A musician needs your help

Perry Baggs, the original drummer for Jason & the Scorchers, is very sick with diabetes. He has racked up huge medical bills and needs a kidney transplant in the near future.

In order to raise money for their former band member, the Scorches held a reunion concert a couple weekends ago. The show was apparently great with performances from the Scorchers themselves, but also from former Scorchers members, Andy York and Ken Fox and the bands other associates such as Stacie Collins and her band, Warner Hodges, Tommy Womack, and the Bottle Rockers.


All the money raised at the show obviously went to helping Perry out with his medical expenses, but there's still a major need. Thanks to the self-proclaimed “Reverend of Rock & Rock” and editor of Alt.Culture.Guide, Keith A. Gordon, there just so happens to be another great opportunity to raise money.

The good Reverend has decided that through July 15th all of the profits from the sales of his latest book ROCK TALK will be donated to Perry’s medical fund. Rock Talk is a 116 page paperback book composed of black and white photos and 36 interviews taken exclusively from the Gordon’s personal collection including ones with the Scorchers, and Warren Haynes of the Allman Brothers. If you purchase the book directly from Gordon himself via his web site and paypal, not only will you receive a autographed copy of the book, but roughly $5 will be donated to Perry’s fund. The book is priced at $11, not much to save a great musicians life, so everybody go out and buy a copy of the book and support Perry and his growing amount of medical bills.

Of course, FMC has been working for years to try to keep these type of benefits from happening via our HINT program, a hotline that allows musicians to get health insurance from other musicians who are experts in the field. FMC doesn't sell anything.

This Week in News: Friday, June 29, 2007

Webcasting


Congress urges peace talks in Net radio conflict
In a hearing on webcasting on Thursday, members of Congress admitted that they were unsure how to balance the interests of webcasters with the need to compensate artists through royalties. Since the new royalties are effective on July 15, Congress is urging webcasters and SoundExchange to work things out independently in order to beat the deadline and avoid the collapse of small business webcasters.
by Anne Broache, CNET, June 28, 2007


Small Business Committee Hears Testimony For, Against, CRB Rates
Thorough coverage of the House committee hearing on the webcasting rates, as well as links to testimony filed by FMC and the Small Webcaster Group
by Kurt Hanson, June 28, 2007;See video from the hearing here.

eMusic Lends Support to Web Radio Campaign
Following June 26th's "Day of Silence," retailer eMusic has announced that it will donate a "modest contribution" to SaveNetRadio.org in protest of increased royalty rates for webcasters set to go into effect on July 15.
by Todd Martens, Billboard Biz, June 27, 2007

Web Radio Stations Hope Silence Speaks Volumes About Fee Hike
Pandora, Live365 and Real Networks' Rhapsody, as well as terrestrial radio stations such as Washington's WAMU and Santa Monica, California's KCRW participated in internet radio's "Day of Silence," which protests the hike in royalties set to take effect on July 15.
by Mike Musgrove, Washington Post, June 26, 2007

Internet Radio Holds Out Silent Hope
Mike McGuire, an analyst at Gartner, said he is sure the Internet radio Day of Silence raised awareness among consumers, many of whom might not have heard about the royalty issue, but he also pointed out that it is questionable whether the Day of Silence protest will rally enough support to reverse the royalty hike.
by Jennifer LeClaire, Newsfactor, June 27, 2007

Music Industry

Music Biz Agrees: Stop Shooting Self in Foot
Industry executives gather at a retreat in Norway to face the harsh realities of a music industry that is undergoing seismic changes.
by Andrew Orlowski, The Register, June 27, 2007

Hanging Up On Ringtones
Rumors are flying around the blogs about whether the new iPhone will allow consumers to convert previously purchase songs into ringtones, and what the price would be, if any. But there are larger questions about the ringtone market, where sales have leveled off. Are consumers now more interested in "sideloading" their own content onto their phone?
Guardian Unlimited (UK), June 28, 2007

To Free or Not to Free
The Layaways blogger/musician debates whether his band should give away their next album via free MP3s. The list of pros and cons is definitely worth reading.
Digital Audio Insider, June 27, 2007

Net Neutrality

Gov. Regulators Issue Wait-And-See Net Neutrality Report
The Federal Trade Commission' took a neutral stance in a report on Net Neutrality released by their Internet Access Task Force. Despite warnings by Net Neutrality proponents, the FTC is unsure that the prioritizing on Internet content through charging fees for fast lanes will be harmful.
"It's clear from the 170 page report that the FTC has no immediate plans to step in on its own."
by Ryan Singel, Wired, June 28, 2007

FTC on Net neutrality: No new laws needed
The FTC report on Net Neutrality indicates the FTC believes Net Neutrality regulations are not needed. Public interest groups, such as Public Knowledge, have responded with disapproval and criticism.
by Declan McCullagh, CNET, June 28, 2007

Net neutrality on Congress's fall agenda?
Never mind that federal regulators discouraged so-called Net neutrality regulations in a report unveiled Wednesday. Democrats in Congress say they still believe it's necessary to enact a new law to clamp down on the perceived threat posed by broadband operators that want to charge content
owners extra fees for priority placement.
by Anne Broache, CNET, June 28, 2007

Radio

Congressional Pair Introduce Low Power FM Legislation
Congressmen Mike Doyle (D-PA) and Lee Terry (R-NE) have introduced legislation that will repeal the Radio Broadcast Preservation Act and allow thousands of low power FM stations to begin broadcasting. The Act currently prohibits low-power FM by requiring that radio stations in a given market be four intervals apart. More low power stations will increase localism and diversity in terrestrial radio. In response to the bi-partisan legislation, the National Association of Broadcasters has announced its opposition to an "overcrowded radio dial."
Radio Ink, June 22, 2007

An XM-Sirius Union: Yea or Nay?
The FCC has asked for public comment on the proposed XM-Sirius merger, which would violate an order specifically prohibiting a satellite radio monopoly, to determine whether the union is in the public interest.
by Anne Broache, CNET News, June 27, 2007

Karmazin Finds the Right Wavelength
Sirius CEO Mel Karmazin, likely to lead XM-Sirius if the merger is approved, has more to worry about than pressuring the FCC for approval. While it is agreed that Karmazin is a talented Chief Executive, neither Sirius nor XM have turned a profit since their entry into satellite radio.
by Matthew Kirdahy, Forbes, June 25, 2007

Bill Would Undercut Democrats' Push to Regulate Talk Radio
Republican Congress Mike Pence (R-IN) has warned that Democrat-backed reinstitution of the Fairness Doctrine would be a dangerous rationing of free speech on radio. This follows a Democratic push to gain ground in conservative-dominated talk radio. The Fairness Doctrine was enforced by
the FCC from 1949 to 1987 and required broadcasters to present both sides of controversial issues.
by Stewart Whitney and Fed Lucas, CNS News, June 28, 2007

FMC's Kristin Thomson at Independent's Day Conference

On Saturday, July 14, FMC Deputy Director Kristin Thomson will be moderating a panel called "Can You Hear Me Now? This Ain't Your Grandfather's Radio", one of the many discussions scheduled to happen during the Recording Academy's Independent's Day event in Philadelphia.


Kristin, Billy Zero from XM Radio's "Unsigned" channel, WPRB's Jon Solomon and other panelists will talk about the state of radio, and the plethora of platforms that musicians can use to get their music heard.

Check out the full schedule of panels here, which includes a keynote by Tim Westergren, musician and founder of Pandora and lots of other great speakers.

Independent's Day
The Bossone Center, Drexel University
3141 Chestnut St., Philadelphia, PA
Saturday, July 14, 2007
8:00 AM - 6:00 PM
Tickets are $25 for Recording Academy members and $75 for non-members.
For tickets and/or information on the event: 215.985.5411 or philadelphia@grammy.com.

Email me if you're interested in applying for a discounted registration rate.

This Week in News: Friday, June 22, 2007

Radio

Doyle Bill Would Encourage New Low-Power FM Stations
U.S. Rep. Mike Doyle introduced a bill on June 21 that could prompt hundreds of new low-power FM radio stations to sprout up around the country, including the Pittsburgh region. The bill would relax a restraint that prevents new stations from securing spots close to existing full-power commercial stations on the radio dial.
by Jerome L. Sherman, Pittsburgh Post-Gazette

New Measures Could Bring Influx of New Noncommercial Radio to the Airwaves
Hannah Sassaman of the Prometheus Radio Project joins us to talk about a series of developments that could result in the creation of hundreds – if not thousands – of new noncommercial radio stations. Legislation has been introduced that would allow the FCC to grant more licenses to low-power FM stations.
Democracy Now!, June 22, 2007

Clear Channel to Indy Musicians: Swap Exposure for Royalties
A settlement between the Federal Communications Commission and major broadcasters requires them to commit a certain amount of airtime to independent musicians. But Clear Channel Communications, one of the four broadcasters that settled, is asking independent musicians to agree to forgo royalties in exchange for the exposure.
by Neda Ulaby, National Public Radio, June 21, 2007

Conservatives Dominate the Airwaves
According to a new report that indicates conservatives dominate talk radio, "92 percent of the political talk radio programming on the stations owned by the top five commercial station owners was conservative, and only 9 percent was progressive."
Center for American Progress, June 21, 2007

Webcasting

Web Broadcasters Plan Protests Over Royalties
Live 365 Inc., Pandora Media Inc., and Yahoo Inc.'s Yahoo Music are going silent on June 26 in a "Day of Silence" to protest the increase the new royalty rates set to go into effect on July 15.
by Sarah McBride, Wall Street Journal, June 21, 2007

Day of Silence Nears, AOL, Clear Channel Remain Aloof
A broadening number of internet-based radio stations are now joining the June 26 Day of Silence, part of a larger protest against imminent royalty increases. The group now includes heavyweights like Yahoo, RealNetworks and MTV Networks, though titans AOL and Clear Channel Radio remain aloof.
Digital Music News, June 21, 2007

Webcasting Rate Hearing in Congress, Next Thursday
On Thursday, June 28, the House Small Business Committee will hold a hearing entitled 'Assessing the Impact of the Copyright Royalty Board Decision to Increase Royalty Rates on Recording Artists and Webcasters.' The hearing will examine the decision to raise rates, the impact it will have on Internet Radio, and the challenges of providing fair compensation for copyright owners while maintaining a business environment that allow small Webcasters to thrive.
Radio and Internet Newsletter, June 21, 2007

Net Neutrality

An Explosion of Comment on Net Neutrality
In the three-month period for public comment on Net Neutrality, over 11,000 people filed comments to the FCC, including private citizens, lobbyists, and companies like Google. Most of the comments favored the preservation of an open internet
ZDNet, June 21, 2007

FCC Commissioner Takes Brave Stand for Open Access
FCC Commissioner Jonathan Adelstein announced his support for open access internet and its importance in fostering competition.
by Timothy Carr, Huffington Post, June 21, 2007

Google Files Net Neutrality Pleas with FCC
Google filed 47 pages of comments on Net Neutrality last Friday. In the comments, Google outlines a list of what the company believes is okay and not okay for broadband providers to do in controlling the internet.
by Jason Lee Miller, WebProNews, June 19, 2007

2008 Candidates Split Over 'Net Neutrality'
Net Neutrality is a hot issue in the 2008 Presidential Election. Find out what the candidates are saying about it and if they're taking action in this article from NewsMax.
by John Mercurio, NewsMax.com, June 19, 2007

Music Industry

V2 Inks With Peter Gabriel's We7 for DRM Free Ad Supported Downloads
The download service We7 is offering free (and DRM-free) downloads. "The advertising attached to the music will ensure that artists receive royalties and consumers get and can share DRM-free music. After a period of time users will have the choice to have the track ad free and there's an option to buy the track ad free at a normal price."
Hypebot, June 20, 2007

The Record Industry's Decline
Rolling Stone examines the fall of the record industry in this two-part article.
by Brian Hiatt and Evan Serpick, Rolling Stone, June 19, 2007; Part 1 and Part 2

Politics and Hip-Hop Are Doing a Mash-Up
Newsweek’s Steven Levy discusses the legality of creating mash-ups with Congressman Mike Doyle and mash-up artist Greg Gillis (Girl Talk).
by Steven Levy, Newsweek, June 25, 2007 issue

Can Rap Regain Its Crown?
Although the entire record industry has been suffering as of late, sales of rap records have suffered more. Possible factors for rap's decline include the emphasis of selling singles over albums and the overall decrease of quality in recent rap.
by Steve Jones, USA Today, June 15, 2007

Copyright Law

WIPO Broadcasting Treaty Talks Break Down
At issue at this meeting was a proposal to increase the rights of broadcasters and cablecasters over their transmissions in order to prevent signal theft. The discussion stalled progressively as objections and alternatives to language in the chair’s unofficial draft treaty proposal piled up, sources said. Read more about the disagreements here:
IP Watch, June 22, 2007

Other

Required Reading: the Next 10 Years
Intellectual property and copyright law pioneer Larry Lessig announced that he is stepping back from his role in the copyright law community to focus on "corruption" related issues.
by Larry Lessig, Lessig Blog, June 19, 2007

The day the music dies

After decades of talking and singing about it, the date for the death of music has finally been set -- it's Tuesday. No, not really, but many webcasters including Live365, Launchcast, MTV, RealNetworks and others will pull the plug on their broadcasts that day to protest the looming increase in the royalty rates they pay. It is being billed as a "Day of Silence."


As we have written about before, many webcasters say the new rates are so high they will be forced off the air. The new rates are scheduled to kick on July 15th. Legislation is working its way through Congress that would knock down the new rates, which were levied by SoundExchange.

"On Tuesday, thousands of webcasters will call on their millions of listeners to join the fight to save internet radio and contact their Congressional representatives to ask for their support of the Internet Radio Equality Act," declared Jake Ward, spokesman for the SaveNetRadio coalition.

Low power radio bill drops as Clear Channel causes more static

There were two very interesting -- but related -- developments on the radio front today. First, Congressman Mike Doyle (D-PA) and Lee Terry (R-Nebraska) announced this morning at a teleconference they would introduce a bill that would clear the way for the creation of low power FM radio stations in urban areas.


Given the shrinking playlists and bland programming brought about by radio consolidation over the last decade, low power FM has the potential to create radio that is truly radio: local voices, cutting edge music and genres that are not regularly heard on commercial radio (i.e. jazz and bluegrass).

Or as Indigo Girl Emily Saliers put it on the teleconference:

"This about the airwaves belonging to the American public," Saliers said. "This is a way to realize the beauty and the differences. This is a way for communities to express themselves."

What's most exciting is that the bill has a good chance of passing. The National Association of Broadcasters had argued (in opposing similar bills in the past) that low power stations would interfere with full power stations next door on the dial. That argument, however, has been demolished by a congressional commissioned study. Here's a summary.

An MP3 of the press conference can be found here.

The other bit of news is not so good, and involves Clear Channel.

You remember several years ago, in 2005, former Attorney General, now New York Governor, Eliot Spitzer caught several major labels and major radio companies with hands in each others cookie jars engaging in payola -- receiving payments from record companies to play certain records?* Sure you do, his investigation garnered national headlines and resulted in fines and penalties from several major labels that exceeded $30 million.

Earlier this year, the Federal Communications Commission joined the fight announcing a settlement with Clear Channel and three other major radio networks after an investigation into the same payola allegations raised by Spitzer’s investigation.

As part of the settlement with the FCC, the radio networks agreed, among other conditions, to air 4,200 hours of local and independent music on their stations. This meant that the talented artists that had long been excluded from the airwaves in favor of payola driven play lists were finally getting a small bone.

(FMC never understood the logic that playing popular indie bands like the Shins and Arcade Fire on the radio was any kind of penalty…but heck, 4,200 hours of good music on the radio is better than none so we weren’t complaining.)

It turns out, we should have been. Recent revelations show that Clear Channel has decided to use it’s olive branch as a cudgel to force local and independent artists to give up hard won performance royalties as a condition for consideration for play. (Hear the story on NPR: http://www.npr.org/templates/story/story.php?storyId=11250011).

Per the settlement, the broadcaster set up an online application for local and independent artists to submit their music for airplay on each of its stations. The applications are on a web page attached to each Clear Channel station web site (i.e., www.dc101.com/cc-common/artist_submission.)

The application requires the artist to approve a licensing agreement that (oops) does away with his or her digital performance right. In other words, Clear Channel is asking the artists to sign away their right to get paid a royalty just to allow Clear Channel to consider playing their music.

The move also flies in the face of the "Rules of Engagement" the broadcasters agreed to as part of the payola settlement, which include the following provision: "Radio shall not ask for or expect, either directly or indirectly, any quid pro quo to play music."

How is Clear Channel showing contrition for allegedly engaging in an illegal practice?

It isn't.

“This is outrageous,” said FMC Executive Director Jenny Toomey. “This is like the fox getting caught in the hen house a second time and arguing that he shouldn’t get in trouble because he was leaving the hens alone…he was just eating all their eggs.”

A further irony is that Clear Channel’s move to require artists to sign away their performance rights is kind of redundant. In the United States, the commercial broadcasters have managed to avoid paying performance royalties for over the air broadcast of music. This means that when a song is played on the radio, only the songwriter is paid whereas in 75 other countries both the songwriter and the performer are paid.

More outrageously, in 1995, when the Digital Performance Act was passed establishing a performance royalty for digital radio The National Association of Broadcasters, the lobby group for the radio companies, successfully negotiated an exemption from having to pay it on H.D. radio streams. That’s right, the richest, largest and most powerful broadcasters -- including Clear Channel -- secured an exemption for themselves. Other digital broadcasters such as Live365, Sirius and XM pay the royalty.

You may wonder why Clear Channel is asking artists to sign away rights they normally don’t have to pay because of their already negotiated exemptions. Well it may just be because Clear Channel’s move comes as strong momentum is developing in the artist community to demand that radio broadcasters come in line with the rest of the world and finally pay a public performance royalty for terrestrial and digital radio.

The effort to extend the public performance right to over the air broadcasts is going to be a huge struggle, but there is broad consensus in both the artist and the technology communities that the digital performance exemption that the broadcasters enjoy is patently unfair. In other words, if the digital performance right exists, everyone should pay it, particularly the wealthy broadcasters.

Forcing artists to sign away their rights in an application document is just one of the many ways that Clear Channel is helping the artist community demonstrate just how greedy big radio has become.

Now why is it that you can’t afford a performance right again?


Footnote:

*FMC has long fought to rid the airwaves of payola. Our recent study “False Premises, False Promises” (www.futureofmusic.org/research/radiostudy06.cfm) documents the role that radio consolidation has played in concentrating radio access into the hands of a very few gatekeepers leaving it vulnerable to financial influence. In this study we identified Clear Channel as the largest and most influential gatekeeper with hundreds of radio stations under their control.

Blur drummer: there's no other way than ditching DRM

DRM has taken its lumps in recent months -- EMI announced it was dumping the anti-copy coding from its tracks and Amazon said it would launch its new music store without DRM laced music. Blur's drummer Dave Rowntree is now getting in on the act saying the record industry should have figured out a decade ago DRM was not the answer to piracy.

"DRM was doomed to fail because the people who it was designed to stop, as in the counterfeiters or the mass file sharers or the people doing it for political reasons could easily bypass it," he said.

"But the people who were caught in the trap of DRM were the ordinary people who wanted to play their CDs on their computer as well as their CD recorder or who wanted to make a tape of it to put on in the car who were doing things that most people regardless of the law would regard as legitimate activities. "


"They have become very much the establishment…by the time that the industry was starting to fight what they saw as the war against file sharing they really weren't in anybody's good books any more, they didn't have the goodwill of the people whose behaviour they were trying to control."

See the full interview from Out-Law.com

Thursday, June 14, 2007: This Week in News

Webcasting


Major Webcasters to face billions in new fees? The CEOs of the four leading internet radio broadcasters, RealNetworks, Yahoo, Pandora, and Live365, say the new annual $500/channel administrative fee would force their companies alone to pay $1 billion per year to SoundExchange ­ without including actual royalty payments.
by Anne Broache, CNET, June 7, 2007

Web spinners and royalty collectors
Why should webcasters have to pay royalties to labels and performers when local broadcasters don't? If an online station builds a business around music, what share of the revenues should go to the copyright owners? Publisher Kurt Hanson and Recording Artists' Coalition attorney Jay Rosenthal debate the webcasting rates over three days of posts.
Los Angeles Times, June 11-13, 2007

Indecency

FCC Needs a Pacifier, His Commission Needs a Clue
FCC Commissioner Kevin Martin uses profanity multiple times in a press release reacting to the court's decision on FCC's arbitrary indecency standards.
by Ryan Blethen, Seattle Times, June 8, 2007

Net Neutrality

The Deciders of Network Neutrality
Major politicians are becoming more vocal in the debate on net neutrality. VoIP gives a quick summary on the members of Congress and 2008 Presidential candidates who have been active on the issue.
by Robert Poe, VoIP News, June 13, 2007

Is Content Filtering the New DRM?
The LA Times is reporting that AT&T plans to filter copyright infringing content from their networks. Michael Geist questions if this is the proper solution to copyright problems and points to the risk of filtering legitimate content.
by Michael Geist, Michael Geist blog, June 13, 2007

Maine is the First State in Nation to Pass Net Neutrality Resolution
Maine passes a resolution that explicitly affirms the importance of net neutrality to small businesses, to consumers, and to democracy in general. With this resolution, Main sets the precedent for other states to pass legislation to preserve net neutrality and pressures the federal government to recognize it as a national issue.
Maine Civil Liberties Union, June 12, 2007

Sen. Kerry: Open the Airwaves for a Better Internet
Senator John Kerry expressed support to make the Internet "more competitive, affordable and widespread" in a letter to FCC Chairman Kevin Martin. He joins a slew of politicians, including Presidential candidate John Edwards, who have spoken up on the upcoming 700mhz auction.
by Timothy Karr, SavetheInternet.com, June 12, 2007

Radio

Civil Rights and Rural Groups Rush to Endorse XM/Sirius Merger
The proposed XM-Sirius merger, which would create a monopoly on satellite radio in the U.S., has been endorsed by civil rights and rural groups. These groups claim that without the merger, satellite radio will fail and eliminate the niche programming that commercial radio does not provide.
by Matthew Lasar, Lasar's Letter, June 10, 2007

NAB Ramps Up Anti XM/Sirius Merger Efforts
NAB lets the world know its feelings about the proposed merger with a banner outside of its Washington headquarters, which reads "Do the Math: XM + Sirius = Monopoly."
Broadcasting and Cable, July 14, 2007

Big Radio Makes a Grab for Internet Listeners
Corporate radio is finally realizing that it must interact with listeners via internet to combat the "erosion of listeners who are turning to iPods, podcasts and other sources for entertainment."
by Jeff Leeds, New York Times, June 12, 2007

The Black Stake in Low Power Community Radio With the help of the Prometheus Radio Project, WMXP, a low power radio station operated by the Malcom X Grassroots Organization, began broadcasting its signal in Greenville, North Carolina on Sunday. WMXP can now serve the interests of the local community that have been largely ignored by corporate broadcasters.
by Bruce Dixon, Black Agenda Report, June 13, 2007

Music Industry

Apple Sparks London-Based iTunes Festival
Apple has jumped into the live music promotion business, getting behind a month-long series of shows at London's Institute of Contemporary Arts. Artists like Amy Winehouse, Mika, Travis and Stereophonics will play to audiences of roughly 350 throughout July.
Digital Music News, June 12, 2007

The Bon Jovi Bundle
In an unprecedented move, Bon Jovi has bundled digital sales of his album Lost Highway pre-sale tickets to an upcoming show.
Coolfer Blog, June 8, 2007

The CD Is Dead? Make That The CD Store. Coolfer comments on a recent Huffington Post article that argues the CD is dead. Coolfer says the format's not dead, but the CD store is.
Coolfer Blog, June 11, 2007

Copyright Law

New Artist Bloc to Fight for Airplay Pay Some of the music industry's most recognizable names are signing up for what likely will be a bruising legislative battle as they attempt to win a change in the law that would force broadcasters to pay a public performance right.
by Brooks Boliek, Hollywood Reporter, June 14, 2007

Treating Downloads Like Drug Deals
The Department of Justice proposes alarming methods of punishing copyright infringement, including the destruction of "'any property used, or intended to be used, in any manner or part, to commit or facilitate' infringement."
by Gigi B. Sohn, Business Week, June 5, 2007

A proposal on monetizing peer-to-peer

We all know unauthorized downloads far outstrip legal downloads every year. Therefore, how to monetize unauthorized peer-to-peer downloads is one of the $64,000 questions facing the music industry right now. FMC intern Jeremy Sheeler put together this look at some attempts to take a crack at the problem:

Is Ad-Supported Music the future of digital music distribution? Jupiter Analyst Mark Mulligan seems to think so, as he has outlined in his recent report The Future of Digital Music: Fighting Free with Free. According to Big Champagne, a company that tracks activity on unlicensed Peer-to-Peer Networks, downloads on these networks are surpassing a billion a month. So the dilemma is: How do you go about monetizing these downloads to compensate the copyright holders of the songs? Because, as Vice President of Sales and Marketing at Big Champagne, Joe Fleisher, has said, "Competing with free means you have lost." Additionally, it is not only free that they are competing with but also the availability of live tracks, rarities, out-of-print, demos and other things that aren’t even available for sale but are available for download on the Peer-to-Peer Networks.

There have been a lot of companies that have popped up recently that all have different ideas of how to create advertising supported digital music distribution including Spiralfrog, Revver and Pandora. Intent Media Works is one that seeds existing peer-to-peer networks with copies of participating label’s songs that contain advertising to help pay for the transaction. Qtrax is another company that will be offering content from all four major labels as well as many independent labels using a heavily restricted, ad-based system that allows the downloader five listens and then an offer to buy the song. The newest company to try a model of ad-supported music is a Peter Gabriel backed company called WE7. It will not be peer-to-peer, but rather music that’s downloadable from their website, although they are planning on creating a community aspect that they hope will rival peer-to-peer communities.

Each company has come up with its own way of embedding the advertisements into the downloads. Some plan to offer a range of ad formats including sponsorships, videos and display units. WE7 plans on putting a ten-second advertisement at the beginning of each song that after a certain number of listens or a certain time period (they haven’t specified which yet), you can then download an advertisement free track. It will be a specific advertisement that, theoretically, should appeal to you based on your listening habits and some demographic information that they collect about you.

This distribution model may work for major labels that engage a more casual music listener that is more interested in singles than full albums and is used to listening to advertisements when they hear the songs on the radio anyway. But for an independent artist, this may not be the way that they want to distribute their music to their fans because they may not want to be associated with advertisers if they have no control over with whom they get associated. If an artist or label can have pre-approval over the advertiser, then they may not have a problem being supported by their advertising money. But an independent artist, generally speaking, is independent because they want control over their music and their image, which has a lot to do with who they associate themselves with.

So far it does not seem that any of these companies have found a viable way to make this amalgam of music and advertising work correctly, but it is definitely a necessary process. The entire ad-supported model may not even work, but at least companies are starting to think outside of the box. New and innovative ways of digital distribution are needed to try and attract people away from unlicensed music that does not compensate the copyright owner. As Terry McBride, the chief executive of the Nettwerk Music Group, a label and artist management company that works with Intent Media Works, has said companies have to “figure out how they’re consuming music, market to that and monetize their behavior”.

A crackdown on piracy or the web?

ATT announced today it would begin filtering pirated music, films and other content from its network -- something every ISP had long avoided up until this point. The L.A. Times reports ATT began working with movie studios and record companies last week to develop technology to keep the biggest pirates off its service.


From the L.A. Times:

As ATT has begun selling pay-television services, the company has realized that its interests are more closely aligned with Hollywood, [James] Cicconi, [ATT's senior vice president] said in an interview Tuesday. The company's top leaders recently decided to help Hollywood protect the digital copyrights to that content.

"We do recognize that a lot of our future business depends on exciting and interesting content," he said.

But critics say the company is going to be fighting a losing battle and angering its own customers, and it should focus instead on developing incentives for users to pay for all the content they want.

Few doubt that piracy is a significant problem. The major U.S. studios lost $2.3 billion last year to online piracy and an additional $3.8 billion to bootleg DVDs, according to industry statistics. AT&T can help only with the online losses, which the industry said were growing faster than those from counterfeit DVDs.

University of Ottawa professor and Toronto Star technology columnist Michael Geist takes issue with the move on his blog. The piece is titled "Is Content Filtering the New DRM?"

There was a time when Internet service providers would not touch the idea of blocking or filtering content, particularly after the Stratton Oakmont decision in the U.S., which intimated that ISPs that got into the content monitoring business would face potential liability for legal issues arising from such content. No longer. Over the past two years, there has been growing concern about net neutrality issues including content blocking (Telus), application discrimination (Shaw on VoIP), traffic shaping (Rogers), and content delivery tariffs (Videotron).

...

Not only does this sound like a DRM-style pipe dream - content filtering replacing DRM as the mistaken "solution" to copyright concerns - but it raises enormous concerns about false positives that filter out legitimate content and privacy implications for customer monitoring. Moreover, by moving down this path, ATT faces the prospect of demands to monitor other content, aggressive legislative requirements to do so, and potential liability when things go wrong. Rather than working on ways to respond to consumer demands, this is yet another step toward annoying the public and opening a pandora's box of legal concerns.

Friday, June 8, 2007: This Week in News

DRM

Apple Debuts Unprotected Songs Online
Apple begins selling DRM-free songs from EMI on Itunes; songs downloaded from iTunes will play on other digital music players for the first time.
by May Wong, Associated Press, May 31, 2007

Amazon Store to Sell Music Free of Copy Protection
Amazon.com plans to launch a digital music store later this year. Their MP3-only strategy, says founder and CEO Jeff Bezos, "means all the music that customers buy on Amazon is always DRM-free and plays on any device."
Billboard.biz, May 16, 2007

Webcasting

Online Radio Royalty Fight Reaches New Pitch
Webcasters appeal Copyright Royalty Board ruling in DC Circuit Court and plan to file a motion to stay the March 2007 CRB ruling on new royalty rates. Support in House and Senate is increasing for Internet Radio Equality Act thanks to grassroots campaigning by webcasters.
by Sarah McBride, Wall Street Journal, May 31, 2007

NPR Joins Appeal of Online Music Royalties
NPR teams up with internet broadcasters in an appeal against CRB decision to raise royalty rates.
by Seth Sutel, Associated Press, June 1, 2007

Radio

Women and People of Color Lacking Among Radio Owners
A Free Press study indicates women and minorities are hurt by radio consolidation.
HearUsNow.org, June 5, 2007

Sound of Success: WETA Thrives on Classical Music
After switching from news and talk programming to classical music, WETA, the Arlington public station, sees ratings double and pledge contributions rise.
by Paul Farhi, Washington Post, June 5, 2007

Net Neutrality

Edwards to the FCC: Free Our Spectrum
In letter to FCC Chairman Kevin Martin, Presidential candidate John Edwards urges FCC to use broadband spectrum auction to enhance Internet access in rural and underserved areas.
by Matt Stoller, mydd.com, May 30, 2007

Edwards, Huckabee Support an Open Internet, McCain Waffles
Hillary Clinton and Barack Obama and others announce support for net neutrality following John Edwards' letter to the FCC.
SavetheInternet.com, May 30, 2007

Music Industry

Q & A with Trent Reznor of Nine Inch Nails
Trent Reznor talks frankly about being on a major record label, his frustrations with the industry, and why people steal music.
by Neala Johnson, Herald Sun, May 17, 2007

Alan McGee: Why I'm Giving Up My Label

Alan McGee discusses shutting down his label, Poptones, in a music industry where going independent has more pros than cons.
The Independent, May 11, 2007

Indecency

Court Overturns Flawed FCC Indecency Decisions
The U.S. Court of Appeals decides that the Golden Globes case (remembered as the Bono F-word case) and other cases of indecency were unlawful due to their arbitrary nature. This decision lifts the overly broad restrictions that limited many quality television shows.
by Jonathan Rintels, Center for Creative Voices in Media, June 4, 2007

The real price of indecency

Kevin Martin is god-darn angry. The FCC chairman has lashed out over a ruling this week by a New York Appeals Court that overturned his agency's citing of several major networks for on-air expletives uttered by Nicole Richie, Cher, a contestant on "Survivor," and others. Interestingly, his own statement is laced with expletives.


The court rebuked the FCC Commission for being "divorced from reality." It's not hard to see why: the commission ruled the mere utterance of certain words like "shit" or "fuck" implied that certain obscene excretory or sexual acts were carried out. Of course -- in reality -- these words are often used as simple exclamations.

Back to Martin. Here's an excerpt from his statement on the ruling:

"The court even says the Commission is “divorced from reality.” It is the New York court, not the Commission, that is divorced from reality in concluding that the word “fuck” does not invoke a sexual connotation."
...

"If ever there was an appropriate time for Commission action, this was it. If we can’t restrict the use of the words “fuck” and “shit” during prime time, Hollywood will be able to say anything they want, whenever they want."

Now consider what Cher actually said at the 2002 Billboard Awards:

“I’ve had unbelievable support in my life, and I’ve worked really hard. I’ve had great people to work with. Oh, yeah, you know what? I’ve also had critics for the last 40 years saying that I was on my way out every year. Right. So fuck ‘em. I still have a job and they don’t.”

Of course, the fines are part of the Bush administration's larger war on indecency that infamously climaxed with the brouhaha around Janet Jackson's wardrobe malfunction at the Super Bowl.

The real price of indecency is revealed when we look at the environment it has created. Take one example: Remember the flap over "Postcards from Buster?" PBS pulled an episode of the kid shows that showed the rabbit Buster visiting a lesbian couple in Vermont just before the new Secretary of Education Margaret Spellings sent a letter to PBS threatening to decrease funding if it didn't pull the show.

Is the real danger what kids are hearing on TV or what they're not seeing?

Women, minorities shut out of radio ownership

Women and minorities have largely been shut out of radio ownership in this country, in part, because of media consolidation, a new study by media reformers Free Press has found. The study concluded women and minorities own 6 and 7.7 percent respectively of the nation's full power radio stations.

The study is the first ever complete ownership assessment of the nation's airwaves. Significantly, the study found stations owned by women and minorities tended to feature more local and diverse programming than those stations owned by white men.


The study found equally dismal representation of women and minorities at the top levels of radio station management, and that minority ownership levels are low even in areas where there are high concentrations of minorities.

Of course, media consolidation has not only affected women and minority ownership. The study makes a great companion piece to a study put out by the Future of Music Coalition last year that found radio listener's options have decreased as the market became more consolidated. The study found just 15 formats make up 3/4 of commercial radio formats. Niche formats like jazz and bluegrass are almost entirely absent from commercial radio.

Both studies are cautionary tales on media consolidation. Hopefully, the FCC does a little reading as it once again discusses whether to eliminate limits on media ownership.

Whitacre's going away party

It seems the good folks over at Save The Internet have managed to get their hands on ATT CEO Ed Whitacre's final speech to his board of directors. Whitacre, who will receive a $158.5 million retirement package complete with access to ATT's corporate jet, just can't resist squeezing customers one more time.