Record Labels Continue 'Negotiating Through Lawsuit'

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

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.

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

Tens Of Thousands Of Students Have Signed Up For Choruss... Even Though No One Knows What It Is?

from the am-I-missing-something? dept

A bunch of folks have sent in the story in The Register about Jim Griffin's appearance at the World Copyright Summit, where he apparently told the crowd that "tens of thousands" of students at universities have agreed to voluntarily pay for Choruss. But, unfortunately, nobody seems to know what it is. Plenty of folks have been asking for an actual description of what it is -- and every time we're not told anything other than that it's "an experiment" that we're not to criticize. So, I'm curious who these tens of thousands of students are, and exactly what they've signed up for. If any of them is willing to share with us the details of what they signed, that would be great.

At one time, we were told that Choruss would be mandatory, but lately, Griffin has suggested that it will be voluntary. A voluntary system is much better, so that's definitely a step in the right direction, if that's true. But there are still plenty of other problems with such a system, many of which I've outlined elsewhere. It still seems like the entire program is based on a negative benefit ("you won't get sued") rather than a positive incentive ("here's a reason to give money in exchange for something you want") and a distortionary effect on the market (i.e., inserting unnecessary bureaucracy into a market, such that artists will actually make less). But, the fact that supposedly tens of thousands of students have agreed to pay for this when no details of what "this" is have been offered seems quite odd.

Separately, I should note that in our last post about Choruss, we solicited questions to be sent to Griffin which he has promised to answer. Due to my own hectic travel schedule, I haven't had time to go through the responses yet and whittle the list down to a more reasonable level, but I'm hoping to do that shortly. Alternatively, Griffin is free to answer questions and discuss these issues in the comments, but to date he has preferred not to do so, which is his right, of course. Still, if you have any additional questions for Griffin, feel free to add them in the comments, and I'll include them in the potential list (which will be narrowed down, so as not to overwhelm Griffin).

Filed Under: business models, copyright, jim griffin, licensing, music, questions
Companies: choruss

ASCAP Thinks That Video Game Providers Should Pay Music Performance Royalties

from the just-make-the-internet-like-tv-so-we-don't-have-to-change dept

Despite claiming to represent the interests of songwriters and composers, ASCAP has consistently provided bad advice on how they should respond to digital technology and the internet. For ASCAP and many other collection societies, anything that doesn't involve royalties seems automatically bad (despite all the success from artists who've been freeing up their content), and other questionable practices raise serious doubts over how royalty money is handled once collected. Now, ASCAP wants to increase the toll on video games and is encouraging video game music composers to reserve performance rights (via Michael Scott). Typically, game developers purchase rights (including performance rights) from music composers, but ASCAP's Director of Legal Affairs, Christine Pepe, argues that the practice no longer makes sense. She suggests adopting the model that was developed for film and television, where composers and songwriters often negotiate contractual provisions for performance royalties.

Not surprisingly, there are some major problems with the article.

First of all, Pepe cites Rock Band, Guitar Hero, Dance Dance Revolution and Stubbs the Zombie to highlight the prominence of music in video games nowadays. These are all cases of popular songs being used in games, rather than music being written for games... yet she's presumably addressing people who write music for video games. Early versions of Guitar Hero used covers to make licensing easier, so composers weren't even part of the negotiation. This licensing is about synchronization or mechanical rights -- not performance rights. Labels have complained that these games aren't paying enough for the music, but it's the games that increase the value (and sales) of the music, not the other way around. These games could simply choose other good music and still be popular. ASCAP clearly doesn't understand that, while music can add value to games, games add value to music. Pepe says that older video game music is "probably difficult to imagine... in a context other than the games themselves." She isn't trying very hard to use her imagination, as there are plenty of examples of older video game music having a life outside of the games. Would anyone care about the Mario theme if it weren't part of the game? The lesson from old video game music isn't that performance royalties used to be negligible. It's that success for a video game music composer isn't just about writing good music, but about having that music associated with successful games.

Second, Pepe's argument that there's a public performance of music in video games seems like a real stretch:

Now, because video games are being delivered by entities other than developers and on transmission-based platforms such as the Internet, there is no reason that composers of music for video games should sign away their rights. Take for instance, X-Box — it is now fully integrated with the Internet and allows users to stream games (instead of just purchase the physical product in the store). Internet-based services that now offer streaming of video games are causing the music contained in such games to be publicly performed. The providers of these video game services typically have or should have a license from ASCAP (and possibly other public performance right organizations). [emphasis mine]

What does "streaming" a video game even mean? A video game is interactive; it's not a one-way broadcast, but communication over a network. Is Pepe suggesting that there's a public performance simply because software communicates over the internet? Email happens on the internet. Is that a public performance? There's such a thing as private communication over a network. Games like Gears of War, for example, allow you to play in co-op mode with another player in the same room or online. I find it hard to believe that the location of player two would determine whether or not the music is being publicly performed. What about a multiplayer game on a local area network? Why would that be any different, in terms of a public performance of music, from a multi-player game with everyone in the same room? Simply playing a game over a network doesn't make it a performance, nor does that make it public.

But maybe Pepe isn't referring to having players in remote locations, but having games in remote locations. She uses the Xbox as an example, which seems odd because, as I understand it, the Xbox Live Arcade lets you download games, but that's quite different from streaming. It's the video game equivalent of the iTunes Music Store, not an internet radio station. Digital distribution doesn't mean public performance -- the game is still played locally, just off a hard drive instead of a plastic disk.

Okay, so maybe Pepe was trying to talk about a platform that actually hosts and runs games on a remote computer. Still, it's pretty hard to believe that just because software is run remotely it's a public performance of the music, when the act of hearing the music would be indistinguishable if the software were run locally. Is it a "public" if I check my email using the Gmail web interface instead of Thunderbird? I have a music server running at home which lets me login and listen to my library from anywhere -- is using that a public performance? Do I need a license to listen to my own library because it's on a different hard drive? How does playing music in a video game become a public performance simply because of the hard drive the game resides on or the CPU that runs the process?

Furthermore, let's pretend there's actually public performance taking place. Is it even in a composer's best interest to demand these royalties? (This is not about a composers "right to get paid;" composers are getting paid -- upfront.) Making it harder for people to hear your music is rarely a good idea. Like with theme music for WKRP in Cincinnati or House in the UK, game developers may just seek other music if the licensing requirements are too burdensome. Focusing on getting every penny for every use of the music ignores the value of being included in a game, film or television show. The lesson from video game music of the past and present is that having your music included in a great game is extremely valuable. Not only are you getting paid to be promoted, but the game developers are even doing the hard work of getting fans to connect with the music! Rather than demanding compensation for every use, composers and songwriters should look at other ways to take advantage of the opportunity to make more money from the increased fan base. If ASCAP were really representing their interests, it would be helping them do this instead of pretending that the internet and video games are like television and insisting on performance royalties which will only get in the way of new business models. Of course, don't expect ASCAP to promote anything that isn't about increasing royalties. If your only tool is a hammer, everything looks like a nail...

Filed Under: licensing, music, video games
Companies: ascap

Dear Free Haters: No One Has Said 'Everything' Is Free

from the once-again. dept

This is getting rather repetitive, but it seems that industry execs and lobbying groups who hate the fact that they have to "compete with free" consistently like to trot out tired old (and inaccurate) lines about how "you can't make money if everything's free." Except that's a total strawman. The latest to do this is Eric Baptiste, head of the International Confederation of Authors and Composers Societies (CISAC). In an interview with The Register, Baptiste repeatedly claims "there is no business if everything is for free." It's the kind of statement everyone has to agree with... minus the fact that it's totally meaningless. No one is suggesting that everything be free. What people are suggesting is that there are some things that it makes sense to offer for free, and some things that it makes sense to charge for. The trick (and it's really not that tricky) is understanding which is which. But, rather than helping folks like Baptiste are misleading their own constituents by making statements claiming that we're moving to a world where "everything is free."

What's funny is he even seems to implicitly realize this with his next statement:

When you listened to commercial radio or watched the BBC or bought CDs, all those things are paid for one way or another - not always by the public directly, but advertising and payment and license fee all created a stream of money. Licenses are being granted and the authors are being compensated, it's a real economy. When you move from this to nothing, to "everything is free", that's not a real economy. And nobody knows how to make the world spin with those rules.

The first part is exactly right. Not everything is paid for by the consumer directly. But the second part is dead wrong. No one is suggesting any business model where "everything is free." Everyone's been focusing on ways to take some stuff as being free and use it to make other stuff more valuable and worth paying for. And it's working. So why is Baptiste pretending that people are pushing "everything is free"? It's because the new business models upset the apple cart for an organization like CISAC, which wants to create a big collective licensing deal (collective licensing is easy, compared to actually giving people a reason to buy).

His real fear isn't that "everything is free," because that's not happening at all. His real fear is that the new business models don't require groups like CISAC. But, of course, he gets away with it, because reporters never seem to challenge completely bogus statements like that we're heading into a world where "everything is free."

Filed Under: business models, economics, eric baptiste, free, licensing

Why Is It So Hard To Set Up A Pan-European Music License?

from the head-scratching dept

We'd been looking at reports about the ongoing discussions about pan-European music licenses without too much interest, given that licensing bodies only ever seem to do things in their own interests. But one aspect of the talks is a little bit interesting. It's often claimed by these bodies and their supporters that they're these little non-profits working tirelessly on the behalf of musicians and songwriters, ensuring they get paid for their work. It's a convenient appearance behind which these groups hide, using it as an excuse to justify plenty of ridiculous behavior. After all, if you object to anything these groups do (supposedly) on behalf of musicians, you're trying to take away the musicians' "right to get paid", so your opinion can be marginalized and ignored.

But the reality is that many of these licensing groups are nowhere near as innocent as they'd have you believe. Their licensing schemes often do little to actually help musicians make money, and in fact, they can even make it harder for musicians to succeed. Then there are examples like that of SoundExchange, which is sitting on more than $100 million in royalties it's collected, but claims it can't pay out because it can't find the musicians to which it's owed. In addition, where do unclaimed funds end up? The RIAA.

Just for a second, let's ignore the above paragraph and assume the licensing bodies really are working in the artists' best interests. If that's the case, and the artists' best interest constitutes them getting paid, why is it so difficult to set up a pan-European license? Why does it matter who collects the money, as long as it ends up in the artists' pockets? Apple has talked before about how having to set up licensing deals in each EU country before allowing iTunes Music Store sales there means that it's simply not worth the effort in some places, and that having a pan-European license would let it open up iTMS in new places. That would be good for artists, right? More outlets for online sales means more money for them. So why hasn't the pan-European license been done? Infighting over which licensing body gets to collect the fee -- and take a cut? If these licensing bodies are all about the musicians, surely that can't be the reason, since they just want to funnel as much money as possible to the artists.

So maybe, just maybe, the licensing bodies aren't solely interested in artists' welfare and have other motives?

Filed Under: collections societies, europe, itunes, licensing, pan-european license
Companies: apple

Ask Jim Griffin Questions About Choruss... Along With My Concerns About It

from the ask-away dept

It's no secret that I think Jim Griffin's plan for Choruss -- to set up a licensing system for P2P -- isn't just grossly flawed, but dangerous in many ways. We discussed at length why the very idea of any sort of licensing (i.e., a "tax") on online music is a bad idea. We've also worried about the apparent bait-and-switch nature of the plan -- in that, while it would grant either "covenants not to sue" or (potentially) "licenses" for any file sharing you do, it wouldn't stop the recording industry from still trying to shut down file sharing apps as illegal.

A few months back, I finally met Jim and was still left with many, many questions about the program -- especially because I felt that when anyone tried to pin him down on any particular bad idea that's been associated with the project, he would cut off the discussion by saying, "we're just experimenting -- so just let us get data before you criticize." And this, in fact, is a part of the problem. Rather than discussing the merits of any particular idea, Griffin keeps suggesting that -- despite evidence, history or theories about how various license programs work -- none of that is relevant to discuss until he's got data on his particular experiment. The way the plan is structured is that different (as yet unnamed) universities and colleges will begin testing Choruss this fall -- and each university will set it up how they see fit, in order to get comparative data. Thus, some could make it compulsory. Some could make it voluntary. Some could charge a lot. Some could bundle it with something else. Some could charge a flat fee. Some could charge a per download fee. Some could charge a per listen fee. But, if you try to dig down into the problems with any of these, Griffin has just said, "well, we're just experimenting, and we don't know if it's a good idea or not." Unfortunately, this avoids allowing us to discuss the details of why the concept is troubling, because we're told repeatedly it's just an experiment.

Jim Griffin to answer questions

That said, in an email exchange, Griffin agreed that if we asked folks at Techdirt what questions they had about the program, he would answer them -- and I hope that we can get more detailed answers. Now, to say our email conversation has been without conflict would be incorrect, and there was a bit of a misunderstanding about the timing of us soliciting questions (I had hoped to do it as a part of The Free Summit, which he was scheduled to attend, but for perfectly legitimate reasons, he was unable to attend at the last minute). But Griffin says he wants to answer whatever questions we have, and I'd like to send him some good ones.

My own concerns

To kick it off though, I'm going to share an edited/updated version of the last email I sent Griffin, after he asked again why I was so against Choruss. In pitching Choruss, Griffin likes to tell the story of the founding of SACEM, the very first collective licensing society. He talks about how since restaurants benefited from the music, they should pay for that benefit -- and how that's the basis of every collection society since: any place/service that benefits from music should pay for that benefit. I have serious qualms about that thinking, and here's why:

My worries about Choruss come from a few different angles. I think any sort of collective/group licensing scheme involving such a third party is an economically inefficient, and unnecessary solution, that ends up doing more harm than good. I know you like to tell the story of SACEM. To me, that's a horror story. It's a story of how to create a system that leads to massive wasted resources, inefficiency, a reliance on a bad (but easy) business model, followed quite quickly by regulatory capture that leads to an ever increasing inefficiency. Look at what SACEM has resulted in, and all I see are massive inefficiencies. The idea of adding to that legacy concerns me. If you look at collections societies, over time they just keep trying to increase how much they collect, and will often lean on the government for help in doing so. The story of PRS in the UK is instructive here.

My concern is specifically that we're seeing other business models that are working tremendously well. I know you were unable to stay for my keynote in Nashville, but I went through examples of many different artists (small, medium and big) who were embracing new business models to tremendous success -- none of which relied on any sort of licensing proposal.

So, then, along comes a licensing plan where I need to pay (and, yes, I know this isn't determined yet and experiments will occur) say... $5/month for Choruss. Now suddenly that's $60/year that I'm paying for music (some of which gets siphoned off by the bureaucracy in the middle, even if it's a non-profit, just for administration) that relies on some magic formula to figure out who it goes to. I'm now less inclined to spend additional money directly with my favorite artists, because I've already spent the money via Choruss. My favorite artists get less money (and I'm reliant on your system to make sure that my favorite artists are actually rewarded). My money is spent less efficiently, and now there's a group in the middle who has every incentive in the world (even as a non-profit) to try to get an ever increasing part of the pie.

That just doesn't make sense to me.

You talk about the two issues: collecting a pool of money and distributing it efficiently. What's wrong with letting the market do that? People are giving money, gladly, to the artists who give them a reason to buy. That's your efficient collection and distribution system all in one. Except it doesn't need a middleman like Choruss.

The problem the recording industry faces isn't that there hasn't been an effective licensing system in the middle. It's that they weren't giving people a reason to buy. A licensing scheme isn't a reason to buy. It's a removal of a threat. That's negative value (we won't sue!), not positive value (here's additional scarce value you want to pay for). The artists I highlighted in my presentation were all giving positive reasons to buy. I'm afraid that focusing on a system like yours focuses on that negative reason to buy (you won't get sued!) rather than the positive reason (check out all the benefits I get).

That's my big concern.

That concern is exacerbated by the fact that every time a direct question is asked about how Choruss will work, your response is "it's just an experiment, so we don't know." I recognize that it is an experiment and you don't know all of the answers, but it feels very much like a dodge. I'm sure it's a fine line, because there are many details you don't know about, but you've been so vague about everything that it's hard to know what to think. A bunch of universities have agreed to it, but who are they? Why would they agree to test something without the details being clear? Who's setting up what those details are? In Nashville, you said some would involve all students, but at the SanFran Music Tech event you were saying they'd all be voluntary for the users. It just has this quantum feel to it. Any time anyone tries to get specific and warn about a certain aspect, you can just claim "well, we might not do that."

My biggest concern, frankly, is that putting in this inefficient, unnecessary bureaucracy in the middle, we take away resources from the new, more efficient, business models that are working. Both times I've seen you speak about Choruss, you've claimed that those business models won't necessarily be harmed, because they can still be built on top of Choruss -- but that goes against fundamental economics. If people have less money due to Choruss, they're a lot less likely to buy into these other business models.

Now, I'll be the first to admit that competing between business models is a good thing, but the very foundation upon which any sort of collective licensing system is built is to basically get everyone to opt-in, somehow or another -- and thus is set up to crowd out more efficient business models. Otherwise it just doesn't work. So you have every incentive to get third parties (universities, ISPs) to put in place policies that either force, or heavily incentivize, their students/subscribers to adopt a much more inefficient plan. The incentives are skewed. You and the universities/ISPs benefit -- but users (and musicians) do not.

So, with that, let's kick off some questions that I have as "starter" questions, and let's see what else you guys can come up with in the comments. Also, feel free to let me know which of the starter questions/user submitted questions you like best. Once we have a good bunch, I'll send them to Griffin and when we get his answers, I'll post them here. Some of these starter questions are the same ones I asked earlier this year, but I've added a few as well:

• Why do we even need such a plan when plenty of musicians are showing that they can craft business models on the open market that work?
• How does adding yet another middleman make the music market any more efficient?
• What's wrong with letting the market mechanism handle the collection and distribution of the funds directly between musicians and fans?
• Will the recording industry promise to stop trying to shut down file sharing systems if this program gets adopted?
• Will the recording industry promise to stop pushing for 3 strikes if this program gets adopted?
• How will the program prevent the gaming opportunities, where artists set up scripts to constantly reload/download their songs?
• Why should music be separated out and subsidized while other industries have to come up with their own business models?
• Why should those who don't listen to much music and aren't interested in giving their money to the recording industry be required to participate if their university or ISP decides to make them?
• Why should we have a business model focused on negative value (you don't get sued), rather than positive value (here's something scarce that's worth buying)?
• The history of collections societies shows that they only tend to expand, and try to capture more rents. Why would Choruss be different?
• If Choruss becomes big, won't lots of other industries want in? Movies will want their own version. Then newspapers. And if newspapers are getting their cut, then why not bloggers too? Or blog commenters? Or just any website? The road this leads down is a bad one, where we end up creating massive bureaucracies to subsidize every form of content, rather than focus on business models where those content providers have to provide a reason to buy their particular product. How do you prevent that?

Filed Under: business models, copyright, jim griffin, licensing, music, questions
Companies: choruss

UK Politicians Recognizing That Draconian Licensing Policies Can Harm Up-And-Coming Musicians

from the free-the-musicians dept

One point that often comes up (from all sides) in discussions about draconian copyright laws is the fact that, rather than worrying about copyright, new musicians can just ignore the legalities with no one being harmed. If only that were true. Earlier this year, we wrote about how those licensing policies in the US and overly aggressive enforcement by ASCAP and BMI meant that fewer and fewer venues were willing to host open mic nights, significantly harming how many young musicians get their start. Over in the UK, where venue licensing rules have reached such ridiculous levels that a woman playing the radio for her horses has to buy a performance license from PRS, it appears that politicians are finally recognizing there's a problem. A new government report is saying that such aggressive licensing policies are holding back young musicians by making it too difficult for venues to allow live performance of music:

"The licensing requirements are still too bureaucratic and costly, particularly for non-commercial groups such as sports clubs, not-for-profit establishments and organisers of occasional events. Our report calls on the government to relax restrictions in this area, which in some cases are unnecessarily draconian, and in others simply absurd."

So, it's important to remember that while you'd like to think those who recognize such draconian laws are bad can just "opt-out," it's not always so easy. The wider impact of these laws can seriously stifle opportunities for new musicians.

Filed Under: copyright, harm, licensing, uk, up-and-coming bands

Can We Please End The Myth That Anyone Is Trying To Take Away 'The Right Of Musicians To Get Paid'?

from the please-please-stop-saying-that dept

One of the very common myths we hear from people disputing the various business models we discuss around here for content creators is the idea that "but... but... content creators have the right to get paid" or "we need to protect the right for the musician to get paid." That implies -- falsely -- that anyone discussing these alternative business models believes that the content creators have no right to get paid. But that's not what anyone's saying at all. It's a total strawman. What we're saying is that you need to change the way you do get paid. No one is trying to take away the rights of anyone to get paid. Some of us just don't like artificial, government-structured taxes that force people to pay when it's not particularly reasonable nor efficient.

So I'm having a lot of trouble with this "set of principles" that the Future of Music Coalition has released (and kindly sent over). Considering that the whole thing is supposedly based on "the right of musicians to be paid for their work," it's no surprise that the "principles" seem to miss the point by a wide margin. They all seem focused on making sure that any tax, collective licensing, voluntary licensing, whatever scheme includes the artists getting their cut.

But what it doesn't discuss is why do we need such licensing schemes at all? Why not just let musicians come up with the various business models that work. No one's trying to take away their "right to get paid." We just think that -- like everyone else -- they should earn it not by some sort of welfare/tax/licensing program, but through making use of business models where open and willing transactions are made.

Filed Under: business models, licensing, music

Electro-Harmonix Shows You Can Handle Trademark Infringement Without The Legal Nastygrams

from the an-example-for-everyone dept

Whenever we write about certain types of trademark disputes, you can almost guarantee that a lawyer will show up in the comments insisting that the trademark holder had no choice but to send a legal nastygram, due to the legal requirement that they defend their trademarks or face having the mark declared generic or abandoned. But, as we've mentioned there are often much better ways of dealing with the situation -- especially when the use of the mark isn't harmful at all, but helpful. Reader eMike sends in a great example of this. The company Electro-Harmonix discovered that a German artist had made a big "huggable" pillow version of an Electro-Harmonix guitar effects pedal, rather than send out the legal nastygrams, EHX took a very different approach:

However, there was a touchy complication: the Big Muff Pi is a registered trademark, and if we discover unauthorized uses of our trademarks, we're legally obligated to do something about it (we have no choice about that).

We're all too familiar with the endless lawsuits suffocating the world of music, and so we decided to do something different. Instead of threats, demands, and legal letters, we contacted Gwendolin, told her we loved her work, and offered a formal license in exchange for an option to purchase them at discount. So, rather than a new enemy we now have a new friend, and a beautiful Big Fluff Pi. Take that as a lesson, music-industrial complex!

A lot of lawyers in charge of enforcing trademarks might want to think about this story before sending out their next legal nastygram.

Filed Under: licensing, nastygrams, trademark
Companies: electro-harmonix

Dear Jim Griffin: Let's Have An Open Discussion About Choruss

from the we're-waiting... dept

Yesterday, we wrote a highly critical post concerning the details around Choruss, the recording industry's latest plan to get universities or ISPs to hand over a chunk of money in exchange for "covenants not to sue." On a private email list (which has been forwarded to me by a few members of that list), Mr. Griffin responded by claiming that my "report is factually incorrect in every respect."

I certainly hope that's true!

The points I've raised are that the industry will continue suing file sharing networks, that they'll still pursue three-strikes policies, and that Choruss will be expensive, diverting a chunk of money away from other legitimate business models, which many musicians have been establishing successfully, by adding yet another middleman. Is he saying all of these assertions are false?

Actually, Griffin doesn't address or refute any of these points at all. With respect to the last one, he actually confirms it, by claiming that Choruss will be costly to run.

The only "factual" point he disputes is a rather minor one: concerning whether the program would also cover publishers and songwriters rather than just the labels. He insists that it will, noting that Warner Music owns one of the largest publishers. That's true, but hardly eases the worries. It just suggests, again, that this is a plan for Warner and its subsidiaries, rather than for building a better system for all stakeholders. And he doesn't explain how the system can cover the necessary rights at the price points being discussed. In fact, by noting how costly the program is to run, and how it will lose money at first, it certainly sounds like he's saying "this program will start out cheap, but then we'll jack up the fees."

He claims that Choruss "cannot credibly be claimed to be a money grab -- the costs will exceed the fees," but that's highly misleading on several accounts. First, as noted, it confirms just how expensive the program will be. Second, if it's a pure money loser, than why would anyone be involved with it at all? Obviously the idea, and the whole reason why Warner Music is backing it, is that it expects this to be a money maker, eventually. Claiming that it's costly simply confirms my original point, that inserting yet another costly middleman is the last thing that we need in the process. And this just suggests that any early pricing is, once again... bait and switch. The eventual prices will have to be increased once people are locked in.

That seems to confirm my initial complaints, rather than show how they're "factually incorrect."

Mr. Griffin, (on a private email list), again tries to refute the claim that they haven't included the stakeholders in the process, by noting:

"the calendar is a clear refutation: The coming week has Choruss at SXSW, a music conference in Nashville and the music educator's conference in Boston. We've done appearances and podcasts with Educause, dozens of public meetings at colleges and a keynote at Digital Music Forum."

Yes, after coming up with the plan in back rooms, without input from the actual stakeholders, Griffin has started going out and presenting the plan to others. But there's been no open discussion with those of us worried about the inevitable consequences of his plan. There's been no explanation of why this is actually needed. There's been no attempt to actually respond to the numerous questions that we've raised about the plan and no attempt to bring the actual users into the discussion:

• Why do we even need such a plan when plenty of musicians are showing that they can craft business models on the open market that work?
• How does adding yet another middleman make the music market any more efficient?
• Will the recording industry promise to stop trying to shut down file sharing systems if this program gets adopted?
• Will the recording industry promise to stop pushing for 3 strikes if this program gets adopted?
• How will the program prevent the gaming opportunities, where artists set up scripts to constantly reload/download their songs?
• Why should music be separated out and subsidized while other industries have to come up with their own business models?
• Why should those who don't listen to much music and aren't interested in giving their money to the recording industry be required to participate if their university or ISP decides to make them?

Finally, Mr. Griffin takes a personal swipe at me, saying that no "responsible professional" would write what I've been writing. I've the highest respect for Mr. Griffin, who I do believe is very capable and very smart -- and most certainly has the best of intentions with Choruss. But it's a bad plan and he seems unwilling to address the many, many questions raised about it, other than to brush anyone who disagrees with him aside, and focus on talking to friendlier audiences. If he wants to brush me off as not a "responsible professional," that's fine. I'm willing to let anyone judge me on my work, not on what Griffin says about me. But the very least he could do is actually address the points that I've raised.

To date, his form of "discussion" has been to have Warner Music PR send me a statement saying that it's "premature" to issue any criticism of his plan. That's not discussion and that's not addressing the many, many questions raised by his plan.

But, there's some good news. That "music conference in Nashville" where he'll be presenting about Choruss next week is the Leadership Music Digital Summit... which I happen to be keynoting. So, I'd love to sit down with Griffin and see if he'll actually answer some of these questions, rather than continue brushing us off as being "factually incorrect in every respect," without actually addressing the fundamental questions raised.

Filed Under: bait and switch, covenant not to sue, jim griffin, licensing, music tax, universities
Companies: choruss, riaa, warner music group