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The Artists, United, Can Never Be Defeated

November 29, 2012 Comments off

Yesterday on Capitol Hill did not quite go the way that the Internet Radio Fairness Coalition had in mind.  At all.  More about that will be written.  Mr. Chaffetz–more about him later, too–had asked Mr. Goodlatte for a hearing on the so-called Internet Radio Fairness Act, and a hearing he got.  I would say mostly a “listening” but that’s good, too.  The hearing was scheduled for 11:30 am and in a brilliant move, David Israelite of the NMPA scheduled a performance by five of our community’s top songwriters in an adjacent meeting room just prior to the IRFA hearing.

The writers were Lee Miller performing his song “You’re Gonna Miss This” (as recorded by Trace Adkins), Kara DioGuardi performing “Sober” (as recorded by Pink), BC Jean performing “If I Were a Boy” (as recorded by Beyoncé), Desmond Child performing his song “Livin’ on a Prayer” (as recorded by Bon Jovi), and Linda Perry performing her song “Beautiful” (as recorded by Christina Aguilera).

Of course there was a masterful political element to the timing and messaging of these songwriters, but first think about this–these writers performed their songs with a single instrument accompanying them.  Just one instrument and the voice, about the simplest instrumentation you can have.

And of course–the song.  These songwriters reminded the audience comprised of Members and staffers of the importance of the songwriter, and they did it by letting the songs speak for themselves.  By performing these songs–not with the vast instrumentation and production values of the recordings that interpreted the songs, they really and truly demonstrated conclusively that which every record company executive knows that is not a hype, not a self interested spin–it really and truly does all start with the song.

The combined Pandora earnings for these songwriters in the first quarter of this year was $587.39.  For over 33 million spins.

And Tim Westergren wants to pay them less.

It’s too bad that Tim wasn’t there for the sing along that Desmond Child led on the chorus of Living on a Prayer.  Since he used to play in a band and all, you would have thought that Tim would naturally gravitate to hanging out with his own kind.

I guess Tim was too busy to show up for a reminder of the investment that these writers are making in his company by giving him a break on royalty rates that all songwriters richly deserve.

When Pandora, and the NAB, and David Pakman and Google complain about royalty rates, remember that’s just about greed.  By handling themselves the way they have, all these people have demonstrated once and for all that they just don’t get it.

That’s OK, they are not our friends.  We don’t have to be friends with everyone we do business with.

But here’s the real deal: Without great songs there are no great records and without great records there is no Pandora.

And that’s the fact.

For Those Who Think the FTC Investigation of Google Doesn’t Implicate the Music Business

November 28, 2012 Comments off

When you read about the Federal Trade Commission’s investigation of Google, you may think this is just another example of Google’s getting away with it through crony capitalism.  You may think that it only involves maps, yelps, finance, and other products by companies that Google is ripping off and then jamming down in search.

Does this directly involve music and movies?  Yes, because Google is extending its search monopoly to video search by subsidizing YouTube with Google’s monopoly profits.  I’ve written about why Google should be forced to divest YouTube for this reason alone, and I still think that is a solid issue.

But think about all the problems that we have with Google search.  We have had these problems for years now and for years Google has either stonewalled us entirely or hidden behind the design defect they have built into search that perpetuates the theft of our music and movies on the one hand, and allows Google to drive the price down on the identical goods in the legitimate side of their business.

But what is most striking about the way Google continually fails to live up to even their own promises is the arrogance of the monopolist.  Think about the most recent promise to push illegal results down in search.  Fail.  Remember the many promises that Google’s General Counsel made to the House Judiciary Committee after COICA?  Fail.

Why does Google continue to float these sanctimonious plans for how they will do better this time?  Because it allows them to squirt out a smokescreen that so far has been effective.  Why do they continue to fail to live up to any of these announced plans?

Because they can.

This is the kind of abuse of their dominant positions that the FTC and the European Commission need to know about.  Because Google is doing everything they can to get out of being sued by the FTC and also having to live under a consent decree.

In other words–get out of any liability.

And as we all know, nothing says Internet Freedom like getting away with it.

IRFA Hearings: In Which Our Friend David Pakman Ignores Herds of Elephants in the Room

November 28, 2012 Comments off

If silence was golden, you could not raise a dime
Because your mind is on vacation but your mouth is working overtime.
By Mose Allison

I like David Pakman, he’s a good guy.  So, sorry, buddy, I just couldn’t let this pass.

In his testimony tomorrow at the House Judiciary Committee Subcommittee on Intellectual Property, Competition, and the Internet,  David is unfortunately going to engage in the jive of false causality.  There’s a bunch of it in his prepared remarks, but let’s focus on this bit here:

The digital music business is one of the most perilous of all internet businesses. We are skeptical, under the current licensing regime, that profitable stand-alone digital music companies can be built. In fact, hundreds of millions of dollars of venture capital have been lost in failed attempts to launch sustainable companies in this market. While our industry is used to failure, the failure rate of digital music companies is among the highest of any industry we have evaluated. This is solely due to the over-burdensome royalty requirements imposed upon digital music licensees by record companies under both voluntary and compulsory rate structures. The compulsory royalty rates imposed upon internet radio companies render them non-investible businesses from the perspective of many VCs….Yet the actions of the RIAA seem counter to this very goal [of a strong digital music market]. They have appeared on the opposite side of every issue facing digital music innovators, opposed to sensible licensing rates meant to achieve a healthy market. Regretfully, and perhaps most upsetting to all of us, the artists are the ones who suffer most. They depend on the actions of their labels to encourage a healthy market to grow and have little influence on the decisions of the RIAA.

First of all–and we’ll leave this to one side–notice what he did.  He started out talking about “over burdensome royalty requirements imposed…by record companies under both voluntary and compulsory rate structures.”  Then he switched to compulsory rates.  And then…big finish…he went after the RIAA.  This is soooo 1999.

Repeat after me:  The RIAA does not license anything.  Why talk about the RIAA in discussion about rates and licensing?  Remember–the RIAA doesn’t license anything.

Next, David is entirely oblivious to the impact of independent labels–those would be the labels that supported his eMusic company and do to this day.  I don’t quite understand how he could speak to the Congress on this important issue without even mentioning the indies both in the US and around the world.

But no discussion about profitability of digital music, and indeed the music business in general, can be taken seriously without mentioning the massive breakdown in private property rights resulting from piracy.  Any capitalist like David should be freaked out about this elephant because it goes to the heart of a market system that David would have you believe is failing because of licensing costs of licenses that the RIAA doesn’t issue.

There can be no market failure without a market and there can be no market without property rights that can be enforced at a market clearing price.  If the government has a history of failure in the music business, it is the failure to enforce the law in the face of massive and unprecedented online theft.  The Obama Administration and IPEC Victoria Espinel have done a great job playing catch up and should be commended.  But they are digging out of a deep hole.

So I have to say that there are so many elephants running through David’s testimony that it’s hard to understand what he’s actually trying to say.

Keep an eye on NYSE: P today.  This kind of testimony can’t help.

Canadian Writer’s Union Conducts a Little Direct Action–the Unmasked Remix

November 26, 2012 Comments off

The Writers Union of Canada visited a meeting of Canadian community college academics (whom I believe are all paid for by Canadian taxpayers) and tried to have a discussion about how the Canadian copyright law was being interpreted to deny writers substantial income from the use of their works in academia.

Here’s where thing got confusing–nobody was wearing a mask, so naturally the writers were asked to leave.  A word to the wise–if you want academics to engage with you, you need one of those white masks.  Or maybe a metaphorical sheet if none are available.

The “Free Culture” Book Report Redux: Terry Hart’s Part 1 on why the RSC “paper” really wasn’t ready for primetime

November 23, 2012 Comments off

Some of you may have heard about the “policy paper” that was posted on the website of the Republican Study Conference (which as near as I can tell is a kind of conservative caucus in the Congress) written by a Georgetown law student–and then promptly withdrawn by the RSC.  Why was the paper withdrawn?  As quoted in Variety (and many other outlets) the RSC spokesman said:

“On issues where there are several different perspectives among our members, our Policy Briefs should reflect that,” spokesman Brian Straessle said. “This Policy Brief presented one view among conservatives on U.S. copyright law. Due to an oversight in our review process, it did not account for the full range of perspectives among our members. It was removed from the website to address that concern.”

I’d put it a bit more bluntly: The report reads more like a book report on Free Culture rather than a bona fide policy paper.  For example, it omits many important issues that a government sponsored paper should take into account–such as the effects on our treaty obligations of the paper’s recommendations.

Terry Hart who writes the Copyhype blog has an excellent treatment of the paper:

Many on the internet were quick to declare the paper the absolute most stunningly brilliant paper history has ever produced. Techdirt’s Mike Masnick lamented the fact that, having read the paper, he will no longer be able to enjoy future papers, for they will only pale in comparison.

So not only are the usual suspects spinning about this startling deficient work product worthy of a Washington shillery like the CCIA or the Internet Radio Fairness Coalition (which of course may assume facts not in evidence) but we can’t help noticing that it is timed with the effort by Representative Zoe Lofgren (D-Google) to roil up the bots on Reddit to crowd source copyright reform…or something like that.

As Terry Hart says:

[A]ny debate or dialogue should begin with sound premises. This policy brief doesn’t. Instead, like an unfortunate strand of copyright skepticism, it runs from reality, rewrites history, and hides from logic.

How the paper got onto the RSC website, whether the author was in contact with a Google “evangelist” (which sounds like a lobbyist to me) apparently in violation of House rules and federal lobbying ethics laws, and why the typical outlets jumped so quickly onto a paper that only saw the light of day for a few hours late on a Friday afternoon all are questions to be answered in the fullness of time.

Google Ignores @carolynbmaloney and @janehamsher and Sells Ads for Russian Brides Sites

November 22, 2012 2 comments

MTP readers will remember the scandal over the Android Utoopi escort app that prompted Representative Carolyn B. Maloney to seek assurances from Google that the app would be removed from the Android Market (Apple never allowed it to be distributed in the App Store).

Not only did Representative Maloney call out Google about Google’s “sex club” app, but she also sent Google CEO Larry Page a bi-partisan letter with Representative Marsha Blackburn about Google’s predatory practices on human trafficking.  Given that there seems to be a never ending trail of prostitution busts from Craigslist, Backpage.com and other online advertisers, it should come as no surprise that Google’s Adsense also profits from this vertical in their human misery operation.

A casual Google search for “russian brides” reveals that not only does Google deliver search results for these sketchy sites, they also sell the ads.  They profit from human misery all day every day in countless ways.

Let’s understand something about Google–they will do anything for money and they really don’t give a rats patootie about the law, elected officials or the nation state.  And so far, why should they?  No one ever does anything about their debased business practices or would ever consider–arresting somebody.

Some Animals Are More Equal Than Others: Citizens Against Government Waste Opposes Internet Radio Fairness Act

November 21, 2012 Comments off

Have you seen the little piggies crawling in the dirt?
Always have clean shirts to play around in….
In their eyes there’s something lacking, what they need’s a damn good whacking…

Piggies, by George Harrison

The Council for Citizens Against Government Waste–home of the “Swineline”–announced its opposition to the so-called Internet Radio Fairness Act.  Yes, the publisher of the Congressional Pig Book took issue with a rasher of issues on the porcine legislation:

According to the Daily [Hog] Caller:

Council for Citizens Against Government Waste, a government watchdog group…joined in on the opposition [to IRFA] with a letter to the Senate Judiciary Committee  and the House Subcommittee on Intellectual Property, Competition and Internet on  November 16.

Council for Citizens Against Government Waste president Thomas  Schatz argued that the bill would bring Internet radio services under a  standard developed in the 1970s.

“The result is to move nearly 1,800 entities that currently operate under the  market-based standard down to the below-market standard, instead of moving the  three grandfathered entities up to the market-based standard,” he said,  referring to satellite radio providers SiriusXM and Musak, and cable music  providers like Music Choice.

And the bill proposes a new, political, presidentially appointed board that  will maximize the lobbying potential of the recipients of the government  subsidy,” said Schatz.

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