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YouTube Hosts Jihadi Recruitment Video: “Equip a Fighter This Ramadan”

August 21, 2014 Leave a comment

Chris Castle:

how much longer before YouTube stops the jihadi recruitment videos? This ones’s been up on YouTube for 2 years.

Originally posted on MUSIC • TECHNOLOGY • POLICY:

YouTube once again demonstrates its recruiting power for the jihad with this video entitled “Equip a Fighter This Ramadan”.  There’s some season’s greetings for you, eh?  Because as the video advises, “whoever prepares a fighter has participated in the fight.”  Mustafa Abi Al-Yazeed was the head of al Qaeda in Afghanistan.

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DOJ Consent Decree Comment Part 2: What Happened to the Bundle of Rights?

August 20, 2014 Leave a comment

This is the second installment of my comments to the Department of Justice review of the ASCAP and BMI consent decrees (see Part 1 here):

What Happened to the Bundle of Rights?

It is axiomatic that under the 1976 Copyright Act, copyright is a bundle of rights.[1]  Copyright owners are largely free to exploit their rights or subdivisions of copyright in whole or in part.[2] This is arguably the fundamental reason why PROs exist—to administer the performance right[3] subdivision of the bundle.

Methods of monetizing songs have evolved with technology as the marketplace identifies new methods of exploitation. Generally speaking, promoting licensing of these new methods seems to be the broad policy goal of the consent decrees. The government has also determined that promoting licensing is so important that it effectively trumps the songwriter’s right to say “no,” a provision of the consent decrees that the regulated PROs were required to agree.

After the last Pandora decision in the ASCAP rate court,[4] it appears that the consent decree is being interpreted to require that copyright owners withdraw from ASCAP altogether in order to enjoy the right to license a subdivision of their bundle of exclusive rights, replacing the songwriter’s decision with the Court’s own interpretation of the government’s requirements. (The same applies to BMI.)

Respectfully, I fail to see the logic, utility or authority for the government establishing an arbitrary bright line limit on how far the copyright bundle can be subdivided.

If the government permits copyright owners to license all of the performance right through regulated PROs, why should the government take a songwriter’s right to license a subdivision of the performance right outside of the consent decree?[5] This is particularly true of digital performance rights that were barely commercialized or did not exist at all at the time of the last modifications of the respective consent decrees.

I understand why the music users would like us to believe that the government intended to regulate uses that did not exist at the time of the modifications, but I hope you can empathize with songwriters who find this rather stunning logic and take a contrary view.

This arbitrary limitation on the statutory right to subdivision essentially dares copyright owners to disassociate themselves from the regulated PROs, a course that I fully believe they will eventually follow. If enough copyright owners are effectively forced to withdraw from the regulated PROs in order to enjoy an actual free market for subdivisions of their rights permitted by the Copyright Act, both ASCAP and BMI surely will be diminished to the great disadvantage of songwriters.

I suggest that the market should be trusted to do a better job of creating licensing opportunities as likely would occur if copyright owners were free to decide how to license their property. The rate courts’ position seems at odds with the elegance of the bundle of rights solution that underpins our private property traditions of personal liberty.

[1] See 17 U.S.C. Sec. 106.

[2] See 17 U.S.C. Sec. 201(d)(2) (“…Any of the exclusive rights comprised in a copyright, including any subdivision of any of the rights specified by section 106, may be transferred…and owned separately”(emphasis added)); see also New York Times Co. v. Tasini, 533 U.S. 483 (2001) (“The 1976 [Copyright] Act recast the copyright as a bundle of discrete ‘exclusive rights,’ § 106, each of which ‘may be transferred…and owned separately….’ § 201(d)(2),” at 484.)

[3] See 17 U.S.C. Sec. 106(4) (“[T]he owner of copyright under this title has the exclusive rights

to do and to authorize…in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly”.)

[4] In re Petition of Pandora Media Inc., 12-cv-08035, U.S. District Court, Southern District of New York (Manhattan)

[5] “[A] private property right includes the right to delegate, rent, or sell any portion of the rights by exchange or gift at whatever price the owner determines.” Armen A. Alchian, Property Rights available at http://www.econlib.org/library/Enc/PropertyRights.html (emphasis added).

Why Does Google Drug Stockholder Settlement Cover Golden Parachutes for Felonious Employees?

August 18, 2014 Comments off

Google recently filed a tentative settlement with its stockholders over the $500,000,000 of the company’s money that Google’s executive team authorized be spent to keep from being indicted by a Rhode Island grand jury.  (I invite you to read the sordid history in the settlement and also the story of the Google sting operation in the Nonprosecution Agreement between Google and the United States,)

The settlement is full of the kind of stuff you’d expect to see in a settlement of this kind:  Google refuses to admit liability, but agrees to spend even more of the stockholder’s money to stop itself before it sins again.  But then out of the blue comes this section:

2.7 Criminal Activity Reporting

Google’s General Counsel shall be responsible for reviewing every situation in which a  Google employee is convicted of a felony under U.S. federal or state criminal statutes in connection with his employment by Google and for reporting to the Board (or an appropriate committee of the Board) with respect to that violation. Presumptively, any employee convicted of a felony under a U.S. federal or state criminal statute in connection with his employment by Google shall be terminated for cause and receive no severance payments in connection with the termination. If the General Counsel determines that such termination is not warranted, he shall so recommend to the Board (or an appropriate committee of the Board), which will act upon his recommendation in its discretion.

Notice that there’s not one word in this section dealing with drugs, drug advertising or the like.

Why would this language need to appear in what will eventually be a court order requiring Google to essentially deny a severance package to Google employees who are terminated for being convicted of a felony under either a federal or state statute.  When would a publicly traded company ever pay a severance package to an employee terminated for cause?  (And being convicted of a felony is almost invariably grounds for termination for cause whether or not it relates to your employment.)

Note that this language appears to be preventative and forward looking in nature as is the rest of the proposed settlement (assuming that all of the settlement has been made public, a big assumption when it comes to Google).  So it appears that during their discovery the shareholders found some information that led them to think this provision of their settlement agreement would have been required.

That would lead me to think that the behavior being proscribed had occurred.  Meaning that somebody was convicted of a felony, was fired, but was given a severance package.

I would also venture a guess that this wasn’t something like two weeks salary–that wouldn’t rise to the level of a court order applying to all Google employees and Google’s most senior management.  What would rise to the level of a court order would be something like a two or three year salary payout, accelerated vesting of stock options, a flat payment of at least six or seven figures, or some combination.   And if you are talking about accelerated vesting of Google stock options, you can get into the million dollar range very quickly.

Now what might motivate a company like Google to make such a payment–given that corporate lawyers are often looking for a basis for termination for cause for the very purpose of getting out of any payout for a termination without cause that can trigger all of the above.  Also known as a “golden parachute.”

Remember–this paragraph deals with employees who have actually been convicted of felony violations of U.S. law, and it might be stretched to include employees who were convicted in other countries of what would have been a felony under U.S. state or federal law.

There’s another reason a public company like Google might give severance payments of a size to warrant this type of response:  Hush money.

Whatever it is, this paragraph didn’t come out of nowhere.

Which leads one to think that there is something putrefying in Mountain View.  Shareholders have a right to know what it is.

 

 

 

DOJ Consent Decree Comment, Part 1

August 17, 2014 Leave a comment

I thought that some of you would be interested in reading my filing in the Department of Justice’s recent request for public comments on their review of the ASCAP and BMI consent decrees. I will serialize my comment letter this week on MTP.

The Songwriters Speak Out

What was far more interesting than my own comment was the outpouring of heartfelt complaints from songwriters about the ASCAP and BMI consent decrees. Over 180 songwriters took the time to write to their government to complain about the fundamental unfairness to songwriters of the consent decrees, and, of course, the rate courts. You stood and told the government to get their boot off of your throat.

Given the way that the government has set up the consent decrees, the DOJ public comment period is about the only opportunity that individual songwriters have to make themselves heard to that group of decisionmakers. That isn’t to take away anything from the representation of the regulated PROs, but at the end of the day when you count the number of comments, ASCAP and BMI get one each. You got 180.

Not only does the sheer number of comments make a statement, but it prevents Google Shill Listers like Public Knowledge from pretending to be a voice for creators–one of the biggest astroturf affronts to artist rights out there.

Just like the #irespectmusic campaign that delivered over 10,000 signatures to Washington, all the creator voices at the table at the DOJ make a difference. Why? If you’re not at the table, then you are on the menu.

At a certain point our issues become election issues. Notice I didn’t say political issues—I don’t care how you vote or who you vote for. You can vote for the Greens, the Libertarians, the Democrats or Republicans, or even the “Rent is Too Damn High” party.

What I think is important is that you vote. What is important is that you ask your candidates for the U.S. House of Representatives and the U.S. Senate what is their position on artist rights? It is important that you let them know that they need to take a position and that you’re going to be paying attention. You may decide to vote for them anyway because of something else they support, but if you demand that they take a position on artist rights, you will at least vote for them knowing where they stand.

This doesn’t mean that you need to get angry and loud. It does mean that you need to get organized. Most importantly you need to show up. Like it or not, there’s a reason why the statutory mechanical royalty was 2 cents for 69 years.

Songwriters Rejected Pie-Ism

The other message that came across loud and clear from your comments is that you were not going to be sidetracked by what we call “pie-ism”—the bait that the broadcasters dearly want you to bite on that pits songwriters against artists and vice versa.

When it comes to fair songwriter royalties the broadcasters (and Pandora) want the songwriters to fight the artists. When it comes to a fair artist royalty for plays of recordings, the broadcasters want the artists to fight the songwriters. The way they do that is by saying here’s the pie, we don’t care how you divide it up. Songwriters and artists can fight it out.

This is a false premise, of course. They want you to accept the antebellum principle that they control the pie and not you. And of course they want to weaken both songwriters and artists by getting you to fight each other—pie-ism. As history shows, what kept antebellum and feudal economic systems in place was the law first and foremost.  The law perpetuated these “extractive” economies. Oligarchs extracted profits by appropriating labor value and property rights—legally.

The first section of my comment deals with the unfairness of the consent decrees in terms of the relative bargaining position.

Part 1

Do the Consent Decrees Make Negotiations a Mere Box to be Checked?

It is obvious that the music user market has changed substantially from the time of either the ASCAP or BMI[1] consent decrees or even their most recent modifications. One major change in the music user market is that many current music users of the regulated PRO blanket licenses vastly outweigh copyright owners in litigation budgets, market capitalization, lobbying influence and other measures of market power. So I suggest that the cost burden of rate court litigation disproportionately favors the well-funded music user compared to the music makers.

I am not suggesting that anyone is negotiating in bad faith or questioning anyone’s motives. I am merely suggesting that if cost is little or no object and litigation is an additional step guaranteed to music users, it is reasonable to expect that there will be some music users who use that litigation, or the threat of it, as the closing if negotiations do not go to their liking.   Particularly if no regulated PRO can stop the use of their music.

If the government wishes to motivate negotiation and consensus through the consent decrees, this review might be a good time to ask if the consent decrees have the opposite effect. I suggest to you that the well-financed music users view the rate court as a mere cost of doing business that can be justified to stockholders, a cost that may not even be material on a balance sheet basis for dominant incumbents like Pandora or Sirius, much less for Google with a $350 billion-plus market capitalization.[2]

But the cost of rate courts is very material to the songwriters who are on the receiving end of the litigation, a material cost that further reduces the real royalty rate derived from the license at issue. One could say that the government’s insistence on litigation as a dispute resolution procedure for the regulated PROs inevitably results in lower real royalty rates for songwriters.

While songwriters have long faced members of the powerful National Association of Broadcasters in rate courts, the last decade has seen new opponents enter the market. Songwriters currently are opposed in the rate courts and on Capitol Hill not only by the National Association of Broadcasters, but also by Google (the dominant search engine and music video platform), Sirius (the dominant satellite radio provider), Pandora (the dominant webcaster) and many other tech companies whose combined market capitalization must approach $1 trillion depending on the particular collaboration.

For example, a recent “Congressional briefing”[3] hosted in Washington by the Digital Media Association (“DiMA”) and the National Association of Broadcasters had a relatively new face at the sponsor table—the Computer and Communications Industry Association.[4] CCIA members[5] represent vast wealth and lobbying muscle even discounting the CCIA’s common membership with DiMA[6] of Google and Pandora.[7]

The relative bargaining positions of music makers and music users is highly relevant to a discussion of the merits of the consent decrees and especially the rate courts. I invite you to review the last 10 years of rate court decisions and then ask yourself if you agree with my observation: The availability of the rate court has made negotiations with regulated PROs a mere box to be checked by well-financed music users on the way to litigation.[8]

It may not be fair to the government, but based on my conversations it is often difficult for songwriters to understand why their government permits multinational corporations with concentrated media dominance like Google and Clear Channel largely to escape antitrust regulation, but then decides that the American people must be protected from songwriters—for 73 years. (Companies like Google seem to escape regulation even when Google uses its dominant market position to cram down take-it-or-leave-it terms[9] on songwriters[10] and independent record companies.[11] “Gang of Four”[12] and DiMA member Amazon[13] also is notorious for take it or leave it overreach in its music publishing agreements[14] and commercial relations with other creators.[15])

I suggest that the influence of these actors across multiple market verticals cannot be viewed in a vacuum if the Justice Department wants to get a full picture of how its consent decrees are being used to increase market dominance by members of the “Gang of Four” and other dominant players.

__________________

[1] Hereinafter “the regulated PROs”.

[2] Today’s GOOG stock quote pegs Google’s market cap at $386.93 billion, which well exceeds the entire value of the worldwide music industry many times over. Stock quote available at http://finance.yahoo.com/q;_ylt=Atc4KfBuWlWIN9ytE47HGLyiuYdG;_ylu=X3oDMTBxdGVyNzJxBHNlYwNVSCAzIERlc2t0b3AgU2VhcmNoIDEx;_ylg=X3oDMTBsdWsyY2FpBGxhbmcDZW4tVVMEcHQDMgR0ZXN0Aw–;_ylv=3?uhb=uhb2&fr=uh3_finance_vert_gs&type=2button&s=goog

[3] The DiMA, the NAB and the CCIA hosted a panel entitled “Preserving the DOJ Consent Decrees Governing ASCAP and BMI: the Justice Department’s Investigation Into Anticompetitive Behavior by the Music Publishers and Performing Rights Organizations,” in 2226 Rayburn House Office Building on July 21, 2014. The title of the panel bears no resemblance to the Justice Department’s request for comments and actually mischaracterizes the stated purpose of the Department’s review in a meeting targeted at Congressional staff.

[4] It should not be overlooked that Google likely has considerable leverage over Pandora if for no other reason than Pandora uses Google’s Doubleclick affiliate for its advertising sales. Pandora acknowledges to its investors that its agreement with Doubleclick exerts considerable influence on Pandora’s business.  “We rely upon an agreement with DoubleClick, which is owned by Google, for delivering and monitoring our ads. Failure to renew the agreement on favorable terms, or termination of the agreement, could adversely affect our business.” 2014 Annual Report of Pandora Media, Inc. (Form 10k) at p. 24 (emphasis added), available at http://investor.pandora.com/phoenix.zhtml?c=227956&p=proxy. Google was allowed to acquire Doubleclick through which it asserts this influence over the webcasting music market through Pandora, a dominant firm in the webcasting market.

[5] See CCIA Members currently listed at http://www.ccianet.org/about/members/

[6] See DiMA membership (includes Google’s YouTube subsidiary) currently listed at http://www.digmedia.org/about-dima/members

[7] Another example both of the opportunities for concerted action and of this David and Goliath order of battle is found with the short-lived Internet Radio Fairness Coalition formed by the Consumer Electronics Association, the CCIA, DiMA, Clear Channel and a number of other broadcaster groups. (Press release available at http://www.prnewswire.com/news-releases/internet-radio-fairness-coalition-launches-to-help-accelerate-growth-and-innovation-in-internet-radio-to-benefit-artists-consumers-and-the-recording-industry-175775071.html.) The coalition was formed to support the Internet Radio Fairness Act (H.R.6480 and S.3609) that would have legislated royalty rates, packed the Copyright Royalty Judges and extended Sherman Act jurisdiction over individual creators in a confusing manner, available at http://www.gpo.gov/fdsys/pkg/BILLS-112hr6480ih/pdf/BILLS-112hr6480ih.pdf and at https://beta.congress.gov/bill/112th-congress/senate-bill/3609?q=%7B%22search%22%3A%5B%22s3609%22%5D%7D . We should expect to see more alliances of these massive media companies against songwriters and I would not be surprised if you received comments from many of them.

[8] We are currently attempting to determine whether there have been any negotiations with a DiMA member that have not “fallen through” and proceeded to litigation in the rate court.

[9] Letter from American Association of Independent Music to Federal Trade Commission (June 4, 2014) available at http://www.a2im.org/downloads/FTC_Letter_June_4_2014.pdf .

[10] Castle, “And Don’t Forget the Songwriters: YouTube is out of touch with the lives of creators, available at http://musictechpolicy.wordpress.com/2014/06/29/and-dont-forget-the-songwriters-youtube-is-out-of-touch-with-the-lives-of-creators/

[11] See, e.g., Dredge, “YouTube Subscription Music Licensing Strikes Wrong Notes With Indie Labels”, The Guardian (May 22, 2014) available at http://www.theguardian.com/technology/2014/may/22/indie-labels-youtube-subscription-music

[12] Google’s Eric Schmidt openly describes Amazon, Apple, Facebook and Google as the “Gang of Four”—Amazon, Apple and Google are members of DiMA. See, e.g., Erick Schonfeld, “Eric Schmidt’s Gang of Four: Amazon, Apple, Facebook and Google” available at http://techcrunch.com/2011/05/31/schmidt-gang-four-google-apple-amazon-facebook/

[13] Amazon’s market capitalization is $145 billion, again several times bigger than the worldwide music industry. Quote available at http://finance.yahoo.com/q;_ylt=AoL5KC8ZhLzGNw7nNXdu3Rip_8MF;_ylc=X1MDMjE0MjQ3ODk0OARfcgMyBGZyA3VoM19maW5hbmNlX3dlYl9ncwRmcjIDc2EtZ3AEZ3ByaWQDBG5fZ3BzAzEwBG9yaWdpbgNmaW5hbmNlLnlhaG9vLmNvbQRwb3MDMQRwcXN0cgMEcXVlcnkDQU1aTiwEc2FjAzEEc2FvAzE-?p=http%3A%2F%2Ffinance.yahoo.com%2Fq%3Fs%3DAMZN%26ql%3D0&type=2button&uhb=uhb2&fr=uh3_finance_vert_gs&s=AMZN

[14] See “Form Amazon Publishing Agreement” available at https://musictechpolicy.files.wordpress.com/2014/05/form-amazon-license.pdf

[15] See Jamie Condliffe, “Amazon Admits It’s Screwing with Hachette and Will Until It Gets Its Way“ (May 28, 2014) available at http://gizmodo.com/amazon-admits-its-screwing-with-hachette-and-will-until-1582531755

Individual Songwriters Come Out In Droves, Submit Large Number Of Comments To DOJ

August 15, 2014 Leave a comment

Originally posted on The Trichordist:

Thank you readers.  You all rock!

When a government agency like The Copyright Office or The Department of Justice asks for comments,  they usually generate a few dozen. And the vast majority of these are from lobbyists, trade groups and law firms engaged in policy fights.

So this week the Capitol has been buzzing about the surprising number of comments that INDIVIDUALS submitted to the DOJ on the consent decree that governs songwriters.  There were over 180 comments from individuals submitted!   And we recognize that many of these comments are from fellow songwriters and readers.   We have made our voices heard.

So let’s keep it going.  Tweet the link to your DOJ comment at us and we will retweet it!  @thetrichordist

Here’s my own comment. 

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Google’s Dominance of Online Display Advertising

August 12, 2014 Leave a comment

Originally posted on MUSIC • TECHNOLOGY • POLICY:

Google has long been criticized providing the advertising dollars that fuel a large variety of bad behaviors online from selling illegal drugs, to human trafficking to plain old copyright infringement.  This is not mere Google bashing—remember, Google’s senior executive team paid $500,000,000 of the stockholders money to keep from being indicted for selling illegal drugs.  Google itself admits disconnecting 46,000 illegal sites from its Adsenses/Doubleclick ad networks—even if Google made a mere $10,000 each from those sites, that’s over $1 billion gross.

And who can forget the drubbing Google took from members of Congress and Firedoglake over the teen-oriented escort app on the Android platform as advertised on YouTube.

Why do they do these things?  Apparently for the money.

The hypocrisy of Internet utopians engaging in such behavior is striking—there must be an awful lot of money involved to make it worth the risk.  Which also is strange because we’ve…

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Spotify Board Member Google Gets Nailed by Stockholders for Another $250,000,000 in Drugs Case

August 10, 2014 1 comment

Americans are freedom loving people, and nothing says freedom like getting away with it.

Long Long Time by Guy Forsyth.

Google has entered into a proposed settlement agreement with a group of Google shareholders that sued Google’s top executives and board members for breach of fiduciary duty, abuse of control, corporate waste and unjust enrichment.  Google agreed to spend $250,000,000 over the next five years to improve its controls over selling advertising for illegal drug sites (this is in addition to the $500,000,000 fine that Google paid to the government that started the shareholder suit).

According to Reuters:

Google Inc has agreed to create a $250 million internal program to disrupt rogue online pharmacies as part of a deal to end shareholder litigation over accusations the search company improperly allowed ads from non-U.S. drug sellers.

Google said it would make content about prescription drug abuse more visible and work with legitimate pharmacies to countermarketing by rogue sellers, documents filed in an Oakland, California federal court on Thursday showed.

Google will allocate and spend at least $50 million a year to the internal effort for at least five years under the settlement. The company has also agreed to pay $9.9 million in fees and expenses to plaintiff attorneys.

How did this happen?

It all started in 2008 when former Secretary of Health and Human Services Joseph A. Califano, Jr. wrote a letter to then Google CEO Eric Schmidt.  Secretary Califano implored Mr. Schmidt to do something about Google’s profit from selling advertising inventory to websites selling prescription drugs illegally.

califano letter

Secretary Califano got no reply from Google.

Looking back, if Mr. Schmidt had just taken action on Secretary Califano’s letter, the smartest guys in the room could have saved themselves $750,000,000.  That’s 3/4 of a billion which is real money even in Silicon Valley.  And not only would they have saved themselves a pile of money, imagine how much human misery might have been prevented–if not deaths–from Google users who were sold illegal drugs through Google’s advertising.

I wonder if anyone who follows Google will be surprised by this in 2014.  But in 2008, it would not surprise me that even a former Cabinet secretary could not get anyone in the press interested in this story, and frankly not much has changed on that score.

But what did change is that Google was the subject of an extensive sting operation by the U.S. Attorney for Rhode Island, the FBI, FDA and the IRS over several years on essentially the same question that Secretary Califano tried to raise to Mr. Schmidt in 2008.  Google was then the subject of a grand jury investigation in Rhode Island during which it produced 4,000,000 documents.

The U.S. Attorney for Rhode Island, then Peter Neronha, disclosed that his investigation demonstrated that the highest levels of Google’s management–including Larry Page–knew that Google was profiting from selling advertising for illegal sites that indiscriminately sold prescription drugs without a prescription, including some drugs that not only required a prescription but that were to be administered in a doctor’s office.

And you will find videos for illegal drugs on YouTube right now.  Not to mention videos like this:

During the course of the Google Drugs grand jury, Google’s lawyer in the matter, Jamie Gorelick, was able to negotiate a “non prosecution agreement” with the U.S. Department of Justice.  A non prosecution agreement is a kind of plea bargain, although it isn’t really a plea bargain because the defendant has not been charged yet.  It’s the kind of thing rich people or big corporations get so they can keep from being charged with a crime.  You know–getting away with it.  It usually involves the payment of money.  And Google’s case was no different.

Google paid a $500,000,000 fine to get away with it, which at the time was one of the largest corporate fines in the history of the United States.  You would have thought that Attorney General Eric Holder would have wanted to tell the world how he got Google (that would be the same Eric Holder who took over as Deputy Attorney General when Google’s lawyer Jamie Gorelick vacated the post in the Clinton Administration).  As MTP readers will recall, the AG stayed far away from the news. Aside from speaking at a White House soirée celebrating all the good Google was doing with the online drugs issue while Ms. Gorelick was likely negotiating the no prosecution agreement alongside ELI keynote invitee and Google General Counsel Kent Walker.

The Washington Post reported:

The forfeiture by Google, and its rare admission of wrongdoing, was announced not by Holder or his deputies — who often take part in announcements for high-profile corporate settlements — but by the U.S. attorney of Rhode Island, Peter Neronha, at a Providence news conference. No Justice Department officials from Washington participated in the event.

 

Mississippi’s Hood, a Democrat, said the relationship between Google and the White House may have led the administration to help soften the company’s public relations blow by playing down the announcement of the fine. Schmidt, now Google’s executive chairman, has been a campaign supporter and adviser to President Obama.

 

“I don’t think the Department of Justice was allowed to promote it the way they would some other $500 million fine,” Hood said.

But here’s the twist–the conduct that was at issue in the grand jury investigation was not really Google’s corporate conduct, because that conduct was outside the scope of the authority of Google’s executives.  Because that conduct was, you know, whatchamacallit.  Criminal.

So when Google’s top executives approved writing that $500,000,000 check to keep from being criminally prosecuted, they were causing Google’s stockholders to pay for what was arguably a fine that should have been paid by the executives out of their own pockets because it was a fine for their conduct in their personal capacity.

Remember the stockholder’s lawsuit had claims for “breach of fiduciary duty, abuse of control, corporate waste and unjust enrichment“?  If you take the corporation’s money and use it to save yourself some money, like for example if you authorized the corporation to pay the biggest corporate fine in U.S. history that was really because of something you did wrong, you are enriching yourself at the stockholders’ expense.

And that’s a big no no.

Also remember that Google has rigged the voting power of stockholders so that it is only theoretically possible for stockholders to ever vote to replace any of the top executives or the board.  Eric Schmidt, Larry Page and Sergey Brin has stock that gives them essentially a 10 to 1 voting advantage over any other Google stockholders.  They like it this way and it’s always been this way.  But you know what else that means?

When they make a decision to use the stockholder’s money and the Google board approves it, they better hope they got it right because if they don’t they only have themselves to blame.  And sometimes those uppity shareholders will sue your ass.

As they did in the case of Google Drugs.

Google’s board and executives settled the case and didn’t have to pay back the $500,000,000.  That’s a pity.  They did not admit wrongdoing.  But then they didn’t admit wrongdoing in the nonprosecution agreement, either.   If they’re not guilty or liable, then why did they pay out $750,000,000 for something that wasn’t illegal?  That’s a pretty big number.

Think about where this leads and all the many things Google has screwed up.  What we know is that there is a group of stockholders that are willing to sue the board and executive team–who are definitely in control of everything that happens at Google.

We know that despite Google’s many protestations to the contrary to Mississippi Attorney General Jim Hood, Florida Attorney General Pam Bondi, New Mexico Attorney General Gary King and a twenty-one other state attorneys general, there’s $250,000,000 worth of improvements they can make in how they handle drugs. (See Bloomberg, “Google Targeted in State Crackdown on Illicit Drug Ads” and Kent Walker’s letter to six state attorneys general.)

And we know that they have now committed to their stockholders that they’ll do better.

Anyone in the music business has heard that song before, especially when it comes to Google driving traffic to illegal sites with advertising sponsored piracy that Google profits from.  After 10 years of Google, what we know is that if they say the Sun rises in the East, you would do well to check it out.  Nobody can figure out what they are doing on the Spotify board and why they were invited to speak during Grammy Week.  If their lips are moving, they’re lying.

But this time they didn’t make the promise to do better to a bunch of hippie freak musicians who they don’t care about.  This time they made it to their stockholders.

And this time they better come through.

@jannarden is Banned on Newcap Stations Through Patented QuickHitz Infringement Machine

August 10, 2014 1 comment

As you know, Canadian artist Jann Aden spoke out against the vile “QuickHitz” radio format that cuts songs in half to sell more advertising.  Jann singled out the AMP radio station in Calgary, which is one of 100 or so stations owned by the Newcap Radio chain in Canada.  Jann indicated in a slightly obscure tweet last week that she’d been banned from the station by “Steve Jones”.

I find it hard to believe that jocks on a station would actually believe that slicing and dicing songs without artist consent was a good idea.  But radio is a tough business and I don’t blame them for wanting to keep their jobs.  However, this is exactly the kind of market power abuse we expect from the National Association of Broadcasters (who at the moment strives to keep the U.S. government’s boot on the throats of songwriters.  Why?  Because “this is what monopoly looks like”)

Based on an email leaked to us by a whistleblower, it appears that not only did “Steve” ban Jann Arden from the Calgary station–it’s a fair inference from the email that he banned her from all Newcap stations.  And the reason he banned her was not because of what she did but because of what she said.  Because of her speech.

From: Steve Jones
Sent: Thursday, August 7, 2014 10:41 AM
To: Trevor Wallworth; Myles MacKinnon; Kurt Price; Daryl Stevens; Dan Youngs; Curtis Bray;
John Roberts; Paul Kaye; Al Tompson; Corey Tremere; Adam McLaren; Jeff Murray; Mike Campbell;
Josie Geuer; Abbey White; Rick Tompkins; Brad Michaels; Kate Buick; Jackie Greening;
Melanie Sampson; Steve Parsons; Jay Bedford; Stuart McIntosh; Taylor Jukes; Christina Fitzgerald;
Stu Ferguson; David Larsen; Troy McCallum; Paul Parhar; Casey Clarke

Cc: Jessop, Paul

Subject: Jann Arden

Please remove ALL music by Jann Arden from your playlist immediately and permanently.

Her antagonistic and pissy social media comments about our company are a clear statement that she doesn’t need our support. She’s a superstar without radio support.

Thanks,

Steve

Steve Jones
VP/Programming
Newcap Radio

902-481-5205

newcapradio.com

This is not the reason that radio stations are given access to the public airways and a license to broadcast.  In this particular case, it’s also a 180 out from the purpose of Canadian content laws.

For American artists, realize that QuickHitz is not just a Canadian disease–it’s also in the U.S.  In fact–QuickHits slices up the sound recording and song copyrights of artists and songwriters, labels and music publishers and has the brass to advertise itself like this:

 

QuickHitz1

That’s right–QuickHitz thinks it can commoditize the property rights of others through a property right of its own.  When you sort through the legal side of this hocus pocus, it sure looks like infringement to me.  And even if it isn’t–why would anyone think that this is a good idea?

This cannot stand.

 

@jannarden gets the Lars Treatment from QuickHitz Broadcaster

August 9, 2014 Leave a comment

We’re trying to get confirmation of what actually happened, but it looks like Canadian artist Jann Arden was banned from a 100 station radio chain in Canada–because she spoke out against a radio format that literally cuts recordings in half. Why would anyone even think of such a vile format? My guess up is that it’s just so the stations can sell more advertising.

This is kind of like YouTube for radio.

Remember that Canadian broadcasters are supposed to help foster Canadian artists, and most of them do. This is why I have to believe that this format is all about the bean counters who love money and not the jocks who love music. Giving artists the Lars treatment is what we expect from SiliconValley money grubbers who profit from piracy. At least the pirates steal the entire song.

And banning an artist from the peoples airwaves because she spoke up has even less integrity.

The broadcaster ban is so incredibly short sighted, surely there’s more to it?

Stay tuned…

Is the QuickHitz Format the Sweeney Todd of Radio? The Incomparable @JannArden Stands Up for Artist Rights

August 8, 2014 Leave a comment

Jann Arden has made some of the best records of the last 20 years and is a Canadian treasure.  I first heard her when she was signed to A&M Records and have been a fan ever since.  So when Jann speaks up about music, I’m all ears.

Jann is speaking up about the latest attack on artist rights:  The “QuickHitz” radio format that chops up records.

According to the QuickHitz website:

QuickHitz is a game-changing mass appeal music format built especially for the needs and lifestyle of today’s multitasking, attention challenged listeners. Imagine more music per hour than any other radio station ever!  QuickHitz is a break-out alternative to Top 40 radio that immediately repositions the competition with a fresh approach to music discovery and all the interactivity of Social Media. Quite literally, QuickHitz is “twice the music in half the time.”

“Twice the music in half the time”.  “How could that be?” you ask.  What about that space-time continuum thing?

The Financial Post explains:

To accomplish this, popular songs are edited from three or four minutes down to half that length. Commercial breaks are also shortened to approximately nine minutes per hour, instead of the usual 12 minutes on most stations. The goal is to prevent listeners from becoming bored.

Billboard’s radio guru Sean Ross tells us:

For the last decade, some radio people have been advocating a format that edits top 40 hits down to their essentials. Who needs to hear Beyoncé declare that “you’ve got me looking so crazy right now” quite that many times, proponents ask? Couldn’t John Mayer say what he needed to say with less repetition? Are we not a short-attention-span society with less discretionary time for music?

For years, pitching this a format around shortened songs was a pretty good way to send a conference room into polite silence. But in recent years, a few stations have been introducing new songs with one-minute versions, while other PDs have been making songs shorter (or longer) based on their PPM retention scores.

Yes, that’s right.  Why not just go all the way to jingles?

One of the QuickHitz stations is AMP Radio in Calgary which is where Jann Arden comes in.  According to the Calgary Herald:

As explained to the Herald by Steve Jones, VP of Programming for Newcap Radio — the company that owns almost 100 stations across Canada, including AMP — the QuickHitz format cuts a song in half in order for the station to play more songs, by more artists. The rough estimate is that the new format allows for 24 songs in one hour, compared with an average of 12.

Jones argued that the four-minute song is an archaic practice originally dictated by radio and the 45 RPM, and that the idea of radio edits to get down to that magic three- or four-minutes was used on such epics as Don McLean’s American Pie to current hits such as John Legend’s All of Me.

That’s right–the stations decided to help John Mayer cut to the chase.  And if that’s not enough to give you a melt down, I don’t know what it would take:

And this one sums it up:

Jann has started quite the movement on Twitter!  It’s important to remember just how much courage it takes for an artist to stand up to the broadcasters no matter what the issue.  Remember, all that has to happen is for a broadcaster to get angry with an “uppity” artist, and you could find yourself shut off.

This is why it’s so important for artists like Jann Arden to get our support when she steps up, just like Roseanne Cash, Jimmy Jam, David Lowery, and many others deserve our backing.  Never underestimate the power of the broadcasters to retaliate.

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