Monthly Archives: September 2010

Music Licensing in the News

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In 2008, a US District Court in Manhattan ordered Yahoo and RealNetwork to pay the American Society of Composers, Authors, and Publishers (ASCAP) a 2.5 percent uniform royalty fee.  ASCAP represents about 45 percent of all the musicians whose work is streamed online.  ASCAP represents almost 400,000 artists and protested the flat rate that the District Court set.  A Tuesday ruling by Judge John W. Walker of the US Appeals Court says the rate set back in 2008 needs to be reevaluated in District Court in order, Judge Walker writes, to “follow an approach more tailored to the varying nature and scope of  Yahoo’s music use.”   He also remanded RealNetwork back to District Court, ruling they must “conduct a more complete analysis of the various uses of ASCAP music works.”

In 2008, the streaming music fee rate was arrived at by multiplying the total revenue from licensed services by a “music-use-adjustment factor.”  This was the ratio of time consumers spent listening to streamed music to their overall time spent on the website.  Judge Walker found that the “district court did not adequately support the reasonableness of its method for measuring the value of the Internet companies’ music use

On a related issue, the 2nd US Circuit Court of Appeals in New York ruled that a “download of a musical work does not constitute a public performance of that work” according to copyright law.  This is important because Yahoo and RealNetworks were arguing that digital downloads were not, in fact, performances and they did not have to compensate the copyright holders.  They were seeking blanket licenses, which would allow them to play ASCAP’s entire catalog instead of having to obtain licensing rights to each song.

The 3-judge panel in New York found in favor of the music streaming sites, writing, “Music is neither recited, rendered, nor played when a recording (electronic or otherwise) is simply delivered to a potential listener.”

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How To Create A Baby Genius

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You’d be hard pressed to find a parent that didn’t think their child is the smartest to ever live. We’re all biased, right? But how can we really make sure our kids turn out smart? Here are a few steps you can take to start early and create a baby genius.

1. Start pre-birth

Did you know that during the 9 months in the womb, a baby’s brain grows faster than any other phase of life? So what can you do to take advantage of this fact? First, don’t do anything to hinder the development. Stay away from all harmful substances. Also, try to relax and keep stress to a minimum. And finally, try some of these next steps even before your baby is born.

2. Read to her

Sure your baby can’t read… yet. And she probably can’t understand a word you’re saying. But that doesn’t mean you shouldn’t read to her. The first step to teaching your kid to read is to get her used to books. Holding them, hearing them, turning pages… It’s never too early. In fact, consider purchasing a program like Baby Can Read to make things a bit easier. It comes with videos, flashcards, and books. Everything you need. But remember, you’re the primary teacher. Not the television.

3. Flash dots

There’s a theory out there that says if you show your baby large flashcards with random dot arrangements, the images will stick in their brain and make them mental math machines. Whether or not it really works is still up for debate. But it certainly stimulates your child’s brain, which can’t hurt in your quest to create a baby genius.

4. Talk a lot

Guess where your child gets most of her language skills from? Here’s a hint: it’s not the TV. The answer is… You. So don’t just stare at him or park her in front of the TV. Open up your mouth and talk. And for Heaven’s sake, forego the annoying baby voice. Use a normal, kind tone so your child learns the real way people converse. Don’t be afraid of mixing some larger vocabulary here and there. You’ll be surprised what she’ll pick up. And nothing says baby genius like a kid who uses words like “intelligent” instead of “smart.”

5. Breastfeed

Studies show breastfed babies are smarter. There’s not much to say about that. Just do it.

6. Forget “cry it out”

Here’s a newsflash—babies that are attended to cry less. And if a kid spends less time crying, she’ll spend more time exploring. And more exploring means more brain growth. And more brain growth means more chances of becoming a baby genius. So when your child cries, don’t ignore her. Pick her up and comfort her so she can focus her energies on useful endeavors.

7. Play some classical music

This idea has been under debate as of late. However, it certainly can’t hurt. Turn the dial on your radio over to the classical station and stimulate your child’s brain through her ears. Supposedly she’ll grow smarter from listening. And if everyone’s wrong about this, at least she’ll develop good taste in music.

8. Discipline

Kids with less behavior problems tend to be smarter. Why? Because they learn more when they aren’t busy being defiant. So what can you do to cut down on the behavior issues? Be consistent with your discipline.

Okay, let’s hear from some of you with baby geniuses. How’d you do it?

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Music Industry Hit with Cyber Attacks

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If it’s not declining recorded music sales or disappointing ticket sales attacking the industry, it’s cyber criminals trying to sabotage industry websites.  Both the music and film industries were targeted by “pro-piracy” hackers who object to increased efforts to stop illegal filesharing.  The cyber attacks have been focused on DDoS, or distributed denial of service attacks, which are designed to flood a website with connection requests, effectively forcing it offline.

Operation Payback, as it is called by those spreading the word on the 4Chan imageboard, has already affected the Recording Industry Association of America and the Motion Picture Association of America. (A later attack on BPI, UK’s music industry association failed.) What are they “paying back”?  Those taking part in the attacks say that they are responding to news that the creative industries had OK’d DDoS attacks on websites suspected of hosting pirated material.  Aiplex, an Indian software firm, has supposedly been hired by the music and film industries to launch these attacks.

A 4Chan post reads, “Aiplex, the bastard hired gun that DDoS’d [The Pirate Bay] is already down! Now we have our lasers primed, but what do we target now?  We target the bastard group that has thus far led this charge against out Web sites, like The Pirate Bay.  We target MPAA.org!”  And further, “We have the manpower, we have the botnets, it’s time we do to them what they keep doing to us.”

Aiplex confirmed that their site was targeted and was forced offline for about a day and a half.

In addition to the sites mentioned, a “despise” law firm full of anti-piracy attorneys, was targeted.  ACS:Law was voted on by 4Chan users as the next target and the site went offline.  When trying to navigate to their site, you’ll get an error message.  ACS:Law’s Andrew Crossley says that Operation Payback is “typical rubbish from pirates.”  To which Payback responded with another DDoS attack.

While DDoS attacks are illegal, those sympathetic to piracy can download software which can target a specific web address and inundate it with connection requests.  Sites are now employing stronger protection against these types of attacks – once they’re back online.

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Steve Jobs Takes on a College Student

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Poor Chelsea Kate Isaacs was applying her journalism training when she contacted Steve Jobs about the lack of responsiveness of Apple’s media relations department.  The Long Island University journalism student decided to write an article after her repeated calls and voicemails to the media department concerning the use of iPads in academic settings (which the tablet was originally used for).  Seems innocuous, right?  All Ms. Isaacs needed was someone to say how great the iPad is for students.  But no one did, and she got herself a better story.

With persistence that will serve her well, Ms. Isaacs skipped the middlemen and wrote directly to Steve Jobs to inquire about the lack of response.  She writes:

“Mr. Jobs, I humbly ask why Apple is so wonderfully attentive to the needs of students, whether it be with the latest, greatest invention or the company’s helpful customer service line, and yet, ironically, the media relations department fails to answer any of my questions which are, as I have repeatedly told them, essential to my academic performance.”

She went on to tell Jobs that while a lack of response from the media department might cost her a grade, it could cost a “journalist in the professional world” their job.  She thanked him.  And Jobs decided to email Ms. Isaacs back.

“Our goals do not include helping you get a good grade. Sorry.”  Fair enough, right?

Ever-persistent, Ms. Isaacs wrote back to tell him that she didn’t want Apple to help her get a good grade.  She just wanted to know why the media relations team didn’t respond to media requests. Again, she got a reply:

“We have over 300 million users and we can’t respond to their requests unless they involve a problem of some kind. Sorry.”  Ms. Isaacs got desperate, thinking about that looming deadline and told Jobs that she was a user, and she did in fact have a problem.  This is the best part, and what has made a relatively minor exchange into news fodder.

“Please leave us alone.”  No “sorry” this time, sister.  Dumbfounded, Ms. Isaacs says that her article can (and has been at this point) be written and that she expects her grade to be lower because of the lack of quote from Apple.

But, as always, Jobs has his supporters.  TechRepublic’s Toni Bowers, says, “She [Isaacs] was being sarcastic by nature of the very wording of the email. She was inherently criticizing a perceived shortcoming in the way the man’s company is run. Her email was snarky so why should his response be any less so? And really, did she expect the CEO of a multinational company with over $42 billion in annuals sales to go scold his PR department for not taking the time to have a thoughtful conversation with a student trying to ace journalism 101?”

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Bob Marley’s Family Loses Court Case over Songs

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Bob Marley has become a legend; dead at the age of 36, Marley has managed to capture new generations of fans almost 30 years after his death.  His posthumous notoriety makes licensing rights to his work tremendously valuable to whoever owns them.  This was the basis for a lawsuit brought by Marley’s wife and nine children against Universal Music Group; they argued that they are entitled to royalties that UMG has long denied them.  District Judge of Manhattan, Denise Cote, recently found that the late artist’s family did not have legal claim to the copyrights of several of Marley’s most popular recordings.

Judge Cote found that Universal is, in fact, the legal owner of the copyrights to five Marley albums, recorded with the Wailers from 1973 to 1977.  On the albums are some of Marley’s biggest songs, including “No Woman, No Cry,” “I Shot the Sheriff,” “One Love,” and “Get Up, Stand Up.”  The albums in question were recorded for Universal subsidiary, Island Records, and have netted millions of dollars in revenue over the last three decades.

The Marley family argued that UMG had withheld royalties that should have been issued under a previous agreement.  They also allege that Universal didn’t consult them or their company, Fifty-Six Hope Road Music Ltd., about using Marley’s songs as ringtones and other important licensing issues. They charge that Universal sought to “exploit the quintessential Bob Marley sound recordings.”

Despite this, Judge Cote found that Bob Marley’s works were “made for hire,” under the US Copyright law, which meant they were created expressly for Island Records and UMG.  “Each of the agreements provided that the sound recordings were absolute property of Island [Records].”  As such, Marley’s widow, Rita, and her children are not entitled to royalties.  The judge ordered UMG and the Marley family to begin court-supervised settlement discussions next month.

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Does Filing Sharing Really Hurt Artists?

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While many regard illegal, free file-sharing as an unalienable right (maybe filed under our right to the pursuit of happiness), the fact remains that copyrights are in place for a reason.  While it is hard to dredge up sympathy for the huge beast that is the music industry and their money-woes, it is easier to see how taking files without paying hurts artists, particularly those outside the mainstream and those who are just beginning their careers.  In fact, this is most often the factor that turns illegal downloaders into law-abiding iTunes or Amazon consumers.  But has file-sharing really hurt artists, even with the large incidence of piracy?  A new study from Norway says no.

The study, which was the master thesis of Anders Sørbo and Richard Bjerkøe, students of the Norwegian School of Management, looked at the revenue collected by the Norwegian music industry from 1999-2009 to determine the impact of file-sharing and digitization.  We have heard that the music industry lost billions in recent years because of illegal downloading.  Mr. Sørbo and Mr. Bjerkøe, however, found that total industry revenue grew by half a billion Norwegian kroner (which is about US $86 million) in this ten year span.  Corrected for inflation, this comes out to a mere 4 percent increase.  But interesting, revenue for artists saw an increase of 114 percent.  In 2009, this revenue totaled about 255 million kronor (US$41.62 million).  A decade – and plenty of digitization later – this grew to 545 million kronor (US$88.94) last year.

Ok, well, there are 28 percent more artists in Norway.  That still equals an average 66 percent greater revenue stream than ten years ago, which would seem to indicate that despite lamentations of losing money, the music industry is faring fairly well in the digital age.

According to TorrentFreak, “The study refutes some of the most common misconceptions about the music industry in the digital age.  Musicians are making more money than ever before.  It is true that the revenues from record sales are dwindling, but that can be just as easily attributed to iTunes as the Pirate Bay.”

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Android to Outpace iPhone?

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A recent Piper Jaffray report is sure to add fuel to the Google/Apple rivalry fire: the major investment banking firm predicts that Google’s relatively new Android platform will begin to dominate the market and leave the iPhone “in the dust,” according to ComputerWorld. What is the reasoning behind Piper Jaffray’s speculation?

Apple is famously proprietary, and their control over the iPhone is typical of their approach to business.  Apple’s sole carrier for the iPhone is AT&T.  While Verizon will be issuing an iPhone early in 2011, AT&T has been the consumers’ only choice since the inception of the smartphone.  Google, on the other hand, works with a variety of carriers to offer phone users the Android platform.  This flexibility is largely responsible for the growth that Piper Jaffray predicts.  From the report:

“We estimate Google will control 14.9 percent of the smartphone market through Android in 2010, growing to 23.2 percent in 2012. For Apple, we expect the iPhone [to control] 15.9 percent of the smartphone market in 2010, growing to 17.6 percent in 2012…Ultimately, we believe Android is likely to control over half of the smartphone market in the next five years. Apple’s essentially two phone focus (low price 3GS and higher price 4) will likely limit how much of the market Apple can control and we believe ultimately Apple’s smartphone market share tops out between 20-30%.”

How does Android gain 50 percent of the market share?  Piper Jaffray analysts expect that RIM and Nokia to stop trying to sell proprietary software and instead use the Android platform.

iPhone customers remain the best targets for Apple: 77 percent of the people who bought the iPhone 4 were already iPhone users.  Even if Android does take over half of the market, analysts say there is still “significant room for growth” for Apple.

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Eminem is Shaking Up the Music Royalty Scene

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Eminem is no stranger to controversy, the limelight, or success: all three of these collided in a recent court ruling.  Back in 2009, a federal court heard the lawsuit filed by Eminem’s former production company, FBT, against Aftermath and parent company Universal Music Group.  At issue was digital royalties.

Universal was paying Eminem based on a store-model for sales; that is, they were paying him for a digital download what they would pay for a physical copy.  This would give the rapper an 18 percent royalty rate.  FBT argued that the sales really amounted to third-party licensing, which would entitle him to 50 percent – the same figure in place for TV and movie deals.  The 2009 jury found in favor of Universal and ordered FBT to pay $2.4 million in legal fees.  This week, the US 9th Circuit Court of Appeals unanimously reversed that decision, finding that FTB was correct in asserting that providing songs to sites like iTunes was paramount to a licensing deal, thus entitling the artist to larger royalties.

What does this mean for Eminem and FBT?  Potentially, it means tens of millions of dollars.  Eminem’s latest album, Recovery, is one of the biggest of 2010, beating out even the omnipresent Lady Gaga.  More than 6.3 million downloads have been purchased.  Fifty percent of 6.3 million downloads is a whole lot more than 18 to say the least.

But the ruling also has implications for other artists, particularly those who were around before the advent of digital sales.  FBT’s manager, Joel Martin, says, for instance, “All the Motown artists who now receive a penny (per download) may be in a position to negotiate a new royalty because of this decision.”  Other artists, like Bob Seger, who have held back from releasing their music for digital download may make the leap now.  Seger’s manager says that this “absolutely” clears the way for Seger to go digital.

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“Unadulterated Piracy” in the US and On College Campuses

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A few months after Joe Biden called digital piracy a huge threat to the country, US Commerce Secretary, Gary Locke, called for tougher measures to combat illegal use of music online.  “This isn’t just an issue of right and wrong.  This is a fundamental issue of America’s economic competitiveness…We are trying to figure out how we shut out the pirates, while preserving the internet as an avenue for commerce for music and for other creative industries.”

Not everyone, even those in the music industry, agree with Secretary Locke.  TechDirt writer  Mike Masnick writes, “Locke conveniently ignores the fact that if you look beyond recorded music, overall spending on music and music related products has gone way up and, more importantly, much more of that money goes directly to artists, rather than to the middlemen.”

While there is disagreement about the extent to which piracy is “ruining” the US economy, there is no doubt that most artists would like to be paid for their work.  The University of Arkansas is taking the matter into their own hands with tough new policies related to digital piracy.  A student caught downloading or otherwise using music illegally can lose his internet privileges, have his student accounts frozen, and he may earn a referral to local law enforcement agencies.

Fear has broken some students of their piracy habits.  Lilian Cai says, “Where I come from Internet piracy is completely normal.  China is the same way; everyone does it, and nobody cares.  But since I have come here, I have not downloaded a single song.  It’s just so, so risky.”

Others have stopped downloading illegally because of concern for artists, particularly up-and-coming or independent artists.  A University of Arkansas junior said she used to download pirated songs all the time because “When all your friends do it, it doesn’t really even feel like stealing.”  Now she has changed her tune.  “A lot of the bands I listen to now are Christian bands, and by stealing music I hurt their profit.  It’s better, then, if I buy music.”

Some, though, believe that piracy isn’t as damaging as Secretary Locke and others portray it, arguing that many musicians get tremendous exposure on sources like YouTube.  Justin Bieber, for instance, shot to incredible teen-star fame after his homemade videos were posted online. Without illegal downloading, would Justin Bieber consistently be one of the biggest trending topics?

Who’s right?  The battle of digital piracy and public perceptions continues.