Even The Usual Defenders Of The RIAA Are Pointing Out They're Simply Lying About YouTube

from the look-at-that dept

Paul Resnikoff's Digital Music News site is a worthwhile read, often turning up some really interesting news. However, the site pretty consistently takes the legacy music industry's point of view in the various debates on copyright and music services. To me, it has a somewhat unfair bias against many of the new innovators and music platforms that have helped drag the industry (kicking and screaming all the way) into the internet era. But it's still well written and thoughtful, and I appreciate the work that Paul does, even if I don't always agree with his opinion. So consider it quite a surprise to see Resnikoff call out the RIAA on its completely bullshit attacks on YouTube over the past few months. Resnikoff isn't pulling any punches. He points out that basically all of the music video views on YouTube are licensed, and ContentID (for better or for worse) has basically made it easy for the labels to do a "notice and staydown" like they've been demanding for the past few years:

But new data not only shows that YouTube isn’t breaking the law, they aren’t even abusing existing copyright law. A recent report from music industry research group Midia revealed that just 2% of YouTube’s music video content is unauthorized. These are illegal UGC uploads of concerts, lyrics videos, the actual videos, or other material that rights owners didn’t green light beforehand. The rest, about 98%, are not only completely authorized, about 75% of them are high-quality and supplied by the labels themselves through Vevo, according to the same dataset.

So, if just 2% of music videos are unauthorized and can be taken down using DMCA procedures, what’s the problem here? The Recording Industry Association of America, an organization that represents the three major labels, has been leading the charge against widespread DMCA abuse by video giant. “YouTube takes advantage of the dysfunctional DMCA to do less about piracy than it could and pay unfairly low royalty rates,” RIAA chief executive Cary Sherman declared. “It doesn’t have to be like this.”

But is that even true? Adding to the confusing is Content ID, a system created by YouTube to allow content owners to automatically flag their content if it appears on YouTube without permission. Once identified, the owner has the option to remove that content, monetize it, or even strip the audio out of it (for example, if paired with a group of people singing karaoke). YouTube says that system, part of a self-contained copyright ecosystem, makes the DMCA irrelevant in most situations. In other words, if you don’t want your video on YouTube, then you should just remove it.

To be clear, looking at the details from Midia itself, it's not saying that only 2% of the videos are unauthorized, but 2% of music video views on YouTube are of unauthorized videos. And that's still an important point. It suggests that, contrary to what the industry likes to claim, the kids these days aren't spending very much time at all using YouTube to watch unauthorized streams. It's almost non-existent. The same report also found that music represents just 12% of all YouTube viewing time. That kinda shows how the claims of the industry about how YouTube is supposedly only successful because of music uploads is complete hogwash.

He notes that most musicians themselves recognize the promotional value of YouTube as well, and they'd probably freak out if the labels removed their videos from YouTube (remember, for all the hype about Taylor Swift removing her music from Spotify and other streaming services... she kept her YouTube videos up). As Resnikoff points out, the labels are upset about the amount of money that YouTube pays, but it's pretty clear that the overall value that YouTube provides in terms of audience, exposure, marketing and, yes, some money, is clearly worth it:

It’s a simple economic calculation: YouTube offers more value than just a fractional penny rate, and artists and labels are making a calculation that it’s worth it. Otherwise, they would leave.

He goes on to point out that the RIAA's complaints make no sense other than as whining because they're upset that Google is so rich... and they're not.

In the end it's good to see this data. To hear some in the recording industry explain things, you'd think YouTube is entirely built off of pirated music. I've literally seen some musicians complain that YouTube deliberately allows piracy because that's the only thing that keeps the site afloat. That appears to be based on conspiracy theories, not reality.

Filed Under: authorized, cary sherman, contentid, paul resnikoff, unauthorized, videos, youtube
Companies: google, riaa, youtube

Despite Massive Streaming Revenue Gains, RIAA Still Lying & Crying

from the give-'em-an-inch dept

The legacy recording industry just has a way with attacking any new technology service that helps it adapt, doesn't it? Whether it's ringtones or video games or YouTube or iTunes, the industry always takes the same basic approach: denounce the new offering as evil. Threaten and/or sue. Maybe take some equity as a way to "settle" the legal threats/suits. And then squeeze the companies for more and more money until they're dead. It's happened over and over again, and we're now witnessing the same thing again in streaming music -- even as it's turning into a major cash cow. For whatever reason, to make this work, the industry wants to turn this cash cow into an enemy.

And a strange enemy at that, as none of my enemies are paying me $2.4 billion a year in revenue. But that's what the RIAA's own data shows came in to its coffers for 2015, representing an enormous upward trend in streaming revenue for the music industry.

In its earnings statement, the RIAA noted that when all types of streaming are combined (subscription, ad-supported on-demand and SoundExchange), it constitutes $2.4 billion in revenue for 2015—a rise of 29 percent over the previous year.

Yet it took exactly no time at all for RIAA CEO Cary Sherman to laugh that revenue off as wholly insufficient.

While today’s data is encouraging, the challenges facing us are significant. The consumption of music is skyrocketing, but revenues for creators have not kept pace. In 2015, fans listened to hundreds of billions of audio and video music streams through on-demand ad-supported digital services like YouTube, but revenues from such services have been meager — far less than other kinds of music services.

So, revenue from streaming services is growing at a one-third clip over previous years, but that's just not enough. And this statement is made even as the RIAA and some of its member artists do everything possible to hamper, block, and outright shut down the streaming services that are producing this revenue for them.

And then there's this bit of pure bullshit:

Need further proof that some fundamental market distortions are at play? Last year, 17 million vinyl albums, a legacy format enjoying a bit of a resurgence, generated more revenues than billions and billions of on-demand free streams: $416 million compared to $385 million for on-demand free streams.

Want to talk about "market distortions," Cary? How about the fact that you're being blatantly dishonest in presenting these numbers, taking the gross "retail value" on vinyl, but for free streams talking about the wholesale net value to you. You're leaving out a ton of relevant details: First, retail value isn't actual revenue, as it ignores the reality of discounts and other pricing differences. Second, and more importantly, you're leaving out the fact that much of the money from retail value doesn't go to the labels, but to the retailers, distributors and to cover production costs of the actual records. Third, with free streaming, you have none of those costs, and the contracts you have with streaming companies mean a much greater percentage of the revenue actually goes to the labels. Fourth, free streaming does two useful things that you ignore: (1) moves people away from infringement, where you earn nothing and (2) moves many people up the chain to paid streaming.

But, I guess if someone is going to be familiar with "market distortions" and how to misrepresent reality, it would be the RIAA.

Beyond that, the claim here is that artists aren't making as much as was made in the old vinyl and CD eras. First, I don't even know if that's true, but even if we accept that claim...so what? Streaming, by the RIAA's own data, is now the majority revenue producer in the music industry. In other words, that's the direction the market is going. But there is nothing promised in business and if the new model means revenues aren't equal to the old model, that doesn't mean there something wrong with the model. It may certainly mean that there's something wrong with the RIAA's model, but not the one so heavily in demand by consumers and generating the majority of RIAA revenue.

And there is certainly nothing in this to suggest that streaming is harming music as an art form. Far from it, actually. As Cary Sherman notes, music consumption is up, up, up. Does Sherman really mean to suggest either that streaming services aren't contributing to that rise, or that wider music consumption isn't ripe to be monetized by any number of forward thinking business models?

Filed Under: cary sherman, free streaming, recording industry, revenues, statistics, streaming, streaming music, vinyl
Companies: riaa

RIAA's Boss Thinks He Knows Better Than Google How To Build A Search Engine

from the so,-uh,-go-build-your-own dept

Oh, Cary Sherman. Lately, the RIAA and its boss have gone back to whining about how the real problem for their industry is Google. There's almost no actual evidence to support this, other than the fact that the record labels that the RIAA represents have seen dwindling revenue, while Google is doing pretty well. So it must be Google's fault. Cary Sherman, head lawyer in charge of the RIAA (funny that they never seem to put business people or innovators in charge...), has written an astoundingly misguided and misinformed attack on Google over at The Hill, which seems to think that publishing factually false information is fine, so long as it's done by a high paid lobbyist.

The global music industry has now sent its 100 millionth music piracy notice to Google. That’s a staggering number and it is worth pausing for a moment to assess what it means and what it says about online music.

Yes. It would appear to mean that (1) there is a lot of music out there that people want and (2) perhaps your labels should do a better job getting it to people and (3) perhaps wasting time sending takedowns isn't a particularly useful strategy.

For starters, that’s at least 100 million times Google offered to direct users to illegal sources for music just within the last two years

Um, no, it doesn't mean that at all. It means that there were 100 million times that some automated crawler bot decided to send a link it found, which it believed was infringing, to Google to take out of its index. Whether it was an "illegal source" is a different question altogether. Whether or not Google offered to direct any legitimate user to that file is also something totally different.

That’s also 100 million times that an artist, songwriter, music label – or anyone else involved in the chain of creating and distributing music – was likely denied the opportunity to earn any royalties, revenues or sales.

That's also just blatantly false. First, any Google search result comes with a bunch of other links as well, many of which could lead to revenue for those in that chain. Furthermore, even if the file was unauthorized (not, as Sherman falsely claims, "illegal"), that quite frequently still does lead to opportunities to earn royalties, as multiple studies have shown over and over and over and over again. On top of that, if someone is really looking for a free MP3 of something, that's what they're looking for and they're not going to spend any money on the file anyway, so no revenue is "denied." That revenue never existed.

And 100 million times that innovative tech companies – like Spotify, iTunes, Amazon, Deezer, Vevo, and dozens more – didn’t benefit from a sale or a stream.

Here is Sherman's weak attempt at pretending he supports innovation. Again, if someone was looking to buy such a track or stream it, they likely know where to go. But that's not why they go to Google in the first place.

From there, Sherman goes on to explain how he'd like Google to work. Because spending decades working for record labels has taught him all about how search engines should work, and how the users of those search engines would like them to work. Or, more accurately, he'd like to change Google's search results in the mistaken belief that the kid looking for a free mp3 will suddenly buy it, if only he were told of places he could pay for it.

So the enforcement system we operate under requires us to send a staggering number of piracy notices – 100 million and counting to Google alone—and an equally staggering number of takedowns Google must process. And yet pirated copies continue to proliferate...

What's that Einstein quote about "doing the same thing over and over again and expecting different results"?

The power of search and the predominant popularity of top-tier results are well documented – particularly in their capacity to steer users to illegal sites. A Wiggins study, for example, found that “65% of ‘pirates’ regularly use search engines to find infringing content.” Similar studies have found similar results.

Not quite. Most studies have shown something quite different. In fact, a study from the RIAA's best buddies, the MPAA, actually found that just 19% of visits to infringing content were "influenced" by search (note: not found by search). In fact, when you dig deep into the numbers, you'll find that a large percentage of searches that lead to content aren't people just searching for some artist or some song, but rather searching for a site -- so-called "navigational searches" such as someone doing a search for "the pirate bay." I'm not sure what Cary Sherman thinks, but I find it doubtful that some kid is going to do a search for "the pirate bay" and then be happy when the search results point him to Spotify or iTunes.

And this is Sherman and other maximalists' general confusion over search. They still think that search engines are supposed to be designed to show users what the RIAA wants them to find, rather than what the searcher wants to find. Directly changing Google's search engine to give results that users don't want won't make anyone suddenly go buy music again, no matter what Sherman wants.

But, hey, since he's so damn sure that he knows how to program a search engine, why doesn't he go and do it? He seems to think he can build a better search engine than Google, so why not have the RIAA build its own search engine and go compete.

Filed Under: cary sherman, copyright, dmca, search, takedowns
Companies: google, riaa

RIAA Whines To Congress That It Doesn't Like Google's Search Results

from the also,-it-doesn't-play-nice-in-the-sandbox dept

We already noted that the first "punch" of the legacy entertainment industry's new attacks on Google was a silly and self-contradictory study from the MPAA blaming Google for leading susceptible people straight to infringing content. Of course, the details of the study didn't really support the inferences the MPAA is throwing out there, but, you know, that's the MPAA. The second "punch" also is pretty weak, and comes in the form of RIAA boss Cary Sherman testifying before the House Judiciary Committee's IP subcommittee. The hearing is supposed to be about "voluntary agreements," and much of Sherman's piece talks up various "voluntary" (and I use the term loosely, since nearly all were "coordinated" by the White House, and many came with the implied threat of legislation if an agreement wasn't made) agreements like the "six strikes" agreement, which studies have shown is unlikely to help the legacy entertainment industry players.

But then he turns to the "what's missing?" section, and front and center is... Google.

If ISPs can be considered the gateway by users to rogue sites online, search engines may be considered the roadmaps or, more directly, the turn-by-turn directions and door-to-door service to these sites. There can be no doubt that search engines play a considerable role in leading users to illicit services and can be a key part of addressing infringing activity online.

Actually, there can be tremendous doubt. Because as we've shown (and the MPAA's own study confirms), search engines are very rarely used to find infringing materials. Furthermore, there has yet to be any evidence that search engine blocking actually helps "address infringing activity online." In fact, as with the MPAA report, the RIAA first claims that changing search results can help, but on the very next page admits that Google did change its search results, and it didn't help. The RIAA, of course, relies on its own "report card" for Google, which has already been shown to be laughably flawed.

The problem is a basic one. The RIAA and MPAA would like sites they like to be listed higher in Google's search. Most companies that want that learn how to optimize their sites for search. It's called Search Engine Optimization (SEO). Only the legacy entertainment industry would think that, rather than doing what every other website does, they get to go to Google (and Congress) and demand that Google change its algorithm to pump up their preferred sites.

The RIAA also has an astoundingly dangerous idea for how to "fix" Google:

We believe it would be useful to see voluntary initiatives by search engines that take into account whether or not a site is authorized to provide the content at issue in determining search result rankings for searches to consume that content. This could take into account not only the absolute number of copyright removal requests sent about a site to trigger demotion of that site, but also whether the site is authorized to provide the content to trigger a higher search rank for that site.

This idea clearly comes from people who don't even have the slightest clue how search works, or what the unintended consequences of such a change would be. Let's take a basic example. If I do a basic search on the title of a movie, it doesn't necessarily mean I want to watch the movie online right away (either via authorized or unauthorized means). I might just want to know who acted in it, when it was released or whether it had good reviews. But, under the RIAA's proposed "solution," Google should demote all the perfectly legitimate websites that provide that kind of information, and instead push sites that have licensed the movies to the top. That's not going to help. It's going to piss off information seekers.

Furthermore, this doesn't take into account how things change, and how sites/technologies that are initially attacked by the industry later turn out to be important. We've talked plenty of times about the MPAA's well covered attacks on the "Boston strangler to the movie industry" that was the VCR. Of course, it was just four years after Jack Valenti made those comments that Hollywood was making more money from home video than from the box office. So, along comes the next VCR... and the RIAA and MPAA get to whine about how it's "not authorized" and pushes down the search results. Suddenly this tool that could be a tremendous boon to the industry can't get the attention necessary to grow and succeed. It's not far fetched. Viacom is still suing YouTube, even as basically the entire legacy entertainment industry relies on YouTube as a tremendous marketing and distribution tool. Imagine if the RIAA's plan was in place in YouTube's early days?

Google has announced that it intends to develop and deploy technology to eradicate links to child pornography images from the web. Certainly similar technology can be used to remove links to other illegal content.

The legacy players have trotted out this line for years, and it's no less ridiculous than it's been every time in the past. There is no "fair use" for child porn. There is fair use for copyright-covered content, and the ability to build up tools (like YouTube) that take advantage of fair use is shown to have a tremendous impact on creating useful and innovative new tools and services for the industry and the public alike. The RIAA's belief that Google can magically stamp out infringement shows a fundamental misunderstanding about how copyright works -- or (more likely) a general condescending attitude towards fair use.

Also, Google has tools in its Chrome browser to warn users if they are going to sites that may be malicious. Shouldn’t that technology be used to warn users of rogue sites?

Except there's a major difference. People don't want to go to malicious sites. Google is doing its users a favor there. When users want to go to access unauthorized content, putting up a warning page goes against their wishes and pisses off users. I recognize that the RIAA has spent decades believing that pissing off users is a viable strategy, but that might also be why they've shrunk so much, while companies that respect their users have grown.

Or better yet, can Google use similar technology to highlight or identify sites that are authorized? Imagine if links to content on legitimate sites were labeled – directly in the search result –with a certification mark indicating that the site is licensed and actually pays royalties to creators. That educational message could have a profound and positive impact on user behavior.

Again, not the problems above concerning perfectly legitimate search results that are not about getting access to the actual content. They would get punished under such a system. Furthermore, this assumes that the problem is "education." That people just don't know where to go to get authorized content. There's little indicating this is true.

Finally, beyond the issue of annoying clutter on Google's interface at the behest of a single industry, you have to wonder where heading down that path lies. If the record labels and movie studios get it, what about luxury brands? I'm sure Louis Vuitton would love to be able to get a special mark on search results it likes. Or, how about the Associated Press? Perhaps it wants a special mark on news publications it "approves." Suddenly lots of other legitimate sites are left out in the cold.

Either way, we've been running around seeing the RIAA and MPAA do the same damn thing for a decade and a half now. It's always about blaming others for their own failures to give consumers what they want. Yet, when they finally do give consumers what they want, infringement tends to go down. Magic. Perhaps instead of continually looking around at who else they can blame for their own failings, they should spend a bit more time trying to innovate.

Filed Under: cary sherman, judiciary committee, search engines, search results, secondary liability
Companies: google, riaa

As Label Funds To RIAA Dry Up, Top Execs Still Make Over $1 Million

from the non-profit? dept

Just a few days ago, in mocking the MPAA/RIAA filing with the US's IP Enforcement Coordinator, we noted that they mocked Kim Dotcom as being arrogant and wealthy, but ignored the fact that their own execs made a ton of money. We specifically called out RIAA boss Cary Sherman's 2009 salary. At the time, I realized it was odd that we hadn't seen any update on salaries, since they have to file these things publicly. Well, it turns out that the RIAA was just dragging its heels, and Torrentfreak highlighted the latest filing, noting mainly that the RIAA's budget is shrinking drastically, as members are paying less (in part due to massive consolidation from the major labels).

That said, it doesn't seem to have dampened the salaries the RIAA is paying its top execs. This report covers 2010, so it's out of date. Mitch Bainwol is still there and Cary Sherman is the number two guy, rather than top dog as he is now. Still, if being rich and arrogant is evidence of someone up to no good, the RIAA's top brass may have some explaining to do: It certainly looks like nearly all of the RIAA's top brass are either deeply embedded in the top 1% of earners or very close to the borderline (about $380k per year). Mitch Bainwol and Cary Sherman each made over $1 million. Neil Turkewitz, Mitch Glazier and Steve Marks all made over $600k. Considering how phenomenally unsuccessful the RIAA has been over the past decade, you'd think that its members could find cheaper execs to keep driving the organization into the ground. As TorrentFreak points out, membership dues dropped from $49.76 million in 2008 down to just $27.88 million in 2010. You'd think that money could be spent somewhat more effectively, rather than pining for a past where they were gatekeepers in control of the market.

Filed Under: cary sherman, funding, labels, mitch bainwol, mitch glazier, neil turkewitz, salaries, steve marks
Companies: riaa

Is Being Rich And Arrogant Against The Law? The RIAA & MPAA Seem To Think So

from the guilt-by-arrogance? dept

I'm planning to do some more thorough coverage of many of the comments that were submitted to the IP Enforcement Coordinator for next year's "Joint Strategic Plan." I just need to find an open block of time to go through a bunch of them. However, the folks over at TorrentFreak have highlighted one of the more ridiculous claims made in the combined filing from the RIAA & MPAA -- suggesting that people like Kim Dotcom are guilty of breaking the law because they're rich, arrogant and are trying to influence public opinion:

In this case, the Justice Department and other federal agencies are now grappling with a set of wealthy and arrogant defendants who are leaving no stone unturned in their efforts to sway public opinion against efforts to hold them accountable...

This reminds me of the debate I had with Jonathan Taplin, in which he referred to Kim Dotcom's (rented) yacht, and asked where were the musicians' yachts. Thing is, if I wanted to, I could easily find evidence of various rock stars with yachts. I could easily point to evidence of record label and movie studio execs with yachts, or who are phenomenally wealthy. Hell, I could just point you to the fact that the RIAA's boss, Cary Sherman made $3.2 million in salary in 2009 -- a number that I imagine is more than what nearly every single person reading this site makes in a year (or, in their lifetimes). Being wealthy is certainly no sign of guilt. And he got this amount even as he's leading the RIAA through it's clear decline in relevance phase, where he's still fighting the wrong war.

Similarly, it's not hard to find examples of massive arrogance on the part of these execs -- from the RIAA and MPAA putting down the public (repeatedly) or ignoring valid concerns about SOPA and PIPA, to decades of arrogant efforts to destroy all kinds of innovations they don't like, from radio to cable TV to the VCR to the mp3 player to the DVR.

Finally, these are the guys who run the media, and they're complaining about a few execs trying to influence public opinion? The MPAA's largest members are Universal (who owns NBC), Disney (who owns ABC), Viacom (who owns a bunch of TV stations and spun off CBS). And they're going to complain that some tech folks have an undue influence on public opinion? Really? And, let's not forget that these same groups have also "left no stone unturned" for decades in trying to influence public opinion. "Home taping is killing music." Remember that? You know those "FBI warnings" on every single movie you watch?

I'd say that if we're going to stack up which side of the debate has involved more "wealthy and arrogant" individuals "who are leaving no stone unturned in their efforts to sway public opinion"... it has to start with the RIAA and the MPAA. But, of course, they're allowed to do all of that, because none of it is illegal. But to try to associate such activity with illegality seems to be a stretch way beyond anything reasonable. Is Kim Dotcom loud, arrogant, crass and tacky in his displays of wealth? Absolutely. I doubt he's the kind of person I'd care to spend any amount of time with, personally. But just because his style is so outlandish, it doesn't automatically make him a criminal, as the RIAA and MPAA imply. Similarly, I don't automatically assume that super wealthy, arrogant individuals who work for the entertainment industry are obviously criminals either.

It is really quite obnoxious and demeaning for these large trade agencies to go around smearing people based on superficial items like arrogance and wealth. Kim Dotcom may eventually be found guilty of criminal activity. And, at that point, they're free to publicize that his actions here were criminal. But in the meantime, they're acting like cliquish high school girls, tarring and feathering people because they don't like the way they look or act.

Filed Under: arrogant, cary sherman, copyright, entertainment industry, kim dotcom, rich
Companies: mpaa, riaa

Big ISPs Expected To Start Six Strikes Program This Weekend [Updated]

from the just-what-we-need dept

Update: Dah. Got fooled on the date. Someone had sent that one anonymously, and we missed that the date was from back in March. Others are reporting the program won't go into effect until the fall.

At this point, it's no surprise, but the RIAA's Cary Sherman has now confirmed that (as had been previously stated) the big ISPs (Comcast, Time Warner Cable and Verizon) will be ready to kick off their "six strikes" plan this weekend. Apparently, the idea of actually giving the public a seat at the table, and looking into whether or not this made sense, wasn't seriously considered. Of course, none of this will do anything to bring revenue back to RIAA or MPAA members. It won't even do anything to stop infringement in the long term. As always, people will figure out ways around this. We've already seen the massive failure of an even stricter program, Hadopi, in France. Can anyone seriously claim that this will somehow work better in the US? Instead, it won't be long until we hear the stories of false accusations, or families who have their internet connection limited or locked down because a neighbor maybe downloaded some infringing content. Little Susie needs to do some research for her homework? Not tonight, kids. Hollywood has to teach you a lesson. Of course, the only real lesson is that the entertainment industry needs to stop blaming customers, and start looking inward, at its own failure to innovate. Pissing people off by limiting their internet connections is not a productive path forward.

Filed Under: cary sherman, hadopi, isp, six strikes
Companies: comcast, mpaa, riaa, time warner, verizon

RIAA To Congress: We're Finally Innovating... Now Go Shut Down Pirate Sites

from the kicking-and-screaming dept

Cary Sherman, RIAA boss, is testifying before Congress on Wednesday morning, and (not surprisingly) he uses the opportunity to whine about those dirty pirates again, while asking Congress to buck up and do something. To his credit, it appears that Sherman (or one of his PR handlers) has realized that the combative and confrontational approach he took right after SOPA and PIPA died. He got a ton of backlash for that, and has since tried to be a little less condescending.

Thus, he starts out by talking about all the new business models and modern services that the record labels have adopted and licensed. Of course, he also says that CDs are not digital, so he's a bit confused about the technology. He also leaves out the fact that the labels had to be dragged, kicking and screaming, all the way to agree to the various services that he talks up -- and even then, its stance in negotiating licensing deals with them has been to try to strangle any service that gets too popular. He also talks up the recently negotiated royalty rates between labels, publishers and some digital music services -- leaving out the fact that they include royalty rates on things that don't require royalties (like mere music storage lockers).

But, in the end, Sherman is a one-trick pony, and back to that trick he goes. After talking about all of this "voluntary" innovation they've done -- and highlighting the various "voluntary" six strikes deal, as well as advertising putting together a blacklist of "rogue" sites they won't advertise on -- Sherman goes back to whining about how "piracy" must be stopped. He starts out by, yet again, misleading and misrepresenting what's happening. He talks about how there's less revenue from music sales -- but ignores that more money has gone into music itself, once you look at the massive increase in live music. He ignores the fact that people are actually spending more on enjoying music today than ever before in the past. The idea that people aren't paying is simply wrong.

And then he has the ridiculous gall to suggest less music is getting out to the world because of this:

What kind of harm? Massive layoffs, of course. But also less money to invest in artists. That means fewer artists on our rosters, fewer people who can make a living from music, fewer songs permeating through our culture that help form a piece of our national identity.

That's ridiculous. Look at any credible data, and you see that more music is being created today than ever before. More artists are making money today from music than ever before. And you know how songs can better permeate through our culture and help form a piece of our national identity? Well, here's a hint: by not locking up that music, by allowing it to be shared and played and heard. But that's not how the RIAA works.

He brings up the record labels favorite talking point these days: which is that fewer people list themselves as full time musicians in the Bureau of Labor Statistics data. This is, at best, a red herring. This is a time of transition, and certainly the labels are funding fewer musicians. But new business models are growing rapidly and while they may not be funding as many full time musicians (yet), they are helping more musicians make some money. And, as we've seen over and over again, the trend on these new platforms is that they're growing and able to fund more and more, as they grow. It's a classic innovator's dilemma situation. Similarly, the deeper you dig into the BLS numbers, the more interesting things you find. For example, there's been a massive increase in independent artists. But, the big labels that the RIAA represents don't want you to know that.

He then goes on to claim that enforcement works -- and uses Limewire and MegaUpload as examples. He notes the correlation between growth in sales after Limewire's shut down, and suggests "it is not a coincidence" the two things happened at the same time (though, other reports note the release of some very popular albums at the same time). He also insists that a survey of Limewire users claims they didn't sign up for any other unauthorized service. That's something more like wishful thinking. The data actually suggests there continues to be a pretty big growth in unauthorized sharing. The death of Limewire looks like a temporary blip. Also, if you were a former Limewire user, and a research firm representing the guys who shut it down came and asked you what you were using now, how many of you would point your finger to the new service you found so they could shut it down? Exactly.

As for Megaupload, nice work by the RIAA to support a case that is rapidly falling apart for the US, where it looks increasingly like the US didn't even come close to following the law in shutting down a site that had significant non-infringing uses. And, of course, he leaves out the fact that it was the RIAA's own bogus evidence, which they could never back up, that resulted in a hip hop blog, Dajaz1, being shut down and censored for over a year. That's the kind of enforcement he's supporting?

And then there's the push for a new SOPA:

These voluntary programs are not a panacea. No program ever will be. And sometimes, the Congress must step in to assure that our property rights, and U.S. economic interests, are being protected. Especially against sites overseas whose business model is the theft of U.S. works.

Funny that he says this right after talking about the success in shutting down Megaupload -- which didn't (according to the RIAA or the feds) require any new action from Congress.

He also continues to take shots at the tech industry, and at search in particular. After talking about things like the six strikes program and the ad blacklist, he notes:

We hope other intermediaries like search engines will follow suit in negotiating voluntary marketplace best practices to prevent directing users to sites that are dedicated to violating property rights.

Of course, this ignores the realities of the situation, in which you can't just block out sites because the RIAA doesn't like them. The RIAA has a long and detailed history of blaming perfectly legitimate products for being "illegal." Remember, this is the same group that sued to kill the first MP3 player. And now they want the search engines to just trust them in determining which sites are evil and which are good? It doesn't work that way.

He then points out that he wants to "reach out" to "the tech and Internet communities." He could just say, you know, "the public." Also, I'm trying to figure out why Sherman, Dodd and others keep talking about reaching out, but never actually do. Once again, it's not at all difficult to get into a discussion online. Why don't they ever do it?

Sherman also uses the opportunity to once again push for a RIAA bailout from radio, by forcing a tax to advertise their music. The RIAA has been pushing for this tax for years and it makes no sense. The labels know that radio is free advertising for them. It's why they're so often accused of payola. Because they know that if they get their songs on the radio, there's massive value in that and lots of ways to monetize it. So they pay ridiculous sums of money to "promoters" who pass that along to radio people to get the songs on the air. And now they're claiming that the labels need to be paid if the radios play that same music? It's insanity.

Either way, it's still more of the same. Until Cary Sherman is replaced by someone who actually spends time on the internet, the RIAA is going to increasingly represent a smaller and smaller portion of the music industry. The new music industry -- including tons of new artists, new music services, and even new labels, know that the RIAA's focus is on the past, not the future.

Filed Under: cary sherman, chris dodd, congress, pipa, rogue sites, sopa
Companies: limewire, megaupload, riaa

ISPs Will Start Acting As Hollywood's Private Online Security Guards By July

from the time-to-find-a-better-ISP dept

Last July, we wrote about how the major ISPs had agreed to a "voluntary" "six strikes" plan (really five strikes, but everyone calls it six...) to start acting as Hollywood's private online security guards. And, by "voluntary" we mean without any input from the actual stake holders (customers) and with significant pressure being applied by the Obama administration. Since then, nothing has been heard, but the RIAA's Cary Sherman has now said that the ISPs involved will roll out their plans by July of this year, a year after the agreement went into place.

Sherman says that the plan had always been to give them a year to deal with the technical aspects of setting up the plan:

"Each isp has to develop their infrastructure for automating the system," Sherman said. They need this "for establishing the database so they can keep track of repeat infringers, so they know that this is the first notice or the third notice. Every ISP has to do it differently depending on the architecture of its particular network. Some are nearing completion and others are a little further from completion."

Funny how, now that the plan is in place, the RIAA has no problem admitting that it required significant infrastructure changes. Somehow I doubt the RIAA is paying for this... meaning that you and I are paying for it with higher fees.

Of course, the real question is what this means for the non-major ISPs who have not agreed to take part in this anti-consumer plan. Will the RIAA and MPAA now start assuming that this is a requirement, despite it not being in the law? That's what they've been doing with content filtering on user-generated content sites now. Multiple lawsuits have pointed out that because YouTube and others have installed upload filters, everyone should have to. I'd imagine it won't be long until they start making the argument that ISPs that don't implement such a plan are "inducing" infringement somehow.

Filed Under: cary sherman, copyright cops, five strikes, graduated response, six strikes
Companies: riaa

RIAA Still Doesn't Get It: Hopes SOPA Opposition Was A 'One-Time Experience'

from the you-don't-know-what-you're-up-against dept

In a previous post, I looked at the first part of Andrew Keen's interview with RIAA CEO Cary Sherman. In the second half of the interview, Sherman fields some audience questions collected on Twitter, and his answers further expose the serious problems with his understanding of what's happening in music, what happened with SOPA, and what's happening to his industry.

The first question directly challenges Sherman over his NYTimes op-ed in which he claimed the massive opposition to SOPA/PIPA was somehow undemocratic, asking him if he really thinks an informed populace is a bad thing. But Sherman is still convinced that it was all a misinformation campaign by Google (though he avoids using the name):

I obviously think that an informed electorate is a great thing. The question is whether they were really informed or whether they were being misinformed. That was the point of the op-ed: that there was a lot of misinformation about the bill that was being circulated, and that was accepted by readers online in terms of "if it comes from these sources it must be true." I know that a lot of members of Congress who had worked very hard on the legislation were very frustrated that they couldn't get out their side of the story, that this legislation was not what it was represented to be. So my op-ed was not intended to really raise questions about whether the legislation was good or bad, but that everybody has a responsibility to be accurate and really factual about what the legislation provides. Otherwise those platforms can be used in ways that aren't engaging the electorate in a good way, but rather in an anti-democratic way.

Sorry, but Cary Sherman is not allowed to accuse others of misinformation—not unless he's going into comedy. In the first half of the interview, and in his op-ed, Sherman attempts constant deception. He talks about the dangers of counterfeit products to play up the unrelated issue of copyright infringement; he presents laughably incomplete data; he insists there was "No Duty To Monitor" in SOPA/PIPA, ignoring the fact that where there was no "duty" there was extreme liability incentive; he claims that Anonymous' DDOS attacks are the "real" censorship in a blatant misuse of the term—the list goes on and on. And can we just pause for a moment to marvel at the sheer insanity of the claim that Congress "couldn't get their side of the story" heard? Congress? The folks who keep multiple 24-hour cable channels fed with stories at every second of every week of every month? They couldn't "get their side of the story" out? Now that's misinformation. Sherman is a misinformation artist, and he'd even be a good one if he wasn't also so naïve, as the rest of his response demonstrates:

Hopefully that was a one time experience that came from a lot of different things coming together, where a lot of different people came to the conclusion that this was a terrible piece of legislation. I think Congress got that message loud and clear. But in the future, think of how that could be abused for bad purposes. I think all of us have an interest in making sure that we hold ourselves on the internet to the same high standards that we've tried to hold ourselves in the offline world, whether it's newspapers or broadcast journalism or whatever. There ought to be clarity and integrity with respect to the facts.

That's right: he hopes millions of people actively participating in the democratic process with the help of online tools was a one-time experience. Putting aside the fact that it makes you question his values, this statement demonstrates that he's a fool. His industry has pushed and pushed for decades, eroding freedoms and locking up culture through deals negotiated in back rooms, and they finally reached the breaking point. The world woke up, and Sherman thinks he can just wait for them to fall asleep again.

He also still can't get it through his head that the internet is not separate, and that media is just people communicating. Newspapers and broadcast news are no more or less perfect than online news, and only the most oblivious commentators truly believe they are paragons of journalistic ideals that can serve as an example to newcomers. Besides, plenty of traditional sources were opposed to SOPA/PIPA as well.

On the topic of newspapers, the next question asks Sherman for his thoughts on their approach online. He notes that many have yet to find the advertising dollars they hoped for, and says it's "interesting" (wink wink) that so many are moving towards paywalls. I won't respond to that, because Mike said it all last week: let 'em.

Another reader asks what he thinks of online services that let artists go directly to fans:

You know, I have nothing with cutting out the middleman. I think that if an artist wants to go it alone, go it without a middleman, that is the artist's choice. And for some artists it can work very well. It hasn't happened that way: most artists who have been more majorly successful have had the help of a label, it could be an indie label or a major label. What they provide is the marketing and promotion that is so clearly necessary to distinguish yourself in this day and age. In 2010 you had 75,000 new albums released. 70,000 of them, that's 94%, sold less than 1000 copies. That isn't much to make a commercial career out of. It's hard to see how you could make a career as a musician when you're selling less than 1000 copies of your recording, unless all you're really doing is live gigs and you're making a few extra bucks by selling some recordings.

It's a muddled response, because the numbers he presents are from SoundScan and do not include the very direct-to-fan services he's supposed to be talking about. More importantly, it shows how limited his thinking is: other than live shows, he ignores every single artist revenue stream, even the traditional ones like licensing. Mere number of albums sold is not enough information to decide if an artist can build a career, and it never has been. Sherman continues, rightly recognizing that there are still very important roles for middlemen services today, but failing to realize that his industry is not the only player:

The point is that for some artists who want to go it alone, that's great, many of the artists that we see are great at making music, they're great at performing, but business is not what they want to do, promotion is not what they want to do. There are some obvious exceptions to that, but that's what record companies do, that's what managers do. They're all intermediaries in a way, but they are intermediaries that grow the audience, that improve the demand for that artist's creative work.

What he ignores is that the traditional record label model is not the only way to offer these services. Increasingly, it's the worst way: even in the first part of the interview he admitted that labels are no longer benefiting artists the way they used to. Artists who eschew labels may have to do some of the legwork of promotions and business, but the tools are all there for them. They can use Bandcamp. They can use TuneCore. They can use Topspin. They can use Bandzoogle. They don't need label help to find a distributor and build a website and launch a merch store—they can do it all in a few clicks. Good middlemen are enablers, while record labels still want to be all-powerful gatekeepers, as Sherman makes disgustingly clear:

There's no doubt that there's going to be a continuing role for record companies. That role may change over time, but the more you've got online capability for anyone with a guitar and a little bit of recording equipment to get online and try to become a musician, the more you need specialists to designate and separate the wheat from the chaff, who is worth listening to, who is worth promoting and marketing. That's what record companies have traditionally done. They have been the talent scouts and then they have put their financial and human resources into actually marketing and promoting that talent and helping to shape it. How many artist pages are there on MySpace right now? Who can figure out who to listen to? So having a curation function that record companies perform is becoming more important, not less.

I hope Sherman has fun separating the wheat from the chaff on MySpace (sigh) while the rest of the world leaves him in its dust. The astonishing arrogance of his statements just underline the problem: the recording industry sees itself as the arbiter of culture, and isn't willing to give up even a shred of control. The internet has enabled countless new curation models, from the ease of setting up a music blog to the algorithmic possibilities of recommendation engines to the ongoing social curation of Facebook and Twitter—we don't need executives to "designate" who is worth listening to based on ROI projections. Promotion takes only a fraction of the "financial and human resources" that it once did, and artists are increasingly unwilling to sign over their entire careers for something they can do themselves.

The next question is about ways to enforce intellectual property rights without damaging innovation and creativity, and Sherman calls for balance (as long as that balance is completely in his favor):

It's finding that sweet spot between protecting content and creators and creativity, and ensuring that you're not losing the benefits of innovation in technology, that is a difficult thing to do. There are ways that it can be done that aren't now being taken advantage of. YouTube for example, anything goes up there, but once it's taken down they have a mechanism, a filter to make sure that it doesn't go back up. Why aren't other websites doing that? Why, when other websites are being told that particular content is illegally being posted, don't they take more aggressive measures to prevent it from being put up there, or being put back up there? There are now technologies available that make it really easy to identify copyrighted content in a way where it can be protected but all the other benefits of the technology would be available. So there are ways for the technology to be used to actually improve the situation for creators and maintain technological innovation, we just need more of a will to see it done.

If it's "really easy" to identify infringing material, why did Viacom sue YouTube over 100 videos they themselves uploaded? How did Rumblefish accidentally claim ownership of birdsong? Why have the feds been seizing domains over label-authorized material? Why did Universal Music declare 50 Cent's own website to be a rogue site? It's only "easy" if you don't care about legitimate material getting caught in the crossfire—and indeed, even Sherman's own wording notes that it's only easy to identify "copyrighted" content, not infringing content.

There is some more discussion, covering Sherman's shock that the streaming services his industry has fought at every turn are not suddenly making him rich—but it's all pretty routine. Sherman closes out the interview with a statement that would have sounded optimistic and forward-thinking ten years ago, but today sounds like an obsolete industry playing catch-up, pretending to embrace something they have fought for years, and fantasizing that they can exert control over something that is happening without and despite them:

I think that one of the things we've learned is that it's not likely to be one big thing, it's likely to be a lot of little things, it could be thousands of little things. There are so many niches in the music market in the way that people want music and the way that people use music and in the type of people who use it, that we think that there are going to have to be a lot of different models to try and monetize many different ways in which content is delivered to consumers. And we're actually optimistic that over time we're going to be finding a lot of those models and they're going to add up to a viable revenue stream for the industry.

"Over time"? Sorry, guy-who-just-noticed-MySpace: time's up.

Filed Under: cary sherman, misinformation, pipa, sopa
Companies: riaa