Eminem's Misguided Lawsuit Against Apple Over iTunes Set To Start

from the apparently-not-yet-settled dept

Back in 2007, we noted that Eminem's publisher was suing Apple for offering Eminem tracks on iTunes. Apple pointed out that it had an agreement with Eminem's record label, and we wondered why Eminem wasn't suing Universal Music, rather than Apple. So, earlier this year, when Eminem and Universal Music went to court we assumed that the lawsuit had been refocused on the proper party. Apparently, we were wrong. The lawsuit against Apple is scheduled to begin Thursday if no agreement is reached today. However, remember that lawsuit against Universal earlier this year? Well, Universal won, with the court saying that Universal had the right to distribute digital offerings. So... why is the lawsuit against Apple still going forward? Am I missing something...?

Filed Under: eminem, itunes, licensing
Companies: apple, universal music

Court Refuses To Dismiss Allman Bros. Lawsuit Against UMG; iTunes Royalties At Stake

from the a-license-or-a-sale? dept

There have been a number of lawsuits over the past few years from artists who are complaining about how the major record labels account for iTunes sales. The question is whether or not a song sold on iTunes is the same as a CD sale (a tiny tiny royalty) or more like licensing a song for a commercial (more like a 50% royalty). Obviously, the record labels want iTunes treated like a CD. But musicians have a reasonable argument that an iTunes sale may be a lot more like a typical license, as a big part of the reason in the discrepancy in the royalty rates is that there's no (expensive) physical packaging and distribution to handle. The Allman Brothers were one of the first to file lawsuits on this issue suing both Sony Music, and then a couple years later, Universal Music Group (I'm still not clear why they sued the two separately, years apart). Eminem also had sued UMG over this issue and lost, as a jury said iTunes was more like a CD sale.

UMG tried to get the case from the Allmans dismissed, but davebarnes alerts us to the news that the court has refused to dismiss the case, and it will proceed to a full trial. Of course, like Eminem, the Allmans may lose the trial, but it's better than having the case dismissed outright. Of course, if the Allmans win, it will create a bunch of similar lawsuits in short order, as pretty much every artist will be demanding a lot more iTunes revenue.

Filed Under: allman brothers, itunes, licensing, royalties, sales
Companies: universal music

Judge Tosses Universal Music Suit Against Veoh; Safe Harbors & Common Sense Prevail

from the google-should-be-happy dept

In a ruling that has to make the folks at Google/YouTube happy (despite not being a part of the case), a judge has granted summary judgment to Veoh over Universal Music, claiming that Veoh's video hosting site is protecting from liability of infringing videos due to the DMCA's safe harbors. This case, which has many similarities to Viacom's lawsuit against YouTube, has gone against Universal Music in almost every way. This is now the second time that Veoh has had such a lawsuit dismissed, and hopefully the judge in the YouTube case recognizes that this is, in fact, the right decision under the DMCA. This latest ruling isn't a huge surprise. Earlier this year, the judge seemed to reject all of Universal's arguments for why safe harbors shouldn't apply. Universal also got smacked down (twice) in its attempt to separately sue Veoh's investors for the actions of the company's users.

While Veoh, as a company, may be struggling, this is a huge victory for common sense. This case describes exactly the sort of situation that the DMCA safe harbors were designed to deal with. A service provider who has no direct say in what content is uploaded by users should not be liable for that content. It's great that judges are seeing this, and hopefully the judge in the YouTube case sees it the same way. Veoh's case isn't "over" yet, though, since Universal will appeal -- and has already claimed the ruling is "wrong." Yet, so far odds of a successful appeal are not looking good. Hopefully, the appeals courts will also correctly interpret safe harbors (and common sense) to recognize that a service provider should never be liable for the content put up by users.

Filed Under: copyright, dmca, safe harbors, videos
Companies: universal music, veoh

Major Record Labels Sorta, Maybe Embracing Direct-To-Fan Projects

from the but-it's-more-than-just-the-platform dept

While we definitely knock the major record labels for their legal strategy and occasional business blunders, in the last two years or so, there has actually been some recognition within the record labels that finally they need to focus on giving fans what they want, rather than just suing them and hoping that the old CD business model magically returns to its former highs. There have been hints and glimmers of hope from the major record labels -- though, even those inside the labels who seem to get it will quietly admit that it's sometimes a struggle to get some of this through to "the old guard."

The question, though, is how much of this is real, and how much of it is the old guard putting on a show, picking up on a buzzword and insisting that this time, they've got it. A few years ago, all the talk was about "360 Deals" and how that would get the labels off of the CD revenue IV drip. But, many artists (smartly) balked, seeing such deals not as an industry adapting to change, but one looking to just get a larger piece of the pie -- and doing so without adding much value, and after decades of screwing over the artists. So that hasn't worked out so well for the most part.

It appears that the latest buzzword that the majors are picking up on is this concept of the "direct-to-fan" model. This is a bit of an offshoot of my own mantra of getting creators to connect with fans. And, for more independent artists, a number of platforms and companies have sprung up to help them more easily connect with fans, whether it's MySpace or BandCamp or TopSpin or TuneCore, or whoever else. And, of course, most of those companies also have relationships or deals with the major record labels, but it seems that the majors are realizing that they need to have a real "direct-to-fan" strategy themselves.

Just recently, we saw Warner Music sign a deal with Cisco to use Cisco's EOS platform for direct-to-fan efforts. And, more recently, Universal Music announced that it was working with Echospin to provide direct-to-fan offerings. I have no doubt that EMI and (probably way way way at the end of the line), Sony will get around to making similar announcements.

While I think it's a great thing that the labels are experimenting with smarter models that actually do focus on bringing the musicians closer to the fans and providing a much more compelling offering that goes beyond brochureware, I'm a bit skeptical that they'll really pull it off successfully in the short term. Direct-to-fan offerings is more than a platform. It's an actual business model and marketing strategy and it's unclear if the labels have actually figured that part out yet. Yes, they're adopting platforms and they're taking steps in the right direction -- so let's give them some credit. But until they really understand what fans want and how to better help musicians provide it, setting up a "direct-to-fan" platform won't make a big difference.

Filed Under: direct to fan, major labels
Companies: universal music, warner music group

Virgin Does Music Deal With Universal; Everyone Involved Forgets The Past

from the let's-look-back-a-bit dept

There's lots of news coming out today about how UK broadband ISP Virgin has signed a deal with Universal Music to allow unlimited access to Universal Music's catalog (downloads and streams) for a set price. Various execs and politicians are talking it up like it's the greatest thing ever. It's as if they think that people can't remember back just a few months.

That's because it was just a few months ago that Virgin was set to launch a similar offering that included all of the major record labels, but then a few of them got greedy and said they'd only agree to it if Virgin also employed Deep Packet Inspection (DPI) techniques to track the file sharing and cracked down on any sharing of MP3s. Virgin resisted -- after all, just a few months before that, it had insisted that it would never cut subscribers off the internet for file sharing. So... wouldn't you know it... a part of this plan is to cut file sharers off the internet.

So, let's take a look at this "wonderful" and "amazing" new agreement. You get a vastly limited catalog (only Universal Music -- and who the hell knows what label their favorite bands are on these days?). It's not clear how the usage is tracked, but given the earlier reports, we have to wonder if it involves DPI spying on your usage... and Virgin is committed to cracking down on file sharing and even "temporarily" cutting off access to the internet (Virgin claims its okay, because the cutoff is only "temporary"). Perhaps there are some folks out there who will sign up for such a service, but it's difficult to see who. They aren't offering any benefits or additional value.

Filed Under: downloads, music, services, uk
Companies: universal music, virgin

Cher Lawsuit Highlights How Record Labels Screw Over Artists

from the protecting-the-artists? dept

It's certainly nothing new to find out that record labels rarely have the best interests of the musicians at heart (despite their proclivity to claim so -- especially to Congress and the press). However, a new lawsuit (sent in by a bunch of you) that pits Cher and the heirs of Sonny Bono, highlights some of the many ways that labels screw over musicians. In this case, Cher is alleging that Universal Music funneled revenue through international subsidiaries in order to completely hide how much revenue was made on Sonny & Cher music, in order to avoid paying the contractually agreed upon royalties. Again, such charges of creative accounting are legion in the industry, but it's nice to see a lawsuit detail exactly how some of the funny accounting is done. Whenever major record label folks insist that the labels have the artists' best interests in mind, it seems worthwhile to point out these sorts of stories.

Filed Under: cher, copyright, music, sonny bono
Companies: universal music

Universal Music Told, Once Again, It Can't Sue Veoh's Investors For Veoh's Actions

from the good-news dept

Back in February, Universal Music got slapped down for its highly questionable attempt to sue the investors in Veoh for the actions performed by the company itself. We've never quite understood why the major record labels have tried, repeatedly, to sue the investors of sites and services they don't like. It's hard to see how that's justified, because if those investors are found liable, it would create a huge liability for any investor. Investors don't have day-to-day control over a company, and trying to make them liable for the actions of the company makes no sense. However, not only was Universal shot down in this attempt, but it tried to refile the lawsuit against the investors... and was shot down yet again. The judge noted that Universal Music presented no evidence as to why the investors should somehow be responsible for the actions of the company and tossed out the lawsuits against them again. Hopefully this wakes up EMI, who recently sued the investors in a small startup as well.

Filed Under: investors, liability
Companies: universal music, veoh

Universal, YouTube Collaboration To Be Run By Someone Who Sees The Bigger Picture

from the a-good-first-step dept

At the beginning of March, I questioned the wisdom of Universal Music and YouTube teaming up to create a separate site just for Universal Music, called Vevo. While I thought it could be interesting, it really depended on the execution, and the early talk about it seemed to miss the point. That is, it said that YouTube would supply the "technology" and Universal would supply the music. Of course, what that's missing is that much of the value in YouTube isn't in the technology (which many others have replicated), but in the community. So, if Vevo was to get anywhere, it would need to recognize that fact, rather than simply looking at YouTube as a tech vendor.

At the end of March, in a totally separate post, I wrote about my surprise at seeing my fellow keynote presenter at the Leadership Music Digital Summit, Rio Caraeff of Universal Music, present a reasonable vision for where the music industry needed to be: getting away from selling "music" and in creating better, more valuable experiences that simply can't be replicated by file sharing. This was in stark contrast to what Universal Music's own CEO had been saying for years. While Caraeff admitted that it was still a struggle to get this message through to everyone at Universal, he believed in it strongly.

That's why it's noteworthy that Caraeff has now been put in charge of the Vevo project. I'm still not convinced it's anything more than a boondoggle that will go nowhere quickly, but putting Caraeff in charge of it immediately makes it a much more interesting project to follow. The real question is what he does with it, and whether the bosses back at Universal Music actually give him enough free reign to let him turn the site into what it needs to be. I wish I could be optimistic, but given the major record labels' track record in dealing with such things, I still think the chances are pretty slim.

Filed Under: music, rio caraeff, videos
Companies: google, universal music, vevo, youtube

There May Be Hope For The Recording Industry, Yet

from the let's-wait-and-see... dept

As noted, I'm at the Leadership Music Digital Summit to give a keynote talk tomorrow. Today's keynote is from Rio Caraeff, the executive VP of the eLabs group of Universal Music Group. Listening to his talk, it's impressive to see that it appears someone within Universal Music Group actually seems to understand what's going on. That may seem a bit dismissive of Universal Music Group, but it's not my assessment, but what the CEO of Universal Music Group flat out said just a couple of years ago, in noting that he had absolutely no clue about digital music and didn't even know how to hire the right people.

Caraeff, however, seems focused on all the right things. He talked about how access to music is more important than possession. He talks about how it's the experience that has always made music valuable, noting "you can't steal experience." In fact, he points out that the concept of the album is dead, but that UMG (and others) need to build a true "living album" that goes beyond the music: adding a full experience that can update over time, that allows fans to access the music however they want, and that enables interaction with that music -- including fan participation and user-generated content associated with the music. And he wants it all built on open standards, to avoid a situation like the Blu-ray consortium where only a few companies have control of the system.

"How do we compete with piracy? It's creating a unique experience that can't be easily replicated through file sharing."

He then goes on to say that the business of "licensing music" is a dead end because it's just not scalable (whoo hoo!) noting that it's killing innovation. Even saying that they need to acknowledge that they need to enable letting a thousand innovators bloom.

He did admit that the team at UMG is still struggling to figure out the best way to make money in this new world -- but he recognizes this is where things are going:

"I'd rather have access to all my music, tv shows and movies anywhere on any device, rather than "own" 100 files. This is going to be a swift transition. It's taken us less than 10 years to go from plastic discs to digital files. It will take 5 years or less to go from digital files to cloud-based services, which will make the music even more valuable."

This is all good news. It's someone who clearly recognizes the shift that needs to be made by a major record label. But, the real question is how much influence he actually has at Universal Music Group. We've seen similar recognition among employees at other record labels, including Warner Music and EMI -- but the "top management" at both of those firms has continued to go in the opposite direction, focusing on stomping out innovation, rather than encouraging it.

Unfortunately, this may be a real issue. He did admit:

"Universal Music is a big company and not everyone there is on the same page, but I was put into this job to make these changes. Turning a big ship around is slow. It's not a lack of desire, but it's a question of when not if. A lot of what I do is talk and evangelize to others within UMG to try to raise the consciousness level about where our business is going, to bring us to a path to growth again. It's not about how do we stop the decline of our business, but to find another billion dollar business for us. I'm not interested in how to I sell more MP3s on Amazon or to create new competitors to iTunes. That's important, but that's not going to transform our business. It's difficult in the day-to-day grind to turn a big company around, but it starts with passion. Passion sells. This is how it works."

It's great to see some optimism coming from within one of the major labels, recognizing all of the opportunities out there. Hopefully, it actually leads to something useful.

Filed Under: access, experience, music, music business models, rio caraeff
Companies: universal music

Eminem Loses Lawsuit Against Universal Music: Jury Says Digital Music Sales Are Like CD Sales

from the so-much-for-that-plan dept

A few years back, a few bands, including Cheap Trick and the Allman Brothers sued their record labels claiming their cut of iTunes sales wasn't right. It was basically a contractual suit. Since there are a million and one different licenses to deal with, the record labels were treating digital sales the same way they treated CD sales -- of which the artists get a tiny tiny percentage. However, these bands noted that it seemed like digital sales was much more similar to a deal where they were licensing their music for use in another product -- such as a commercial or a movie. In those deals, the bands get a much bigger cut. A little while later, Eminem filed a similar lawsuit -- though somehow (great lawyers there...) thought that it was all Apple's fault and sued Apple. It looks like that got sorted out eventually, and Eminem refocused the lawsuit on Universal Music. And... didn't get very far. Last week a jury found that Universal Music was right: a digital sale is just like a physical sale, and thus the significantly lower royalty rate applies. You can bet pretty much every major record label just breathed a huge sigh of relief (even though an appeal is likely), because a ruling in the other direction would take away a hefty chunk of margin from their digital sales.

Filed Under: digital sales, eminem, royalties
Companies: universal music