UMG Finds Perfect Biz Model: Cheat Artists, Then, If Caught, Demand Insurance Company Pay Instead

from the wow dept

Mon, Nov 14th 2011 12:29pm — Mike Masnick

The sheer chutzpah of Universal Music is really quite stunning. As you may recall, in 2009, it came out that the major record labels had been screwing over musicians in Canada with a bit of sleight of hand called "exploit now, pay later if at all." The way it worked was that labels would put old works on compilations without getting artists' permission, then put the artists' names on a "pending" list, which was supposed to mean that payment to those artists was "pending." Except the pending lists were never touched and the royalties were never paid. Labels not paying artists royalties is a pretty common issue, but here they weren't even getting any credit at all. Pretty sneaky. Realizing they had been caught red handed, the labels "settled" by agreeing to pay the $45 million in royalties owed.

However, it turns out that Universal Music Group actually seems to think that its insurance company should be paying the $14.4 million it owes (UMG's share of the $45 million). It's now suing its insurance company for refusing to pay. If you think about it for a second, you realize just how insane this claim is. Basically, Universal Music is claiming that it can simply not pay any royalties at all, then wait to get sued... and if it loses and has to pay, it believes its insurance company has to foot the bill. Now there's a business model!

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Filed Under: canada, cheating, copyright, insurance, scams
Companies: universal music

50 Comments

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Ima Fish (profile), 14 Nov 2011 @ 12:35pm

"Now there's a business model!"

And you say that the copyright industry cannot come up with innovative business models.
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- Bengie, 14 Nov 2011 @ 2:02pm
  
  Re:
  I was going to ask if you like fish sticks, but your joke is so much better. +9001
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Anonymous Coward, 14 Nov 2011 @ 12:38pm

The policy is a "conduct of business" policy, and might actually really cover this sort of thing.
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- Anonymous Coward, 14 Nov 2011 @ 12:43pm
  
  Re:
  Well, I'm going to stop making insurance payments and when called on it, I'll send the bill to the recording industry.
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- Richard (profile), 14 Nov 2011 @ 12:55pm
  
  Re:
  The policy is a "conduct of business" policy, and might actually really cover this sort of thing.
  
  It might cover negligence - but no insurance company in the world will ever cover deliberate wrongdoing - and this looks pretty deliberate to me.
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Anonymous, 14 Nov 2011 @ 12:45pm

The fact that Canada's largest ever copyright infringement case was brought by artists against a record label says it all, doesn't it?
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- gorehound (profile), 14 Nov 2011 @ 2:08pm
  
  Re:
  The only thing wrong in this suit was the Artists should of demanded the maximum amount per each track as that is what these asshole RIAA PIGS do.All of those Canadian Artists should of hammered the bigwigs and give it back to them.
  
  No new Artist needs to sign with any of these bloodsuckers anymore.You can do it all on your own with the NET and not have to lose your income.Your Musical Act will receive 100% of the money as opposed to whatever a bigwig thorwsd to you and what they throw is shit.
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  - Niall (profile), 15 Nov 2011 @ 5:10am
    
    Re: Re:
    So maximum amount per track... each track could have been heard by X people per actual unit produced... in fact, could potentially have been heard by the whole population of the planet, plus of course Little Green Men since we're beaming radio into space...
    
    ...How's my MAFIAA methodology going?
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Richard (profile), 14 Nov 2011 @ 12:49pm

Jammie Thomas
Could Jammie Thomas's Home Insurance company pay her bill?
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- MrWilson, 14 Nov 2011 @ 12:51pm
  
  Re: Jammie Thomas
  Probably not. Getting sued by the recording companies would be exempt from coverage under the "Acts of the Devil" clause.
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  - Richard (profile), 14 Nov 2011 @ 1:09pm
    
    Re: Re: Jammie Thomas
    But then UMG's insurance company would be offering insurance to the Devil!
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    - hmm (profile), 14 Nov 2011 @ 3:53pm
      
      Re: Re: Re: Jammie Thomas
      Wouldn't that be the devil insuring itself? I'm sure thats illegal........
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    - Narcissus (profile), 15 Nov 2011 @ 12:27am
      
      Re: Re: Re: Jammie Thomas
      Fo insurance companies that is not risky since they have no soul.
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  - Anonymous Coward, 14 Nov 2011 @ 10:20pm
    
    Re: Re: Jammie Thomas
    But...! I'm not Christian, and don't believe in the Devil or any greater power dedicated to Evil outside the mortal realm!
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weneedhelp (profile), 14 Nov 2011 @ 12:52pm

UMG's exec's waddle
Because of their big balls.

AC Said: "The policy is a "conduct of business" policy, and might actually really cover this sort of thing."

If the policy was worded to cover this kind of extortion, they would have just paid. I doubt the non-payment of royalties until sued was in that contract.
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weneedhelp (profile), 14 Nov 2011 @ 12:55pm

UMG
Underhanded Moneygrubbing Greedtards
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WDS (profile), 14 Nov 2011 @ 1:01pm

Who should pay what?
I could actually see the insurance company being on the hook for any punitive damages, but not for royalties actually owed.
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Anonymous Coward, 14 Nov 2011 @ 1:06pm

Another article Masnick posts in order to rationalize ripping off music.

Remember though, unless you only rip off Universal, instead of everyone- independents etc, you're a greedy hypocritical douche.
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- Chris Rhodes (profile), 14 Nov 2011 @ 1:09pm
  
  Re:
  A+ trolling, I really believed it!
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  - Bergman (profile), 14 Nov 2011 @ 3:29pm
    
    Re: Re:
    I almost believed it too, then I realized the troll forgot to use the Trolling Word of the Day. Drops his grade to a C- for that.
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- WDS (profile), 14 Nov 2011 @ 1:12pm
  
  Re:
  I know I should just ignore this, but could you please explain how being opposed to ripping off artists means you are in favor of and justifying ripping off music.
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- Anonymous, 14 Nov 2011 @ 1:14pm
  
  Re:
  What's the recording labels' rationale for ripping off music?
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  - Bergman (profile), 14 Nov 2011 @ 3:32pm
    
    Re: Re:
    I would guess that they believe that the label is the "real" copyright owner, and that they have an absolute right to their profits. Having to pay money to those "artist" leeches interferes with profits, after all.
    
    I wonder if such a scam would make the label's site 'dedicated to theft of property'?
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    - hmm (profile), 14 Nov 2011 @ 3:55pm
      
      Re: Re: Re:
      I don't care either way, if SOPA passes I'm filing requests for takedowns to every single URL controlled by universal anyway....should be good for a few minutes fun
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- jupiterkansas (profile), 14 Nov 2011 @ 1:28pm
  
  Re:
  I think this one was about labels ripping off artists.
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- Anonymous Coward, 14 Nov 2011 @ 2:09pm
  
  Re:
  http://en.wikipedia.org/wiki/List_of_Universal_Music_Group_labels
  
  Not really, a demon with a thousand names is difficult to separate from truly independents right now.
  
  So unless those people are in a place where makes sure their customers rights are respected don't expect nobody to respect you independent of what you call yourself this days.
  
  Are you in Jamendo if not, I'm sorry, if people rip you off they are doing society a favor.
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- Anonymous Coward, 14 Nov 2011 @ 2:13pm
  
  Re:
  Call for all pirates here is a hit list.
  
  http://en.wikipedia.org/wiki/List_of_RIAA_member_labels
  
  Is your label in there somewhere?
  
  Tell yours is in there LoL
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anonymous, 14 Nov 2011 @ 1:14pm

and they call 'file sharers' 'piates'! they will (try) to do anything possible to hang on to all of their ill-gotten gains, for as long as possible, even under circumstances such as this!
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Anonymous Coward, 14 Nov 2011 @ 1:14pm

I would love to do no work, and get paid to do it. Where do I sign up to be a music corporation?
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- Lucifer, 14 Nov 2011 @ 1:22pm
  
  Re:
  A dark thick smoke fills the room.
  As the lights dim you start to smell the distinct aroma of sulphur & burning flesh.
  
  A dark figure approaches you with a small stack of paper with fine print and places it down in-front of you, you feel a small prick in your finger & notice a drop of blood forming at the tip.
  
  He states, just sign at the bottom of this stack, and I'll make you an offer you just can't refuse.
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  - Anonymous Coward, 14 Nov 2011 @ 1:27pm
    
    Re: Re:
    Sounds good to me. I've always wanted to meet Donald Trump. I did think he'd smell more like toupee glue than sulphur though.
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    - Anonymous Coward, 14 Nov 2011 @ 1:31pm
      
      Re: Re: Re:
      He has lots of eggs in the morning. It is OK, WE will forgive you this time.
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out_of_the_blue, 14 Nov 2011 @ 1:19pm

Big banks speculate, keep profits, stick taxpayers with losses.
Glad you're at last catching on to how capitalism works, Mike. Secret to gettting rich is figuring how to trick or force someone else into paying. The Rich are born into effective lifetime entitlements to the highest levels without effort, while the poor are doomed to labor.
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- G Thompson (profile), 14 Nov 2011 @ 5:19pm
  
  Re: Big banks speculate, keep profits, stick taxpayers with losses.
  Though unusual Change can occur. In that The poor can get rich, the rich can become poor. There is the possibility
  
  Strange and totally freaky people like yourself though...
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fogbugzd (profile), 14 Nov 2011 @ 1:28pm

>>I know I should just ignore this, but could you please explain how being opposed to ripping off artists means you are in favor of and justifying ripping off music.

There isn't a hint of anything in the article saying that Universal ripping off artists justifies ripping off anything. At most the article highlights the hypocrisy of a major record label itself ripping off the artists that it claims to be supporting.
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- WDS (profile), 14 Nov 2011 @ 1:55pm
  
  Re:
  If you view things as threaded instead of flat you would see my comment you quoted was in response to an Anonymous Coward's claim that Mike was making the post only to justify ripping off artists.
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  - fogbugzd, 14 Nov 2011 @ 6:29pm
    
    Re: Re:
    I would love to read the posts threaded, but the lite version for smartphones does not allow for threading, and the full version screws up the display.
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NullOp, 14 Nov 2011 @ 1:50pm

Ripped Off
I once had a dream about being a famous recording artist. It ended up with the label I was with ripping me off. I plan on suing the record industry for this. It's just as valid as the BS their pulling!
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Anonymous Coward, 14 Nov 2011 @ 2:00pm

Labels and studios live in a doggie dog world where is every dog for himself is not about the craziness of claims is about what they can get away with it.
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- Anonymous Coward, 14 Nov 2011 @ 2:16pm
  
  Re:
  doggie dog?
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  - Anonymous Coward, 14 Nov 2011 @ 6:37pm
    
    Re: Re:
    Someone is a fan of Modern Family, or at least, Gloria.
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Anonymous Coward, 14 Nov 2011 @ 2:09pm

Labels and studios live in a doggie dog world

This world's first name.. it wouldn't happen to be "Snoop", would it?
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- The eejit (profile), 14 Nov 2011 @ 4:02pm
  
  Re:
  No, it's Bow Wow.
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  - Anonymous Coward, 14 Nov 2011 @ 4:44pm
    
    Re: Re:
    Who let the shill out! {woof, woof, woof, woof}
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    - Just John, 14 Nov 2011 @ 7:59pm
      
      Re: Re: Re:
      Illegal copyright infringement.
      Do you have a license to remix?
      Reporting you to RIAA and ICE.
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Al Roberts aka. me (profile), 14 Nov 2011 @ 4:05pm

I like it, Is there any sort of torrent insurance available.
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- G Thompson (profile), 14 Nov 2011 @ 5:21pm
  
  Re:
  Probably not, though if you downloaded/uploaded a whole lot of torrent's at once the insurance company might pay as long as you have torrential flooding insurance!
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That Anonymous Coward (profile), 14 Nov 2011 @ 5:15pm

As UMG is now trying to avoid paying what was a very generous settlement agreement I think the artists should move to have UMG removed and the original charges brought back up.

I think the original computed damages was over 6 billion or something like that. UMGs share should be enough to make it more fun.

I am surprised that no one has pointed out the obvious thing happening here. UMG is showing once again that the industry is all for someone else paying to help them out. They want YouTube/HotFile/et al to spend money to create a system to protect their copyright, when their own attempts show its nearly impossible to do cheaply. But lets pass some more laws and make everyone else pay for our free ride.

I wonder what would happen if we started shaming Congresscritters who take money from UMG for supporting a business who feels they are to big to fail and want someone else to come in and pay to fix their wrongdoings.
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MikeVx (profile), 14 Nov 2011 @ 8:01pm

These entertainment company attitudes...
Remind me of the motto of a corporation from another dimension. "Grab it all, Own it all, Drain it all."
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get out the 'cuffs, 15 Nov 2011 @ 7:36am

MAFIAAs in love - the prison edition
wait a second, isn't that sort of 'piracy' .. for commercial gain .. illegal? Thats not a breach of contract, thats a direct copyright infringement case, complete with jail and everything. Why is an insurance company even involved with this obviously illegal activity?
Time to use the labels own arguments against them in court.
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