This Week in News

It's been a while since we've rounded up the latest music-tech-policy news. It's easy to get distracted — in case you didn't notice, there's an election going on! Anyway, here's This Week In News: The Halloween Edition.

From MP3 to Audio in 3D
Karlheinz Brandenburg of the Fraunhofer Institute for Digital Media Technology helped develop the MP3 format more than a decade ago, setting the stage for a new era of music consumption. Lately, he's been adding a new dimension to his audio achievements — technology to deliver sound in true 3D.
Jon Healey, L.A. Times

First-Week Blowout: Wal-Mart Pushes AC/DC Past 780,000
Wal-Mart helped AC/DC sell more than 780,000 copies of Black Ice last week, the fruits of an exclusive deal. (Album not available as digital downloads.)
Digital Music News

Lime Wire Signs Lewis Black's Record Label
The renegade file-sharing service will sell Comedy Central albums in its download store. Will the major labels be next?
Devin Leonard, CNN

Finding a Gold Mine in Digital Ditties
Joel Moss Levinson always knew he had a calling in life. But it took cheap video cameras, YouTube and some desperate corporations to show him what it was.
Stephanie Cifford, New York Times

RealNetworks Boosts Music Subscribers; Rhapsody Up
After a period of stagnant growth, RealNetworks has now reached a total of two million music subscribers.
Digital Music News

Latest Staffing Casualty: eMusic Triggers Layoffs
Independent music store eMusic is now reducing its staff, according to details surfacing late Wednesday. The company confirmed a ten percent cut to the Wall Street Journal, based on a top-level staff of 100. The reductions were characterized as a proactive move ahead of continued economic malaise and resulting pressure on subscriptions.
Peter Kafka, Digital Music News

All You Need Is a Digital Guitar to Join the Beatles
The Beatles made their first foray into digital music yesterday with a video game that will allow fans to play along to their entire catalogue. The surviving members of the band have been resistant to new technology, refusing to allow their music to be downloaded from online stores such as iTunes. Instead, in the band's first significant move into the digital world, fans will be able to transform into any member of the quartet and sing, drum and strum along with their favourite Beatles songs.
Murad Ahmed, Times UK

The Monster Mash(up)
YouTube

Benefit for Sweet Home New Orleans

Our friends at Sweet Home New Orleans — a Big Easy non-profit that provides housing and assistance to musicians displaced by Hurricane Katrina — are the beneficiaries of a major bridal show at New Orleans' W Hotel on October 30, 2008.

But this isn't your mother's bridal show. As the press release states, "Operation Aisle Style is a party, a fashion show and an epicurean adventure inspired by intrepid travelers, libertines, alterna-wedding wunderkinds, Carolyn Gerin, creator of the best-selling Anti-Bride series by Chronicle Books, and Jennifer Stein, Editor in Chief of Destination I Do Magazine." That's a mouthful, but it sounds like a good time. And it's definitely for a good cause.

The event runs from 7:00pm - 10:00pm. If you're in the area and want to attend, RSVP at the Operation Aisle Style Facebook page, or via e-mail.

And stay tuned for more info about our Fourth Annual Artist Activism Camp, which takes place in New Orleans in December.

Being Your Own Marketer

Today's post at the Copyright Alliance blog got us thinking about how today's musicians develop a fan base. The digital revolution has led to unprecedented ways to connect with potential audiences, but the landscape can be tricky to navigate.

If there's any consensus about what you need to succeed, it's probably much the same as back in the analog era. Talent (even if it's currently only your mom or GF/BF who thinks you've got it) and persistence are still your best bet. The good news is that you've got tons of tools to start convincing the rest of the world.

While there's no shortage of new technologies to promote and distribute your work, getting going can seem daunting. FMC talked about ways to get your music out there at our "What's the Future for Musicians?" events in Chicago and New York City (as well as our earlier seminars in upstate NY) — we'll be archiving the presentations online as soon as they're available.

In the meantime, here are a few interesting places you can visit to learn how to "market yourself."

FMC Advisory Board member Derek Sivers is a hero to many for having started CD Baby — a service that's helped countless indie musicians sell physical discs and get their stuff in digital stores. Derek recently sold the company, but he hasn't given up on helping artists promote their work. His site has tons of DIY tips for musicians, which he's constantly refining and adding to.

Randy Chertkow and Jason Feehan are the authors of a book called The Indie Band Survival Guide, and they also run a website of the same name. (We got to meet Jason in person at our Chicago seminar). The book you have to pay for, but the PDF that it's based on is still free. The site has tons of information about tools you can use to promote your music.

Ariel Hyatt is a publicity expert who appeared at our Big Apple event. Her main site is here. (She's also got a new book called Music Success in Nine Weeks.)

David Rose has a blog called Know the Music Biz that's full of good tips.

It used to be you pretty much needed to have a label or distributor (or spend a lot of time consigning stuff at individual record shops) to get your tunes to retail. Nowadays, you can "stock" your music with all the leading digital stores for a nominal charge. There's the aforementioned CD Baby, which includes digital servicing when they stock your physical disc (you can also opt for digital-only), TuneCore (which also offers CD duplication and marketing tips) and ReverbNation — which recently went from being just a streaming player to a full-service digital distributor.

Of course, once you've made your music available, you gotta let people know about it. Today's artists have a lot of different means to do so — podcasts and webcasts (either their own or other people's), blogs, social network sites and online "radio" stations like Pandora and last.fm. And let's not forget good-old-fashioned terrestrial radio. Indie artists may be mostly locked out of commercial stations, but there are stil plenty of opportunities with non-commercial, Low-Power FM and college broadcasters.

The bottom line is that you've got great deal more opportunity to self-promote than at any other time in history. This might mean a lot of work that doesn't seem to fit into the "rock star" stereotype of boundless leisure. But it also means more control over your musical destiny — something pretty rare in the days of bottlenecks, gatekeepers and middlemen. (If you think musicians should be able to make their own choices about how their music is distributed online, you should check out our Rock the Net campaign for net neutrality.)

Of course, we're curious: what are some of YOUR favorite means to promote your music?

Payola and Indie Access to Commercial Airwaves

As part of our ongoing work to improve the state of terrestrial radio and create more opportunities for artists to reach potential audiences, FMC has worked closely with the American Association of Independent Music (A2IM) — a group that represents a broad coalition of independent labels — to determine whether independently-released music is reaching the commercial airwaves.

Having observed trends in terrestrial radio since the turn of the millennium, we realize two things: a) consolidation in station ownership after the 1996 Telecommunications Act has led to a loss of independent owners and local control over programming decisions at commercial stations, and b) pay-for-play schemes like payola have made it incredibly difficult for non-major label talent to score commercial radio play.

While consolidation still remains a problem, attempts have been made to curb payola. In 2003, then-New York Attorney General Eliot Spitzer launched an investigation into whether the nation’s biggest radio chains were participating in payola. The answer was a resounding yes. Spitzer uncovered blatant pay-for-play arrangements, including major label inducements and a corrupt system of middlemen (independent promoters) who acted as gatekeepers to commercial programming. (You can read some of Spitzer’s published evidence here, or learn more about the history of payola and the NY AG investigations in our Payola Education Guide.)

While Spitzer's probe resulted in consent decrees and the collection of over $30 million in fines from the four major labels, it was up to the FCC to complete the investigation on radio stations. In March 2007, the FCC decided to settle with the four largest radio station groups that had been accused of engaging in payola – CBS, Citadel, Clear Channel and Entercom. Although the agency was successful in collecting small fines from the station group owners and implementing consent decrees, the FCC resisted calls for oversight, leaving no means through which to guarantee implementation or compliance. So, the independent music community – led by A2IM and FMC – helped implement a separate set of voluntary "Rules of Engagement" with the broadcasting chains. The hope was to create the conditions for a more productive relationship between the indies and the major broadcasters.

So where are we, some 18 months later?

A new survey of A2IM label members conducted by investigative journalist (and former FMC Communications Director) Justin Jouvenal found that indie labels are still having difficulty getting airplay on commercial radio.

A2IM sent out a 42-question survey to its label membership, which asked about whether their relationship with commercial radio had changed over the last year. The report, which was released on October 20, 2008, at an A2IM-sponsored roundtable discussion in New York City, revealed near-unanimous sentiment among label owners; little has changed over the last year and a half, with 92 percent of label respondents describing their relationship to commercial radio as “the same” as before the Consent Decree and Voluntary Agreements. You can see the press announcement here; read the report here; and download the full report with appendices (PDF) here.

FMC continues to research, analyze and document commercial radio play to better understand if and when independent music is played on corporate radio. At the same time, we continue to push for and support non-commercial and Low-Power FM as an alternative to the homogenized sounds heard on commercial stations. We also believe that, for terrestrial radio to be viable in the 21st century, it must reaffirm its commitments to serving the communities in which it holds licenses. In other words, it needs to think, program, and act locally. In this way, we hope to rebuild the vital connections between listeners, artists, labels and programmers so everyone can benefit from the public airwaves.

For more information on radio issues, visit our articles and research pages.

MySpace Music: Penthouse or Third-Floor Walkup?

By guest blogger Greg Capobianco
October 21, 2008

When MySpace Music launched last month, early reviews were generally mixed, although most were optimistic for what the service could eventually become. MySpace’s revamped music component was long in development, so the fact that it was finally released was newsworthy in and of itself. A few weeks in and over a billion streams later, we can finally look a little deeper at the quality of the service and what it could mean for artists and fans.

The Welcome Mat
The MySpace Music interface itself is probably the chief point of contention for users. Although it’s likely that fans of the current MySpace design will find the layout completely acceptable, those who already think the core site is cluttered and obtuse will probably feel the same about the company’s music venture. That said, there were no user interface dead ends in our testing and, despite lacking some design refinements, it’s solid enough in terms of functionality. Managing and sharing user-created playlists is easy, and purchasing music is as simple clicking the “buy” button, which takes you to the Amazon.com MP3 Download Store — widely considered to be the largest legitimate competitor to Apple’s iTunes.

The Directory
Browsing by “Top Artists” provides three lists, each one featuring 100 singers/bands. It’s nice that MySpace Music breaks out the top major label, indie and unsigned artists into separate categories, potentially preventing non-major acts from being buried in the listings. You can also browse by genre, which by default sorts by the most number of plays the artist has received (at time of writing, Panic at the Disco, Akon, and the Ying Yang Twins).

The sheer number of artists on MySpace Music makes casual browsing somewhat difficult, but no more so than sorting through artists’ profiles on MySpace itself. The search criteria/filters help, as they’re tailored particularly for music (by influence, genre, etc.). Still, the service works best if you have an artist in mind, instead of stumbling around.

When visiting an artist's page, users can stream music via the embedded player, which requires no additional software download and will be familiar to most MySpace users. With the new playlist feature, you can add songs you like from artists’ pages directly to your own personal playlist, and share them with your MySpace friends or place on your own MySpace profile page. For regular users, this enhanced functionality is probably the most noticeable new feature, though the playlists cannot be shared with or embedded other sites like Facebook or on personal blogs.

As for the purchasing process, Amazon.com MP3 links appear next to each song in the player (if they are available in the store). The process is quick and simple, provided you have an Amazon account and have used the MP3 store before. If you haven’t, you’ll have to go through a standard Amazon account creation process before the song will download. After the initial set up, downloading songs is simple. Perhaps most importantly, you’ll be able to play them on any device – including the iPod – as all music sold from Amazon is DRM-free.

The Rent
Under the current agreement between the four major record labels and MySpace, the labels make money in two ways. First, the labels are reported to get a portion of advertising revenue. Second, MySpace has agreed to give each of the four major labels equity stakes in MySpace Music in exchange for their participation. The specifics on how the revenue is spilt among the labels remains unclear, with all parties seemingly uninterested in revealing the details of the deal.

While MySpace Music may be the most robust attempt yet to build an ad-supported model, some questions remain. First, there has been no announcement about whether the labels plan to share the equity with their artists. FMC would hope that major label artists and their management team would be asking these questions during the next royalty accounting period. Second, it’s been widely reported that independent artists and labels – mostly represented by UK/EU’s Merlin, IODA and A2IM – were not offered similar equity arrangements. This means that many independent artists – the kind of artists that built up MySpace’s public profile and traffic – are not completely sharing in the wealth. For now, even though independent artists will be able to collect song royalties, they will not be able to collect additional revenues from the ad-supported service.

Unsigned musicians are worse off. While MySpace Music does enable the user to include unsigned acts’ music in their personal playlist, the artist has no means to collect any ad revenue or even offer their music for sale. As it stands, if you do not have an agreement with MySpace, you cannot participate in the most lucrative parts of the service. MySpace claims they are working on “opportunities” for unsigned artists to participate more fully in future. The traditional method of unsigned artists uploading music to their profiles still exits, but so far there’s no way for them to collect money from the streaming of their music.

MySpace has created the underpinnings of a potentially great service, and now they need to make some key improvements. While they should be commended on implementing a universal playlist solution and integrating a DRM-free, legal download store, the service cannot receive full marks until it puts independent and unsigned artists on a level playing field with major label talent. Until the equity gap is narrowed, the service gets a mixed review. MySpace Music is off to a decent start, but there’s more work to be done.

Net Neutrality and Urban Music: Part III

Here's the third part of our series on Net Neutrality and Urban Music, written by hip-hop journalist Eric K. Arnold. The article (which is archived in its entirety here), offers an in-depth look at what the open internet means to the urban music community.

Here's Part I and Part II, in case you missed them.

To learn more about net neutrality, read our net neutrality fact sheet and join our Rock the Net campaign.

Enter the Message Police

Internet filtering techniques are standard practice in countries like Belarus, Burma, China, Cuba, Egypt, Iran, North Korea, Saudi Arabia, Syria, Tunisia, Turkmenistan, Uzbekistan and Vietnam, whose governments “seek to curtail freedom of expression on the Internet,” according to Reporters Without Borders. Yet while the U.S. government has a responsibility to uphold the Constitutional rights of its citizens, telecommunications companies appear to have no such scruples.

This topic is particularly relevant, because censorship has always been an underlying issue in hip-hop and urban music. In addition to direct censorship (i.e. the PMRC’s campaign against explicit rap lyrics in the early ’90s), indirect censorship also exists, mainly in the form of exclusion.

For instance, mainstream rap is often taken to task these days for sexist or violent content, which reflects on hip-hop as a whole. Yet rap’s critics often fail to point out that what you’re not hearing on commercial radio or seeing on video outlets is hip-hop that promotes positive or conscious sentiments – the overwhelming majority of which is released on independent labels. The same holds true for socially-aware or political hip-hop. Ask yourself, when was the last time you heard dead prez, Immortal Technique, Paris, or the Coup on your local “hot urban” radio station?

Without Net Neutrality, the Internet could turn from a fun place where anyone can be a star to a place where only corporate-approved artists get to dance. It also could amount to an end-around run on the First Amendment, if telecommunications giants like Verizon and Comcast have their way.

Both companies have already shown hints of employing below-the-belt tactics with regard to Net Neutrality. Internet free speech advocates have likened Comcast’s “traffic management” tactics to those employed by the Chinese government. According to CNET.com’s Chris Soghoian, “the techniques used by Comcast are essentially the same as those used by the Great Firewall of China.” As Indiana University of Informatics Associate Professor Jean Camp noted, “When China does it, we call it ‘censorship.’"

The potential harm of these practices is considerable. “We have seen network operators block political speech,” Christian Coalition of America spokeswoman Michele Combs said during an April 2008 FCC hearing at Stanford University, a charge she repeated a few days later during a Senate Commerce Committee hearing on “The Future of the Internet.” Combs (no relation to Sean “P.Diddy” Combs) was referring to the King James version of the Bible, but it just as easily could have been politically-explicit rap songs like Immortal Technique’s “The Fourth Branch” or the Coup’s “Captain Sterling’s Little Problem.”

On the bright side, an outpouring of public interest has made a difference on a Federal level, raising hopes that Net Neutrality will be upheld. On August 1, the FCC approved an enforcement order requiring Comcast to stop interfering with P2P files and to disclose its methodology for regulating Internet traffic. This provides some relief for, say, indie producers who send music tracks to artists via the Web, but is only one small victory in a much larger battle.
Making the Link to Urban Music

Net Neutrality is fast approaching critical mass, yet with few exceptions, the issue has flown under the radar of the urban community. As Lyrical Swords author Adisa Banjoko points out, “A little kid who has a two-way isn’t thinking about how that content gets to him.”

However, because today’s urban music audience is so reliant on the Internet, BET's Paul Porter says, “I think this is the one time where hip-hop could have a large voice.”

Yet that voice has so far been largely silent, quite possibly because urban indie artists and labels have been more focused on the issue of illicit downloading than ISPs filtering online content.
“No disrespect, but the concerns of artists. . . are minimal compared to the much larger and more stifling effect on the general exchange of information,” remarked Davey-D, who adds that upholding Net Neutrality is in artists’ own interest, even if they don’t realize it yet.

To Banjoko, “The MP3 thing is a really big red herring. While everybody’s arguing about that, they’re gonna lock down the rest of the game” – ‘they’ being telecommunications companies and corporate media. Congressman Ed Markey (D-MA), who has introduced pro-net a neutrality bill, used similar language at a May 6, 2008 hearing on the issue. “This whole idea that this legislation helps piracy is 100 percent wrong," Markey said. "It's a red herring. We should put an aquarium out here because there are so many red herrings floating around to mislead about what the intent of Net Neutrality is.”

Asya Shein of Fusicology.com says Net Neutrality has been overlooked by the urban community “because there hasn't been proper education to the artists and their reps that can help them better understand the consequences of this very possible looming situation.” It’s important, she adds, to “keep the net free and open for all — censorship online conflicts directly with the Constitution. It would affect all music communities if we had to worry about a controlled Internet.”
What You Can Do, Now

*Take a few minutes to do an Internet search on “Net Neutrality” and read up on the issue.
*Join Future of Music Coalition’s Rock the Net campaign to demonstrate your support of the open Internet.
*Net neutrality is currently being examined at the state and Federal legislative levels; learn more at SaveTheInternet.com
*Tell Comcast and Verizon that censorship is un-American.
* Attend an FCC hearing in your area.
*Forward this article to all your MySpace and Facebook friends.
*Record a song defending Net Neutrality, make a video of it and post it on YouTube.
*Write your favorite urban publication and ask them why they haven’t covered this topic in-depth.
*Support underground and/or indie artists by legally downloading their music.


About the Author:

Eric K. Arnold has been writing about urban music culture since the mid-1990s, when he was the Managing Editor of now-defunct 4080 Magazine. Since then, he’s been a columnist for such publications as The Source, XXL, Murder Dog, Africana.com, and the East Bay Express; his work has also appeared in the San Francisco Chronicle, Vibe, Wax Poetics, SF Weekly, XLR8R, the Village Voice and Jamrock, as well as the academic anthologies Total Chaos and The Vinyl Ain’t Final. Eric began his journalistic career while DJing on college radio station KZSC, and remembers well the early days of hip-hop radio, before consolidation, and commercialization set in. He currently lives in Oakland, California.

Net Neutrality and Urban Music: Part Two

The following is the second installment of hip-hop journalist Eric K. Arnold's article about net neutrality and the urban music world. (You can read the first entry here.)

For more information about why the open internet is crucial to the music community, check out our Rock the Net site. And stay tuned for Part III!


Changing of the Guard: The Evolution of Urban Gatekeepers

Having an Internet presence is especially critical to urban music because of the frenzy of ownership consolidation that all but eliminated small, independent commercial radio stations. As a result, urban radio has become formulaic and bland, with the same 20 or 25 songs in heavy rotation all across the country, and has rarely been accessible to independent artists not affiliated with major labels. (See “The Effect of Consolidation on Urban Radio” for more info).

The past few years have also seen the shrinking of the retail market for CDs. Large music-oriented retailers like Tower have given way to “big box” stores like Best Buy, and digital downloading has also taken a bite out of the retail pie.

The effect of all these trends on the recording industry has been considerable. While the independent labels’ market share continues to grow incrementally, major labels have taken a huge financial hit. Faced with lower revenues, their cost-cutting measures have included everything from dropping artists who don’t sell a certain number of units, to underpromoting acts not deemed a priority, to layoffs and the elimination of traditional A&R departments.

At the same time, commercial radio numbers are down overall. Major players in the radio industry like Clear Channel have begun to target the online social networking market as their desired audiences have increasingly become accustomed to surfing the web in order to hear new music.

Meanwhile, multi-tasking sites like Fusicology and Okay Player have become one-stop multimedia outlets for urban audiences — providing a digital alternative to traditional print publications — while online stations like Breakdown FM have presented music, news, and information left untouched by urban commercial radio. And Vibe.com has featured important political coverage missing from the newsstand edition.

By the same token, popular sites frequented by the young urban demographic like YouTube and MySpace have filled some of the role once played by A&Rs – developing new artists. For instance, The Pack and Soulja Boy built up their online buzz to viral levels, parlaying YouTube views and MySpace hits into commercial success and mainstream radio and video play. These days, many new rap songs are leaked first to YouTube, leapfrogging commercial radio in the buzz-building chain. After Ludacris’ “War with God” was posted online, Luda’s label manager Chaka Zulu told the Associated Press, "It had the Internet going crazy… (YouTube is) a viable marketing tool for us now."

All this has created a situation where the Internet has become a primary resource for the entire urban music industry – and a battleground where indie artists, major labels, radio stations, and telecommunications companies are all jockeying for position.

According to indie rap icon and label owner Paris, “The end result, in my opinion, will be that non-music retailers will soon become the new record companies…The main difference is that these new parent companies will treat their musical pursuits as advertising for the corporate entity, and will not rely on the revenue generated from sale of music at all. It will simply be used to generate interest in other products and services.”

“That’s why [the potential loss of] Net Neutrality is really scary,” BET's Paul Porter says. “Some of the things [telecommunications and cable companies] are trying to do is put a lock on musical freedom.”

He expresses concern that the same thing could happen to the Internet that happened to the radio industry. Urban radio was once “a beautiful thing,” he recalls, but “once consolidation hit, the variety went down, the quality went down.”

Davey-D — one of the few urban journalists who’s consistently covered net neutrality — predicts “a chilling effect” not just on artists, but also “folks gearing up to be their own media.”
He cites a recently announced merger between Clear Channel and Katz Media —which effectively consolidates over 1,200 online stations — as a revenue-siphoning move, which could result in a potential death blow for independent Internet radio. This development makes the fight to preserve net neutrality even more critical, since corporate-free online content is already being threatened.

At a recent panel discussion on the Future of the Independent Artist in San Francisco, Public Enemy’s Chuck D urged the audience to step up their Internet game:

“When (people) talk about net neutrality and preventing online radio shows from happening, or three years from now each email you send out is gonna be taxed with digital postage attached to it. . . these things are realities if you don’t take advantage of what’s out there now.”

As the online landscape continues to be shaped, preserving Net Neutrality becomes tantamount to protecting Freedom of Speech and Freedom of Expression – probably the two most important principles of the Constitution and the First Amendment.


About the Author:

Eric K. Arnold has been writing about urban music culture since the mid-1990s, when he was the Managing Editor of now-defunct 4080 Magazine. Since then, he’s been a columnist for such publications as The Source, XXL, Murder Dog, Africana.com, and the East Bay Express; his work has also appeared in the San Francisco Chronicle, Vibe, Wax Poetics, SF Weekly, XLR8R, the Village Voice and Jamrock, as well as the academic anthologies Total Chaos and The Vinyl Ain’t Final. Eric began his journalistic career while DJing on college radio station KZSC, and remembers well the early days of hip-hop radio, before consolidation, and commercialization set in. He currently lives in Oakland, California.

Net Neutrality and Urban Music: Part One

e

Not long ago, FMC asked journalist Eric K. Arnold to write an article about net neutrality and the urban music community. (Eric previously wrote about the impact of media consolidation on urban music; check out that piece here.)

We weren't sure if the hip-hop world was familiar with net neutrality, but figured there might be a connection between the scene's entrepreneurial, anti-censorship spirit and the open internet — which allows free expression and gives everyone the same level of access, whether they're a huge company or a bedroom beat-maker.

Eric talked to a wide range of urban music figures from prominent bloggers to hip-hop label chiefs and MCs, and got their opinion on why the internet is crucial to their work. We're publishing his piece in installments right here on the FMC blog — today is the first entry. Stay tuned for more of this fascinating story, and check out our Rock the Net site for more information about the importance of net neutrality to the music community.


Net Neutrality and Urban Music By Eric K. Arnold

Hip-hop has always been about getting the word out, by any means necessary. In the past this meant dealing with all kinds of intermediaries — those gatekeepers at major labels, radio stations, video outlets and magazines who decide which talent rises from the streets to the mainstream. With the Internet, today’s hip-hop artists are taking the hustle into their own hands, finding new ways to connect their words and rhymes with potential audiences without interference or censorship.

When pioneering rapper Too $hort ended his business relationship with Jive Records, his home for 21 years, he decided to start his own independent label, Up All Nite. “I’ve been offered (record) deals,” he says, “but it feels really good to not be a part of the major label big pimpin’. It just feels good to say I don’t need a signature from a label to do a guest appearance on someone’s album.”

To a large extent, the Internet made his decision not to re-sign with a major possible, while allowing him complete creative and artistic freedom. Up All Nite’s online “set-up shop” allows the label to sell new music directly to fans via digital download, thus saving on the manufacturing and distribution costs associated with a traditional brick-and-mortar retail model.

Up in Your Bits

This way of digital life might not last forever. Powerful companies that provide your Internet hookup (Internet Service Providers, or ISPs) are looking to alter the fundamental way the web works, by deciding the wheres, whos and hows of information exchange.That’s why public interest groups, technology experts, innovators and creative types are fighting to preserve net neutrality — the principle that protects the open internet.

If that sounds a bit confusing, you’re not alone. Look at it this way: net neutrality is what allows you to go where you want to go on the Internet, download or upload the legal content of your choice and say what you want to say without undue restriction. Basically, it’s the Internet as you know it.

But the ISPs want to charge those who put content on the web — artists, filmmakers, mix-tape DJs, etc. — an extra fee for speedy delivery of their sites and sounds. Those who couldn’t afford to (or didn’t want to) cut a deal with these huge corporations would be stuck in the slow lane. Currently, all users get equal access to the Internet, regardless of their corporate connections. Which is why the fight to preserve net neutrality is shaping up to be an epic battle for nothing less than the soul of cyberspace.

But Net Neutrality isn’t just about politics and technology; it’s also about artists being able to connect with fans, and vice versa.

“We’ve seen what happens when a majority of musicians have limited access to a communications medium — it’s called corporate radio,” says Michael Bracy, Policy Director for Future of Music Coalition — a Washington, D.C. non-profit that deals with musicians’ issues. “We can’t replicate the mistakes of the past when dealing with new technologies. Net neutrality ensures a level playing field for all musicians, and not just those with major industry backing.”

Eloise Lee is the Net Neutrality Policy Director at Media Alliance, a non-profit media watchdog organization who have been closely following the issue. She says the open internet is of crucial importance to musicians and the public. “If you have a MySpace account, if you rely on the Internet to share your work, Net Neutrality is your issue,” Lee explains.

“The U.S. is about freedom of speech. If Net Neutrality is not protected, all of that would fade. Those rights are under attack,” she adds. Immigrants, youth, people of color and other independent voices have been historically underserved and underrepresented, Lee notes — restricting Internet access would affect these voices disproportionately.

For that reason, it’s not an overstatement to say that the future of the Internet is at stake, and quite possibly, the future of cultural and musical expression as well.

Urban Music and the Internet

Because artists on alternative-leaning, underground-oriented labels have rarely enjoyed commercial radio support, they’ve had to turn to cyberspace to get the word out about their releases and tour dates. Blogs, chatrooms, and fan forums have allowed listeners to share music and interact with each other, and in many cases, with artists directly.

“The Internet, that’s ‘it’ for independent artists,” says Paul Porter, a former BET executive who now operates Industry Ears, a non-profit music business watchdog organization. With an increasing number of urban artists taking the independent route, maintaining access to the Internet becomes critical for long-term survival.

“What’s happening on the Internet is that’s the only place you’re hearing real music and real news,” Porter says.

“The Internet is more vital for indie and underground artists in urban music
than any other available media,” echoes Asya Shein, founder of urban culture site Fusicology.com, which operates in 17 North American markets through a combination of street-level promotion and online activities ranging from album reviews to event marketing.

The Internet, Shein says, “allows the artist to directly connect with their fanbase in a direct and inexpensive manner.” That’s important, she adds, “considering most music on the radio is neither indie nor underground — in the urban sector, especially.”

The Internet levels the playing field in very real terms for urban artists who face a significant barrier to entry into mainstream outlets. Examples include independent labels like Hieroglyphics, Quannum, Stones Throw and Rhymesayers — cornerstones of underground hip-hop whose Internet presence has been critical to their building a diverse, dedicated fan base over the years. All of these labels have featured unique content (i.e., music videos MTV or BET won’t air or exclusive freestyles) online, and their websites have been extremely important in their being able to brand themselves and create revenue streams.

“We’re the original Internet label,” says Tajai Massey of Hiero Imperium, whose Web presence helped the eight-member Hieroglyphics collective reinvent themselves way back in 1997 — long before YouTube or MySpace were even in existence — as an independent entity following stints on major labels.

“When we first came up, nobody had the Internet. It was a means of mobilizing our fans,” Massey relates, adding that Hiero’s online presence remains an integral part of their marketing and promotional strategy: “Nowadays it’s impossible to get the word out without the Internet.”
According to Lateef the Truthspeaker, a core Quannum artist who’s been putting out records independently since the mid-’90s, the Internet has become a tastemaker in and of itself: “Especially at a time when everything’s changing, the Internet influence just can’t be denied now.” He cites “the access that involves the youth, and the empowerment to the youth in deciding what is and isn’t successful… I think that that’s really big.”

Artists and fans aren’t the only people for whom the Internet is empowering. As urban music publications have fallen by the wayside, bloggers have picked up some of the slack, offering opinions, reviews, and commentary unfettered by the conflicts of interest with advertisers which have long been an albatross for urban media outlets.

“The blogosphere has reestablished a balance between what people want to see and read and what publications choose to omit,” says Adisa Banjoko, author of the Lyrical Swords blog.
There has been a dumbing down of hip-hop journalism in general over the past decade, yet urban bloggers like Banjoko, Jeff Chang, Clyde Smith and Matt Sonzala have conswasdfistently presented information unavailable anywhere else.

Stay tuned for the next installment of this article.

About the Author:

Eric K. Arnold has been writing about urban music culture since the mid-1990s, when he was the Managing Editor of now-defunct 4080 Magazine. Since then, he’s been a columnist for such publications as The Source, XXL, Murder Dog, Africana.com, and the East Bay Express; his work has also appeared in the San Francisco Chronicle, Vibe, Wax Poetics, SF Weekly, XLR8R, the Village Voice and Jamrock, as well as the academic anthologies Total Chaos and The Vinyl Ain’t Final. Eric began his journalistic career while DJing on college radio station KZSC, and remembers well the early days of hip-hop radio, before consolidation, and commercialization set in. He currently lives in Oakland, California.

FMC and realizePhiladelphia Present: Web.illish.us

We at Future of Music Coalition recognize the difficulty of explaining complicated issues in plain language, but we do our best. Right now, a huge concern is net neutrality, which also happens to be kinda tricky to articulate. Luckily, we've had some practice!

Our Rock the Net website offers an excellent primer on why net neutrality should matter to the music community. In a nutshell, net neutrality protects the open internet, and allows all artists to promote and distribute their music online without undue interference from gatekeepers or middlemen. The internet is THE tool for the modern musician to connect with fans, and it shouldn't be controlled by a few ISPs looking to maximize profits.

Fans would also be affected if we lose the open internet. Let's face it, there are more legal ways than ever to discover new music — but without net neutrality, this could change. We've seen what happens when the majority of musicians have limited access to your ears — it's called commercial radio. If net neutrality goes away, the internet could resemble the corporate airwaves, where what you hear is determined by a handful of powerful companies.

And that's just the tip of the iceberg. Net neutrality ensures that freedom of expression, commerce and creativity can flourish on the web. If the network operators are allowed to decide what goes over their "tubes," our digital way of life could be permanently altered. That's why we've teamed up with realizePhiladelphia — a non-profit group that promotes social causes in the City of Brotherly Love through musical and educational events — for the Web.illish.us concert series.

FMC and realizePhiladelphia will present a handful of monthly shows at Philadelphia's Silk City, which educate on net neutrality in fun and unique ways. Hosted by Charles Gregory of 3guysdontlie.com and streettalkin.com, Web.illish.us encourages progressive attitudes on technology, media, music, arts and culture in the online realm.

Web.illish.us takes place on the third Wednesday of the month from November 19, 2009-February 18, 2009. All shows start at 9PM EST. If you're unable to attend in person, have no fear: the concerts will be webcast live. Check out the Web.illish.us site for details on the specific theme for each event, and stay tuned for more info.

Hope to see you there!

Back From the Big Apple

Audience converges on panelists at "What's the Future for Musicians?" — NYC.

We just wrapped up our events at The Public Theater in New York on October 6, both of which went extremely well. It was a long day for staff, what with our "What's the Future for Musicians?" seminar and "Creative License" panel discussion taking place essentially back-to-back (with an awesome cocktail party in between). Still, it was a blast, and attendees were excited about the range of information offered in both the presentations and breakout sessions.

"What's the Future for Musicians?" kicked off at noon with the "Music 2.0" segment, which featured a brief overview about new models for promotion and distribution by FMC's Kristin Thomson, followed by an in-depth panel discussion with some of the sharpest minds in music, technology, artist advocacy and public relations.

Attendees also learned about the critical issue of health insurance for musicians at a discussion led by Alex Maiolo of FMC's Health Insurance Navigation Tool (HINT). A lot of great info was presented by panelists who do work around the issue, or have been personally affected by it.

The breakout sessions were a hit, with eventgoers participating in informal, face-to-face conversations about new revenue streams, podcasting/webcasting, international touring, funding opportunities and more.

We wrapped up "What's the Future for Musicians?" with a net neutrality presentation by FMC's Michael Bracy, which segued into a policy overview that brought perspective on issues of concern to musicians, labels, broadcasters and fans. You can check out complete programming descriptions here.

After a heady policy discussion, folks usually require refreshment, so we took a break for a cocktail party and finger-foods. Then it was time for "Creative License: A Conversation About Music, Sampling and Fair Use," which got underway around 7 PM.

The discussion featured moderator/media professor Kembrew McLeod and interviewees/panelists Steve Stein (aka Steinski of Sonic Boom), musician/composer/educator T.S. Monk, producer/label chief El-P and American University Professor Peter Jaszi. The back-and-forth was fascinating — the only problem was that we didn't have quite as much time as we might have liked. Thankfully, we'll be doing more events about sampling in the near future, in advance of the fall 2009 publication of Creative License — a book co-authored by McLeod.

A huge and hearty thanks to all of our sponsors and partners who made these New York events (and the previous one in Chicago) such successes. We'll be posting audio and visual archives of the presentations and panels as soon as possible, so those who couldn't make it can see (and hear) what they missed.

Next up, our D.C. Policy Day, which is set February 11 2009. Stay tuned for more info on that event!

Clock is Ticking on FMC's NYC Events!

FMC Policy Director Michael Bracy at"What's the Future for Musician?" Chicago

There's only three days until our final two fall events, both of which take place at the Public Theater in New York City on Monday, October 6. Online registration closes at 11:59 PM this Saturday, Oct. 4, but we'll also be taking on-site walk-up registration as space allows. Slots are filling up really quickly, so reserve your spot now!

We're really excited to be bringing our "What's the Future for Musicians?" seminar to the Big Apple. This info-packed event offers musicians, indie labels and fans up-to-the minute info about internet-based promotion and distribution options, how to navigate the health insurance landscape, the importance of open internet structures and how copyright law and business models affect musician compensation. Breakout sessions will cover such topical subjects as new revenue streams for musicians, podcasting and webcasting, international touring and New York funding opportunities for artists. It's a great way to get the latest music-tech-policy scoop, interact with the experts and network. Did we mention there's a post-event cocktail party? That's how the pros network!

What's the Future for Musicians? NYC
Monday, October 6, 2008
12:00 PM — 6:00 PM with cocktail party to follow 6:00 - 7:00 PM
The Public Theater, New York, NY
Registration: $25
Only 5 more musician scholarships left! Apply today!

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(Check out our Flickr photostream from the What's the Future for Musicians?" Chicago, which took place on September 22.)

Immediately following the musician education seminar at The Public is "Creative License: A Conversation About Music, Sampling and Fair Use," which kicks off at 6PM with a cocktail party (the discussion begins at 7PM).

As part of a multi-part discussion series, FMC and media professor Kembrew McLeod (University of Iowa) will examine this issue in-depth.

Joining FMC and McLeod are experts from all sides of the debate, including producer EL-P of Def Jux Records, musician T.S. Monk, June Besek, Executive Director of the Kernochan Center for Law, Media and the Arts at Columbia Law School, and Peter Jaszi, Professor of Law and Intellectual Property at American University.

Attorneys attending this event can earn 1.5 professional practice credits. Attendees of the earlier event who do not need CLE credits will be able to attend "Creative License" free of charge.

Creative License
Monday, October 6, 2008
6:00 PM – 8:30 PM (following a 6PM cocktail party)
The Public Theater, New York NY
Admission with CLE credits: $75
Discounted CLE rates for ACS attendees or members of BESLA or CSUSA: $50
Regular Admission: $25, a very limited number of CLE and musician scholarships are still available

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Agreement Royale

On September 23, songwriters, publishers, record labels and digital music services announced they had reached an agreement on mechanical royalties for songs played on online music services.

Called a “breakthrough that will facilitate new ways to offer music to consumers online,” the voluntary agreement crafted by the Digital Media Association (DiMA), the National Music Publishers’ Association (NMPA), the RIAA, the Nashville Songwriters Association International (NSAI) and the Songwriters Guild of America (SGA) ended a longstanding dispute about mechanical royalties for interactive streaming and limited downloads.

According to the agreement, which still must be approved by the Copyright Royalty Board to take effect, limited download and interactive streaming services will pay a mechanical royalty of 10.5 percent of revenue, less any amounts owed for performance royalties. In certain instances, royalty-free promotional streaming is allowed.

This agreement garnered a significant amount of press and blog coverage last week, but lots of it jumped to the conclusion that this was the answer to the ongoing digital performance royalty fight between SoundExchange and webcasters like Pandora and soma.fm. Not so. That’s a different issue, related to a different part of copyright. We know this stuff can be horribly confusing, so we’ve put this blog post together in an effort to explain what happened last week, and how it affects musicians, music services and webcasters.

What’s a mechanical royalty?
The mechanical royalty is the fee paid to the publishers of a musical composition for the reproduction and distribution of the work. The publishers usually pass a share of this royalty on to the songwriters and composers. In the physical world, mechanical royalties for songs that have already been recorded are calculated as a payment-per-song- manufactured rate. Labels – a.k.a the licensed “manufacturer” of a musical work – have two options: they can rely on the statutory rate, which is currently 9.1¢ per song, or they can negotiate with the publisher to try to come up with a different rate.

For the purposes of this blog post, let’s just use the example that a record label releases an album that has 10 songs on it. Based on the statutory rate, it owes the publisher 91¢ in mechanical royalties for every album that’s manufactured. If the songwriter has a publishing deal, these payments are usually made to her/his publisher, or to Harry Fox if the publisher is a member of HFA. The publisher then splits the royalties with the songwriter and composer according to the terms of the publishing deal. For self-published writers, the royalty goes directly from the label to the songwriter.

How is a mechanical royalty earned on the digital platform?
In a physical world, calculating the mechanical royalty using the statutory rate is a simple equation: # of songs on CD x # CDs manufactured x 9.1¢. But calculating mechanical royalties in the digital environment? Not so simple. In fact, there have been two simultaneous disputes going on between the publishers, the labels and the digital music services for the past few years:
A) what type of use (download, stream, etc) invokes a mechanical royalty?
B) What should the rate be?

Up to this point, the publishers have argued that nearly all digital uses of music involved the reproduction of a musical work, even if it was just an “incidental” copy that was made simply to facilitate another licensed use. As such, the publishers said that these uses were subject to a mechanical royalty fee.

But most digital music services and their trade association – DiMA – disagreed, especially about mechanical royalties being due on buffer copies on hard drives that make streaming services possible and on promotional, 30-second clips that were simply there to promote another licensed use. DiMA and the services argued that publishers being able to collect mechanical royalties on these uses was double-dipping, since in most cases these incidental copies were simply helping customers to either listen to or stream a song; activities that generated their own royalties.

What does last week’s agreement say?
Last week’s agreement tries to, first, solve the dispute about what invokes a mechanical royalty in the digital environment. According to the press release, the settlement will apply to two uses: limited downloads and songs streamed as part of interactive streaming services. The parties also agreed to permit certain kinds of promotional streams without payment, and agreed that webcasters will not owe mechanical royalties for non-interactive, audio-only streams.

What services does this apply to?
This agreement primarily affects Rhapsody and Napster, for both their on-demand streaming services and their “to-go” services that allow subscribers to take music on portable players. But it will also begin to affect many more services – MySpace, imeem, iLike and others – as they start to offer interactive streaming options to their users.

What’s an interactive stream? What’s a limited download?
Of course, we still need to see how these uses are specifically defined in the settlement but, generally, an interactive stream is a stream — not a download – of a composition that is selected by the user. In other words, streaming music on demand. This is essentially the user’s experience when using Rhapsody or Napster’s music subscription service where, unlike the iTunes Music Store or Amazon or eMusic, the user doesn’t need to download music to enjoy it; the music is simply streamed via an internet connection from the “celestial jukebox.”

A limited or “tethered” download allows users to download a song or a playlist onto a computer or an MP3 player — the songs will continue to play as long as you maintain your subscription. If you cancel your subscription, the music disappears. Again, this is different than purchasing a song from iTunes/Amazon/eMusic, which is considered permanent download. Note that even if a purchased song contains digital rights management (DRM) that “limits” the type of devices on which it can be played, it’s still considered a permanent download.

What’s the rate of payment?
Last week’s agreement also tries to settle the question about the rate for the mechanical royalty for these types of uses in the digital space. Remember that, in the terrestrial world, it’s currently a per-penny/per-song rate. This was something that the publishers wanted to preserve in the digital world, since it guaranteed a fixed amount of revenue, no matter what the use. But the music services and labels argued that this per-penny/per-song rate forced them to adopt old models and left them no flexibility on pricing. In other words, at 9.1¢ per song, mechanical royalties became a fixed cost, whether the song was being downloaded for 99¢, or 25¢, or being streamed as part of a person’s subscription. In some instances, the publishers’ royalties would have been higher than everyone else’s.

The September 23 announcement states that all parties agreed to a “percentage of revenue” calculation (again, the Copyright Royalty Board must still approve this for these specific uses). Under this arrangement, interactive audio-only webcasters and subscription services will pay 10.5 percent of their revenue to songwriters and publishers, minus any performance royalties already being paid to labels. This formulation addresses the digital music service’s concerns about paying the publisher twice; it makes clear that a mechanical payment is due, but permits the service to deduct its performance royalties, thereby capping the rate paid to publishers at 10.5 percent. A percentage rate provides a much more flexible system that allows for some pricing experiments, and an easier calculation for the music services to make.

How do songwriters ensure that they’re receiving any mechanical royalties due to them?
Based on conversations with representatives from a number of parties affected by this agreement, these details have yet to be worked out. However, if a songwriter has a publishing deal with a publisher who’s a member of HFA, the royalties should go from the music service to the publisher through HFA, then be passed along to the songwriter/composer as per their deal. For self-published musicians who use a digital aggregator, the royalties should, in theory, go from the music service to the digital aggregator, which then would pass them on to either the musicians’ indie label, or directly to the musician. This is the theory, but the real payment mechanism has yet to be determined.

How does this affect Pandora and other webcasters?
While last week’s agreement doesn’t solve the high-profile debate about webcasting rates for performance royalties, the mechanical royalty agreement does settle some lingering uncertainty about whether webcasters would have to pay mechanicals on the buffer or cache copies that make non-interactive streaming possible. According to the press release, the parties agreed that non-interactive, audio-only streaming services like Pandora and soma.fm do not require a mechanical license. This means webcasters no longer have to worry about paying the publishers both for a performance and again for the cache and buffer copies made to enable that performance.

However, this agreement does not solve the debate between webcasters and sound recording rightsholders, which has to do with the non-interactive public performance of a recording on a digital platform. The digital performance royalty is generated when a recording is performed on a radio-like webcast, on Sirius XM, or on those cable channels up in the 300s. SoundExchange collects these fees and subsequently distribute the royalties to the sound copyright owner (usually the record label) and the performers. What Pandora and others are concerned about is the rate for these digital performance royalties for performers and copyright owners of the sound recording. It’s a long story that we have described in detail in a number of places, but the short story is that the disagreement about this digital performance royalty rate is ongoing. We remain hopeful, however, that a settlement will be reached soon.

FMC commends the NMPA, DiMA, the RIAA, the SGA and the NSAI for coming to a voluntary agreement that seems to balance the needs of the emerging services with those of musicians, songwriters and copyright owners. There are many parts of this agreement — particularly the acceptance of a percentage of revenue calculation — that make a lot of sense. We hope that this can serve as a model for solving the other lingering royalty and licensing disputes, so that new business models can continue to flourish and musicians can benefit from increased access, exposure and revenue, and music fans can discover more music.

(Web)Casting Call, Round II

Yesterday, we mentioned the House of Representatives' passing of the Webcaster Settlement Act of 2008. The bill allows copyright owners, performers and online broadcasters to negotiate royalty rates for webcasts in Congress' absence, and permits the implementation of an agreement — provided they can reach one. (Check out our previous post for the full rundown).

On Tuesday, September 30, 2008, the Senate passed its version of the bill, which now awaits signing by the President. The legislation allows all parties to negotiate through 2015, and sets set a royalty rate retroactive to 2006, pending settlement.

Such an agreement would set aside the Copyright Royalty Board's (the judicial body that decides royalty rates) 2007 decision, which many webcasters argued would drive them out of business.

As we've said in the past, we hope those involved in negotiations can come to an agreement that allows for the growth and stability of webcasting, but also provides fair compensation for creators.