Too Little Too Late: Universal Music Finally Realizes That Maybe CDs Were Too Expensive

from the you're-about-a-decade-behind dept

David Herron alerts us to the news that it's finally occurred to the brain trust at Universal Music that, perhaps, CD prices were too high. They've introduced a "new pricing structure," which effectively means they've lowered the suggested retail prices on many CDs to between $6 and $10. Amusingly, the article quotes an anonymous person at a competitor who doesn't like this at all:

"Why does Universal feel the need to get below $10?"

Uh, perhaps because the market is shrinking because people find it too expensive otherwise. Either way, this move seems like way too little, way too late. Doing this in the late 90s might have been a start, but this isn't going to get people who have stopped buying CDs back into a plastic disc fix.

Filed Under: cds, prices
Companies: universal music

Record Labels Put Out Misleading Study Trying To Get ISPs To Setup Broken Music Streaming Services

from the neutrality? dept

The record labels have been trying out all sorts of schemes for a while now to try to get ISPs over to its side in propping up their old business models, and the latest is pretty laughable. BPI at the behest of Universal Music, commissioned a study which suggests that ISPs can make a lot of money by offering music services to their users. No doubt. But that leaves out some rather pertinent details. For example: many ISPs have very much wanted to offer such music services, but have been blocked by the likes of (uh oh...) Universal Music and BPI. Funny how that works.

The problem, of course, is that the ISPs want to offer music services that people would actually use, and the record labels want to handicap the services to the point at which they're completely lame. So there's a bit of a stalemate there.

But the bigger issue is (reading between the lines here) what the record labels are really saying to ISPs here is: break net neutrality. That's because they're not talking about just any music service. After all, there are lots of music services out there that people can sign up for no matter who their ISP is. But what the labels seems to be suggesting here is that ISPs specify one special music service that locks in customers. That's why the report highlights that a music service can "reduce churn." Of course, the only way it does that is if it's locked to that single ISP -- and if your music is limited to you only as long as you're with that ISP. In other words: locking it down so that it's lame.

As if to make the point even stronger, though, BPI blatantly tells ISPs to break neutrality:

"It's increasingly clear that it isn't smart to be a 'dumb pipe'. This report shows that the revenue potential of digital music services alone makes sound economic sense for ISPs," said BPI Chief Executive, Geoff Taylor.

Being a "dumb pipe" of course is a well-known code-word in the internet world for a neutral network. So, really what the labels seem to be suggesting here is that ISPs break network neutrality for the purpose of serving up a preferred music service that locks you into that ISP. Apparently, no one who put together the study contemplated the fact that this might piss people off and make them look for ISPs that don't lock them in. Thankfully, it appears that some ISPs aren't biting:

"TalkTalk thanks the BPI for its strategic business advice. Though some may question the value of such insight from an industry which has failed to acknowledge the impact of new technology on its own business models and is pressing the Government to criminalise its biggest customers," a spokesperson told TorrentFreak.

Exactly. If the record labels were really serious about helping ISPs offer up music services, they wouldn't be blocking them at every turn. This report is a typical red herring.

Filed Under: isps, labels, lockdown, music, streaming
Companies: bpi, universal music

Damages Possible, But Limited, For Bogus DMCA Takedowns

from the good-and-bad dept

We had discussed earlier this year just how damages should be figured out (and if they should be available at all) for bogus DMCA takedowns. The law, technically, says that there can be punishment, but it's rare to see a case ever get that far. In the ongoing Lenz v. Universal Music, however, (about the video takedown of a child dancing to less than 30 seconds of a Prince song), the judge has ruled that damages are available, but at the same time limited how those damages might be calculated. So, there's some good, in that filing bogus DMCA takedowns can lead to damages, but the amounts are likely to be so small in most cases as to be meaningless. Compare this, of course, with the statutory damages given to those who infringe on copyrights -- starting at $750 for sharing a single item and going way up from there. How is that equitable? Basically, the incentive is quite strong for copyright holders to continue to file DMCA's willy-nilly, knowing that the threat of errors is mostly minimal, even as the impact is to silence one's free speech -- which should be seen as a bigger issue than interfering with someone's business model.

Filed Under: copyright, damages, dmca, lenz, takedown
Companies: universal music

Universal Music Gets A New CEO... Who Thinks CDs Are The Future

from the wow dept

What's up with Vivendi? We're still amazed that the French conglomerate that own Universal Music didn't step up and fire CEO Doug Morris back in 2007 when he came out and confessed that not only was he clueless about the most important change in the music business (the rise of digital), but that he was too clueless to even know how to hire people who could help:

"There's no one in the record company that's a technologist," Morris explains. "That's a misconception writers make all the time, that the record industry missed this. They didn't. They just didn't know what to do. It's like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?"

Personally, I would hire a vet. But to Morris, even that wasn't an option. "We didn't know who to hire," he says, becoming more agitated. "I wouldn't be able to recognize a good technology person -- anyone with a good bullshit story would have gotten past me." Morris' almost willful cluelessness is telling. "He wasn't prepared for a business that was going to be so totally disrupted by technology," says a longtime industry insider who has worked with Morris. "He just doesn't have that kind of mind."

How does any board of directors let that person stay in place as CEO, in charge of guiding the largest music label in the world into the modern era, when that CEO admits he's so clueless on the most important thing impacting the industry that he doesn't even know who to turn to to help?

Well, now, it looks like Universal is finally getting a new CEO -- but not because Morris has finally been given the boot -- he's still sticking around and gradually easing out of his role as he "mentors" incoming CEO Lucian Grainge, who has headed the company's international division until now. So, what's Grainge's take on the future?

"I believe that the CD will out-survive me as a format," Mr. Grainge said in an interview.

Yeah, good luck with that. Between you and Warner Music opting-out of online streaming services, it's as if the major record labels are simply trying to accelerate their own demise. Have they taken out life insurance policies on themselves? In the meantime, Vivendi, who's watching over Universal Music these days?

Filed Under: cds, dough morris, future, lucian grainge
Companies: universal music

Veoh Shuts Down; What Happens To The Lawsuit?

from the that's-not-good dept

Veoh was one of a number of online video YouTube-wannabes that, despite being connected to Michael Eisner and raising money from Time Warner and Goldman Sachs, never got very much actual traction... and... got tangled up in a lawsuit with Universal Music pretty quickly over alleged copyright infringement, despite Veoh abiding by the DMCA. Every single step of the way, Veoh basically won big in the lawsuit. Time and time again, every trick that Universal Music tried -- including suing Veoh's investors directly, was rejected by the judge, and the final ruling late last year was that Veoh abided by the DMCA and was protected by its safe harbors from Universal Music's lawsuit. It was a complete victory.

The only problem? Veoh spent a lot of time, money and effort on this lawsuit, and no one was using Veoh.

I'd heard about a month ago that the company was flat broke, but that it had a good chance of raising more money to continue fighting the appeal from Universal Music... but it looks like that fell through. The company has laid off everyone and is shutting down. Those involved with the company are blaming Universal Music... and certainly it's tempting to blame UMG and this pointless lawsuit, which definitely sucked up a ton of resources. But, let's also face facts: no one was using Veoh. When was the last time you were sent a Veoh video? I get sent videos on YouTube, Hulu, Vimeo and even DailyMotion every so often. But I can't recall ever hearing about a Veoh video.

Still, with the company declaring bankruptcy, I'm not quite sure what this would mean for Universal's appeal in the lawsuit. While the company was a total flop, the district court ruling last year set a very important precedent in clearly stating that the DMCA's safe harbors did protect such sites (like YouTube) as long as they complied with the takedown process. Without a company to continue fighting what happens to the appeal? I'm not that familiar with how bankruptcy plays into such lawsuits, so any lawyers here want to chime in and let us know....

Update: Surprised that no one actually answered this question in the comments, but thankfully Eriq Gardner from THR, Esq. has a post explaining what happens to the lawsuit now in all probability:

If Veoh declares Chapter 7, a bankruptcy judge would issue an automatic stay in the case. UMG would likely file a motion with the bankruptcy court seeking relief from the stay to perfect its appeal. The trustee would engage legal counsel and make financial arrangements to cover the costs of defending the case before the 9th Circuit.

We're betting that all of this happens. The requiem on Veoh is now being written, but the company could continue to play a significant role in helping shape copyright liability for tech companies. (We wouldn't even be surprised to see Google acquire Veoh just so it could share in the fun of the action.)

Filed Under: copyright, dmca, lawsuits, video
Companies: universal music, veoh

Should Copyright Holders Pay For Bogus DMCA Takedowns?

from the seems-reasonable,-doesn't-it? dept

A few years ago, you may recall that Universal Music issued a takedown for a 29-second video involving a little kid dancing to a Prince song playing on the radio in the background. While the woman issued a counternotice and had the video put back online, the EFF sued Universal Music, claiming that it had filed a false DMCA takedown, since it did not take fair use into account. Universal Music tried to claim that it it shouldn't have to consider fair use, since fair use is just a defense, not a right. While the court eventually did (much to many people's surprise) say that copyright holders do need to take fair use into account, it's not really clear what sort of punishment there is for those who do not. In fact, we've seen that it's quite difficult to get any actual punishment for those who file bogus DMCA takedowns.

With that in mind, it's interesting to see that the EFF is now trying to recover its legal fees in the case, claiming that Universal's actions violated section (f) of the DMCA, and thus it should be liable for attorneys fees. Universal claims that there is already a "remedy," which is the counternotice process. But if that were the only remedy, then why does the law allow for legal fee recovery. Furthermore, if the only remedy is a counternotice process, there is nothing to really stop the filing of bogus DMCA notices, since there is no punishment for such activity.

In the linked article, Bennett Haselton argues that paying legal fees like this might not actually make sense, and worries about the legitimate content holder who accidentally files an incorrect DMCA getting hit with a big legal bill. But, again, I'm not sure how that applies. Shouldn't we be just as worried about the completely innocent individual hit with a DMCA takedown and the process they need to go through to get their legal content back online? Given how massive the damage awards can be for simple (even incidental or accidental) copyright infringement, the fact that there is barely any real punishment for bogus copyright claims seems incredibly one-sided and unfair.

Filed Under: dmca, eff, legal fees, prince
Companies: universal music

US Court Brings Back Price Fixing Lawsuit Against Major Record Labels

from the all-priced-the-same? dept

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.

Filed Under: antitrust, price fixing, record labels
Companies: emi, sony music, time warner, universal music, vivendi, warner music group

Grooveshark Sued Again... Negotiating Via Lawsuit Continues

from the and-so-it-goes dept

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.

Filed Under: lawsuits, negotiation
Companies: emi, grooveshark, universal music

Major Labels Accused Of $6 Billion Worth Of Copyright Infringement In Canada

from the oops dept

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.

Filed Under: canada, copyright, music, record labels
Companies: emi, sony music, universal music, warner music group

Universal Music Prevents Popular Play From Showing In Stockholm, Despite Not Having The Legal Rights

from the copyfraud... dept

As the major record labels and their lawyers and lobbyists run around the globe demonizing anyone for any sort of copyright infringement, we keep hearing stories of how they falsely claim rights over music for which they do not hold them. We recently covered the story of Edwyn Collins and his inability to offer free downloads of a popular hit song -- because Warner Music Group put in a copyright claim on the song. Reader Marius points us to a similar situation, over in Sweden. Despite theaters in Sweden being covered by a license agreement on musical performances by STIM, the Swedish performing rights collection society, apparently some music publishers claim that theaters still owe more money.

In one case, Universal Music (I assume its publishing arm...) threatened a theater because a popular play (that had toured without incident all over Europe) included a part where a Simon & Garfunkel record was playing in the background. The theater owner actually wrote a letter to Paul Simon to find out what his complaint was -- and received a response saying that Universal does not represent Paul Simon's music in theater contracts. Now, it's possible that there was some misunderstanding (language, cultural or legal), but this sort of thing seems to be happening more and more. When the theater owner informed Universal of this, Universal apparently retracted its demands for payment -- but the theatre company putting on the performance had already decided not to risk doing the play.

It's difficult to see how anyone comes out ahead in such a scenario. The Swedish public doesn't get to see the play or hear the music. Paul Simon doesn't get to attract new fans. Universal Music doesn't get anything other than a lot of ill will from the theater community. Why even bother at all?

Filed Under: licensing, music, paul simon, plays, sweden
Companies: universal music