Uncle Sugar Says Feed the Hits, Starve the Rest

November 25, 2014 1 comment

Once again, Eric Schmidt (call sign “Uncle Sugar”) shows us why he will never understand the music business.

Many, many years ago, I attended a panel that included a finance executive from a major label.  He was describing how the record company allocated resources to the records they were working.

As he explained it, 90% of the resources went to the top 10 sellers.  This seemed absolutely idiotic to me.  I raised my hand and asked, “If you are allocating resources to the records that are already successful, how do you support the records that are yet to be successful?”

Pause.

“We think this is the best way to maximize profits.”

“But how does a record get to be in the top 10 sellers if you are starving it from promotion and marketing spend?”

Pause.

“They have to prove they have an audience.”

“How?”

Pause.

“We think this is the best way to maximize profits.”  Read [shut up kid, you’re bothering me]

“Luck then?”

“What do you mean?”

“I mean that you get to have a hit by being lucky.”

So fast forward to 2014 and we have:

“If you’re choosing where to invest resources, feed the products that have earned support, not the ones that need it.”

Right.

Guest Post: “Taylor Swift, Spotify and the Musical Food Chain Myth” by @DoriaRoberts #irespectmusic

November 23, 2014 Leave a comment

doria roberts promo photo

[Ed. Note: Chris Castle says:  We are so lucky to have the opportunity to publish this illuminating post by Doria Roberts, an outstanding discussion that shines a light on the issues facing all professional artists. I’m sure we’ll hear Doria’s strong voice many times in the future and will be the better for her.] 

“The most common way people give up their power is by thinking they don’t have any.” –Alice Walker

I cannot tell you how happy I am that the conversation about Taylor Swift and Spotify is happening. Maybe people will start listening to what independent artists like me and my peers have been saying for years now.

A little background for those who don’t know me: I’ve been a indie musician by choice for 22 years. In 1999, I was chosen to perform at Lilith Fair and quit my day job the following Monday. I attracted several major labels, but ultimately, I walked away because I felt the industry was not going to be supportive of me, the business model was almost laughable for a new artist with little leverage and an insidious law called the Work For Hire Copyright Law had been passed that year, which prevented copyright ownership from reverting back to artists and remained with record labels in perpetuity. Like, that means forever. Luckily, Sheryl Crow and Don Henley went to Capitol Hill and had it repealed, but, by then, I was determined not to be become a cog and had committed to my full time life as an artist.

And, you know, I had good run of it…

Fast forward to 2008 when everything was crashing. I don’t think people think of artists being affected in a failing economy, but we were. Gas prices were sky high as were flights so expenses went up and venues started paying less because fewer were able to come out to the shows because they were broke, too. And, for the first time in all my touring history my American dollars lost value going into Canada. It was sobering to say the least.

In the years preceding this, I saw a slow but very deliberate decline in my music sales, which was more than just supplemental income, it was nearly half of my income. So, I stopped touring full time to access the situation and come up with solutions.

The only solution I found that allowed me to stay true to who I am an artist was to stay put—which brings me to today.

Like clockwork, once or twice a week since I stopped touring full time in 2008, I get asked when I’m coming back to XYZ. And, like a broken record once or twice a week, I’ve had to say I can’t afford it. I’ve had to explain that not only have physical CD sales been down, but also the digital money I used to get from legal downloads all but disappeared. Instead of getting weekly payments ranging between $200-$750 from my distributor, I started getting an average $11.36, once a month from all streaming services combined. Yes, $11.36/month is what I get from all of them. That is not a sustainable business model for a truly independent artist.

While carefully building and maintaining a social media connection with my fan base and doing mostly one-offs in some of my bigger markets, I decided to do a full regional tour in 2012. And, while I am grateful to the people who came, I had miserable turnouts at most of the shows. In Buffalo, where the temp dropped to 30 degrees that night, I cleared $14 once the door was split with the venue. In Philadelphia, where I started my career, I lost upwards of $1,500-2,000 on one show because only 12 people showed up. It was the night of the Presidential debates, something I couldn’t have known when I booked the show months before. But, I still had to pay the venue, their door person and sound person, pay my band, pay for their hotel room and mine for three nights so we wouldn’t have to stay in NYC, paid for their flights (along with baggage handling fees for my cellist’s cello), my rental car, gas and food for myself and the band (breakfast, lunch and dinner). Same with DC where the venue wouldn’t even allow me to officially charge a door fee and where some people (my fans included) opted not to pay one even as a requested donation.

This is my reality and the reality of the many artists you care about.

I’m sorry if you think so, but music is not free. It costs money to make and it costs money to support via touring. It’s a “life cycle”. This “life cycle” is how I used to get my CDs out and how I used to see my fans two to three times a year in some places. It worked like this: Fans would come to my shows, they and their friends would buy my CDs and then I made another CD and went on a another tour and so forth and so on.

Simple.

All the money I made went to bills, touring, promotion and creating new music and so I had to keep my overhead low. No new cars (I had and still have my ’78 Volvo that I bought for $600 in 1996), no new shoes or clothes and I lived in a small 425 sq ft apartment for 12 years. 12 years. That’s how I did it. It’s not a sob story. It’s not a mystery or a marketing ploy. I am a working class artist. There is no rich-uncle-wizard-behind-the-curtain type situation here. This is how it goes when you make tough decisions to be true to your life and your life’s work. I have no regrets.

But, I’m seeing a lot of chatter about Taylor Swift and her supposed “greed”. If you’re saying it, you’re probably saying it because Taylor is already wealthy. But, what about artists who aren’t? If you or your friends are indeed one of those people, I challenge you and them to go to work for a year, bust your butt, do a good job (maybe even a great job) and then accept half of a year’s pay (or less) from your boss. I further challenge you to pay your bills and keep your other financial commitments from that pay all while keeping your enthusiasm for your job—which is kind of essential for you to even do your job.

Go on. I’ll wait…

As indie artists, for all intents and purposes, our fans control our careers, the ebb and flow, trajectory and course. For example, if I hadn’t raised enough via Kickstarter to do my last project, a tribute CD to folk legend Odetta, there wouldn’t have been a new CD to this day. Period. No new CD in eight years even though I was able to release six projects on my own before that and have enough music for about four or five full length CDs right now.

Another example: I haven’t been back on the road since 2012 because I assume my fans don’t want to see me or can’t afford to see me in NYC, Philadelphia, Washington, DC, Buffalo, NY and Charlotte, NC. Because of that, I can’t take a financial chance on Chicago, Seattle, Portland, Boston, San Francisco, Los Angeles, Austin and the like. And, just forget Canada, France, Sweden, Japan or Australia altogether. I’ve remedied this by doing online shows on a platform called StageIt and this has allowed fans as far away as Vancouver, Taiwan, Germany and Boise, ID to see me play. It works, but it isn’t ideal.

The point is, we haven’t just “given up”. It’s not that we don’t “want to” do it anymore. It is, painfully and honestly, simple math that mostly prevents me and others like me from doing what we do.

And, before the comments’ section gets flooded with snarky retorts like “Get a job.”, I will say this:

First, I have a job, one that I’m fairly good at and one that I’ve had for 22 years (or over half my life).

And, second, what if Bob Marley or Bob Dylan, Kurt Cobain or Joni Mitchell or Mozart, Frank Zappa, Joan Jett, Diana Ross, Prince or Aretha Franklin had actually listened when someone (undoubtedly and repeatedly) said to them “Get a job.”?

What would your life look like?

What happens to the first dance at your wedding to that special song, the one that made you realize you loved her? Or, the song you hum to your baby because it’s the only one that makes him less fussy? What would you be distracted by in an elevator ride with your creepy co-worker who wears the same shirt every day? Or, what would you focus on when a dentist is drilling a hole the size of the Grand Canyon in your head? And, how, pray tell, would you know when Jaws or Jason or Darth Vader is coming so you can yell your futile warnings at the screen?

Okay, granted, those last few examples sound frivolous but they’re serious considerations to make when you consider how music plays an integral and inseparable role in your life, from the mundane to the momentous. How it can be both ubiquitous and precious. That’s something to protect. That’s something to respect.

I want to tell you something: As a consumer and a fan, you are at the top of this food chain, not the bottom. You are not subject to the whims of popular culture, you are the arbiter of it. If you want to see less “fluff” in the music industry, if you want to see your artists remain authentic, creative and prolific beings and, if you want them to come back to your hometowns:

  1. Start buying our music again. Digital, hard copy, doesn’t matter, just pay for it. If you can pay $4 for the coffee you’re only going to drink once or $15 for a blockbuster movie you’ll see once, you can pay $9.99 for something meaningful that you’ll have forever.
  1. Stop using streaming services that only pay us $.0006 per listen if you don’t already own our music either via a legal download or a hard copy. Educate yourself. If you think the profits that oil companies make are obscene, I urge you to do some digging about what some of these streaming companies are really about.
  1. And, this is important: Set your DVRs on your favorite show nights and go to our concerts. If I had a dime for every time a person told me they weren’t able to make my show because it was the finals of DWTS/American Idol/The Voice, I wouldn’t be writing this post. I’d be sitting in a bungalow in Costa Rica sipping something fruity and delicious.

Simple solutions sometimes require difficult choices.

Oh, and this goes for independent movies, books, indie/feminist bookstores, small venues and small businesses, too.

Just know this: You have the power to change the cultural landscape around you. Use that power wisely.

© 2014 Doria Roberts/Chatterbox Blues

About the author:

Doria Roberts has been a full time musician, performing with her trusty acoustic worldwide and releasing her projects independently since 1993. In her spare time, she runs, owns and bakes sweet things for a bodega + deli in her adopted hometown of Atlanta while simultaneously trying to teach her dog Piper how not to eat holes in her freshly painted walls. Her Odetta tribute, “Blackeyed Susans” is scheduled for re-release in August 2015. Her latest appearance is the track “Poor Man Blues” on a Bessie Smith compilation entitled “The Empress of the Blues” featuring Abigail Washburn and Tift Merrit. This and most of her music is available on…iTunes.

Social Media:

Twitter: @doriaroberts
Instagram: DoriaRoberts
Vine: DoriaRoberts
Tumblr: DoriaRoberts

Will the European Union Break Up Google and Should They Include YouTube?

November 22, 2014 Leave a comment

When Kim Dot Com was arrested, a reporter asked me if I was surprised.  This reaction completely went against the mood of the moment about the fellow.  You’re not? (Incredulous)  Why not? (Scandalized).

Because if you get down on your knees and beg to be punished, don’t be surprised if you are.

I have the same reaction to news that the European Parliament is considering a resolution that Google should be treated as a monopoly in Europe and be “broken up” or required to divest itself of its search business.  According to Reuters:

The European Parliament is preparing a non-binding resolution that proposes splitting Google Inc’s search engine operations in Europe from the rest of its business as one possible option to rein in the Internet company’s dominance in the search market.

European politicians have grown increasingly concerned about Google’s and other American companies’ command of the Internet industry, and have sought ways to curb their power. A public call for a break-up would be the most far-reaching action proposed and a significant threat to Google’s business.

The draft motion does not mention Google or any specific search engine, though Google is by far the dominant provider of such services in Europe with an estimated 90 percent market share.

So how did this come to pass?  It’s simple:  Once again, Google overplayed their hand.  Supposedly the master of public relations and behind the scenes play, Google–and in particular Eric Schmidt (call sign “Uncle Sugar”)–dragged out the European Commission’s antitrust investigation for four years.  But oopsie–that also coincided with the term of the antitrust official of the EC with whom Schmidt had become BFFs.  Uncle Sugar left out the closing part.  When you spend four years working on a deal with a guy, you want to be thinking in terms of that closing bit.  Especially when you know going in that the guy you’re schmoozing is LEAVING ON A DATE CERTAIN.

What Google was truing to avoid was/is something called a “Statement of Objections” that is an administrative proceeding in EC law that allows the imposition of a fine for violating the EC competition law.  That should be a huge amount of money–in Google’s case some estimates are $10 Billion–and it comes with service after the sale, meaning regulatory oversight.

What has become apparent in the not one, not two, not three but an unprecedented four settlement negotiations with the OUTGOING competition commissioner, is that Google has in fact violated the laws that they are avoiding prosecution under.  And even if Google is prosecuted now, they’ve still had an extra four years of operating profits, an extra four years of expanding their control over European governments and an extra four years of extending what Public Citizen called Google’s “soft power”.

However, what has also happened in the intervening four years is hockey stick increase in the public distrust of Google and extreme dissatisfaction with the way the EC was handling the Google investigation.  All the supposed “settlement” proposals that Google made were that special kind of “we think you’re an idiot” approach that anyone who has dealt with Google will immediately recognize.  A fish rots from Uncle Sugar down, don’t you know.

What has happened instead is that there is a full throated movement now among Members of the European Parliament to do what’s worse for Google than paying almost any fine:  Divestiture.

It is possible for governments to require extremely large (check), arrogant (check) and unrepentant (check) violators of antitrust law to divest themselves of certain assets.  This is a relatively normal process with mergers (we’ve even seen record companies required to do this as a condition of approving the merger), and that’s a different breed of cat altogether as it’s part of an overall negotiation.

But to cause divestiture with a company that has violated the antitrust laws is far less common.  We saw this with the break up of the Bell system in the US (United States v. AT&T, 552 F.Supp. 131 (D.D.C. 1982) for those reading along).  The reason for the AT&T case was that the FCC accused the company of using monopoly profits from its Western Electric subsidiary to subsidize the costs of its network.  Sound familiar? I’ll come back to this.

It’s important to note that the way that this break up would be accomplished is not through the European Parliament as Deutche Welle reports:

While the European Parliament lacks the authority to break up corporations and has no power to initiate legislation, such a resolution would increase the pressure on the European Commission to take action against Google.

“It’s a strong expression of the fact that things are going to change,” Gary Reback, a United States attorney who has filed complaints against Google on behalf of companies said, adding “The parliament doesn’t bind the commission for sure, but they have to listen.”

According to Reuters, the resolution was co-sponsored by German center-right Christian Democrat lawmaker Andreas Schwab and Spanish centrist Ramon Tremosa earlier this week. Schwab told Reuters it was “very likely” to be adopted by his own parliamentary group and it was also supported by the main center-left group.

The new anti-trust chief for Europe, European Competition Commissioner Margrethe Vestager, said she would take some time to decide on the next step in a long-running investigation into Google, after her predecessor, Joaquin Almunia, had rejected a proposed settlement with Google which would have ended the matter.

Regardless of whether the European Parliament has the authority to break up Google, it is not a good thing on many levels for even a nonbinding resolution to be adopted in favor of that result.  It’s like the Parliament is telling the public we don’t like Google, we’re keeping an eye on Google and we really don’t trust Google.  And the signal it sends to the new European Competition Commissioner is–go for it.

But that’s not really the end of it.  What about YouTube?  Extremely large (check), arrogant (check) and unrepentant (check) violators of antitrust law.

If Google dominates search in Europe, YouTube is just another search vertical–video search.  And we know that Google used its monopoly profits from search advertising to subsidize YouTube for years.  We’ve seen in the indie label case filed against YouTube with the same European Competition Commission that YouTube certainly behaves like a monopolist–because YouTube is a monopoly.  So Google used its monopoly profits to create a new search monopoly with YouTube and then used its monopoly control to try to bully independent labels.

It also appears that YouTube was unable to use the brass knuckle negotiation tactics it’s so famous for to bully the indie labels into dropping their complaint in Brussels as a condition of closing the Music Key license.  But the case stands out as a prime example of what should be done if the divestment train gets rolling.  Google search and YouTube are just two sides of the same coin.

And of course what it all comes down to is that Google uses its monopoly position to dominate smaller players, all the while harvesting data to profile Google’s search users and music fans on YouTube.  And we all are contributing to Google’s ultimate monopoly–data.

Google shares data across all its platforms which itself a kind of monopoly subsidy across all it’s platforms.  So you can’t really accomplish the goal if all you do is divest the search platform.  YouTube itself must also be spun off with separate management and transparency in data sharing.

As Garth Brooks said, “I’m telling you, [YouTube is] the devil.”  Who never would have survived without subsidies from Google’s monopoly profits.

Sirius Must Go To Trial with Flo & Eddie–“Baffling” Request to Appeal Denied in California

November 20, 2014 Leave a comment

Order Denying Sirius Certification

While the Court is largely unpersuaded and sometimes baffled by Sirius XM’s repetitive or off-point theories about how reasonable jurists might read an unwritten exclusion into §980(a)(2), the Court will not analyze the potential grounds for difference of opinion because certification of this Order suffers from an even more basic deficiency. At this stage in the litigation and under the operative scheduling order governing the case, certification of the Order for immediate appeal would delay rather than materially advance the termination of the litigation; therefore, the Court denies the motion.

This case is moving swiftly toward trial and a final resolution that will be appealable to the Ninth Circuit in the customary manner allowed by the Federal Rules of Civil Procedure. The Court has already ruled on liability as to Sirius XM’s wrongful conduct – publicly performing Flo & Eddie’s sound recordings without its permission.

Rut ro.

Is Irving Azoff sending a signal to all digital services and is Pandora receiving 5×5?

November 20, 2014 Leave a comment

Is Irving sending a signal to all digital services?  Oh, I just betcha he is.

There’s actually a pretty simple answer to the very public demand letter to YouTube from Irving’s Global Music Rights.  If Irving’s GMR has the public performance rights to these high profile songwriters it’s probably because the writers transferred their songs to GMR from wherever they were.  The songs had to start somewhere.

If those songs transferred out of the ASCAP, BMI and SESAC environment, then it’s likely that none of them are subject to blanket licenses granted by those societies.  That also means that those songs aren’t part of the US government’s iron fisted control over songwriters, either.  Which means that unlike at least ASCAP and BMI, GMR is under no obligation to license anything to anybody.

That means that it’s possible that anyone who had a blanket license with the societies now has to also have a deal with GMR.  If you think that is unusually fragmented, send your thank you note to the U.S. Department of Justice, followed closely by Pandora.  The dynamic duo of DOJ and Pandora have been doing their best to screw up collective licensing in the U.S. for years.

Well, Pandora, now you’ve got it.

Here’s how it could work.  Even though artists are subject to the compulsory license for sound recordings that is the backbone of Pandora’s business, songwriters that are not subject to the Department of Justice are free to say no.  That would include GMR songwriters, you know, the ones who write the hits.

If GMR songwriters decide they don’t want to be in Pandora, then Pandora can’t use the songs.

So YouTube may stumble around trying to come up with a theory other than Lex Google Sum, but they, too, are on notice that they don’t have rights to these songs.  That’s called “red flag knowledge” in the trade.  And red flag knowledge of infringement trumps the DMCA safe harbors.

Just in case you thought that 100,000,000 take down notices didn’t do the trick.

So Irving Azoff is broadcasting his intentions if you ask me.  Is anyone listening?

Music Fan Survey Preliminary Results: What is Bit Torrent?

November 19, 2014 Leave a comment

Well, we thought about this.  Here’s another preliminary snapshot from the Music Fan Survey, this time about Bit Torrent.  (Take the survey here.)

bit torrent prelim

bit torrent answer choices

Music Fan Survey Preliminary Results

November 18, 2014 2 comments

As some of you may have noticed, we are conducting a casual survey of music fans.  While we are still collecting data, here’s an interim look at a couple of the results.

I have to say that I’m not surprised by any of these results, but it is worth noting that some are wildly opposite to what some companies would have you believe (Pandora, Google, Sirius, Spotify).

Primary Source Interim

recommendation

Monthly Streaming Spend Interim

streaming spend

Artists on Social Media Interim

social media detail

Follow

Get every new post delivered to your Inbox.

Join 558 other followers

%d bloggers like this: