$6.6 Million Ruling Against Lyrics Site, Once Again, Shows How Short Sighted Music Industry Is

from the makes-no-sense dept

For many years now, we've covered how music publishers have gone after all sorts of sites that post song lyrics, arguing infringement. As we've noted time and time again, this whole thing seems short sighted in the extreme. Lyrics sites don't take away from interest in a song, they only increase it. And, yes, publishers have different interests than the musicians or labels, but it still seems counterproductive to sue and take down sites that were increasing interest in the actual music, as lyrics sites do. Unfortunately, lots of lyrics sites have been forced offline because the rates the publishers want are insane. A few years ago, a bunch of publishers went after Brad Greenspan's LiveUniverse for its lyrics offerings. Greenspan -- who was associated with MySpace in the early days as its parent company Intermix's CEO -- has, well, a colorful history. He's spent many years stamping his feet about how Rupert Murdoch should have paid more for MySpace back in the day.

Unfortunately, colorful and extreme CEOs aren't necessarily what you want in a lawsuit that involves a number of important issues. From the look of it, Greenspan did a lot more harm to himself in this lawsuit with his actions, so it's little surprise that he lost and was told to pay $6.6 million a few weeks ago:

Greenspan went through three law firms. One withdrew, citing a "personality conflict." Another withdrew, citing nearly $85,000 in owed fees and a "breakdown in the attorney-client relationship." At times, he showed up in court, representing himself and failing to obey proper procedures in submitting motions. At other times, depositions were ignored upon "medical emergencies."

Later on, after the court ordered an injunction, Greenspan ignored it -- a big no-no. As a result, it's almost surprising that the final ruling was only $6.6 million. The judge, thankfully, more or less realized on his own that the $100,000 per song that the publishers were asking for was crazy talk. He specifically asked about what actual licensing rates would have been, "to avoid a ridiculously disproportionate damage award" -- even though statutory damages don't require any indication of "actual" damages. Of course, they still ended up with $12,500 per song for 528 songs, leading to the $6.6 million verdict embedded below.

The whole case, however, reminds us once again how shortsighted the legacy players in the industry are. They seek to get cash out of every single use, even if those uses make the overall work more valuable. The end result is fewer people engaging with lyrics. It's just too expensive, and that serves to generate less interest in the music as a whole. But, it gets some publishers a short term big check, and that seems to be the extent of strategic thinking in parts of the legacy industry these days: "how can we get them to pay us right now?" rather than "what actually makes the most sense?"

That may sound like an exaggeration, but it's not. Remember, when now-Sony Music (then Universal Music) boss Doug Morris basically made exactly that statement? When asked about increasing value to benefit down the road, Morris responded by telling a reporter that this just meant that:

"someone, somewhere is taking advantage of you."

The legacy music industry needs long term strategic thinking. And instead it just looks for who it can sue.

Filed Under: big picture, copyright, lyrics