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Three of the Hottest Reasons Not to Invite a VC to a Music Conference

March 23, 2015 1 comment

Sorry, couldn’t resist.  They tell you that if you want to have a clickable post make it about lists of things, so after reading “SXSW: The 7 Hottest Topics in Music Tech“, I thought I’d give it a try.

The thing to remember about the conference part of SXSW is that there’s two conferences.  One is at the panels where panelists are pitching, the other is everywhere but the panels where things are getting done.  Frankly–I went to two panels this year and had a reason to go to each.  So here’s a good example of why I don’t spend a lot of time at the panels.  Not saying they’re not worthwhile or anything negative, just that this is  a good example of why I don’t tend to show up there as much as I do at the Four Seasons (where they have valet parking).

The DMN story is about a panel with Director of Product Management at Facebook, Michael Cerda, VP of Business Development at BandPage, Chris Wiltsee, Managing Director of Walden Venture Capital, Larry Marcus and the moderator was SF MusicTech veteran, Todd Tate.

In other words–no musicians.  No songwriters.  So unless you really like being spoonfed what the VC class and their followers want you to believe, no reason to go to yet another “top down” panel.

Proof?  You ask for proof?

Here’s three of the 7 that I think prove the point.

1.  “Business Models For MusicTech Companies With Copyright Reforms”:  This was a biggie for Pandora investor Larry Marcus.  (Who is a well-meaning guy, so don’t flame him.)  When a VC starts talking about “copyright reform” what they really mean is “using my crony capitalist connections in Washington so I can make more money and musicians make as little as possible”.  He’s a Pandora investor, right?  If you want to see how much Walden VC made off of Pandora, click here.

Don’t get me wrong–I want venture investors to make piles of money off of music tech companies.  It’s just that I’d like artists, songwriters and musicians to make piles of money, too.  Risk-adjusted, to be sure, but when we are asked to take a cut in royalties and subsidize Pandora’s business, we are investing, too.

And when we do it because the government orders us to do it as in the case of the statutory license and the ASCAP/BMI rate courts, the rate we should do it at should reflect the value of Pandora’s one product–music.

So here’s the money quote–so to speak–that DMN attributes to Mr. Marcus:

“I hope there is a shifted mindset for people who own the copyrights, the labels, to construct win-win deals.  And that’s NOT about upfront cash payments.  It’s where if the company succeeds then everyone succeeds.”  -Larry Marcus, Walden VC

Right–first of all, “people who own the copyrights” are not just “the labels.”  So either Larry needs to back to music business school to understand how insulting it is for him to completely gloss over songwriters and independent artists, or Pandora needs to finally come clean and stop this charade that they give a rats ass about artists and songwriters.

But the choice part is “that’s NOT about upfront cash payments.  It’w where if the company succeeds then everyone succeeds.”

No, see that’s what happens when you are a stock holder.  So unless a VC is planning on treating those scruffy artists and songwriters the same as his well-scrubbed little cheeks, that statement is complete bunk.  Or something.

2.  Replace House Sound Mixers with a Machine:  Another quote from DMN:

“Algorithms can do a better job at live mixing than most people” – Larry Marcus.

He thinks the “Virtual Sound Guy” app is just around the corner. And with the notoriously shitty house sound guys, I’m interested to see what an algorithm can do.

You must be playing somewhere other than Austin and Nashville.

Next they’ll be telling us that you can download Abbey Road in a Box for free off the Internet and make a better record than The Beatles.

3.  The Real News:  Why do the tech giants stop you from connecting with the fans you drive to their platforms?

In fairness, Mr. Marcus is quoted by DMN as saying something important:

“[Y]ou may have 2 million followers on YouTube, but you can’t actually reach those followers. It’s really important to own your fans.”

There’s a very simple fix for this that I have discussed with Beats and Spotify but no takers:  Allow artists to have a email signup button that would take the fan out of the service to the band’s own email sign up page so that the fan could sign up directly with the band.

So I’ll be looking forward to Pandora adding this feature soon.

Something else for Tim Westergren to think about in his 13 bathroom house after he has a think about copyright reform.

#howgoogleworks: Why did the Federal Trade Commission ignore staff recommendations to prosecute Google for antitrust violations?

March 21, 2015 Comments off

OK, now that you’ve stopped laughing, that’s not a trick question.  We all know why Google has never been prosecuted by the U.S. government.  One way or another, they buy their way out of it through Google’s unprecedented network of lobbyists, fake academics and shadowy nonprofits like the Electronic Frontier Foundation and Public Knowledge.  (For the detail, see Public Citizen’s extensive report on Google’s three-dimensional influence network “Mission Creep-y–Google Is Quietly Becoming One of the Nation’s Most Powerful Political Forces While Expanding Its Information-Collection Empire“.)

The Wall Street Journal and a tidal wave of other publications are reporting on a previously secret internal FTC memo demonstrating conclusively that the FTC’s professional investigating staff recommended prosecuting Google.  The secret memo was produced by the FTC under a Freedom of Information Act request as disclosed in the Wall Street Journal.  If that wasn’t enough news, the copy of the secret report that the FTC provided was not redacted.  That means that there was nothing blacked out so the public could actually read the report with all the information that was available to the FTC commissioners–the political appointees for whom the professional staff authored the report.  And also read by outside attorney Beth Wilkinson who was hired by FTC Commissioner and Latham & Watkins partner J. Thomas Rosch shortly before the report was concluded to oversee the FTC’s investigation into Google.

That would be the same Beth Wilkinson who was herself a former Latham & Watkins partner, and a protege of Jamie Gorelick, who represented Google in the negotiation with the Eric Holder Department of Justice and who currently represents Google against Mississippi Attorney General Jim Hood.  The same Eric Holder who replaced Gorelick as Deputy Attorney General.  The same Jamie Gorelick and Beth Wilkinson who both worked for Fannie Mae where Wilkinson was paid over $5 million in compensation in 2006 plus an $800,000 “sign on bonus” even though “she knew little about mortgage-backed securities.”  Well, who among us can say they did, really?

Interestingly, Beth Wilkinson also represented Big Tobacco in 2006…you know, the same Big Tobacco that lost a multibillion dollar class action case to the then-attorney general of Mississippi Mike Moore currently advising Mississippi Attorney General Jim Hood in prosecuting Google.

We’ll get to just how important that is–and why without the benefit of the unredacted report, the public would never have known just how absurd it is that the FTC’s political appointees voted not to prosecute Google.  But realize just how unusual it is for anything even sightly negative about Google to reach the public and the press.  Protective orders, nondisclosure agreements, misleading statements to Congress requiring subsequent correction after the reporters have stopped looking, heavy political pressure, a PR department that demands journalists change unflattering but truthful reporting, inside deals to suppress evidence, all standard operating procedure.

But the delicious irony is that the last remaining state prosecution is being brought against Google by Mississippi Attorney General Jim Hood who Google is currently trying to muzzle based on stolen documents that surfaced after the United States suffered one of the first known cyber attacks by a state actor on a private company.  That state actor was North Korea.

Eric Schmidt, Kun Tony Namkung

After heaping loads of sanctimony from Google and its shills against the scrappy populist Hood, all based on stolen documents presented to a federal judge, Google has pretty successfully deflected attention away from Hood’s antitrust case against the company.  But the disclosure of the previously secret report highlights that the U.S. had a strong case against Google that mysteriously was ignored by the commissioners who voted 5-0 against prosecuting Google.

Since the facts at issue in the Mississippi antitrust case (and other state cases) would have substantially overlapped with factual basis for the U.S. antitrust case, we can easily understand why Google would want to suppress the FTC report and worked hard to stop other state antitrust investigations (including hiring now Senator Ted Cruz when he was in private practice).  It was undoubtedly easier to get state attorneys general comfortable with the idea of dismissing their cases if the U.S. dismissed its own investigation.

But that didn’t work with Mississippi Attorney General Hood. Like his fellow prosecutors at the FTC, he smelled a rat. And now he’s got the FTC’s own report that demonstrates conclusively that the U.S. had a recommendation to prosecute Google from those who have the experience to know better and that these recommendations were ignored by political appointees.  And he didn’t get his evidence from North Korea.

Uncle Sugar’s Field Trip

More importantly, the FTC’s previously secret report shows that companies of the size of Amazon and eBay were so afraid of Google that they decided to file confidential complaints with the FTC, now revealed in the unredacted report.  Mississippi’s case against Google includes investigation into advertiser fraud on behalf of small advertisers who live in the state.

Ask yourself this:  If it weren’t for Hood’s investigation and the FTC staff’s “inadvertent” disclosure of the unredacted secret report, how would we ever know how bad Google’s behavior really is?  And if Amazon and eBay have to go to the FTC for help, who does the average Joe advertiser in Mississippi go to?

Maybe their attorney general?

Remember–Google has been trying to relitigate SOPA as cover for trying to stop Hood’s antitrust investigation.  So far they have been successful using stolen documents and deflection.  Every state attorney general that Google talked out of prosecuting them for antitrust is reading this news coverage, too, and are rethinking what they should do now that it is obvious that they were conned.  Senator Cruz must feel like an idiot now that he knows conclusively just how much he was deceived by his client.  Nothing new, but it sure does sting when you put your own integrity on the line and your client burns you.

No one in the music business who deals with YouTube is going to be surprised by the behavior documented in the FTC’s previously secret report.  We’ve watched how they treat indie labels and independent artists like incomparable Zoë Keating.  There may be some comfort in knowing that Google treats us the same way they treat the big boys, but there’s no question that the Google problem is bigger than even the biggest of us can handle, and apparently bigger than even the U.S. government is prepared to handle.

But not Jim Hood.  As the extraordinarily popular Mississippi AG told MLex:

“If a mother is searching for a pediatrician somewhere in Europe, and she is able to get the correct results for the best pediatrician, as opposed to being led to some pediatricians that actually signed up for Google Plus, a mother in Jackson, Mississippi, ought to be able to get the same search result. The EU is leading the way, and America will follow at some point.”

In the US, he added, “people don’t really get it. The Internet is great, but people don’t really grasp what [Google has] really done” with search results. Google Plus is the company’s online social network. 

A Google spokeswoman declined to comment Thursday on Hood’s comments, citing the ongoing litigation. Google had previously acknowledged antitrust investigations by the attorneys general of Texas, Ohio and Mississippi. While Texas and Ohio spent several years investigating Google for antitrust violations, both states dropped their probes after taking no action in 2014….

Despite the fact that Hood is the only known US regulator investigating Google for antitrust violations, the Mississippi attorney general said he believes that will someday change.

“Google is walking into exactly what [AT&T] did. At some point, they are going to get broken up. If this ruling [on the Wingate injunction] is that an Attorney General can’t even ask a question, even as strong as a lobby as they have in Washington, the Congress is not going to let that stand,” Hood said.

“Basically Google is just walking into an antitrust case where they are broken up,” he added. “Maybe in the next administration, there is some interest in pursuing it, and the Congress gets on it. They are going to get broken up.”

Let’s start with YouTube.

Remember–if you had walked into a room of MBAs in 1985 and told them that in a few years time junk bond king and Master of the Universe Michael Milken would be in prison and his vastly influential Drexel Burnham Lambert would be bankrupt, you would have been laughed out of the room.  And yet it happened.

Why?  Because Goliath never learns.

schmidt senate

Googlers Pablo Chavez, Uncle Sugar and David Drummond Conferring Before Uncle Sugar Took the Fifth Under Oath At U.S. Senate Antitrust Subcommittee Hearing on Google Oversight

Is Your Home Radio Station Lobbying the FCC for a Payola Waiver and Fighting Artist Pay for Radio Play? Part 2: Entercom Communications

March 21, 2015 Comments off

As discussed in Part 1Ben Sisario reported in the New York Times that “Big Radio”, including Entercom Communications based in Bala Cynwyd, PA, is lobbying the FCC for a waiver of the long standing payola rules.

Right about the same time that Entercom’s payola waiver filing was released by the FCC, “Big Radio” launched the Free Radio Alliance to fight artist pay for radio play.  What do these two events have in common?

The Free Radio Alliance listed its members largely by station call letters without associating the call letters with the station ownership group.  That’s a much, much longer list than the names of the ownership groups because the groups own so many radio stations.  That creates the impression that there’s this endless list of radio stations opposing artist pay for radio play but wanting to hide payola.

So we cross referenced the list of radio stations to their ownership groups, and culled out the following list of Entercom stations.  Entercom is one of the station groups lobbying the FCC for the payola waiver and now we know which stations on the Free Radio Alliance list are both owned by Entercom and so which stations are lobbying for a payola waiver.

Since the list is so long, today we are just focusing on the Entercom stations in California, New York and Texas.  If you live in one of those states, see if you can find your home radio station on the list.  That way you’ll know if they are going to be getting that FCC waiver and if you’re a music maker or music lover, whether they are yet again trying grind down artists on pay for radio play.

Or as George Orwell said, “In a time of universal deceit, telling the truth is a revolutionary act.”

California KUFX-FM Entercom Communications
California KRBQ-FM Entercom Communications
California KOIT-FM Entercom Communications
California KSEG-FM Entercom Communications
California KDND-FM Entercom Communications
California KRXQ-FM Entercom Communications
California KUDL-FM Entercom Communications
California KCTC-AM Entercom Communications
California KKDO-FM Entercom Communications
California KBLX-FM Entercom Communications
California KGMZ-FM Entercom Communications
New York WLKK-FM Entercom Communications
New York WKSE-FM Entercom Communications
New York WWWS-AM Entercom Communications
New York WBEN-AM Entercom Communications
New York WTSS-FM Entercom Communications
New York WWKB-AM Entercom Communications
New York WBEE-FM Entercom Communications
New York WBZA-FM Entercom Communications
New York WCMF-FM Entercom Communications
New York WPXY-FM Entercom Communications
New York WROC-FM/AM Entercom Communications
Texas KAMX-FM Entercom Communications
Texas KJCE-AM Entercom Communications
Texas KKMJ-FM Entercom Communications
Texas KKMJ-FM Entercom Communications

Is Your Home Radio Station Lobbying the FCC for a Payola Waiver and Fighting Artist Pay for Radio Play? Part 1

March 20, 2015 Comments off

As Ben Sisario reported in the New York Times, “Big Radio”, including iHeart Radio formerly known as the less warm and fuzzy monicker Clear Channel, is lobbying the FCC for a waiver of the payola rules.  Great news, eh?

Right about the same time, “Big Radio” launched the Free Radio Alliance to fight artist pay for radio play.  What do these two events have in common?

The Free Radio Alliance listed its members largely by station call letters without associating the call letters with the station ownership group.  That’s a much, much longer list than the names of the ownership groups, so creates the impression that there’s this endless list of radio stations.

And remember–this is the same NAB that Pandora has aligned itself with in lobbying the government against artist rights–for example, Pandora’s continuing effort to manipulate the Congress into turning against songwriters such as with the ASCAP and BMI star chambers.

Dima Panel

So we cross referenced the list of radio stations to their ownership groups, and culled out the following list of Clear Channel stations.  Clear Channel is one of the station groups lobbying the FCC for the payola waiver and now we know which stations on the Free Radio Alliance list are owned by Clear Channel and so which stations are lobbying for a payola waiver.

Since the list is so long, today we are just focusing on the Clear Channel stations in California, New York and Texas.  If you live in one of those states, see if you can find your home radio station on the list.  That way you’ll know if they are going to be getting that FCC waiver.

Texas WOAI-AM iHeartMedia, Inc.
Texas KQXT-HD3 iHeartMedia, Inc.
Texas KZEP-HD2 iHeartMedia, Inc.
Texas KBGO-FM iHeartMedia, Inc.
Texas KBRQ-FM iHeartMedia, Inc.
Texas KWTX-AM iHeartMedia, Inc.
Texas KWTX-FM iHeartMedia, Inc.
Texas WACO-FM iHeartMedia, Inc.
Texas KKMY-FM iHeartMedia, Inc.
Texas KLVI-AM iHeartMedia, Inc.
Texas KYKR-FM iHeartMedia, Inc.
Texas KKMY-HD2 iHeartMedia, Inc.
Texas KAGG-FM iHeartMedia, Inc.
Texas KKYS-FM iHeartMedia, Inc.
Texas KNFX-FM iHeartMedia, Inc.
Texas KVJM-FM iHeartMedia, Inc.
Texas KKTX-AM iHeartMedia, Inc.
Texas KMXR-FM iHeartMedia, Inc.
Texas KNCN-FM iHeartMedia, Inc.
Texas KRYS-FM iHeartMedia, Inc.
Texas KSAB-FM iHeartMedia, Inc.
Texas KUNO-AM iHeartMedia, Inc.
Texas KDGE-FM iHeartMedia, Inc.
Texas KDMX-FM iHeartMedia, Inc.
Texas KEGL-FM iHeartMedia, Inc.
Texas KFXR-AM iHeartMedia, Inc.
Texas KHKS-FM iHeartMedia, Inc.
Texas KZPS-FM iHeartMedia, Inc.
Texas KHEY-AM iHeartMedia, Inc.
Texas KHEY-FM iHeartMedia, Inc.
Texas KPRR-FM iHeartMedia, Inc.
Texas KTSM-AM iHeartMedia, Inc.
Texas KTSM-FM iHeartMedia, Inc.
Texas KBME-AM iHeartMedia, Inc.
Texas KQBT-FM iHeartMedia, Inc.
Texas KODA-FM iHeartMedia, Inc.
Texas KPRC-AM iHeartMedia, Inc.
Texas KTBZ-FM iHeartMedia, Inc.
Texas KTRH-AM iHeartMedia, Inc.
Texas KIIZ-FM iHeartMedia, Inc.
Texas KLFX-FM iHeartMedia, Inc.
Texas KBFM-FM iHeartMedia, Inc.
Texas KHKZ-FM iHeartMedia, Inc.
Texas KQXX-FM iHeartMedia, Inc.
Texas KTEX-FM iHeartMedia, Inc.
Texas KVNS-AM iHeartMedia, Inc.
Texas KAJA-FM iHeartMedia, Inc.
Texas KQXT-FM iHeartMedia, Inc.
Texas KRPT-FM iHeartMedia, Inc.
Texas KTKR-AM iHeartMedia, Inc.
Texas KXXM-FM iHeartMedia, Inc.
Texas KZEP-FM iHeartMedia, Inc.
Texas KASE-FM iHeartMedia, Inc.
Texas KHFI-FM iHeartMedia, Inc.
Texas KPEZ-FM iHeartMedia, Inc.
Texas KVET-AM iHeartMedia, Inc.
Texas KVET-FM iHeartMedia, Inc.
Texas KVET-HD2 iHeartMedia, Inc.
Texas KCOL-FM iHeartMedia, Inc.
Texas KIOC-FM iHeartMedia, Inc.
New York WGY-AM iHeartMedia, Inc.
New York WGY-FM iHeartMedia, Inc.
New York WKKF-FM iHeartMedia, Inc.
New York WOFX-AM iHeartMedia, Inc.
New York WPYX-FM iHeartMedia, Inc.
New York WRVE-FM iHeartMedia, Inc.
New York WTRY-FM iHeartMedia, Inc.
New York WRVE-HD2 iHeartMedia, Inc.
New York WAXQ-FM iHeartMedia, Inc.
New York WHTZ-FM iHeartMedia, Inc.
New York WKTU-FM iHeartMedia, Inc.
New York WLTW-FM iHeartMedia, Inc.
New York WOR-AM iHeartMedia, Inc.
New York WWPR-FM iHeartMedia, Inc.
New York WBWZ-FM iHeartMedia, Inc.
New York WCTW-FM iHeartMedia, Inc.
New York WHUC-AM iHeartMedia, Inc.
New York WJIP-AM iHeartMedia, Inc.
New York WKIP-AM iHeartMedia, Inc.
New York WPKF-FM iHeartMedia, Inc.
New York WRNQ-FM iHeartMedia, Inc.
New York WRWB-FM iHeartMedia, Inc.
New York WRWD-FM iHeartMedia, Inc.
New York WZCR-FM iHeartMedia, Inc.
New York WDVI-FM iHeartMedia, Inc.
New York WHAM-AM iHeartMedia, Inc.
New York WHTK-AM iHeartMedia, Inc.
New York WKGS-FM iHeartMedia, Inc.
New York WNBL-FM iHeartMedia, Inc.
New York WAIO-FM iHeartMedia, Inc.
New York WVOR-FM iHeartMedia, Inc.
New York WBBS-FM iHeartMedia, Inc.
New York WHEN-AM iHeartMedia, Inc.
New York WSYR-AM iHeartMedia, Inc.
New York WWHT-FM iHeartMedia, Inc.
New York WYYY-FM iHeartMedia, Inc.
California KQJK-FM iHeartMedia, Inc.
California KSTE-AM iHeartMedia, Inc.
California KGB-FM iHeartMedia, Inc.
California KHTS-FM iHeartMedia, Inc.
California KIOZ-FM iHeartMedia, Inc.
California KLSD-AM iHeartMedia, Inc.
California KMYI-FM iHeartMedia, Inc.
California KOGO-AM iHeartMedia, Inc.
California KSSX-FM iHeartMedia, Inc.
California KIOI-FM iHeartMedia, Inc.
California KISQ-FM iHeartMedia, Inc.
California KKSF-AM iHeartMedia, Inc.
California KMEL-FM iHeartMedia, Inc.
California KNEW-AM iHeartMedia, Inc.
California KOSF-FM iHeartMedia, Inc.
California KYLD-FM iHeartMedia, Inc.
California KQOD-FM iHeartMedia, Inc.
California KWSX-AM iHeartMedia, Inc.
California KBFP-AM iHeartMedia, Inc.
California KBFP-FM iHeartMedia, Inc.
California KDFO-FM iHeartMedia, Inc.
California KHTY-AM iHeartMedia, Inc.
California KRAB-FM iHeartMedia, Inc.
California KALZ-FM iHeartMedia, Inc.
California KBOS-FM iHeartMedia, Inc.
California KCBL-AM iHeartMedia, Inc.
California KFBT-FM iHeartMedia, Inc.
California KFSO-FM iHeartMedia, Inc.
California KHGE-FM iHeartMedia, Inc.
California KRDU-AM iHeartMedia, Inc.
California KRZR-AM iHeartMedia, Inc.
California KSOF-FM iHeartMedia, Inc.
California KBIG-FM iHeartMedia, Inc.
California KFI-AM iHeartMedia, Inc.
California KRRL-FM iHeartMedia, Inc.
California KIIS-FM iHeartMedia, Inc.
California KLAC-AM iHeartMedia, Inc.
California KOST-FM iHeartMedia, Inc.
California KSRY-FM iHeartMedia, Inc.
California KEIB-AM iHeartMedia, Inc.
California KVVS-FM iHeartMedia, Inc.
California KYSR-FM iHeartMedia, Inc.
California KFIV-AM iHeartMedia, Inc.
California KJSN-FM iHeartMedia, Inc.
California KMRQ-FM iHeartMedia, Inc.
California KOSO-FM iHeartMedia, Inc.
California KDON-FM iHeartMedia, Inc.
California KION-AM iHeartMedia, Inc.
California KOCN-FM iHeartMedia, Inc.
California KPRC-FM iHeartMedia, Inc.
California KTOM-FM iHeartMedia, Inc.
California KFNY-AM iHeartMedia, Inc.
California KGGI-FM iHeartMedia, Inc.
California KKDD-AM iHeartMedia, Inc.
California KMYT-FM iHeartMedia, Inc.
California KTDD-AM iHeartMedia, Inc.
California KTMQ-FM iHeartMedia, Inc.
California KFBK-AM iHeartMedia, Inc.
California KFBK-FM iHeartMedia, Inc.
California KBEB-FM iHeartMedia, Inc.
California KHYL-FM iHeartMedia, Inc.

#howgoogleworks: Did Uncle Sugar Reveal How Google Treats Revolving Door Employees?

March 17, 2015 Comments off

Eric “Uncle Sugar” Schmidt, Google’s Executive Chairman is having a rough day.  Uncle Sugar was on a panel at SXSW where he made an ass of himself.  Again.  (Don’t worry, he can’t be fired–he controls the company’s voting stock with Brin and Page, and they damn sure aren’t going to do anything about the latest outrage.)

According to the Wall Street Journal:

Google Executive Chairman Eric Schmidt had a lot to say Monday about the lack of racial and gender diversity in the technology industry.

In fact, Schmidt had so much to say that he often interrupted and spoke over his co-panelist, Megan Smith, the U.S.’s chief technology officer and a former Google executive. The two appeared on a panel at the South by Southwest conference in Austin, Tex.

I’m going to pose two questions about this latest debacle for Uncle Sugar.  The first will sound trivial, but it really isn’t.  Why is it these people come to Austin (where I live) to act out?

The second is, I hope, a more subtle one.  If even half of what is reported about Uncle Sugar’s private life is true, he definitely does not lack for female companionship.  I’ll pose a different interpretation of his behavior that is not meant to excuse it at all, but to point out another layer of offensiveness.

I think what we saw in the interaction between Uncle Sugar and the Chief Technology Office of the United States was an example of how Google treats government employees.  At the risk of pointing out the obvious, Ms. Smith works for the President of the United States.  At least nominally.

What if in fact she only has a dotted line to the President, but she actually still works for Uncle Sugar?  Schmidt clearly has no qualms whatsoever about running roughshod over a former employee in public on a panel about the problems with the very behavior he exhibited.

Why?  Let’s go with the obvious conclusion.  Let’s assume for a moment that he knew what he was doing, he knew where he was, he didn’t care, and he treated Ms. Smith the same way he does all the time regardless of her title because she works for him and this is how Schmidt treats those people.  And if he will treat someone who ostensibly works for the President this way, how do you think he treats the other “former” Google employees who are running the United States Government in lesser positions?

Here’s the sad part.

Toward the end of the session, one woman in the audience asked the two to address how personality biases in men and women affect workplace dynamics. She noted that Schmidt repeatedly talked over his former colleague — prompting applause from a full exhibit hall….

Schmidt didn’t respond to the questioner.  He had noted earlier in the panel that the lack of women in college computer-science programs is a “tragedy.” A Google spokeswoman declined additional comment [so in case that slipped by you, the antecedent of “additional comment” from the ubiquitous “Google spokeswoman” is Schmidt noting the tragedy.  Don’t be shocked if you missed it the first time around].

Smith, for her part, avoided discussing Schmidt’s interruptions specifically. [Why?  Why didn’t she lean in?]  But she noted that differences in how men and women act can create inequality in the workplace. She cited a study showing that if a job listing shows 10 requirements, a man may still apply if he only has three of them, whereas a woman will hold back unless she has seven.

Acknowledging she can be cryptic, Smith also recalled how she’ll sometimes float ideas at meetings and get no response. A half hour later, a man will offer up the same idea, she said.

“It’s not anybody’s fault,” Smith said.

Oh yes it is.  It’s definitely the fault of the leader who fails to notice that dynamic.  When it creates a culture of diminishing a group of employees based on gender, it’s the fault of Google’s senior management and most especially their board of directors.  The dominos of the failure of leadership is simply revolting.

But what is more telling is Schmidt’s arrogance toward a senior government official.  There was no equivocation in Schmidt’s demeanor–he thought Ms. Smith still worked for him.

So the question is…does she?

RSVP for Jumpstart 8’s Day Party for SXSW on 3/20 at the Side Bar, co-sponsored with #irespectmusic and @thetrichordist!

March 16, 2015 Comments off

They’re back!  The Midgetmen’s SXSW Day Party at the Side Bar returns again with Jumpstart 8 and we’re pleased to be sponsoring again this year.  This time our co-sponsors include the #irespectmusic campaign and The Trichordist!  Click here to RSVP!

Side Bar, Friday, March 20, noon-6pm

602 EAST 7TH ST (just East of Red River)
Austin TX 78701
512.555.1212

Jumpstart 2015

Here’s the stellar line up and set times:

INSIDE

1200 – ROZWELL KID

1245 – PILE

130 – TERRY MALTS

215 – MEAT MARKET

300 – RAT FIST

345 – THE BLIND SHAKE

430 – HEAT

515 – SWEARING AT MOTORISTS

OUTSIDE

1215 – DIARRHEA PLANET

100 – LEFT & RIGHT

145 – KRILL

230 – SLOTHRUST

315 – PUJOL

400 – THE MIDGETMEN

445 – LEE BAINS III & THE GLORY FIRES

530 – PS I LOVE YOU

Music Discovery and Purchasing Survey Results Part 1

March 15, 2015 Comments off

We conducted a survey of how a small group of 187 self-selected respondents discovered and purchased music.  I’m publishing these results because they were interesting and may point to some ideas about how more rigorous surveys should be undertaken.  There will be one more post with the rest of the slides.

What Kind of Stream Am I?

One interesting trend in the survey is that consumption charts may be measuring the wrong thing or measuring it the wrong way.  Spotify has suggested that Spotify streams should be valued at 100 streams to the value of a single track download.  Billboard has counted 1500 streams to a single album download at a $7.50 wholesale price.

[D]igital interactive streaming — not including passive streams from services like Pandora, iTunes Radio and Sirius — appears to be making up the [year over year decline in digital revenue], on a revenue basis at least. According to SoundScan, interactive music and video streaming totaled 34.28 billion streams in the first quarter of the year, versus 25.44 billion streams in 2013’s corresponding period. Not only have streams grown by nearly 9 billion, but per-stream payout has improved this year versus last year, according to label sales executives.

Last year, interactive streams paid an average of $0.00375 per stream, meaning 2,000 streams equaled the average $7.50 wholesale — the average price when you consider the $9.99 list price for most albums and $11.99 for some superstar albums — for a digital album download. This year the industry average is more like $0.005, which means that 1,500 streams equal the wholesale cost of an album.

Figuring 2,000 streams per stream equivalent album last year, and 1,500 streams per stream equivalent album this year, that means that SEA totaled 22.85 million in the first quarter of this year, while last year totaled 12.72 million, a difference of 10.1 million album units. So, while digital albums and track equivalent albums were down 9.06 million units, streaming revenue growth is outpacing digital sales decline.

First, in discussing the value of streams, it’s always important to distinguish which kind of streams you are counting.  Ad supported streams are of vastly lower economic value than subscription streams, so it’s probably not consistent to count “streams” without being very clear about which stream you mean.  The variability in accounting for streaming revenue is compounded by having (for the most part) no fixed rate on streaming plays due to revenue share deals which will vary from accounting period to accounting period in both the nominator and denominator.

Slide 2 suggests that there may be questionable value in streaming services like Pandora and YouTube as music discovery platforms which may make sense since both services involve searching for something you already know about or play me something like something I already know.

Again looking at trends, there is a large majority of respondents who spend $10 or less per month on streaming services and a plurality of respondents who spend $10 or less per month on streaming and permanent ownership formats combined.

Not to be overlooked, 12% of respondents said the did not buy music at all.

We will be doing a more detailed live music survey, but note that a significant plurality of respondents spent less than $25 per month on live music.

The “Zero Effect”:  Do Consumption Charts Penalize Artists Windowing Streaming Services and Most Compilation Records?

Although we can’t tell how consumption charts are weighted (as far as I know that information hasn’t been released publicly), it’s pretty clear that if you are not on streaming services–meaning you have zero streams–you will be penalized in the chart.

Based on data for the week ending November 2, 2014, Taylor Swift’s first week sales were so strong it wouldn’t matter that her streams were somewhat lower for the consumption chart.  At #1, she outsold the #2 NOW 52 title by 10:1, and NOW 52 outsold the #3 Sam Hunt album by 5:4–but Sam Hunt had 4 million streams that punched up the chart position.

The “zero effect” is much greater further down the chart, however.  In the same week, “Frozen: The Songs”, a compilation record, got credit for zero streams and 10,723 albums sales for a chart position of 49.  Blake Shelton sold 8,735 albums but got credit for 930,928 audio streams and a chart position of 44.  The same week Iggy Azalea sold 4,947 albums but got credit for 5,060,617 streams for a chart position of 25.  In other words, Frozen will never have any streams because compilation records typically do not get streaming rights, and got a much lower chart position in spite of selling over twice as many albums.

If you compared based on album sales along, Guardians of the Galaxy zero effect soundtrack would have entered the chart at #25, not #40, Sam Smith would have been #15 instead of #6, Bob Segar would have been #23 instead of #34.  Another zero effect soundtrack is Now Disney 3 that would have been #40 instead of #59, and U2’s Songs of Innocence would have been #64 instead of #94.

Seasonal records such as Christmas albums are also penalized.  The Nov 2 chart showed that based on album sales alone, Home Free’s Full of Cheer would have entered the chart that week at #66 instead of #104.  While the title had 26 streams, that was a sufficient penalty to cost the record 38 chart positions.

Conclusions?  Charts are relative beasts to begin with, and the consumption chart won’t keep a phenom like Taylor Swift from dominating the top position.  Measuring streams probably isn’t enough to affect the top 10.  But for records that are compilations, soundtracks, seasonal or other specialty titles that either aren’t allowed a streaming audience based on contract, are windowed, or haven’t found that audience yet for another reason, the consumption chart penalizes high sellers that are not present on streaming services.

If chart position matters to your record, then this should be of concern to you as the zero effect creates an incentive to stream.  Some would say that the more streaming, the lower the sales.  Without getting into cause and effect on that issue, it certainly can be said that the lower the streams, the lower the chart position even if sales of a given artist are higher than another given artist.

From a profitability perspective, artists whose records sell but don’t stream may well be thankful.  If that trend continues, then it would also stand to reason to question the benefit of chart position as a selling tool.  But then we hear about services like YouTube routinely deleting billions of fake plays in its video playlists during December.  If this same phenomenon is repeated in streaming services used to measure chart position….not to imply that anyone in the music business would ever try to rig the charts.  Perish the thought.

So what is it all about?  Is there a “zero effect” or is there zero affect?  Sales or streams?

1.  Age

Age 1

2.  Music Discovery from specified sources

Music Discovery3.  Monthly spend on streaming services

Monthly Spend on Streaming Services

Comment:  Based on this slide, it seems unlikely that respondents subscribed to more than one streaming service.

4. Monthly spend on streaming plus CDs, downloads or vinyl

Monthly Spend on Streaming plus CDs downloads

A near plurality spend less than $10 a month on combined sources, similar to the purchasing on streaming only. The majority spend more that $20 but less than $50.

5.  Music buying location

buying location

bit torrent prelim

The 3rd bar on the Bit Torrent slide is “I don’t know a retailer called Bit Torrent”.

6.  Format purchased

Format

Downloads nearly equal CDs and vinyl.

7.  Live show spending

Live Shows 1

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