites exploiting artists work and paying them nothing that we can see from the looks of the Google transparency report.
To be precise at the time of the writing of this post there are 281,340 infringing sites on the report with the #1 offender having received over 7.5 Million DMCA takedown notices! Seriously, 7.5 Million… and Google can’t determine that this is a site “dedicated or primarily used for infringement.” Wow.
REDWOOD CITY, Calif. – Jackie Chavez has been trying to make it big as a singer and musician for five years now. It hasn’t been easy.
“It’s tough when you’re just doing it independently and you don’t have connections. You rely on pure talent. It’s really hard,” she mused.
Chavez released her self-titled album in the Philippines in 2011, and she’s trying to do the same in the U.S. For now, she earns her money through gigs. But she said selling her songs online through iTunes and Amazon has been especially challenging, because of piracy.
“As artists, we put our dedication and hardwork to create music. It’s so sad that they’re just going to copy it. They’re just going to pirate it,” she added.
Music piracy is stealing. And it does hurt the musician. Over the past decade, we have gradually shifted from physical distribution to digital distribution with the advancement of mp3 players, specifically the advancements of Apple and it’s “iProducts”. Digital distribution now accounts for more than 52% of the music industry in the US.
But there was a time during the shift when people had difficulty placing “value” on a digital product, with tangible products being of more value. This is what led people to believe that they aren’t really “stealing”, because a file can be duplicated an infinite number of times and not “cost” the musician anything. But it does cost us.
For anyone that didn't know 30 Seconds To Mar's award winning documentary
ARTIFACT has been out for quite some time now.
Artifact is a 2012 American documentary film directed by Jared Leto under the pseudonym of Bartholomew Cubbins.
The film is a documentary about the making of the 30 Seconds to Mars album This Is War and the band's battle against record label EMI.
Included in Artifact are several interviews, including one with neuroscientist Daniel Levitin, author of the popular science book This Is Your Brain On Music.
The film won the BlackBerry People's Choice Documentary Award at the 2012 Toronto International Film Festival.
I just bought it this morning and watched it and I can't believe how good it is.
There are interviews with a number of industry figures that add extra insight into the dire state of the business, with artists like Linkin Park's Chester Bennington and System Of A Down's Serj Tankian helping to represent the artist's perspective outside of the focal band. Enlightening first-hand accounts from former Virgin/EMI executives also aid in giving a more well-rounded picture of how the litigation was handled from the label's end, as well as discussing the purchase of Virgin/EMI by a UK equity firm that further complicated the lawsuit.
Even if your not a huge fan of the band you will enjoy this film thanks to it's exposure of the music businesses inimical and destructive ways.
And it's ONLY $14.99!