Beyond EU Antitrust: Sign Up for Class Action Against Google in Europe

September 1, 2015 Leave a comment

Anyone in the music business has felt Google’s boot on their throat in a host of ways.  Set aside the millions of take down notices and the absurd YouTube ContentID system.  Set aside how Google hides advertising revenue from its YouTube cash cow that should rightly go to the artists and songwriters.  The Europeans are focused on a much simpler issue.

Google favors YouTube in video search results.  We all know they do it and they’ve been doing it for years.  Now there may be a chance to actually do something about it, at least in Europe.

As MTP readers will recall, the European Commission has pursued antitrust complaints against Google in Europe on behalf of price comparison sites and others that Google steals content from.  Anyone in the music business is very familiar with Google stealing content in their various business lines–they do it to us all the time when they’re not driving traffic to pirate sites.

According to the New York Times:

[Google] may be the target of a series of new civil lawsuits that claim Google abused its market dominance to favor its own services over those of its rivals.

On Tuesday, Hausfeld, an international law firm [and US-based class action specialist] with connections to companies affected by Google’s activities in Europe, and Avisa, a European public affairs company that has represented complainants in the antitrust case, will announce that they have created an online platform [the Google Redress & Integrity Platform (GRIP)], to help companies sue Google for financial damages in European courts….

“So far, the focus has been on public enforcement,” said Laurent Geelhand, managing partner at Hausfeld, in Brussels, who declined to comment on the size of any potential civil damages. “But what’s still missing is how this has financially affected the victims.”

That’s us.

According to Reuters:

[T]he [GRIP] platform would build on the European Commission’s April charge sheet, which accuses Google of unfairly promoting its own shopping service to the disadvantage of rivals.

“GRIP offers corporations, consumers and other entities harmed by Google’s anti-competitive business practices in Europe a mechanism to evaluate their potential claims,” Michael Hausfeld, chairman of Hausfeld, said in a statement.

Re/code quotes Avisa Partners:

“It has been five years between the first complaint against Google and the EC’s statement of objections, which is about three times longer than the groundbreaking Microsoft case,” Jacques Lafitte, founder of Avisa Partners, said in a statement. “Google’s president, lawyers and publicists have worked well to create this delay. But Google has not been able to stop the inevitable: It finally faces justice.”

Yeah.  What he said.

IMPALA have brought their own complaint with the European Commission which, as far as I know, is still in the hopper and has not been acted on as yet, although I’m sure it will be.  Even so, artists and labels may wish to consider investigating the Hausfeld online platform to see if it would make sense for them to participate in any civil action against Google.

While Google’s potential exposure to a ruling against the company would start with a staggering $6 billion fine, that fine does not preclude civil lawsuits against Google by those it has harmed.  While nobody takes paying a $6 billion fine lightly, does it really seem like it would be a lot of money to Google?  And when you consider that Google have managed to drag out the adjudication for years already, it really seems rather like chump change.  No pun intended.

We appear to have a law firm interested in at least helping potential plaintiffs bring these cases.  Why not at least check it out?

U.S. music folk should be thinking that this may be their last chance to get justice from Google.  Since Google already owns the U.S. government, it’s unlikely there will be any in this country.

News from the Goolag: What if You Make a Deal with Spotify and It Turns Out to Be With YouTube?

August 31, 2015 Leave a comment

We’ve all heard from numerous sources that Spotify is in the middle of renegotiating their license agreements with at least the major labels.  What has gotten less attention is YouTube’s interest in buying Spotify.  Spotify’s exit to an IPO is getting cloudier by the day as another tech bubble bursts in Wall Street alongside a volatile stock market, one should not rule out an acquisition of Spotify and who better to do it than Google’s wholly-owned YouTube subsidiary.

Remember that we saw this July 21, 2014 story in Re/Code by the highly credible tech journalist Kara Swisher:

Omid Kordestani, who has just temporarily replaced Nikesh Arora as chief business officer of Google, is joining the board of Spotify, according to people with knowledge of the situation.

In addition, sources said, one of the search giant’s former execs, Shishir Mehrotra, will become a special adviser to CEO Daniel Ek and the company’s management.

The move is a fascinating one, especially since sources inside Google said that new YouTube head Susan Wojcicki has expressed interest in acquiring the popular online music service if it were for sale. It is not currently and there are no such discussions going on between the pair about such a transaction.

YouTube is so disinterested in buying Spotify that Ms. Swisher was evidently asked to revisit that July 21 story on July 22 to clarify the reference to Google’s potential purchase of Spotify–only.   She wrote:

…Spotify co-founder and CEO Daniel Ek has indeed met with Google execs about various and substantive commercial deals at YouTube, Google Play and Android.

“There has not been a single conversation about Google’s interest between the two,” said one source, reflecting many others. “There was never a price, never a negotiation, never anything.”

Like most truths in business, that will be true until it’s not.

Does YouTube have the money?  That’s hard to tell because of the total lack of transparency about YouTube’s earnings in Google’s already opaque balance sheet.  However, Morgan Stanley analysts have broken out an estimate of YouTube’s earnings revealing an astonishing profit margin and revenue growth:

They clearly have–or can get–the money.  Given the paltry royalty that YouTube pays to artists, songwriters, labels and publishers, a Spotify acquisition would put the proverbial fox in the henhouse.  And like all of Google’s other efforts, that means the already pathetic Spotify royalties could go into a nose dive.

So you have to ask yourself–what protections are built into the soon-to-be renegotiated Spotify deals to allow copyright owners to pull out of a license if involves getting further into the Google grasp?

An Interview with Andrew Shaw of PRS for Music on Negotiating with Google, a guest post by Jonathan David Neal

August 27, 2015 Comments off

[Editor Charlie sez: We are lectured to endlessly about “transparency” by Google and their fellow travelers.  Google is, of course, famously opaque, so whatever they mean by “transparency” they don’t apply the same standard to themselves and never will.

This post is by Jonathan David Neal and originally appeared in The Score, the membership publication of the Society of Composers and Lyricists.  You can read his blog at Composer’s POV. PRS for Music is the principal music licensing body for performances of music in the United Kingdom and is roughly the equivalent of ASCAP, BMI and SESAC for UK residents.  Although this interview is from 2009, it gives you some insight into Google’s over the top negotiation tactics and how they use the withholding of content as a negotiation tactic in the press–enforcing your property rights is “censorship” don’t you know.  This is a long read, but worth every minute and is information you won’t get anywhere else.]

An interview by composer Jonathan David Neal with Andrew Shaw, Managing Director of Broadcast and Online of PRS for Music.

Background:

In the summer of 2007 PRS For Music, the UK PRO, licensed You Tube, owned by Google, for music use on a per download basis. That contract ended at the end of December 2008, at which time Google and PRS entered negotiations to renew the contract. In March 2009 while continuing negotiations Google, without warning blocked premium content access to users in the UK and few weeks later did the same thing in Germany. I interviewed Andrew Shaw (who is one of the PRS negotiators) in London on May 15, 2009. This story has strong implications for composers, songwriters and lyricists all over the world, since we are in a continuing struggle to maintain our rights as creators and copyright owners.

Neal: Please give us a short back-story to the [PRS’s] struggle with Google & You Tube

Shaw: Well, I think that to understand what is happening now you need to understand the history of where it all came from. You Tube as you know was started in December 2005 and was bought by Google in early to mid 2006 and that’s the time it really started getting some traction in the market place. The service had evolved from very humble beginnings as a way for private individuals to share their home videos. But over a period of time, the content that was being uploaded was copyright content rather than people having dinner parties and they were for a long time relying on their DMCA (Digital Millennium Copyright Act) protections and equivalent protections in Europe to say they had no liability for the content.

Neal: For the readers please explain DMCA.

Shaw: Digital Millennium Copyright Act, that is essentially the US law that says if you are a mere conduit you don’t have any  responsibility for what’s transmitted over your pipe provided that if someone notifies you that you are hosting illegal content, you take reasonable steps to take it down as soon as possible [Ed. Charlie: And without knowledge of infringment and if you terminate repeat infringers]. Google was saying, “Look we are just a big electronic notice board that some people around the  world decide to post things onto and other people around the world decide to come and have a look at these notices and we’ve actually got no idea what’s going on.”

Part of the business logic was that there is a huge community of users out here and “if we take the Google experience and knowledge of digital advertising sales and sprinkle some of that pixie dust onto You Tube, you’ve got excellent digital advertising sales married with a huge user base and massive traffic scale.” I think one of the reasons it hasn’t worked in that way is you’ve got millions of individual pieces of content that are all being viewed, the majority of which are being viewed a relatively small number of times.

The whole principle of Google’s advertising is it’s contextual advertising but they couldn’t actually identify what the content is, so if you tag a video as, for example, “Madonna,” You Tube or a computer has no idea whether that is a pop video or something about the Catholic church.

Advertisers were finding that adverts were appearing next to content that they weren’t quite aware of what that content was. They wanted their brand to be associated in certain places and not with others types of content. [Ed. Charlie sez: like an implied endorsement.] So the whole business model of advertising and targeted advertising required a much greater level of precision of knowledge of what was in the video.

Now as soon as you get into a level of knowledge about what’s in the video, by default you know what that video is and therefore, you start to lose your potential defenses that you are just a mere conduit and you don’t know what’s going on.

So there is a sort of process whereby, I suppose you call it “dancing around the handbags,” where they came to us and said, “We would like to have a license, but, of course, we don’t need one.” We said, “We’d like to give you a license, but we need to know what you’re doing.” They said, “Well we can’t tell you because we don’t know, because if we knew…” and there was a sort of Kafkaesque situation.

But we took what I think was a pragmatic view at the time and said look, at the end of the day we’ve actually  got two choices. We can either license You Tube and try and get what we believe is a fair and equitable remuneration for the works being used and pass that back to our members or we can go down the litigious route and sue them like Viacom had done or we can do nothing. We felt that doing nothing was sort of tacit approval that this was all acceptable.

We took the pragmatic view that licensing was preferable to litigation, for a number of reasons. First of all, getting into litigation was always going to be extremely expensive, extremely time consuming and take a long time to get resolution. The Viacom case proves that point. At the end of the day the outcome was very uncertain. An uncertain outcome might have been great, it might have been not so good and in a worst case, it could have been not so good with a knock on impact on all sorts of other areas of our business. We took the view that licensing was the best approach, so we licensed them.

We were the first society in the world to license You Tube, which was a major coup for us. But, I think that it was also, a major turning point for You Tube because it was the first time, that they had, actually, by default, recognized that they required a license, where if they didn’t require a license and they were so sure of that they certainly wouldn’t take one out. So, we licensed them in the summer of 2007. The license expired at the end of last year, 2008.

During the two years of You Tube’s license they were a model licensee. They did absolutely everything they said they were going to do, they went above and often beyond the call of duty in terms of trying to work with us to develop standardized reporting mechanisms, reporting tools, and we enjoyed a very good working relationship with them.

So, we’re now in a position at the end of 2008 where our license comes up to expire, we’ve got 18 months worth of data about what is actually being used on the service.

We’ve also seen a big transition in the content that’s been on the service over that 18 month period. They had realized that a very large number of videos being watched over a relatively small period of time, with no knowledge of what’s going on, was not going to generate big advertising revenue. Where the advertising money was going to be was in sponsorships and professional content. And so they started actively acquiring what they called seeded content, so they went to the BBC and did a deal to get clips of programs and previews. They’ve now expanded this to all sorts of different content owners, whether it be Hollywood studios, music labels, the White House, Downing Street, whatever.

[Ed. Charlie sez: The evidence against YouTube in the ongoing Viacom case and class action suggests that YouTube knowingly and purposely seeded their website with illegally obtained and distributed premium content for the purpose of profiting from the users attracted to the seeded content.]

A large proportion of the value of what is being generated by YouTube is actually around seeded content [Ed. Charlie: that is the revenue to YouTube], notwithstanding the fact that it accounts for a relatively small proportion of the usage. So you’ve got a sort of asynchronous pattern there. And, clearly music has been a very big area for them; they’ve done deals with all the labels except Warner Bros. and the labels have actively created channels for their artists on YouTube, where artist videos can be shown/promoted.

Now as far as we’re concerned, when you use a generated content, it’s pretty hard to value as far as the music, for instance, from the copyright point of view because you don’t know whether the music is in the foreground, the background, whether it’s incidental, whether it’s 30 seconds, 5 seconds or is it the whole point of the piece or is it just incidental to it. Then if you sort of move up the hierarchy of value, as far as music is concerned, you get into the professional seeded content where clearly there is some economic benefit being derived either by YouTube or the content user or both as a result of making that content available.

But still, music is a supporting ingredient to the finished created work. And then the “top end” of value from our perspective, is something like a pop video where music is actually the whole essence of it. If you then relate that to our regulatory framework, we have something called a “joint-online” license, which is our licensing scheme for digital music, and it was the subject of a  copyright tribunal decision back in 2007.

The copyright tribunal (UK Copyright Tribunal-similar to the US CRB) set a rate which was sort of equivalent to the American CRB, and the rate that they set for digital exploitation of music, pure music, like a pop video, was the greater of 8% of revenue or 0.22 pence per work streamed. So, every time a video was shown, we should have been paid at the greater of 8% or 0.22 pence.

The rates that they (the UK Copyright Tribunal) published in the summer of 2007, would only be applicable for a 2-year period, and it would expire in July 2009; they didn’t say what would happen after that. So, it is obviously incumbent upon us to do extensive market analysis and then come to a decision as to whether anything material had changed between then and now that would justify amending those rates or the structure of those rates, and if so to put that into place. So, we’ve been going through this process, and we are close to publishing what our new rates will be in the next few weeks. But YouTube, and Google has, and again, this is not confidential because they’ve said it publicly, said their position is a per-stream minimum for a service like You Tube doesn’t work, the only thing that works is a percentage of revenue. On a superficial level, their argument sounds very plausible. They say, “We’re trying to create this brand new business model, we’re giving exposure to all of these artists and these musical works, all we want to do is share in the revenues that we’re able to generate with the creators of those works. We absolutely believe the creators should be paid, but they should be paid a percentage of what we can make.”

Our view is that music has a value, irrespective of whether or not someone else is able to generate revenue out of it. If [music] didn’t have a value, then, [Google] wouldn’t be using it.

And it is very important for a number of reasons, including that the rights of creators are respected and they are remunerated a small amount of money every single time the music is played. There are a number of reasons why it’s important, one is, as I’ve said, it has a value.

The second is that specifically with respect to YouTube, any person who is uploading content has 3 choices when they upload that content. It gets fingerprinted and they can choose to monetize it, they can choose to not monetize it, or they can choose to block it. But, we don’t believe that if a third party makes a decision not to monetize content that it can be fair to the creator of that content not to get any sort of remuneration; a decision over which they (the creators) have no control.

The third reason is that with respect again to YouTube, there is a huge amount of crosssubsidization going on. Before the internet came along, there were lots of areas of commerce where as product or services become commoditized, what their provider does is bundle them with other products and services. So whether it’s handsets and minutes for mobile phone tariffs, whether it’s cable television and telephone and broadband connection from a cable TV provider, or whether it’s Google, whose business actually is all about the monetization of data.

To a large extent they don’t care whether the data they have about you comes from your email usage, your calendar, your search patterns or what you’re watching on You Tube. All of that has a value to them that is far greater than the sum of the parts. And therefore, simply looking at how much advertising is sold against one particular page of showing a video on YouTube is not an accurate and reflective economic analysis on which to base an appropriate remuneration for creators. That fundamentally, is a difference of opinion between the two of us.

We believe creators should be paid a small amount of money every time their music is used.

They [Google] believe that creators should be paid a percentage of what they can make in terms of advertising.

So, what happened after that is that we had been having our negotiations and had a meeting scheduled for, a series of meetings scheduled and a plan to try and come to some resolution, when on a Monday afternoon, I received a phone call from Google saying “We have made a decision that we are going to block all premium music content with effect from 6pm tonight.”

Neal: No notice? [Ed. Charlie sez: Welcome to the Googleplex.]

Shaw: No, this call came at 2:30 in the afternoon. This was clearly a very calculated and premeditated tactic on their part, because first of all, we had actually had a meeting with them the previous Friday where we had been consulting with them on what their views were for our new joint online license. The next negotiation meeting had actually been penciled in for the following day, a Tuesday, so it was rather strange that 2:30 in the afternoon, I get this phone call, and within 5 minutes of me putting the phone down, I started getting calls from our press office, who were receiving calls from every single media outlet in the UK, saying “We’ve heard that Google is about to block all music videos in the UK tonight-what have you got to say about it?”

Chris Smith: Big Day . . .

Shaw: Now, what they actually did was very highly targeted, and designed to create a much bigger story than the actual impact on the user experience. If you go on to YouTube even today in the UK, you may not be able to find every single version of a particular pop video, but I would pretty much bet that whatever video you wanted to find, you could find a version of it somewhere. So, they have not blocked all music videos in the UK. What they have purported to do, is to block what they call Premium Music Content. Premium Music Content by their definition is content that is either being uploaded by record labels or claimed by record labels, either some label uploaded or it seems someone else has uploaded it, they’ve owned it and they’ve said we own the copyright in this and therefore it’s part of our pot.

I think there are 3 reasons why they honed in on these two. Number one, it was the only part of the content set that actually disrupted other people’s revenue funds. So, if Joe Blog gets their video blocked, they get pissed off, but, so what? If Universal Music gets their video blocked, they stop receiving revenue every time that video is played.

So, the tactic, one has to assume, was to put pressure on other people who were being affected, to put pressure on us, to concede our position. So, one was it was disrupting other people’s revenue flows.

The second was that it was highly targeted, as I said, on the Premium Music Content, which actually accounted for a relatively small portion of all usage on YouTube. So, the videos concerned, and we don’t know exactly how many there are, because it seems to change on a daily basis, but it accounts for probably single digit percentage of total views or streams viewed on YouTube.

The third reason was that they will still at some point claim that as far as user generated content is concerned, (as opposed to) user uploaded content, because they are two quite different things, they would still want to fall back on some sort of “We’ve got no responsibility for this.” As soon as you start blocking something because it fits into a certain category then you have to know what it is in order to block it.

So, by leaving all of the user uploaded content alone they preserve their position with respect to DMCA protections and a lack of obligation to take responsibility for that content.

So they have blocked some of these videos, a few weeks later they did the same thing in Germany. They publicly said that the reason they did it was because they were unable to reach an agreement with us, although, we were still in the middle of a negotiation and we certainly did not ask them to take this action, and take content down.

They also said they felt uncomfortable being in a position where they were not licensed. Now, I find that quite ironic, given that the other 200 or so countries in the world don’t seem to pose such a moral dilemma for them and their content is still available there. Since the date of the take-down, or the blockage, I think March, about 2 months ago now, so early March, we have continued to talk to them and we do continue to talk to them, but there is still a fundamental difference of opinion over what they are responsible for and what is the appropriate mechanism to judge that.

Neal: At this point, you don’t really know what kind of effect it’s had? Have you heard from publishing members or record labels complaining that they’re losing money on this?

Shaw: No. I have to say we’ve been extremely pleased by the support that we’ve got from a wide variety of constituents and  stakeholders in the industry, and actually, not just in our industry, but across all creative industries.

This is not an issue between Google and PRS Music: this is a battle that we happen to have stuck our head above the parapet, being in a large territory that’s important to them, perhaps having been the first to license them, but, we are being made an example of in a battle that applies equally to record labels, it applies to journalists, it applies to book publishers and photography.

Any type of content that is being exploited over the internet, where there is a very fine line between a company providing an ability for consumers to find what they’re looking for, that other people have put there, and a company that is actually providing that content as a service provider. There is a fine line between data and/or information and content. If you go on to Google’s corporate website and look at their strategy file, their mission statement, one of their strat lines is “Don’t be evil” but another is there that is the corporate mission, (I can’t remember it verbatim) but it’s something like “to make all the world’s information available to anybody who wants to find it,” something like that. And that word, “information”, was probably put in there when that’s exactly what they did, but the line between information and content has become very, very blurred.

And if you look at what’s going on in the US with the book settlement, you look at what’s going on all over the world with newspapers and the Google news aggregation service and Google books as well, there are lots of areas where that line is becoming very blurred and probably being overstepped.

___________________

Conclusion by Jonathan David Neal

This is just one example, in one part of the world of how some corporate giants are trying to devalue the work and content of creators, and ultimately respect of composers, and songwriters. It’s happening all over the world. Their mantra has been, “you need us.” However, they need our content, which is just as important. A second observation is, “if they devalue our intellectual property, they undermine the value of their own intellectual property, their services and everyone loses.”

It’s very short sighted. We as composers, songwriters and lyricists need to take an active stand against those who would devalue our work and demand respect for our craft and ourselves.

Note: On September 3, 2009 PRS for Music announced a new licensing agreement that covers music contained in videos streamed via the online video platform.  Premium music videos have now been reinstated to YouTube in the United Kingdom.

Thanks to Dan Foliart and UK Composer Chris Smith, for helping me make this interview possible. Chris sits on the board of PRS-MCPS and arranged the interview, which took place at PRS For Music’s London office in May of 2009.

Now that’s a special relationship

August 25, 2015 Leave a comment

According to the New York Times:

President François Hollande of France on Monday awarded the Legion of Honor, France’s highest award, to three Americans and a Briton for their role in stopping a gunman on a high-speed train traveling to Paris from Amsterdam on Friday.

The three Americans — Airman First Class Spencer Stone, 23; Alek Skarlatos, 22, a specialist in the Oregon National Guard; and their friend Anthony Sadler, 23 — received the honor in the gilded halls of the Élysée Palace, where they were joined by Chris Norman, 62, a British consultant….

A French citizen who was the first to tackle Mr. Khazzani but who has declined to be identified will receive the honor at a later date, as will Mark Moogalian, 51, a passenger with dual French and American citizenship who struggled with the attacker and is recovering from a bullet wound….

Mr. Norman, speaking in French to reporters after the ceremony, said he felt honored by the distinction. “I did what I had to do,” he said. “It wasn’t heroism, it was what needed to be done in a situation of survival.”

The three Americans did not speak publicly on Monday, but at a news conference on Sunday at the American ambassador’s residence, they brushed aside suggestions that they were heroes.

Right.  They were just there when the wheel went round.  But it did go round and they were there.

 

Spotify Apologizes for Using Your Music To Spy on Your Fans

August 24, 2015 Leave a comment

Digital Music News reports again today on the latest Spotify debacle, this time data mining from pretty much everything users do on the service including mining their contacts.

In our new privacy policy, we indicated that we may ask your permission to access new types of information, including photos, mobile device location, voice controls, and your contacts.

Let’s be clear–there’s really no reason for anyone to have a Spotify account if they’re not coming to the service because of some artist’s music.  So how they treat fans is very important.

Explain to me exactly why Spotify needs your fans’ contacts when you’ve already created the motivation to send the fan to Spotify in the first place?

And even if they could get the data mining into some socially acceptable format, do you think they are doing this for free or are they selling the data out the back door?

Why is the New York Times Coverage on Artist Rights So Oddly Inconsistent?

August 23, 2015 1 comment

If you read the New York Times Sunday Magazine (which probably means you’re over 40 or live inside of the Acela corridor), you may have noticed a story last week titled “The Creative Apocalypse That Wasn’t“.  This piece is another of these “Sky is Rising” type things bankrolled by the Computer & Communications Industry Association, aka Google.  I’m not accusing the author of being on anyone’s payroll (except perhaps the Times itself…more about that later), but I can’t help noticing the similarities.

Here is the author’s thesis:

But starting with [Lars] Ulrich’s [2000] testimony [in the Napster case and hearings], a new complaint has taken center stage, one that flips those older objections on their heads. The problem with the culture industry is no longer its rapacious pursuit of consumer dollars. The problem with the culture industry is that it’s not profitable enough. Thanks to its legal troubles, Napster itself ended up being much less important as a business than as an omen, a preview of coming destructions. Its short, troubled life signaled a fundamental rearrangement in the way we discover, consume and (most importantly) pay for creative work. In the 15 years since, many artists and commentators have come to believe that Ulrich’s promised apocalypse is now upon us — that the digital economy, in which information not only wants to be free but for all practical purposes is free, ultimately means that ‘‘the diverse voices of the artists will disappear,’’ because musicians and writers and filmmakers can no longer make a living.

Not surprisingly, this thesis leads to the following conclusion:

But just because creative workers deserve to make more money, it doesn’t mean that the economic or technological trends are undermining their livelihoods. If anything, the trends are making creative livelihoods more achievable. Contrary to Lars Ulrich’s fear in 2000, the ‘‘diverse voices of the artists’’ are still with us, and they seem to be multiplying. The song remains the same, and there are more of us singing it for a living.

The thrust of the article is essentially just because there is a lot of anecdotal evidence that artists are hurting in the post-Napster era doesn’t mean that they are.  And we can “prove” that by looking at government data sets.

The author notes:

The problem with the [Labor Department] data is that it doesn’t track self-­employed workers, who are obviously a large part of the world of creative production. For that section of the culture industry, the best data sources are the United States Economic Census, which is conducted every five years, and a firm called Economic Modeling Specialists International, which tracks detailed job numbers for self-­employed people in specific professions.

You know, rather than cherry picking data, there’s another good way to find out about how self-employed artists are doing–why don’t you ask them?  Case in point:  The Austin Music Office commissioned a study that did just that.  You can read Texas Monthly’s coverage on it.  Somebody at the Times might want to read it–and the data collected from 4,000 respondents from the artist, music business worker and venue owner communities.  The Census data drove the conclusion, and not the other way around.  I don’t think it supports the conclusions in the Times–conclusions that were all derived from inside a library by the look of it.

It’s interesting that the author starts with Napster and then largely restates and extends the narrative crafted by Napster’s litigation PR team.  You know:  Fire good, Napster bad.

Because the thesis in the Times dances around a narrative that’s straight outta 1999:  Blame the victim.  It seems carefully crafted to lead to the desired conclusion apparently driven by a number of factors.

1.  Omit Any Reference to Brand Sponsored Piracy:  The author’s basic argument about piracy is straight out of the CCIA playbook–yes, piracy is bad, but the artists make it up on live music.  This substitution argument allows the author to sidestep the entire issue of who profits from piracy, who drives traffic to pirate sites, in fact, the whole income transfer that is essentially at work in online piracy across all copyright categories.  And you know, some of the companies benefiting from piracy are the same people who sell advertising on the New York Times website and drive traffic to it.

Even if the author wanted to avoid mentioning they who must not be named (Google), he could at least have noted the big box brands that benefit from advertising cheaply to pirate sites that attract the same demographic as do more costly and less populated music sites.  I’m not really joking about not mentioning Google’s name–it only comes up once.

2.  Discuss Independent Bookstores with No Reference to Amazon:  Here’s the treatment for independent bookstores:

This would be even more troubling if independent bookstores — traditional champions of the literary novel and thoughtful nonfiction — were on life support. But contrary to all expectations, these stores have been thriving. After hitting a low in 2007, decimated not only by the Internet but also by the rise of big-box chains like Borders and Barnes & Noble, indie bookstores have been growing at a steady clip, with their number up 35 percent (from 1,651 in 2009 to 2,227 in 2015); by many reports, 2014 was their most financially successful year in recent memory. Indie bookstores account for only about 10 percent of overall book sales, but they have a vastly disproportionate impact on the sale of the creative midlist books that are so vital to the health of the culture.

This is a carefully worded paragraph.  Maybe I missed it, but I don’t see a cite for the number of independent bookstores.  I also note that the name “Amazon” doesn’t appear, nor the fact that Borders filed for bankruptcy and Barnes & Noble has been running on fumes for years (most recent evidence is that Barnes & Noble reportedly stopped paying its Marketplace sellers this month).

The author would have us believe that “the Internet” was only a contributing factor rather than Amazon being at least a significant cause for the demise of both indies and big box even prior to 2007, the year that Amazon launched the Kindle.  Amazon did what Amazon does best–use other peoples’ bricks and mortar stores as show rooms while offering the same goods at a lower price.  (Partly by dodging state sales tax.)  People didn’t stop buying books, they just stopped buying them from local booksellers.

Another major issue the author skipped is the brisk market for pdfs of pirated books on Torrent sites.  But why expect that level of nuance from someone who clearly can’t even see the boulder in his own eye.

3.  Everything is Awesome!  The author treats us to this list of glittering generalities:

And just as there are more avenues for consumers to pay for creative work, there are more ways to be compensated for making that work. Think of that signature flourish of 2000s-­era television artistry: the exquisitely curated (and usually obscure) song that signals the transition from final shot to the rolling credits. Having a track featured during the credits of ‘‘Girls’’ or ‘‘Breaking Bad’’ or ‘‘True Blood’’ can be worth hundreds of thousands of dollars to a songwriter.  (Before that point [which point?], the idea of licensing a popular song for the credits of a television series was almost unheard-­of.) 

Oh really?  And what is that statement based on exactly?  First the money–Maybe–maybe–if he’s talking about a major composer commissioned to write and record a  main title theme and score for a big series.  But end titles?  I think not.  I personally have licensed recordings for many, many television programs throughout the 1990s and 2000s and I know of plenty of “popular songs” that were in the end titles and none of them got “hundreds of thousands of dollars” for the songwriters.

Video-­game budgets pay for actors, composers, writers and song licenses. There are YouTube videos generating ad revenue and Amazon Kindle Singles earning royalties, not to mention those emerging studios (like Netflix and Yahoo) that are spending significant dollars on high-­quality video.

Here’s a hot tip–unless you’re bringing personality rights to a video game, music license fees have been in a steady state of decline since I did the first videogame sound track license for Road Rash 3DO where all the artists got a per-unit royalty on the game that A&M passed through to the artists on a non-recoupment basis.  It’s a cold day in hell that any videogame company pays a royalty for music (with the possible exception of Guitar Hero-type games).

Of course, video game budgets do pay for a bunch of employment.  Glad he brought that up.  So do record company and music publisher advances.  But we don’t see much discussion about the benefits of their demise.  The kind of discussion you might have if you did something like…oh, interview someone from a record company or music publisher.

Ad revenue from YouTube is a joke–even more confirmation that the author did no original research for the story.  It is certainly true that Netflix, Amazon and Yahoo are spending money on original programming having learned from the YouTube tsunami of shite.  That parenthetical is one of the few unquestionably true statements in the article.

Filmmakers alone have raised more than $290 million on Kickstarter for their creations. Musicians are supplementing their income with instrument lessons on YouTube. All of these outlets are potential sources of revenue for the creative class, and all of them are creatures of the post-­Napster era. The Future of Music Coalition recently published a list of all the revenue streams available to musicians today, everything from sheet-­music sales at concerts to vinyl-­album sales. They came up with 46 distinct sources, 13 of which — including YouTube partner revenue and ringtone royalties — were nonexistent 15 years ago, and six of which, including film and television licensing, have greatly expanded in the digital age.

The reward based crowdfunding is a real thing that I support, and the Patronism.com and Patreon models have appeal for musicians.  However, these crowdfunding models do not make up for the consistent investment in production, marketing and promotion spend from record companies or the sustaining advances from music publishers.  And please don’t tell me that the huge hit to musicians is going to be offset by music lessons on YouTube.

I find it odd that the author had the brass to mention the Future of Music study.  Here’s what FOMC had to say about their New York Times experience:

Earlier this month, the New York Times Magazine reached out to Future of Music Coalition with regard to a forthcoming feature. We like to help out with this sort of thing, because we know that music business structures and practices can be quite complicated, and think it’s important that journalists get the facts and context as correct as possible, whatever narrative they’re advancing. Last week, fact-checkers from the magazine followed up with FMC staff. There was a good deal of back and forth as we were provided short paragraphs, and later, individual sentences, from the article and asked to verify whether they were “true.” (Unfortunately, we weren’t provided with much context.)

Alas, what ended up running was rather disappointing. NYT Magazine chose to publish without substantive change most of the things that we told them were either: a) not accurate or b) not verifiable because there is no industry consensus and the “facts” could really go either way.

4. The Most Offensive Part:  As MTP readers will recall, we’ve been using the tag line “Your Survival Guide to the Creative Apocalypse” for a good long time.  Personally, I think that’s a lot cooler than “All the News that Fits” or whatever the NYT slogan is, I forget now.  So when we saw an article using “The Creative Apocalypse” attached to such an agenda driven post, it was particularly offensive.  Get your own damn title.

So…the real question is not what this author was up to.  The answer to that is not much.  Another example of what we’ve all come to expect.

The real question is what is the New York Times up to.  On the one hand we have great reporting at NYT by journalists like Ben Sisario who has some of the best music business writing out there.  He takes the time to actually talk to people, get both sides, and so some first rate analysis.  Trying to get at the whatchamacallit..you know, that truthiness thing.  This is what we expect from the New York Times, the newspaper of record.

But to have factcheckers cherry pick issues presented “how long have you been beating your wife” style and then to not even use the information in a side bar is really hard to understand as being anything other than agenda driven.   How difficult would it have been to run a companion piece saying that people disagree?

I’ve been reading the Times so long I can’t remember when I didn’t.  But this–this is really hard to understand.

If you find it incomprehensible as well, feel free to write to the Times public editor and let her know what you think:

Margaret Sullivan public@nytimes.com

DMN: Spotify’s New Tracking Terms Shows The Interlocking Influence of Google’s Seat on Spotify Board

August 21, 2015 Leave a comment

Digital Music News has excellent reporting on Spotify’s new terms of use controlling everyone’s use of the service.  The headline says it all: Spotify Is Now Tracking Your ‘Online Activity’ Even When You’re Not Using Spotify.

You’re now being tracked even when you’re not on Spotify, often through Spotify ‘business partners’.

Spotify TOSNow remember that we saw this July 21, 2014 story in Re/Code by the highly credible tech journalist Kara Swisher:

Omid Kordestani, who has just temporarily replaced Nikesh Arora as chief business officer of Google, is joining the board of Spotify, according to people with knowledge of the situation.

In addition, sources said, one of the search giant’s former execs, Shishir Mehrotra, will become a special adviser to CEO Daniel Ek and the company’s management.

The move is a fascinating one, especially since sources inside Google said that new YouTube head Susan Wojcicki has expressed interest in acquiring the popular online music service if it were for sale. It is not currently and there are no such discussions going on between the pair about such a transaction.

Google Adsense is one of the companies that Spotify uses to sell advertising:

Some of our advertising partners may use cookies and web beacons on our site. Our advertising partners are listed below:
– Google AdSense – Commission Junction – Adbrite – Widget Bucks – Kontera – Clickbank – Azoogle – Chitika – Linkshare – Amazon

And Spotify’s privacy policy says this:

We may use third-party vendors, including Google, who use first-party cookies (such as the Google Analytics cookie) and third-party cookies (such as the DoubleClick cookie) together to inform, optimize, and serve ads based on your past visits to our websites, including Google Analytics for Display Advertising.

Is anyone really surprised?

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