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Updated: A New Twist on Artist Consent Provisions: Protect Your Right to Say No to @mcdonalds ads on pirate sites

September 26, 2012 Comments off

A recent blog post on The Trichordist has sparked some debate about how much artists can control advertising on pirate sites that rip off their work.  This post will consider contract rights that artists have and how these rights to approve advertising can achieve that end.  A particularly important topic raised by Ari Emanuel at the recent D10 conference.

It has long been accepted practice in talent agreements to give artists consent rights over how their recordings are used in commercials, certainly during the term of the artist agreement and after the term if the artist is recouped.  Even if the artist is unrecouped, there are some categories of advertising that are verboten and that list has grown over the years–certain drug products, so-called “feminine” products, political advertising, tobacco advertising, alcohol, and a few others.  A comparable provision relates to motion picture, television and videogame licenses based on the rating of the movie, show or game.

These clauses are contractual reactions to artists who do not want to be associated with certain products or the creations of others who invoke certain behaviors that the artist finds offensive and at odds with their brand.  Another way to look at these provisions is that they sound like “moral rights” (especially the right of “integrity”) but are expressed in a private contract right as opposed to a public law proscription.

While particular provisions may vary, these contract rights represent years of table pounding by artist representatives who came before, and are now pretty standard gives, so standard that they are often in the first draft of a recording agreement.

What is now becoming alarmingly common (as we noted here on MTP recently), unlicensed song lyric sites rip off a song’s lyrics (violating the songwriter’s copyright interest and undermining the value of the “lyric reprint rights” and sheet music rights of the songwriter).  These illegal sites wrap song lyrics in equally illegal photographs of the artist and often have links to videos that the artist may have voluntarily placed on YouTube.  (It seems that YouTube is the only video site these people link to.)

So far, this may sound like an unauthorized fan site, right?  Except that in every case we have looked into, Google has reportedly indexed over 500,000 pages at each of these sites and the sites boast of hundreds of thousands of lyrics in a searchable index.  Does this look like a fan site?

Another way sites like Lyrics007 differ from most fan sites is that they sell advertising–lots of advertising.

QUICK OVERVIEW

According to Webdetail.org, “Lyrics007.com has an estimated value of $ 999,354 USD and receives about 432,594 pageviews per day. The site has Google Pagerank of 5 and ranked # 2,433 in the World based on Alexa traffic ranking. This domain is currently hosted by SoftLayer Technologies with IP address of 75.126.235.178 on the server that is located in United States. With nameservers: dns7.hichina.com dns8.hichina.com.  And has Adsense Publisher ID: pub-0919305250342516.”

In order for the site to publish advertising, the site must have a deal with an adserving company.  In the cases we have seen so far, the adserving companies publishing advertising on these pirate sites ultimately resolve back to a Google address through AdChoices (which Google joined reluctantly it seems) and Doubleclick, owned by Google.  (Ad Choices is an industry group that some think was put together to avoid regulation but which actually does a pretty good job of masking where a particular ad is coming from at least on a quick review.)  AdChoices is an icon and brand that’s associated with a process rather than a particular adserving company, several companies use it.  However, if you hover over the “AdChoices” icon, you can see a link–that link is pretty convincing evidence of who is serving the ad.   Try hovering over AdChoices ads on Lyrics007–all the ones I tried it with resolve back to Google or Doubleclick (owned by Google).  Try the same thing on Yahoo! or MSN.com (two other users of AdChoices) and you will see the link resolves to a Yahoo address or to a MSN or Microsoft address.  So–and stay with me here–even if you see an AdChoices logo you can still make a very educated guess as to who is actually serving the ad to the pirate site–and making the money, of course.  In this case, if Webdetails is right, it’s actually easier because we already know the site’s Adsense publisher ID (which is how Google knows who to pay their share of ill gotten gains…I mean advertising revenue).

And then of course you can look at the source code on the page which also tells you the AdSense publisher ID:

So Google indexes the pages, includes the pages in search, then drives traffic from search to these illegal sites where they sell advertising based on CPMs derived from traffic that Google drives to the site.

The advertising published on these sites is not low end or shady products–Google advertises its own Google Play music service as well as brands like McDonalds, Levi’s, Macy’s and Google’s own Chrome web browser.  When the fan sees advertising of quality products like these on a website, it adds to the “legitimacy” of the site because the fan–rightly–says to themselves that it must be OK or McDonalds wouldn’t be advertising there.

So how does this phenomenon relate to artist consent over advertising?  As you can see from the screen captures on these lyric sites (and the same is true for many other pirate sites), advertisers are connecting their brands to the artist’s name and the title of the song the artist recorded and probably wrote or co-wrote.  This is not very different from using the artist’s name in the actual advertisement itself or an “implied endorsement” of the product.  While there’s not much the artist can do to actually stop Fortune 500 companies from profiting from piracy (directly in the case of the adserving company), the artist can refuse to do business with the offending company and point out to whoever will listen how the company’s shortcomings let to the juncture.

In an even more complex example, one blog found that Brandi Carlisle’s new album was being advertised on a pirate lyric site.  I don’t believe for a second that Brandi Carlisle or her label had any idea that the ad would show up on the pirate site.  They probably have a deal with Google to advertise the record, and Google decided to serve the ad to publishers in their network and could care less whether the ad shows up next to lyrics from a song by another artist that were ripped off.

It would not be a very big leap for artists to include in their recording agreements and touring agreements a provision that prohibits the record company or tour promoter from advertising the artist or a tour with the artist on websites that promote illegal activities.  (See the screen capture below with an ad for the Warped Tour.)  A further step more appropriate to the touring context would be to prohibit the tour from taking sponsorships from companies like McDonalds, Verizon and Levis that advertise on pirate websites, knowingly or unknowingly.

Will all artists have the leverage to negotiate these provisions?  No, they won’t.  But 50 years ago only a very small handful of artists had the power to control their music being used in commercials–now practically all do.

When artists stick together, eventually they get justice.

PS  For an important and eye opening discussion of the rights of advertisers to control how their brands are used by companies like Google, see Harvard Business School Professor Ben Edelman’s excellent piece “Toward a Bill of Rights for Online Advertisers

If you want to call McDonalds you can reach them at:

McDonalds Global Communications

Office: (630) 623-3678 Facsimile: (630) 623-8843

Heidi Barker Vice President heidi.barker@us.mcd.com

YouTube Serves POTUS and Thai Teen Girls?

September 24, 2012 Comments off

The wisest among you learn to read your portents well
There’s no need to hurry because the road is all downhill to Hell…

From Don’t Stand Still by The Original Snakeboy

Firedoglake and Redstate have done a great job in focusing public attention on the scandal of Google’s profiting from human trafficking by means of Android applications (see Jane Hamsher Rep. Carolyn Maloney: Google Android Sex App “Appalling Beyond Belief” and Breeanne Howe “Google Profits from Sex Trafficking“).

But one thing we weren’t quite prepared for is the kinds of videos that Google sells ads against on YouTube.  Try searching YouTube for “Thai teen girls” and this is what you get:

So in case you don’t know about Pattaya girls, let’s Google them–and check out the paid ad:

So if you were to ask Google about this, they would probably tell you about all the money they’ve given to trafficking organizations (perhaps the International Justice Mission, for example).

But Jane Hamsher has an interesting point about the bona fides of such contributions:

Google’s response was to promote its Google Ideas Initiative [run by the Most Interesting Man in the World], which burnishes its image with NGO’s working in the field but really didn’t address its own role in profiting from advertizing of what they acknowledge is an annual $2.1 trillion industry.  Or what they’re doing to limit the use of Google’s networks in its perpetuation.

So given that Google is making so much money from advertising on human trafficking, I guess we shouldn’t be too surprised to see this ad:

A little free advice to the Obama campaign–don’t buy (or take donations of) that run of site ad inventory.  There’s no telling where you might end up.  Which is exactly what happens when Google serves ads for legitimate brands to pirate sites.

Amanda Palmer redux

September 22, 2012 Comments off

I did an interview this week with Amy Vallancourt-Sal of Classical Revolution PDX (Portland, OR) about the current state of classical music and also about Amy’s post regarding Amanda Palmer’s employment relationship with some of her musicians.  That story was moving faster than either of us thought–the day I posted the interview, Amanda Palmer “found the money” to pay the local players that she wasn’t intending to pay.  Amy had already written a supportive post congratulating Palmer and posted it, so be sure you read “Hooray Amanda” so the interview is in context.

Maybe it’s my sideman bias, but my takeaway from the entire tableau as well as what I learned from Amy about Classical Revolution has very little to do with Amanda Palmer.

1.  The Artists Got it Sorted:  The individual artists and musicians were able to express their ideas to each other and didn’t need any intermediaries.  This is really important (at least to me).  The artists are perfectly capable of expressing themselves to each other, and didn’t need a manager or lawyer to do it for them.  From Amy, to Jason Colletti, to David Lowery and back to Amanda this all worked out very well.

2.  The Unions Still Matter to the New Boss:  Having said that, it’s also important to recognize the role of the unions in this.  Remember–when you set yourself up as the star, you are also an employer.  There are rules that apply to all employers, and just because you once were a street performer, doesn’t mean the rules don’t apply to you.

I have no idea whether any of this would have happened, but after looking at some of the shows Palmer was playing, I think I recognized some union halls on the list.  Meaning that particularly in states like California and New York, the halls where Palmer was playing were under the jurisdiction of the stagehands union.  If the American Federation of Musicians organized a picket line, such as an informational picket line, I seriously doubt that the stagehands would have crossed it.  And good luck humping trap cases up the stairs at the Fillmore without the stagehands.

This is what unions are there for–to help with the clout of solidarity when a sister or brother is treated unfairly by an employer.

3.  It Helps to Have Been Signed before 2004:  I wrote an article in 1999 titled “Why Free Agency Matters: The Coming Changes in Record Company Artist Relations” (remarkably prescient if I say so myself and I do) in which I argued that artists who have been signed to a major label and who “go indie” after becoming successful on a major (the “free agent” reference) are able to capture much of that record company investment in making them famous.  That’s more important than ever when entering the Billboard top 200 album chart at #10 now takes about 10% of the sales it used to in 1999 (depending on the competition that week).  So there are likely many factors at work with Palmer’s famous $1.2 million.

4.  Steve Albini:  Well…he’s Steve Albini.  Maybe a cruise on the Love Boat with Lefsetz would do them both some good.

5.  What if It’s Just About the MusicKillick is one of my favorite artists.  Killick hasn’t raised $1.2 million on Kickstarter, and frankly I don’t think that’s a very likely outcome.  To state the obvious–the most popular is not the best.  It’s like guns and butter, there’s a continuum between Tweeting every breath you take and practicing for hours under a bare lightbulb (which was how Nelson Symonds spent his days according to the legend).  I still remember seeing Nelson at Rockheads, but I couldn’t tell you a single Tweet by any artist, really.

Eric Harvey summed it up well:

It’s easy to position Palmer as the living embodiment of a successful 21st-century DIY musician, and many have. But such a designation leaves out the most important details. Amanda Palmer is a successful 21st-century musician/public figure/entrepreneur, each title feeding equally into her self-created brand. She has effectively translated the ideas that drove her as a street performer and cabaret act (no distinctions between audience and performer), and her more traditional, label-supported early-2000s work, into a new paradigm, much like Kickstarter has put the idea of community funded DIY projects on steroids. This makes Palmer an interesting subject for discussions of music and technology, but far from a workable model for up-and-coming artists. Appropriately, she ended her “trolls” blog post with a request that would seem self-evident for most musicians: “Do me a favor… keep talking about the music.” If the music were the most noteworthy thing about Palmer’s career to this point, that plea would be self-evident.

6.  Classical Music Merits Your Support:   The most important thing I learned from Amy in my interview is that it’s well to be reminded how much work it takes to be able to call yourself a classical musician.  To paraphrase a great daughter of Texas, classical musicians do everything Amanda Palmer does but backwards and in high heels.  While reading.

I highly recommend going to hear a full symphony orchestra if you never have, or do it soon to remind yourself of what it sounds like if you go infrequently.  It will give you a whole new perspective on amplification for starters, and musicianship for afters.

Mr. Pandora Goes to K Street: It’s all about the lobbying bucks

September 21, 2012 Comments off

Digital Music News has an interesting story about the op-ed by Ray Hair, president of the American Federation of Musicians, calling out Tim Westergren’s latest lobbying trip to Washington (this week).  For the benefit of the Valley Boys, the AFM is a union, you remember those?  Those are the things you don’t have in Silicon Valley.  Unions do this thing called collective bargaining–and no, that’s not VCs setting a valuation.

Here’s the money quote (so to speak) from Tim:

“The current system for establishing royalty rates is astonishingly unfair. Fairness demands that all music related rate settings utilize the same 801(b) standard.”

Ah, I see.  “Fairness demands”.  Love how they switch into the passive voice when they don’t want you to know who is actually doing the demanding.  Could it be….Wall Street?

So what Tim is really saying is that “fairness demands” that Pandora make more money.  And the quickest way to do that is to cut its royalty obligations.  Of course–Pandora could come up with an innovative business model and actually make more money.

And maybe that is exactly the rub.  If you take Sirius XM as an example, Mel Karmazin’s recent interview with Jim Kramer on Mad Money tells the tale.  In its darkest hours a few years ago, Sirius came to the artists and asked for a rate reduction–a 50% rate reduction which they got.

Now–just a few years later–Karmazin expects to be sitting on over $1 billion in cash by the end of this year.

MEL KARMAZIN: Free cash flow is what enables you to buy back your stock, make acquisitions, pay down debt. And I believe free cash flow is an important metric. Our free cash flow now, is growing– it’s extraordinary. Before the merger we had negative free cash flow of $500 million. Negative free cash flow. This year we will have $700 million of free cash flow. We haven’t given guidance for next year. Analysts have us at a billion of free cash flow and continuing to grow. So it’s a great start.

Kramer asked him what he would do with it.  And of course, the top of the list was a bonus payment to the artists who cooperated with Sirius to help it through the bad times.

Actually–not.

Acquisitions, paying down debt, stock buy back, dividends.  All those were mentioned.

Nothing for the artists.

So while Pandora may not be “profitable” now, I’m sure that was no more a concern for Pandora’s IPO underwriters than it has ever been for any other Internet company, including Facebook and Zynga.  The point is that Mr. Pandora is going to K Street now because these are 5 year deals on rates and the current one expires in 2015.

And Pandora anticipates being profitable sometime between now and 2020.

So they will–of course–be standing in line right behind Mel Karmazin to bonus the artists who invested in their company in the bad times, right?

Fairness demands no less.

Hope in Almunia’s Fordham Speech: Is Someone Big Enough to Challenge the Leviathan?

September 20, 2012 Comments off

When the European Commission’s Competition Commissioner Joaquín Almunia first started settlement discussions with Google regarding its dominant position and bad behavior toward competitors in Europe, he expressed a preference for a settlement over a “Statement of Objections” (essentially a finding by the Commission that Google likely violated the European antitrust law and ought to change its business).

He said:

“I believe that these fast-moving markets would particularly benefit from a quick resolution of the competition issues identified.”

That was May 21, almost four months ago to the day.  While one can sympathize with Mr. Almunia in that the issues are complex and the defendant well-heeled and uncooperative, if you have had any experience with Google you know that their favorite game is obfuscation, delay with almost unbelievably legalistic and litigation oriented methods.  While the markets may be fast moving, Google descends on those markets like a slow moving hurricane, using its tremendous financial strength to exploit every leak in the roof.  Until the roof caves in.

Case in point: Google Books.  When the case was filed in 2005, did anyone seriously think at that time that seven years later Google would have scanned over 10 million books (no one but Google knows the actual number).  That seven years later Google would challenge the authors’ and photographers’ right to be represented by their union–an issue that Google had not challenged for seven years of litigation?  A “quick resolution”?

Case in point: YouTube.  When Google acquired the company in 2006, did anyone think that they would use their monopoly profits from search to subsidize the company for six years and on to the forseeable future?  Did anyone think they would adopt the “notice and shakedown” business model?  And get away with it? And the Viacom case and related class action still grinds on.  A “quick resolution”?

I could go on.

I’m encouraged by Mr. Almunia’s statement quoted by Bloomberg that settling the antitrust case was an option he would not keep on the table “forever”:

“‘To explore the possibilities of an [antitrust] settlement is not open forever,’ Almunia said. He added: ‘I have no deadline.’”

I feel confident that Mr. Almunia is probably too good a poker player to actually say publicly what his deadline is, so I seriously doubt that he has not defined in his own mind the limits of what good public policy demands, not to mention his own patience.

I’m sure he knows what anyone who has dealt with Google has learned, usually the hard way.  That line that we won’t cross is way, way, way in their rear view mirror.  They are not having a serious negotiation with Mr. Almunia.  They’re just trying to extend the day that they bring in their litigators or they somehow maneuver Mr. Almunia out of his job in exchange for a more compliant official.  They have no intention of settling anything.  There is no intention of a “quick resolution”–that is already four months in process and producing no fruitful progress.

But I am encouraged that Mr. Almunia is standing up to the Leviathan of Mountain View.  Someone has to.  Not that he’s looking for free advice from me, but I’d suggest to him that he may as well file his Statement of Objections.  Google has managed to play the okie doke with him for four months–each month that passes is torture for the entrepreneurs who Google is bullying, and each month is just more cash in Google’s pockets to fund the inevitable litigation.

While hope springs eternal, eternity is too long to wait.

September 19, 2012 Comments off

Originally posted on paidContent (old):

In a recent column, “Internet pirates will always win,” New York Times writer Nick Bilton suggested that stopping online piracy is futile because the pirates’ techniques evolve faster than efforts to stop them. This view is an article of faith for many in the tech community but that doesn’t mean it’s true.

Michael Smith, an economist from Carnegie Mellon, is one person who doesn’t buy the “pirates always win” meme. At a legal seminar in New York last week, Smith pointed to empirical data that paints a more nuanced picture of the piracy situation. He also called out “three myths” he says are clouding the debate:

Myth #1: You can’t compete with free

This myth is often invoked by content owners to justify heavy-handed enforcement measures against piracy sites and individual consumers. After all, why buy a song or movie when you can simply download it for free at…

View original 467 more words

Google gives the DMCA Okie Doke on the Utoopi App

September 19, 2012 2 comments

WASHINGTON, DC  –  Rep. Carolyn Maloney (D-NY) spoke today about a destructive illegal escort service app. Google listened, and then did the right thing, removing the app from the Google-hosted Android marketplace.

Earlier today, Congresswoman Maloney was notified about an app marketed under the name “Utoopi”, designed to be used for locating escorts using mobile phones and tablets that operate the Android operating system. The app offered to connect users with escorts and, according to its own description, “all the sex you want” in four cities, including New York.

Immediately after learning of this disturbing app, Representative Maloney fired off a letter to Google (attached) saying in part:

“…It is appalling beyond belief that someone would try to market an ‘app’ like Utoopi, which is about illegal escort services plain and simple. I urge you to ban the promotion of sex services and immediately remove Utoopi from the Android ‘app’ marketplace hosted by Google.”

Google listened, and today took down the app from the “play.google.com” marketplace.

Background

In April, Reps. Maloney and Marsha Blackburn (R-TN) requested – and received – clarification of Google’s policies relating to escort service ads on the Google service. In response, Google reaffirmed its policies against advertising such services. Find out more at http://maloney.house.gov/press-release/reps-blackburn-and-maloney-join-efforts-address-online-promotion-human-trafficking.

We have to be happy that Breeanne Howe (Redstate) and Jane Hamsher (Firedoglake) focused attention on yet another way that Google profits from human misery–specifically the Utoopi app.  Rep. Maloney took quick and decisive action, and sent the letter described above to Larry Page describing her expectations in no uncertain terms.  After some wriggling, Google took down the offending app.

This is a good thing, certainly, and we’re glad that it happened.  But those of us who have dealt with Google before recognize what just happened.

Google (a) only reacted when they pretty much had no other choice, and (b) did the least they had to do to stop the sunlight.  This is what we call the “DMCA Okie Doke.”  Meaning, they preserved the essential element of Internet Freedom–getting away with it.  They didn’t fix the real problem which is an unmonitored Android Market.  (If you use your imagination just a tiny bit, you can find plenty of other questionable apps in the Android Market.)

Case in point?  Grooveshark.

On April 6, 2012 the House Judiciary Committee’s Subcommittee on Intellectual Property, Competition and the Internet held a hearing about piracy.  Google Senior Vice President and General Counsel Kent Walker raised his right hand and told the American people that “We must work together to target the ‘worst-of-the-worst’ rogue foreign websites without unintentionally impeding legitimate interests of those innovating and using online services to drive economic growth and global freedom.”   Evidence of Google’s intentions?

Google removed the Grooveshark app from the Android Market.  (Grooveshark is the shadowy company that is generally regarded as a “worst of the worst” distributor of pirate content.)  When did Google remove the Grooveshark app?

April 6, 2012.  That is–the morning of the day that Walker was testifying to the American people.  Did he tell the Congress that Google had taken down the app only on the day of the hearing?  Not really.  If you weren’t following along in the news, you wouldn’t know of the suspicious timing and you also wouldn’t know that Apple had removed Grooveshark from the Apple App Store a year before.  But Kent Walker could raise his right hand to God to tell what passes for the truth at Google.  (For another example, see Eric Schmidt’s testimony to the Senate regarding the Google nonindictment agreement on violations of the Controlled Substances Act.   See also “LYING: Cadets violate the Honor Code by lying if they deliberately deceive another by stating an untruth or by any direct form of communication to include the telling of a partial truth and the vague or ambiguous use of information or language with the intent to deceive or mislead.”)

So just like Google’s reaction when Congresswoman Maloney called them out on the Utoopi app, Google removed Grooveshark when they were backed into a corner–and a pattern is developing.  Only when Google was backed into a corner did Google do something that they could pawn off as the right thing.

But not to be stopped, Techcrunch tells us that “[On April 18--less than two weeks after Walker's testimony], Grooveshark makes its triumphant return to Android, albeit not through the official App Market. Playing on Android’s ability to install third-party applications through the browser, Grooveshark has taken on the responsibility of distributing the application themselves.”

Presumably, Utoopi can do the same.

The Grooveshark take down is relevant because Google put the app right back up in August when they thought no one was looking according to PC World:

The music streaming application Grooveshark is available again for Android devices…after [Kent Walker told the Congress] it was removed by Google from its application market.

Grooveshark, which is run by Escape Media Group based in Gainsville, Florida, has had a rocky time with mobile application stores. Apple pulled Grooveshark from its App Store in August 2010 just days after it launched due to copyright-related complaints.

The company issued a statement saying that it had worked with Google in order to be reinstated.

Google did remove the Grooveshark app again around the end of August after enough people complained.  It should not be lost on anyone that this occurred just as Google is in a process of renegotiating many of its music deals, especially for YouTube.  So while Google can threaten to complain to Congress about certain deals if they don’t get their way, that only works with certain people.  Grooveshark is an equal opportunity thief.

But Google’s reaction to Congresswoman Maloney is reminiscent of what Google does with DMCA takedown notices–they surely must know the work is being infringed, but they will only move if it suits them or if they are ordered to do so and will allow it to go right back up once the danger has passed.  What we call the Google Okie Doke.  And Congresswoman Maloney should not be at all surprised if they run the Okie Doke on her with Utoopi.

It’s nothing personal, it’s just business.

Oh sorry–no, it’s nothing personal, it’s just Internet Freedom.  And this is what monopoly looks like.

But we have to be glad that dumping the Utoopi app may save a mom from having to pick up their child after school–at the morgue.

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