THE MUSIC INDUSTRY'S GROUNDHOG DAY!

During the highly publicized Limewire trial, there was an unforgettable use of a tool as old as a vinyl record or even eight track tape (social networkers hang tight for a moment!). The tool was called a chart an this chart had an arrow pointing upwards to indicate the potential recorded music profit that may have been if file sharing companies like Napster and Limewire did not exist.  Immediately, since the news of this graft in a courtroom lit up the internet like a comet in the night sky, one question was echoed throughout many podcast and web articles: “why can’t the music industry move on already?”.¹ Although it has been over 12 years since the arrival of Napster and mass usage of P2P sharing systems, the music industry has yet to embrace the new technology instead of treating it like a commercial pariah.² According to MP3.com founder Michael Robertson, record labels are stuck in a “past era” and they will remain that way until a new management team changes the entire system. (Reporter’s Roundtable, March 4, 2011, Ray Thidelman). Despite the customer’s clamor for more music interactivity on social network sites like Facebook, according to Michael Robertson, consumer demand doesn’t affect royalty rates that are codified into law, therefore, what the consumer wants is not the ultimate factor. Companies like Spotify or Pandora provide a great technological service, however, royalty rates as determined by law strangle the profitability of these companies and may even threaten their existence.² The option of getting free music on You Tube is making recorded music customers more “careful” about purchasing entire albums at retail stores.² (Reporter’s Roundtable, 2011).  However, other media industries like Hollywood are facing the pressure of internet media streaming technology.³ Greg Santos of the Media Maverick blog believes that if theatres become more concerned about patrons leaving the movie theater for alternatives like patrons in Spain, then Hollywood could have more problems;³ Furthermore, Greg believes that Disney channel’s recent movie streaming service at $30 per movie is a sign that company’s are realizing that giving consumers what they want when they want it is good for customer access.³ All of the podcast reports shared a common conclusion regarding the music business and its relationship with technology: “Wake up and get over Napster already. Embrace technology instead of increasing royalty rates and the number of lawsuits”.  

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REFERENCES:

1) What would the Music Business Look like Without Napster; Music Biz Weekly Podcast; Michael Brandvold / Brian Thompson; April 8, 2011

http://michaelbrandvold.com/blog/2011/04/the-music-biz-weekly-podcast-episode-4-what-would-the-music-industry-look-like-without-napster/

2) Michael Robertson on Today’s Music Industry; Reporter’s Roundtable, March 4, 2011, Ray Thidelman; http://www.cnet.com/8301-30976_1-20039456-10348864.html

3) The Internet vs. Hollywood; Reporter’s Roundtable on CNET.com; Hosted by Rafe Needleman w/ guest Steven Gaitos, Executive Editor of Variety & Greg Santos of CNET.com’s Media Maverick Blog; October 1, 2010; http://www.cnet.com/8301-30976_1-20018347-10348864.html?tag=contentMain;contentBody;1n

NEW TRADE FOUNDATIONS FROM EFFECTIVE OLD METHODS

A new drink from an old well is what the 21st century music consumer and trade professionals are experiencing in this age of digital music.  The new drink is the digital format for recordings and means of distribution.  The old well is the sea of legal issues surrounding the changes in the music business.  It was during the change from music on piano rolls to public performance on radio and vinyl records that organizations championing the "rights" and "royalty" interest of artists emerged in the start of the twentieth century; therefore, it is no surprise that the legal frontline is where an intense battle to control the direction of commercial music is intense.  Admittedly, the RIAA is throwing any "violator" under the bus for "illegal downloads of music".  Students, parents, college administrators and music pirates were all subjected to the lawsuits. Citing a $55 billion dollar loss over the last ten years due to piracy, lawyers for the RIAA and major record companies are heralding the value of the lawsuits for the long-term good of the music industry.  However, critics of the lawsuit strategies of the RIAA and music executives are crying enough with the blame game. The effect of Napster, Limewire, and, other digital download services on the music industry has been advantageous for technology companies like iTunes, cell phone companies and MP3 device manufacturers. On the other hand, the emphasis on the “challenges” of technological change has seemed to eclipse the “creative” side of the trade.  The over emphasis on digital technology as a tool for corruption instead of an ally for change is part of the problem, according to critics of the lawsuit strategies. Moreover, critics assert that embracing digital services like Spotify peer-sharing services would bring the type of success being experienced in other countries.  The closing of record stores, massive layoffs at music companies, and anti-development perceptions seem to foster the consumer revolts against the corporate record companies’ traditional processes.  Critics may be wary of the “blame game” from the RIAA and major record labels, however, the legal battle was always the frontline for establishing the systems for a century of trade.    

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REFERENCES:

1) Downloading Music Illegally and the Role of the RIAA; Legal Talk Network; November 16, 2007;

http://legaltalknetwork.com/podcasts/lawyer-2-lawyer/2007/11/downloading-music-illegally-and-the-role-of-the-riaa/

2) Greg Kot interview; The Sound of Young America; August 10, 2009;

http://www.maximumfun.org/sound-young-america/greg-kot-interview-sound-young-america

3) Music Industry Still Blaming Napster; April 8, 2011: http://www.thornybleeder.com/index_files/episode4_the_music_biz_weekly_podcast.html

THE PERFECT MUSIC BUSINESS STORM

Queen could be heard singing the theme song in a too familiar scenario of the indie and major music business – another one bites the dust!  According to a recent Rolling Stone article, as revealed in the Billboard magazine, the Arc Music Factory production team and the artistic/management duo of Rebecca Black plus her mother are in a copyright infringement tug-of-war.  Despite a #38 ranking on the Billboard charts, an increase in web video views, and rising popularity of the song ‘Friday’, a struggle over the ownership of master recordings, videos and music compositions of the hit song rages.  In terms of the “meat” of some sort of legal agreement, the article fails to mention whether some formal agreement exists, thus, leaving one to ask “where’s the beef” in this legal matter? The meat being the question: was there ever a formal agreement regarding the song’s publishing ownership split, music video as a work for hire, or ownership over the composition? Actually, the article makes it seem as though this was some sort of handshake deal where the bridges of music legality would be crossed “when they got there”.  How else could one explain the implosion inside the Arc production team, and the charges of an “illegal exploitation” of the image of their artist – who, by the way, paid $4,000 to produce the video instead of the label or production team¹.  During the peaking success of the music on the charts, the internal conflict is occurring at an inappropriate time (when all hands should be focused on enhancing the value of the song instead of fighting over the song).  MUSIC ASPIRANTS TAKE HEED TO THIS LESSON!  A similar discrepancy in an understanding of terms in a music agreement is occurring between the Christian music group P.O.D. and its label INO Records.  Citing P.O.D.’ s “abandonment” of the contractual obligations it was under, the INO record label did not provide $400,000 in order for P.O.D. to begin production on a new album².  The importance of understanding the terms in a music recording agreement is being impacted by the dynamics of physical music sales versus digital music sales. if data revealed in the Nielson SoundScan, Strategy Analytics, and the IFPI Global Music Industry Reports has any merit, then, artists need to make certain that they secure favorable terms in order to maximize the benefits of physical and digital publishing royalties.  The data suggests that digital sells presently accounts for 40% of all music sold, and, sales of physical music will have an even split of 50% with digital music selling the other 50% of all music sales by 2012.³ Therefore, aspiring artist and record labels seeking to gain the most from future music sales, and, avoid the pitfalls of a lack for understanding the terms of a music contract, should stay clear of these music industry storms (or prepare to adopt the Queen’s anthem for losers).  

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REFERENCES:

1)   Rebecca Black Reportedly Threatens Legal Action Against ‘Friday’ Producer Arc Music Factory; Billboard Magazine, April 1, 2011; by Phil Gallo;  http://www.billboard.biz/bbbiz/industry/legal-and-management/rebecca-black-reportedly-threatens-legal-1005109432.story

2)   P.O.D. Files Lawsuit Against Record Label; Billboard Magazine, April 1, 2011; by Gary Graft;   http://www.billboard.biz/bbbiz/industry/record-labels/p-o-d-files-lawsuit-against-record-label-1005108712.story

3)   When Will recorded Music Be 50% Digital?; Billboard Magazine, March 31, 2011; by Glenn Peoples; http://www.billboard.biz/bbbiz/industry/digital-and-mobile/when-will-recorded-music-revenue-be-50-digital-1005106392.story