Record Labels Continue 'Negotiating Through Lawsuit'

from the it's-why-they're-so-lovable dept

Thu, Jun 18th 2009 1:09pm — Mike Masnick

We've noted in the past that the record labels have a pretty well established operating procedure when it comes to "negotiating" with startups that are actually doing the innovative things in the music delivery and promotion space. They open "negotiations" with these startups... and then after a certain point, they file a lawsuit. It's purely a negotiating tactic (and a way for record label lawyers to keep busy), that makes the "negotiation" a lot more antagonistic, and often ends with the startup agreeing to give up way too much. Warner Music perfected this trick, such as when it sued iMeem only to then invest in the company as part of the settlement. Of course, because iMeem had no choice but to cave in order to deal with the lawsuit, the terms of the deal were so onerous that iMeem nearly went out of business -- until Warner Music wrote off the investment and recently renegotiated.

As unbelievable as it may be, the major record labels apparently don't recognize that "deals" negotiated at the end of the barrel of a gun tend not to work out very well in the long run. They're certainly not mutually beneficial.

And yet... the process continues. While Warner Music has done a bunch of these sue-to-negotiate deals, EMI seems to be involved in many of the more recent lawsuits of this nature. Its latest target is GrooveShark, one of a bunch of sites that lets you listen to streaming music online. Apparently the two companies had been negotiating terms... and then suddenly EMI sued. Par for the course. In the meantime, if you're a music startup hoping to do a licensing deal with a major label, make sure you have some litigators on your legal team. You're going to need them.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: licensing, music, negotiations, streaming
Companies: emi, grooveshark

8 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Ima Fish (profile), 18 Jun 2009 @ 1:19pm

"They're certainly not mutually beneficial."

The music industry does not enter into these "deals" for the mutual benefit of the parties. It sues and enters into these deals for two reasons.

First, to destroy any music related business model which could interfere or compete with their business model.

Second, in case the new business model somehow succeeds, the music industry gets a cut for doing nothing.

Either way, the current music industry succeeds, even as they are circling the drain.
[ link to this | view in thread ]
barren waste, 18 Jun 2009 @ 1:33pm

irony
When I did stuff like that in my younger days, the courts called it extortion......
[ link to this | view in thread ]
bob, 18 Jun 2009 @ 3:46pm

Overseas
Have you servers in Antigua.
[ link to this | view in thread ]
Anonymous Coward, 18 Jun 2009 @ 5:49pm

Re: Overseas
Doesn't matter where your servers are... it's where YOU are. You only get that dodge if you move to that remote jurisdiction and NEVER come back - you can get served any time you are in the US.

Dodging means you have something to hide, anyway.
[ link to this | view in thread ]
Fsm, 18 Jun 2009 @ 6:04pm

Re: Re: Overseas
"Those aren't MY servers, your honor. They belong to a local Antiguan!"
[ link to this | view in thread ]
Anonymous Coward, 18 Jun 2009 @ 6:22pm

Re: Re: Re: Overseas
"interesting sir, and how come you are listed as the main person on every blog post, on every entry, and that you make your living off those servers".

Oldest dodge in the book, and it doesn't work (ask the gambling folks).
[ link to this | view in thread ]
Killer_Tofu (profile), 19 Jun 2009 @ 6:11am

EMI
And EMI was supposed to be under new leadership and going in a new direction.
Just more of the same junk from the same old evil labels.

As one AC used to say a lot:
Not one cent!
[ link to this | view in thread ]
Sammie Houston (profile), 19 Jun 2009 @ 3:08pm

Watunes, The New Music Industry!
Watunes offers a business model that provides the artists & record labels a solution to lost revenues due to P2P, Bit Torrent, and other mediums that are used which decrease profits as well as pay 100% of royalties to the artists & record labels. As representatives for the largest digital distribution in the world, we will show you how to benefit from a Digital Distribution relationship. Gone are the days of selling your music through a physical means. Statistics say 48% of teenagers purchased their music online in 2007 with that number increasing from 32% a year prior. If you are still slanging CD’s, you are quickly falling into the dinosaur arena. We can help you change all that.

Watunes offers services for the entire independent music community, whether you already have digital representation or are just getting started in the digital world. We make it easy to distribute your content to digital outlets, promote your content using our innovative marketing systems, and manage your catalog and sales using our first-class technology.

WaTunes is a social media distribution service that enables artists, groups, and record labels to sell music, music videos, and audiobooks through leading online entertainment retailers, including iTunes,ShockHound, and eMusic. Artists and labels can sell unlimited music and earn 100% of their profits – ALL FOR FREE! In fact, as of Tuesday June 9th, we signed NBA Legend and Hall of Famer Earl ‘the Pearl’ Monroe who owns record label Reverse Spin Records. The link is listed right below & you can either click on it and/or copy & paste into your browser. Please direct any further inquires, comments, questions, or concerns to us. We're more than elated to serve you anyway we possibly can.

Best,

Sammie

Earl "the Pearl" Monroe link:

http://news.google.com/news?client=safari&rls=en&q=watunes&oe=UTF-8&um=1&am p;ie=UTF-8&sa=N&hl=en&tab=wn

--
watunes.com

Sammie Houston
SVP, Client Services
e-mail: sammiehouston@watunes.com
Skype ID: sammie.houston
Office: 678-598-2439

Sneak Preview: http://tinyurl.com/dh3mum

Youtube advertisements:

http://www.youtube.com/watch?v=ESwBmhWmF4k

http://www.youtube.com/watch?v=O2AY rcDVhCs

Check out our Reviews, add your comments & feedback too:

http://www.rateitall.com/i-1125252
watunes.aspx
[ link to this | view in thread ]