Last year, we wrote about singer Carly Simon's decision to sue Starbucks for not promoting her album enough. As you may recall, Starbucks, for a little while, tried to get into the music business by building on its success in selling a few CDs in stores and trying to start its own record label. The company invested heavily in its Hear Music subsidiary, but the results weren't very good, and about a year later it dumped the plan. In the interim, however, it did release a few albums, including one by Paul McCartney. Carly Simon had also signed on, but the label shut down five days before her album came out. She claims that because of this, she suffered greatly, and went on to sue. Of course, there seemed to be a lot of holes in the argument. First of all, she still sold a ton of albums, and the company had given her a huge advance (over half a million). On top of that, this could have happened with any record label.
In April, the judge tossed out the dispute, pointing out that Simon's actual deal was with Hear Music, the subsidiary, and not Starbucks. Unable to leave things alone, Simon has filed an amended suit, claiming that Starbucks misrepresented how much it would promote the album. But, once again, record labels change promotional strategies for albums all the time. On top of that, these days, it seems like any musician should realize that much of the promotional effort on new albums really falls on the artist themselves, rather than their labels. Blaming the label may seem like an easy target, but it's a stretch to then claim they had some legal obligation in terms of how the album was promoted.
Michael Scott points us to one of the best summaries I've seen of the state of the music business today -- published in the ABA Journal. It's an incredibly balanced piece, that really does carefully present both sides of the story on a variety of issues, and presents actual evidence, which suggests the RIAA is blowing smoke on a lot of its claims. The piece kicks off by highlighting that the music industry appears to be thriving, and then noting that it's not the same as the recording industry, which has been struggling.
Much of the piece does present the RIAA's viewpoint on things, such as the idea that the legal strategy the labels have taken has been a "success." However, it follows it up by questioning what kind of success it has been when more people are file sharing and more services are available for those who want to file share. From there it segues into a discussion on "three strikes" and ACTA, which includes the jaw-dropping claim from an RIAA general counsel that "three strikes" was "never even put on the table." I've heard from numerous ISP folks who say that's not true at all. However, the article does a good job (gently) ripping apart the RIAA's claims, with evidence to the contrary, and does a beautiful job digging deep into ACTA to show how the text might not explicitly require three strikes, but is worded in such a way as to make it hard to qualify for safe harbors without implementing three strikes.
The latter part of the article then focuses on how the music industry really is booming, and how more people are making music, and there are lots of opportunities for musicians to do well these days, even without relying on copyright law. The arguments made (and the people and studies quoted) won't be new to regular Techdirt readers, but it really is a very strong piece, targeted at lawyers (many of whom may not have realized some of these details). For example:
If the ultimate goal is to promote the creation of new works, then perhaps it isn't really necessary to take stronger legal actions against illegal file-sharing because the evidence does not suggest that it is hindering the creation of new works by musicians
I certainly don't agree with everything in the article, and there are a few statements from the RIAA folks that could have been challenged more directly. But, on the whole, it's definitely one of the better articles I've seen looking at the music industry from the perspective of the legal profession that doesn't automatically drop into the "but we must protect copyrights!" argument from the outset.
Back in March, we wrote about reports that Apple had gone around and pressured various record labels to stop working with Amazon on its "MP3 Daily Deal" promotion. The reports suggested that Apple had told the labels that it would not promote any releases that were featured as Amazon's Daily Deal. As we noted at the time, this sounded like a classic "restraint of trade" situation that the government tends to frown upon, especially when performed by what might be considered the dominant player in the market. I'm not sure I believe it should be an antitrust issue, but it certainly is the kind of thing that the government gets upset about.
So it should come as little surprise at all to find out, indeed, that the Justice Department is now looking into this. Of course, it's early, and nothing may come of it, but you would still think that Apple would be a bit more careful than blatantly telling partners not to work with a competitor. Or does Steve Jobs hope that his powers of persuasion will wow over the Feds as well?
Why is it that politicians keep using music in commercials without getting permission first? No matter what you think of the copyright issue (and we'll get to that), it's amazing to me that any politician doesn't recognize that if he or she uses a song without permission, and the musician doesn't happen to like that politician or that politicians party or policies, that a whole news cycle will be devoted to that musician being able to bash that politician. The latest is Florida Governor, and now Senate candidate, Charlie Crist, who is being sued by former Talking Heads front-man David Byrne for one million dollars. This is similar to Jackson Browne's lawsuit against the McCain campaign (though, in that case, the commercial wasn't actually by the campaign, but a local party group).
Byrne keys in on the copyright issue, but seems to jump back and forth between the moral issue and the copyright issue without realizing they're not quite the same thing:
The suit, he adds, "is not about politics...It's about copyright and about the fact that it does imply that I would have licensed it and endorsed him and whatever he stands for."
But, of course, in the US, we don't have moral rights on songs like this. While it's true that the campaign might need to license it for a commercial, Crist could easily have used it at campaign rallies (assuming the venue paid performance rights licenses) and Byrne could do nothing to stop him, no matter how upset he was that some might think he endorsed Crist's positions.
That said, you could potentially make a pretty strong fair use case in such a commercial. It would be for political, not commercial, purposes, and it's only a snippet of the song. Also, it's not like the commercial is going to replace the market for the actual song, so the effect on the market should be minimal (or even potentially positive, if it reminds people of that song and gets them to go out and buy it). That said, I would imagine Byrne's response is that it could potentially harm the market in a few ways, including the negative association of the song with a campaign, and (more convincingly) that it could potentially harm the market for Byrne to license the song to other commercial advertisements. I can see the argument either way, though I (not surprisingly) would lean towards this being fair use.
Even so, though, whether it's fair use or not, you would think that after so many examples of this sort of thing backfiring on politicians, that they would learn to check with musicians to make sure they support the politician before using the song, just to avoid the easy headlines of "big famous musician suing politician x."
Recently, we've noted some similarities between Amanda Palmer and the band OK Go, in that both had been signed to major record label deals, both had built up an amazing (and amazingly loyal) group of fans through various means (different for each) using methods totally outside of their major label marketing effort (which was somewhat lacking in both cases)... and last month, both were officially dropped from their label deals.
In the past, getting dropped from a major record label deal was seen as a bad thing -- a sign of trouble for the band. But in both of these cases, the process of getting dropped was initiated by the musicians themselves, who realized they could do much more outside of the major label system, than within it. So it seemed like a bit of serendipity, that both acts had aspects of their ongoing tours overlap in San Francisco this week -- leading to an event put together by Creative Allies at the Ex'pression College for the Digital Arts, where both acts performed and did some chatting about music and the music business as part of a webcast. Thanks to Amanda, I was able to attend in person with a small group of folks in the studio, and it was a fun time -- as both acts basically celebrated their freedom from their record label deals.
You can see the webcast in two parts below (not sure why it's two parts, and it was not easy at all to find the second part):
It's yet another reminder of how the role of the major labels is totally changing. Historically, the only way to be successful in the music business was to get a major label deal. They were the gatekeepers, and without a deal, you were out of luck. Being dropped from a major was effectively the end of your career as a performer with a very small number of exceptions. But, these days, artists are realizing that there's so much more that can be done without major label help, and that actually being on a major can hinder or block those opportunities, that it's become a cause for celebration when you get "dropped" -- or, perhaps, more accurately, freed!
While there's plenty of music, there were two key points on the whole business model side of things that came up that are worth repeating (in case you don't feel like watching both videos -- though, you should, since they're pretty cool). The first is that during the interview session between acts, Amanda was asked about "direct to fan" stuff, and she made a point that I've been trying (perhaps unsuccessfully) to highlight for quite some time: and that's that each act needs to do something that fits with what works for them. Her fear is that there's so much talk about "direct-to-fan" offerings, that people are going to start just trying to all do exactly the same thing, rather than charting a course that's unique to them.
We've tried to point this out as well, in noting how different the various success stories are. Inevitably, of course, someone says that we're saying everyone should do what one of these artists are doing (a favorite of critics is the false idea that we've said everyone should go to Disneyland with some fans, like Josh Freese). But that's not the case at all. For Freese, it was a part of his personality (and his life, as he basically grew up at Disneyland, and performed there as a kid). The whole point of learning how to better connect with fans and giving them reasons to buy, is not that everyone has to use Twitter, or that everyone has to offer "tiered" offerings. Or that everyone has to tour, even. It's that there are many different ways that each artist can connect with fans and give them a reason to buy directly, and that each artist has to figure out the way to apply the concept in a way that fits with their own personality and sensibilities. It's great that Amanda was able to really drive home that point during her interview.
The second part is actually an amusing exchange between OK Go and Amanda after OK Go's second song. Lead singer Damian Kulash asks the audience for questions, and if you listen closely on the video, you can hear Amanda ask about how the band was able to not just get dropped by Capitol/EMI, but also to take the last record with them (something she was unable to do with Roadrunner/Warner Music). Kulash tries (not all that successfully) to dance around the legalities by setting up a hypothetical version of EMI -- but basically admits that with EMI more or less fighting every day to avoid defaulting on massive loans -- while at the same time fighting with the Beatles and other top acts, the label apparently found the fact that Kulash might occasionally pen
op eds for the NY Times that made the label look totally clueless on digital things, that it was better to just usher the band out the door as quickly as possible. And, as such, the band had a bit of leverage, which was used to not just get out of the contract, but to take the last record with them.
Of course, the business model stuff was a minor part of the overall evening, which really was very much about music, and a rather celebratory mood from both acts about their freedom to stretch out creatively -- as both demonstrate beautifully in their separate performances. Among the many highlights, there's Kulash forgetting lyrics and later getting a case of the giggles in the middle of the band's hit song "Here It Goes Again" -- plus a rendition of "What To Do" performed entirely by the band using a table full of hand bells... And Amanda playing a song from her upcoming EP of Radiohead covers played on the ukulele because, as she noted, she can.
Earlier this year, we wrote about how Lady Gaga had leveraged free music as a huge part of building up her popularity, and turned that into money via sellout tours and corporate sponsorship. However, most of that article focused on "legal" free music -- such as the songs her label had put up on MySpace and YouTube and elsewhere. But what about the unauthorized kinds? Well, in a wide-ranging (and really quite fascinating) interview that Lady Gaga did with the Times Online in the UK (check it out before they put up the paywall), Lady Gaga admits she's fine with people downloading her music in unauthorized forms because she makes it up in touring revenue:
She explains she doesn't mind about people downloading her music for free, "because you know how much you can earn off touring, right? Big artists can make anywhere from $40 million [£28 million] for one cycle of two years' touring. Giant artists make upwards of $100 million. Make music -- then tour. It's just the way it is today."
Similarly, she knocks bands that don't really try to work hard to please the fans, and who just expect them to automatically buy each album:
"I hate big acts that just throw an album out against the wall, like 'BUY IT! F*** YOU!' It's mean to fans. You should go out and tour it to your fans in India, Japan, the UK. I don't believe in how the music industry is today. I believe in how it was in 1982."
Like Mariah Carey, it looks like Lady Gaga has realized that this concept of Connect with Fans and giving them a Reason to Buy works at the superstar level just as much as it does down at the indie artist level. The specifics of implementing a business model around the concept are very, very different -- but the core concept remains the same. Treat your fans right, learn to leverage what's infinite to make something scarce more valuable, and then sell the scarcity.
We've covered this silly move in the past by music publishers and songwriters, but they're apparently still at it, and the NY Times is giving them publicity for trying to shut down lyrics sites online. This is ridiculous for any number of reasons, but shows you the state of some parts of the music industry these days. Basically, lyrics -- which, by themselves, generated absolutely no money for songwriters/publishers for pretty much the entire history of the business -- are suddenly seen by publishers as gold, because some people started putting them online. And rather than realize that this is a way to get more attention to songs, more attention to songwriters and more attention to lyrics -- all the publishers and songwriters saw was "hey, people should give us money for repeating the lyrics we wrote!" And since then it's been a constant battle. Oddly, the NY Times article never seems to even present the other side of the argument -- that perhaps it's ridiculous to try to charge people for putting lyrics online. Instead, it seems to think that the idea makes perfect sense. But, then again, this is the newspaper that thinks putting up a big paywall makes perfect sense too...
I've been a pretty harsh critic of Lala over the years. The company was long on hype and short on substance with its ever changing business model. First it was a CD swapping service. Then it was a free streaming music service. Then it was an iTunes-in-the-cloud. Still, the final product was decent, and with a bit of work could take on Spotify in the market. When Apple swooped in and bought Lala late last year, many people got excited over the possibility of Apple creating its own streaming music service that really could be seamless.
Instead, it looks like Apple bought Lala to shut it down. Just five months or so after purchasing it, Apple has announced that Lala will be closing at the end of May, pissing off lots of users. Now, it's entirely possible (or even likely) that Apple is timing the shutdown with a launch of a totally new streaming iTunes-in-the-cloud type service, but it does seem weird to buy a company and shut it down so quickly, and raises questions of whether or not the purchase was really about building out Apple's offerings, or about shutting down a nascent competitor just before Apple launched its own version. Also, if the plan is to launch its own version, why "shut down" Lala? Why not just transfer them over to the new service?
In the meantime, Spotify still hasn't launched in the US, but you would think that now might be a good time to step in and sign up disgruntled Lala listeners -- before Apple really enters the market...
Don Bartlett, who manages a variety of music acts, and who has guest posted in the past, alerted us to a recent blog post by a band he works with, called Skybox, explaining their views on file sharing. Like many smart music acts these days, the band is totally cool with people downloading their stuff, but they add one addition to it: if you're going to share it, then really share it and spread it to others:
So here is our win/win proposal to people who download the record from a filesharing site: If you like the album, pick your favorite song and email it to 10 of your friends. Simple as that. That way you get to enjoy the record AND our music gets promoted. If you're feeling really ambitious, post a link to our new video on your twitter or facebook. Or use the "share" button on all of the players on our site... they're easy as hell to use and are a simple way to have your friends check out our music. You get the idea.
It's nice to see a band not just recognize that file sharing isn't necessarily a bad thing, but also recognize the increased benefit from the actual sharing, while encouraging more such sharing.
In a time where many in the recording industry are running for the hills as a result of the digital revolution, classical music seems to be embracing the new era. As a result of the access to the long tail afforded by the internet, classical labels have seen an increase in sales. Contemporary classical composers are experimenting with posting their scores online for free, recognizing that scores locked up behind copyright that nobody plays are far worse than freely available scores that musicians do play. Furthermore, considering that many scores by the great composers like Mozart and Beethoven are public domain and not covered by copyright, it provides additional incentive for modern day composers to participate in the sharing ecosystem. This entrepreneurial spirit of experimentation would greatly benefit the rest of the music industry.
Great orchestras around the world are also trying new things of their own, from running their own labels, to offering digital subscriptions of downloadable tracks, to online streaming of live concerts. Orchestras have a unique set of challenges as compared to a rock band. They tend to consist of many, many more members (around 100) and also have large fixed costs like concert halls to contend with. So, since touring is not really a viable option, most orchestras are limited to larger cities that have large enough populations to support them. The digital era brings with it the opportunity to engage with audiences that are far beyond the cities in which they play.
Fans of the Berlin Philharmonic, widely regarded as one of the best orchestras in the world, can now subscribe to live streaming concerts through its "digital concert hall." For about $200, fans have access to live and archived performances for a year. Granted, the virtual experience probably does not come close to seeing a show at the concert hall, but the price is much lower than the cost of a ticket, which opens up the experience not only to fans who are limited by distance, but also fans who are limited by funds. However, as internet technology continues to converge upon living rooms, televisions equipped with internet access, connected to high fidelity home theater audio systems will undoubtedly start to become more commonplace, making the experience of watching a live concert from the comfort of your own home even better. Even so, it seems unlikely that home viewing would ever really compete with the live experience. Especially with orchestras the live sound fidelity just can't be matched -- and most people attend such performances for the social experience. After all, there's no chance at all that you'd show up in the society pages if you're watching the show from your couch.
Still, it will be worth watching to see how much revenue that these new products generate. Most orchestras, even the most successful ones, still rely upon charitable giving for a large portion of their revenues -- but there's no reason the focus needs to be on charitable giving. There's no reason why orchestras can't start coming up with valuable scarce reasons to buy beyond just the live shows (or even streaming access to shows). They could offer all sorts of special views or access. For example, for less experienced listeners, you could take part in a special "educational" stream, where an expert would alert you to things to listen for -- and listeners could ask questions and discuss. Alternatively, they could provide access to the musicians in other manners, such as one-on-one discussions, music lessons or even solo performances. They could sell off old instruments, broken strings or used sheet music (perhaps signed?). There are lots of additional ways in which they can start to embrace the same sorts of business models that others in the wider music industry are using.
