You may recall back in December that we wrote about the oddity of EMI suing Vimeo, claiming that by creating its own "lipdub" videos of people singing along to a song, it was actively encouraging (i.e., "inducing") copyright infringement. The main example, of course, was the company's first lipdub, which kicked off the craze, to the song Flagpole Sitta by the band Harvey Danger:
To claim that this is somehow harmful to EMI is flat-out ridiculous. The song got a lot more attention because of this video (which currently has over 2.3 million views) -- and almost certainly helped the band and EMI out in terms of sales. And yet, EMI says it was harmful. The Citizen Media Law Project points out that the lead singer of Harvey Danger appears to disagree in a big way, having sent Vimeo an email after that lipdub video came out:
That Flagpole Sitta video made me incredibly happy, just when I thought there was NOTHING that could make me listen to that song again. A thousand thank you's.
A thousand thank yous... and a lawsuit from your label.
So last week we discussed how EMI was seriously harming the ability of the latest Ok Go video to go viral, by putting on geoblocks and forbidding embedding. The band had said it was upset about this and pointed people to a Vimeo version -- despite the fact that EMI is suing Vimeo for posting music videos (um, oops) and Vimeo supposedly hates commercial content.
The band has now come out with a more detailed explanation that puts more of the blame on YouTube, while also explaining how the band gets to "snort drugs off the Queen of England" (so it's got more important things to deal with). Well, specifically, the band points out that way back when, Google agreed to give record labels a bit of money every time someone watched one of their videos on YouTube. That much is well-known, of course. However, the band claims that this little bit of money is only paid on videos that are seen directly via YouTube, rather than on embedded videos. Why? Well, because advertisers on YouTube only let ads be shown on YouTube itself, so they're not suddenly showing up on some random website (though, of course, those same advertisers probably have no problem using Google AdSense, which does the same thing, but....). So the band suggests the issue is more with YouTube and its refusal to count embedded videos in the views... though it claims it's been arguing with EMI to allow the video anyway.
This still seems backwards and shortsighted by EMI. Even if it's not getting paid for the embedded videos, it seems quite likely that the embeds actually lead to more views on YouTube itself, as people click through. Instead, now, all of the views are going to go to Vimeo. The company EMI is suing. Sensible.
In the meantime, though, Ian from Topspin alerts us to the news that Ok Go is using the Topspin platform to offer up, as a part of its "reason to buy," the uniforms and props from the video shoot. Of course, I would imagine those things would be in higher demand if EMI let people embed the video in the first place...
You probably know of the band Ok Go's famous treadmill video:
It helped attract a ton of attention to the band. The band's lead singer, Damian Kulash, has been quite outspoken about why bands need to be fan friendly, and even took to the pages of the NY Times to discuss the evils of DRM, and has spoken before Congress on music industry issues as well. The band has always done quite a lot to try to connect with fans and not hinder them in any way -- which is part of why it has such a huge following.
So, with the band coming out with a new quirky video, you would think that it would be readily available all over the place. However, Martin points us to the news that the video was put up on YouTube by the band's label, Capitol Records, a subsidiary of EMI, but it did so with geoblocking and with embedding disabled. In fact, if you go to the original treadmill video, you'll see that Capitol Records has disabled embedding on that video as well. Notice that I have it embedded above? That's because I used the embed code from an earlier post back when embedding was allowed. Yet now, go and click on the video... and it gives you an error message saying embedding has been disabled. All those people who helped spread that video? Capitol Records broke them all. Nice of them. It's impossible to fathom what the folks at EMI/Capitol are thinking here. They are making it more difficult to make a viral video viral. Both blocking it from being viewed in various regions and blocking embeds makes no sense at all.
As for the issue of geoblocking, we're incredibly upset that the youtube versions of our videos can't be embedded. Just one more example of major labels accelerating their own demise. We (and every individual band out there) have exactly zero leverage in this particular battle, however. So we post to other sites as well.
In fact, the band itself has now put the video up on Vimeo as well, which does allow embedding:
Of course, given that Vimeo has these bizarre and nonsensical rules against commercial use, and this is obviously a commercial video, you have to wonder why this is allowed. Oh yeah, also, it's worth remembering that Capitol Records just sued Vimeo for copyright infringement -- so I can't see the label being all that thrilled about this. Either way, the video is going up in a variety of other places in embeddable format, but not by Capitol Records, meaning that it gets more fragmented, less viral, and hurts Capitol Records. And people wonder why EMI and the other major labels are collapsing.
For many years, we've wondered why the major labels haven't gotten in trouble for what appears to be clear price fixing -- having all of the major labels band together to both demand identical wholesale pricing and attempt to dictate retail pricing by partners as well. There have been various investigations by both local and federal officials, along with a few lawsuits -- but nothing has really gone very far. One lawsuit was tossed out by the district court back in 2008, but in a surprising move, the 2nd circuit appeals court has revived the lawsuit, claiming that the evidence is "sufficient to plausibly suggest" price fixing by the major labels with regards to digital music. So now it goes back to the lower court. I still doubt this will really have much of an impact, but it's nice to see some recognition of what's seemed pretty obvious for quite some time.
We've discussed in the past how the record labels have this habit of "negotiating through lawsuits," in that they will often sue an innovative music startup, even as they're negotiating licensing deals with them, just to get the upperhand in the negotiation. It's happened with countless music startups -- and it's one of the main reasons so few survive. They're overly burdened with ridiculous costs from the beginning. We already saw that EMI used this strategy with Grooveshark, in forcing it into a licensing deal, and apparently Universal Music decided it could do the same thing. It's now suing Grooveshark as well -- even though Grooveshark insists it pays all the appropriate licenses. Of course, the end result of all this is that it gives Grooveshark more publicity, but may make it more difficult for the company to survive.
Three years ago, video hosting site Vimeo got a lot of attention for itself with a "recruiting" video of sorts that was one of the first popular "lip dub" videos, which are now quite popular. In it, pretty much the entire Vimeo staff is seen singing and dancing to the song Flagpole Sitta by Harvey Danger. However, it looks like that particular lip dub may now get Vimeo, and parent firm InterActive Corp. in a bit of trouble. Copycense points us to a new lawsuit filed against Vimeo by Capitol Records (really, EMI) alleging copyright infringement. The way they're getting around the DMCA safe harbors and the Veoh ruling is pointing to Vimeo's own lip dubs and its apparent encouragement that others should make lip dubs as well. Of course, it's difficult to argue that lip dubs damage the labels in any way. The popular lip dubs seem to do a lot to expand the recognition of a song and an artist, and some musicians have been known to encourage such things. But, of course, that's not how the major record labels tend to view things...
You had to be pretty clueless in 2007 not to recognize that the major record labels were seriously struggling. Still, we thought that the decision by private equity firm Terra Firma to buy EMI in 2007 might actually be an opportunity for a major record label to change, since the new bosses did not come from the recording industry, and weren't saddled with silly preconceived notions about how a major record label had to do business. And, early on, things actually looked positive. New boss Guy Hands was quick to embrace Radiohead's experiment and let everyone at EMI know that they needed to learn from it, rather than deny it or freak out about it. He also threatened to leave both the IFPI and the RIAA if they didn't stop suing fans (eventually he stuck with both, but cut their allowance). On top of that, he hired some smart outsiders to help.
Since then, however, everything has pretty much collapsed. While they weren't saddled with preconceived notions, they were saddled with dreadful contracts, and every attempt to change them resulted in charges from EMI's biggest artists that the company was trying to screw them over. On top of that, the company started giving really mixed messages. At times it seemed to be embracing the new, and at other times, it would try to personally bankrupt the CEOs of innovative startups. It didn't take long for the tech experts EMI brought in to quit. Then, there were stories of infighting at Terra Firma, with arguments over what to do with EMI altogether, which could explain some of the contradictory strategy decisions.
Either way, Terra Firma has now decided to sue Citigroup for misleading it into the deal. Again, given the state of the recording industry, it's hard to see how they thought it was going to be a good deal in the first place, but Terra Firma claims that Citigroup lied to Terra Firma about other bidders to get the firm to pay more and pay now -- noting that Citi had a major conflict of interest in acting both as an advisor and a financier of the deal. Of course, that's how investment banks make their money anyway. They want deal flow, so they have a neat little script that always encourages more deal flow. At times, they talk about synergies, and why companies need to buy each other, and then once they get big, they talk about spinning off parts to "unlock shareholder value." You can't trust those guys for an honest assessment of such a deal, and if Terra Firma did so, it seems like it should be the firm's own fault.
The major labels and their friends like to throw around huge numbers of "damages" when it comes to copyright infringement. But how about when they're on the receiving end of a copyright infringement lawsuit. Up in Canada, there's a class action lawsuit against the Canadian divisions of all of the major record labels, suggesting that the labels have infringed on the copyrights of artists to the tune of $6 billion (Updated: the original math was off, it's actually $6 billion, not $60). As Michael Geist explains:
The claims arise from a longstanding practice of the recording industry in Canada, described in the lawsuit as "exploit now, pay later if at all." It involves the use of works that are often included in compilation CDs (ie. the top dance tracks of 2009) or live recordings. The record labels create, press, distribute, and sell the CDs, but do not obtain the necessary copyright licences.
Instead, the names of the songs on the CDs are placed on a "pending list", which signifies that approval and payment is pending. The pending list dates back to the late 1980s, when Canada changed its copyright law by replacing a compulsory licence with the need for specific authorization for each use. It is perhaps better characterized as a copyright infringement admission list, however, since for each use of the work, the record label openly admits that it has not obtained copyright permission and not paid any royalty or fee.
Over the years, the size of the pending list has grown dramatically, now containing over 300,000 songs. From Beyonce to Bruce Springsteen, the artists waiting for payment are far from obscure, as thousands of Canadian and foreign artists have seen their copyrights used without permission and payment.
And yet, amazingly, the record labels -- these "strong defenders" of the importance of copyright and paying for every use -- somehow have decided that it makes no sense to pay this bill. The list itself details about $50 million in unpaid royalties that are owed, often to well known musicians who it would be quite easy for the industry to find and pay up. As for the $6 billion number? Well, the class action lawsuit that's been filed seeks statutory damages starting at $20,000 per infringement and going up from there. Given that these same record labels have been defending those same (or, similar, in the US, at least) statutory rates for infringement, you have to wonder how they can realistically claim that those statutory rates shouldn't apply to themselves as well.
Once again, though, we're seeing what's really happening. The record labels are copyright defenders only when they profit unfairly from it. When they can screw over others via ignoring copyright, they have no problem doing so.
Last last week, a bunch of music blogs started noticing that a previously unknown site called Bluebeat.com was selling MP3s for $0.25, including numerous acts that still haven't officially authorized online sales -- such as The Beatles and AC/DC. There was a lot of headscratching among bloggers and reporters who wondered how this could possibly be legal. The answer, of course, is that it wasn't. The site didn't even make any attempt whatsoever to claim that they had licensed this music. They just said they thought that $0.25 was a better price for music. Not surprisingly, it took just a few days before EMI sued the site, and I'd imagine other lawsuits will quickly follow as well. It's not clear what the folks at Bluebeat were thinking -- other than that they were about to get a ton of publicity in the form of lawsuits, but it's hard to see what good that publicity is if the site is forced out of business.
It's one thing to try to influence politicians and laws to protect an incredibly obsolete business model. It's another thing to try to shut down innovative companies who are better serving the market than you can. But it's in an entirely different class of evil to go after individuals personally for the actions of companies, in an attempt to bankrupt them. Stand up and take a bow, EMI, for not just doing the latter, but then paying a witness, getting her to change her deposition and get a lawsuit reinstated against an individual after the judge had already tossed it out. EMI has leapfrogged to the front of the line for the most despicable record labels out there. No wonder their artists are jumping ship as fast as possible.
You may recall that EMI not only sued Michael Robertson's most recent company, MP3Tunes, but also sued Robertson personally, which is an intimidation technique that creates tremendous chilling effects for any executive or founder of any company. We thought it was good news a year ago, when the court dismissed the part against Robertson directly. The whole lawsuit seems crazy anyway. MP3Tunes isn't set up for infringement -- it just sets up a way for you to store your own songs online in a music locker for your own personal access. So the whole lawsuit is questionable anyway, but seems to be part of EMI's greater strategy of suing every innovative music startup.
However, a new ruling has apparently put Robertson personally back in the firing line, after MP3Tunes' former president gave a new deposition (after she was fired, and well after her original deposition). The new testimony apparently convinced the judge to reinstate the personal lawsuit against Robertson, though the judge doesn't seem to discount the fact that Emily Richards had been fired by Robertson (so her new testimony should be suspect already) and the rather interesting fact that EMI paid Richards $10,000. That combination of facts should raise plenty of credibility questions, but apparently did not.
So, once again, we're left with an incredibly chilling situation, where execs of companies are being sued personally -- exactly what the entire corporate structure is designed to prevent. So, congrats, EMI, for reaching a new low in misguided copyright-related lawsuits.
