Jan 30 Save the Date! T Bone Burnett in Conversation with Jonathan Taplin in Los Angeles on the Value of the Artist — MusicTech.Solutions
T Bone Burnett
in conversation Jonathan Taplin on The Value of the Artist, and the Value of ArtMonday, January 30, 2017
8pmAnn and Jerry Moss Theatre
New Roads School
Herb Alpert Educational Village
3131 Olympic Boulevard
Santa Monica, CA 90404
Reserve seating, click here for ticketing.
This will be an inspiring evening with two of the deep thinkers in the artist rights movement!
Composer and performer Jean-Michel Jarre put his finger right on the right approach to online policy in a recent speech to policy makers at an SIAE event in Italy. (Jean-Michel is the current president of CISAC.) Jean-Michel gave his own interpretation of the “value gap” calling it instead a “transfer of value” which is exactly what it is. And when you consider who is the greatest offender in the “transfer of value” ecosystem, it’s not AT&T or Verizon, it’s not Time Warner or even Cox–it is Google, and, of course, Facebook that is the worst of the worst. And while Jean-Michel didn’t call out Google or Facebook by name, the Leviathans of Silicon Valley were lurking behind every word.
MTP readers will remember that I have been emphasizing the income transfer in the “digital economy” or what Lessig calls the “sharing economy” or what we call “getting Googled.” This income transfer is based on the idea that the people who do the work get little or none of their labor value. This income transfer occurs on pirate sites when artists’ work is literally stolen and distributed in ad supported piracy with advertising sold by the biggest advertising networks.
The income transfer is not difficult to see–the songs, recordings, movies, television programs or books are simply stolen and posted on ad supported sites that directly compete with legal sites. The value of these works are converted into advertising revenue by unscrupulous brands and ad networks and published on pirate sites with that value sucked out by everyone involved.
The fact that these sites continue to flourish is not only attributable to a perverse interpretation of safe harbors–these site flourish because of gutless national governments that allow the income transfer to continue, Kim Dot Com notwithstanding.
The biggest offender, though, is the one search engine that drives the most traffic to these sites (where they are also found on the other side of the transaction selling advertising)–Google. Google is an integral part of the income transfer economy, receiving over 1 billion job-killing take down notices in the last 12 months.
The next biggest offender–and one that many artists are not really focused on–is Facebook. Whatever we may think about Google’s role in the income transfer economy, at least Google acknowledges that it needs a license for its music properties like YouTube. Facebook is entirely unlicensed and operates its own walled garden pirate operation.
Jean-Michel’s speech (as quoted in Complete Music Update (but without the snark)) sums it up:
[T]he truth is that the creative economy, for the creators whose works are driving it, is still under-performing. We need to fix flaws in the environment in which creators are working. And if we do, the economic benefits will be enormous, leading to further growth and many more jobs.
The biggest flaw I want to highlight today is what is known as the “transfer of value” or the “value gap.” To survive and thrive, creators must be fairly paid for their works. Yet today, some of the world’s major digital music services are building large businesses on back of creativity while paying next to nothing in return.
This is not fair. It is a market distortion. And it is holding back growth in the creative sectors.
One way to fix this is not by trying to get rid of the safe harbor which solves a problem by providing a little latitude to reasonable people acting reasonably. To take one example, the ISPs participating in the Copyright Alert System should not be lumped in with Google. Let’s face it–Google is in a class of its own and should not be entitled to benefits for which Google bears no burden.
There is no part of Google’s business that has greater resources available to it than search. Mrs. Palsgraf take note–if Google search attracts over 1 billion take down notices a year, then you can be sure of one thing–search is working exactly as planned, and the plan is to keep transferring the value of everything the network touches including the labor value of every artist and songwriter in the history of recorded music.
Facebook is also working exactly as planned and rips off songwriters, artists, publishers and labels all the live long day–not to mention selling artists names as advertising keywords which is the ultimate insult-to-injury commoditization.
Jean-Michel is exactly right. This job-killing market distortion must be fixed.
MTP readers know I take a dim view of the music business (and the larger entertainment industry) falling over themselves to drive traffic to YouTube. Big Machine is taking a major step in the right direction to protect their artists’ brands from being used to hand Google negotiation leverage on a silver platter. This trend won’t reverse itself overnight, but Big Machine is to be applauded for having the foresight (per usual, frankly) to set the right strategy for the industry.
Here’s the press release:
Big Machine Label Group will soon launch a proprietary digital video platform that gives fans direct access to content featuring the label’s superstar roster of talent. Big Machine TV (www.BigMachineTV.com) will offer music videos and behind-the-scenes content when it goes live in February, later hosting exclusive interviews, announcements, contests and more. All of the label’s artists, including superstars Taylor Swift, Tim McGraw, Reba, Florida Georgia Line, Rascal Flatts and Thomas Rhett, will have individual channels on the platform that allow viewers to seamlessly search for desired content for an immersive online fan experience.
The development of Big Machine TV comes just as Nielsen Music’s recent 2016 U.S. Year-End Report shows that music video streaming is up 8% year over year, reaching nearly 180 billion streams last year. Video viewership on the new BMLG platform will count towards Nielsen’s consumption charts.
“Big Machine has always pushed the envelope, and we found ourselves asking, ‘is there a better way’ when it comes to syndicating our online content, pushing it onto social media, protecting it and ultimately monetizing it at the highest rate possible to benefit our artists,” said BMLG President and CEO Scott Borchetta. “And the answer was ‘yes’. The Big Machine TV platform is an incredible tool to better serve our artists and their fans by delivering content when and how we want, all the while making sure the creators are compensated fairly.”
Big Machine Label Group has repeatedly been known for making groundbreaking moves among the music industry and in 2016 was named by Fast Company magazine as one of the “Most Innovative Companies” in America. In 2012, in an unprecedented deal, BMLG made history by working with Clear Channel, the largest owner of U.S. radio stations, to secure sound-recording performance royalties to the label and its artists. This became the first time in history that artists would get paid of their recordings on terrestrial radio stations.
@thetrichordist: Updated! Streaming Price Bible w/ 2016 Rates : Spotify, Apple Music, YouTube, Tidal, Amazon, Pandora, Etc. — Artist Rights Watch
The problem with a pro-rata share of advertising revenue is that the fraction may well always trend downward and is dependent on the growth rate of the service involved. If that sounds like a ponzi scheme, it is pretty similar.
[your plays/all plays] * [ad revenue]
If the fraction is always your plays divided by all plays, your plays may spike a bit but will always be more constant than the all plays number which continually grows at least on a relative basis as more recordings are released industry wide. The “your plays” number will likely never grow at a rate that is greater than the growth in the “all plays” number. The denominator will probably always grow faster than the numerator, which means the fraction is continually getting smaller.
This may be offset somewhat by growth in the ad revenue, but in order for royalties to grow for any particular artist, the percentage increase in the ad revenue would have to exceed the percentage decrease in “your plays” and your percentage piece of the pie. Based on the Trichordist findings, it looks like the percentage decline in the plays ratio is greater than the increase in ad revenue.
The same will probably be true of subscriber revenue as the “new money” starts to level off or even decline.
That’s why it’s like a ponzi scheme.
The last time we did this was back in 2014, so we thought it was time for an update. Not a lot of surprises but as we predicted when streaming numbers grow, the per stream rate will drop. This data set is isolated to the calendar year 2016 and represents an indie label with an […] […]
The string trio Time for Three and S’More Entertainment filed a class action yesterday (Jan 17) in New York federal district court against “Defendants Entertainment One GP LLC and Entertainment One U.S. LP, doing business as E1 Entertainment and/or Koch Entertainment LP” for a variety of claims relating to the defendant’s direct deal with SiriusXM.
The class action complaint describes the suit:
4. In violation of the Class Member Contracts, Defendants entered into secret negotiations and agreements with satellite radio provider Sirius XM Radio (“Sirius XM”), for the exploitation of Plaintiffs’ and the Class Members’ intellectual property. Defendants have systematically failed to account for any revenue, or pay any portion of the revenue generated from the exploitation of the Class Members’ Musical Works on Sirius XM under this agreement.
5. Plaintiffs bring this nationwide class action on behalf of themselves and similarly situated Class Members arising from Defendants’ failure to properly account for and pay revenues generated for the distribution of the Class Members’ Musical Works on Sirius XM and other digital satellite radio providers. Plaintiffs bring claims including for breach of contract, breach of the implied covenant of good faith and fair dealing, an accounting, and declaratory relief. Plaintiffs seek monetary damages, injunctive, and/or declaratory relief on behalf of themselves and others similarly situated against Defendants’ for their willful violation of the Agreements….
B. Defendants’ Secretly Withheld Revenues From Sirius XM in Violation of the Contracts Resulting in Substantial Damages to the Class Members
24. Pursuant to the 1995 Digital Performance Right in Sound Recordings Act, and the 1998 Digital Millennium Copyright Act, artists, songwriters, and masters holders are legally entitled to receive royalties for digital performances of Musical Works on DEMD, including on Sirius XM. In the absence of a direct contractual agreement between the digital transmission entities (e.g. Sirius XM) and a record company, these DEMD royalties are determined based on federally-approved statutory license rates. By law DEMD royalties generated pursuant to a statutory license—absent an agreement between the parties—are collected on behalf of and distributed to rights holders by the independent non-profit organization, SoundExchange, Inc. (“SoundExchange”).
25. When digital transmission providers contract directly with record companies for DEMD rights, such royalties are paid at contractually negotiated rates, and the obligation to collect, account for and pay such revenues to artists and musicians falls on the record company, instead of SoundExchange.
26. In this case, Defendants secretly negotiated and entered into an agreement for Sirius XM to distribute the Musical Works of Plaintiffs and the Class Members. Defendants had a legal obligation under the Agreements with Plaintiffs and other Class Members to properly and accurately account for and pay the revenue received by Defendants to Plaintiffs and Class Members. On information and belief, rather than fulfilling their contractual obligations, Defendants have systematically, knowingly, and intentionally withheld and failed to account for and pay for revenue generated from Sirius XM Plaintiffs and other Class Members.
27. As a result of Defendants’ conduct, the revenue that Defendants have collected from Sirius XM is never reported, and is never subject to potential remittance to Plaintiffs and the Class Members. Instead, these revenues have been wrongfully retained by Defendants outright.
28. Defendants have engaged in this conduct even though they have no contractual or legal right to do so. It is currently unknown whether there are entities other than Sirius XM from whom Defendants are collecting DEMD revenue, without reporting and paying such revenues to Plaintiffs and the Class Members.
29. Defendants are wrongfully retaining monies that are owed to Plaintiffs and the Class Members. On information and belief, Defendants could easily account for and pay the money owed to Plaintiffs and the Class Members, as required by the Agreements.
This will be one to keep an eye on. The lawyers filing the complaint on behalf of the potential class include some familiar names and are:
Michael R. Reese
George V. Granade
100 West 93rd Street, 16th Floor
New York, New York 10025
Telephone: (212) 643-0500
Facsimile: (212) 253-4272
JOHNSON & JOHNSON LLP
Neville L. Johnson
Douglas L. Johnson
Jordanna G. Thigpen
439 N. Canon Dr. Suite 200
Beverly Hills, California 90210 T: (310) 975-1080
F: (310) 975-1095
PEARSON, SIMON & WARSHAW, LLP
Clifford H. Pearson
Daniel L. Warshaw
15165 Ventura Boulevard, Suite 400
Sherman Oaks, California 91403
Telephone: (818) 788-8300
Facsimile: (818) 788-8104
@njmacphee: Musician @MaximCormier wonders how songs ended up for sale online without his OK–Artist Rights Watch
One of the only stories on piracy where the artist called the cops. More of that, please!
A guitarist from Cape Breton was shocked this week to discover his music was being sold online without his knowledge or consent. Maxim Cormier of Chéticamp said a local radio station was offering track-by-track digital downloads of his songs for a fee. “I had never given permission to them to do that,” said Cormier. “And I had certainly never received any payments for any of the sales.” When Cormier found out, he called the police.
After years of catering to copyright holders and their increasing demands, is Google about to go rogue in sheer frustration? According to a report by TorrentFreak, 2017 could well be the year Google throws its toys out of the pram, raises the Jolly Roger and takes to the digital seas in anger by launching its very own mega torrent search engine.