The Pirate Bay Goes Legit

In what is quite possibly one of the most unexpected twists one could imagine in the music industry, file-sharing haven The Pirate Bay has been acquired – legitimately! – by a Swedish software company, Global Gaming Factory. GGF offered the equivalent of nearly $8 million for the website and have stated that they plan to turn it into a legal enterprise.

Though the move comes as a shock to TPB’s community (and much of the Internet), the transaction involved no coercion. It turns out that the folks at TPB do believe, more or less, that GGF’s goals are in line with their own.

The obvious challenge is how one can take a website devoted to flagrantly violating copyright law and somehow make it legal, without turning away the entire community. GGF has stated that they will begin to charge users for content, but they will also (somehow) pay users for sharingsaid content. Advertising revenue and “offering services to telecom operators” will also play a part.

Do you think the new, GGF-owned Pirate Bay will survive?

(Editor’s Note: Preparing for a wedding and moving into a new apartment are more time-consuming than I expected. Still looking for guest writers to help in times like this – just shoot me an email!)

Swedish Software Firm Buys Filesharing Site Pirate Bay [wsj.com]

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New in France: DRM-free, unlimited music via ISP

As sales of recorded music continue to decrease, the concept of point-of-connection-based music subscription services appears more and more attractive to record labels. In Europe, this business model of customers paying an ISP for essentially unlimited downloading in exchange for a small fee has already been implemented through Omnifone.

Now, the internet service provider Virgin Media has partnered with Universal Music to create a similar model in France specifically. The deal will allow Virgin customers to download as much DRM-free music from the Universal catalog as they want. A fee will be associated with this service, though an exact figure has yet to be reported by either party.

In exchange for their catalog, Universal is asking Virgin to cooperate more in piracy-related matters. France itself is already taking measures to protect copyright, so this request isn’t too surprising.

When are we going to see unlimited, point-of-connection subscription services in the U.S.?

(Editor’s Note: Sorry for the gap between new posts; I’ve been busy finishing up my undergraduate degree program. I’m proud to say that I’m now officially a Bachelor of Science in Music Industry!)

Universal Music and Virgin Reach a Download Deal[NY Times]

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More Radio Industry Royalty Nonsense

The bill that would create a new performance royalty for recording artists in the United States looks like it has majority opposition in the House of Representatives. Unfortunately, this seems to be the result of the same fallacious arguments that anti-performance royalty apologists have been spouting for awhile.

“‘The members of Congress just simply aren’t buying the argument that radio stations ought to be taxed to make up for the struggling business model of the record labels,’ NAB spokesman Dennis Wharton told the Associated Press Tuesday.”

This is a classic fallacy of straw man. The recording right should not be created because the recording industry simply needs more money, but because it is the morally correct thing to do. As I’ve written previously, the radio industry generates plenty of revenue from their advertisers. This is a well-established model that has proven to be very successful. In order to generate this revenue, they require content to broadcast. That is simply a normal cost of doing business.

No one would think twice about this in any other industry; the reality is that the recording industry has been so demonized due to the actions of major labels that even the House has been unbelievably biased.

Would they mandate that J.J. Abrams pay ABC when LOST is aired? After all, ABC helps him get DVD sales for his show, right? This inane logic can be extended to any number of situations where any rational person would reject it instantly. The same critical thinking should be applied to the music business.

Here’s another tidbit from Wharton:

“‘If this issue were about ‘fairness to artists,’ ” he continued, ‘why would 50% of the proceeds from this new fee go directly to the record labels? Aren’t these the same record labels that have abused artists for decades?’”

This could be described as ad hominem, another logical fallacy. Rephrased, “major record labels are bad, therefore they’re wrong and shouldn’t be supported.” Bzzt. Bogus reasoning. This isn’t a criminal or civil proceeding where a judge and jury are trying to decide what party gets a monetary reward.

It doesn’t matter if some record labels have acted in bad judgment (not to mention the vast majority of music being released is not on major labels, so to imply that all labels should be punished for the actions of a few is a fallacy unto itself.)

This is the creation of legislation. In this country, we extend legal and Constitutional protection even to those who have not obeyed the law in the past. In fact, those are the instances where fairly and equally applying protections matters the most. Yes, some labels in the history of recording industry have engaged in scare tactics and underhanded legal maneuvers. They’ve certainly ripped off artists.

However, when we can determine the moral necessity of a given right, we must extend that right to everyone.

Should radio pay a performance royalty to artists? [accessAtlanta]

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Become a SoundTempest Contributor!

You may notice a new email link on the right-hand side of all SoundTempest pages. By sending an email to tips at soundtempest dot net, you can easily submit any news tips you might have. Any music-related topic is fair game: copyright litigation, new laws, notable trends, interesting websites, stuff for artists, etc. Original stories (ie. not culled from other sites) are even better!
I also welcome any original articles you’ve written, whether they’re op-ed pieces or news reporting. Provided they’re well-crafted and properly sourced, I’ll post them with a minimum of editing and you’ll be fully credited.

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The Headache of International Licensing

Arbitrary barriers to accessing hardware media content are nothing new. DVD and video game aficionados are well-aware of region lockouts, which are software or hardware “safeguards” that prevent media outside the player’s region from being enjoyed by the consumer. In short, you can’t play North American PS2 games on a European PS2, and if you plan on importing foreign DVDs to play on your North American player, you’ll likely encounter problems.

Naturally, issues with artificial region compatibility have extended to the Internet. For example, the online radio service Pandora is available in the United States, but not Canada or most other countries on Earth. Likewise with Hulu and even a wide variety of YouTube videos. Of interest to this blog is the inability of some countries, even in Europe, to access the iTunes store.

Why does this happen? The answer is more complex than you might think. In virtually any music industry deal, geography is always a factor; more often than not, this favors the artist (content creator) as it enables them to work with an American entity to market and distribute their music in that territory, and, for example, a Japanese entity for business operations there. Of course, the consumer can sometimes be hurt from this simply because an artist in one country might not necessarily work with any entity in another country, leaving a gaping hole in distribution for that area.

Unfortunately, this isn’t the only issue. While most countries have signed on to international agreements and treaties with regards to intellectual property (such as the Berne Convention), copyright laws and royalty systems for each country can vary wildly. Apple and the contributing labels to the iTunes store might reach an agreement with the United Kingdom, but they must deal with an entirely separate set of entities and laws in, say, Spain.

new mandate by the European Commission is set to cut through some of these barriers through sheer legal force:

“The two clauses that the EU has struck down are a membership requirement that prevents music authors from moving to another collection society, and territorial restrictions that prevent a collecting society from offering licenses to commercial users outside of their domestic territories. Under the current system, music stores must establish individual storefronts for each individual country due to licensing restrictions, a policy that recently brought Apple and the Big Four labels under fire from the EU due to country-specific song pricing and the lack of EU-wide offerings.”

collection society, in case you’re unfamiliar, is a government-created or government-endorsed entity with the highly exclusive ability to collect and distribute money on behalf of composers and performers in a given country. In the United States, there are three collection societies, better known as performing rights organizations: ASCAP, BMI and SESAC.

Unfortunately, collection societies in Europe have made international licensing difficult, mainly because of their monopolistic position. Hopefully, the dissolution of two major artificial restrictions will help the situation and push the world a little closer to an internationally-available library of music.

iTunes still not available in some EU countries. Here’s why [Ars Technica]

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Is “Free” Overrated as a Business Model?

James Ledbetter of the Washington Post penned a great rebuttal argument that takes some of the air out of the argument that all businesses should give away some key part of their products. The piece is designed mainly as a counter to Chris Anderson, editor of Wired, who has aggressively promoted the idea that virtually any kind of business, but especially ones operating in the digital realm, can and should give away key components of their products or services.

Ledbetter points out that this model makes no sense in many industries;

“Just about any activity that merits the title “business” has a cost of producing its goods or services. Take the oil-and-gas business. It costs a huge amount of money to extract petroleum from the ground (more now than it used to in many places), as well as refining the stuff, storing it, shipping it and so on. Those costs may or may not justify the price of a barrel of oil or a gallon of gas, but neither do they justify a price of zero. It’s exceedingly difficult to envision a way in which the oil industry could recoup its expenses without charging for its product…”

He also names a number of businesses operating online that have failed or are failing, despite their model of giving away services for free. I can name plenty myself – to name just two popular sites, Twitter and YouTube.

My favorite point that Ledbetter makes is that many Internet-based businesses think that if they give away lots of stuff for free – say, music for example – they can make up the difference (and more) with advertising. However, the problem is that the value perceived by advertisers in any given ad space is entirely dependent on the target market, and, for the majority of businesses, it is far preferable to advertise to a small group with a higher response rate than to a dispersed group.

Here’s a practical example. It would be possible for me to buy a billboard outside of 30th Street Station in Philadelphia and advertise my sample library products. This would be exorbitantly expensive, and it is highly unlikely I would get more than a handful of conversions as a result, despite the massive expense. On the other hand, $300 gets me ad space on Northern Sounds, a web forum devoted entirely to discussion about sample libraries. Which would I want to spend my money on?

Ledbetter’s point is well-taken. Musician industry veterans know that giving out hundreds of copies of a CD at a convention will likely result in absolutely no return on investment, because your target audience is too broad. Internet companies would be ill-advised to simply gain as many ‘customers’ as possible by giving out free products with no consideration for how this may dilute their advertising prospects.

Call It Free, But It Will Cost You [Washington Post]

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REAPER, Awesome DAW Software, Updated to Version 3

Normally I don’t go out of my way to post about specific software tools, but this one is really worth a mention. REAPER (Rapid Environment for Audio Prototyping and Efficient Recording) is a DAW program that rivals the functionality of even the most expensive tools like Sonar, Cubase and Logic, and today it has been upgraded to version 3.

REAPER made waves when it first started development as it offered an extremely low price point for the non-commercial license ($60) and a very competitive price for the full commercial license ($225). However, most notably, it was updated constantly, being the brainchild of Winamp creator Justin Frankel, and had an unlimited, fully-featured demo version.

All of these things are still true in REAPER 3. The software is still being updated very frequently, taking into account user feedback from the REAPER community. The non-commercial license is still $60, but it’s even more broad than before; it’s now the “discounted license” and applies to anyone generating less than $20,000 per year from music as well as educators, students and academic institutions.

The program has made massive strides since its first release and is absolutely worth a try if you’re on Windows XP or Vista (the Mac and 64-bit Windows versions are still in beta, but looking very promising.) REAPER is very stable and hardly eats any resources; plus, if you’re on a multicore computer, you can expect incredible efficiency, moreso than DAWs like Cubase or Sonar.

Personally, I’m a big fan of how REAPER handles audio editing. The interface is highly customizable and once you settle into your setup, you can work extraordinarily fast. I actually used it extensively to edit a new sample library for Impact Soundworks, a vintage drum kit collection called Groove Bias. I think I created at least 3,000 individual WAVs with this program!

Cockos Reaper [reaper.fm]

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Lawyer Claims RIAA Suits Were Unconstitutional, Wants Settlement Money Re-Distributed

If you’re going to go after the RIAA, you might as well go all-out; at least, that’s the apparent philosophy of Harvard Law professor Charles Nesson, who is not only seeking to argue that file-sharing is fair use, but that the fines exacted from convicted file-sharers are essentially unconstitutional. If all goes according to his plan, the RIAA’s litigation campaign will be deemed unlawful and they will be forced to return the $100 million they’ve collected in settlements.

A pretty extreme strategy, to be sure. Not even Lawrence Lessig, vocal proponent of relaxed intellectual property laws, creative remixing, and mashups, among other things, supports the idea that file-sharing is actually fair use. Still, it’s a legal theory worth discussing, and perhaps it will spur more reasonable amendments to copyright law.

Lawyer: RIAA must pay back all $100M it has collected [Ars Technica]

(thanks to Brad Burr for the tip)

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Radio Advocates Claim Record Labels Are Ripping Them Off

Apparently, record labels, recording artists and performers have it all wrong. Not only should artists not be compensated when radio stations play their music, but it should in fact be the other way around! Labels are “ripping off” radio, according Tony Coloff, who claims he feels “feel like a waitress who gave the greatest service. But the customer doesn’t pay — a gross injustice. Then, even more incredibly, the customer demands payment from the waitress. An absolute outrage.”

Coloff goes on to say that it is actually radio stations that “create intellectual property.” Not, you know, songwriters and musicians. You see, radio is the only thing that “created value” in recordings, so they should own them.

It’s hard to even know where to begin with such a specious argument, but let’s start with the basics. First of all, Coloff seems to conveniently forget that radio stations get their revenue from advertisers. That is the entire business model of radio, and for that matter, television as well. Radio stations collectively make billions upon billions of dollars per year because, as Coloff himself pointed out, radio still has a massive audience and a 98% exposure rate.

Put simply, without its content, namely music, radio stations would have no audience and no advertising dollars. The waitress analogy makes no sense, because the “customer” of the radio station isn’t the record label. The label is, more accurately, the CHEF – the person who makes the food which brings people to the restaurant to begin with. And restaurants pay the people who prepare their food.

So, I guess by Coloff’s logic, magazine and newspaper columnists should be paying their employers. Television production companies should pay television stations to broadcast their programs. This makes absolutely no sense. It doesn’t even begin to make sense.

If your business model revolves around providing a free or extremely inexpensive product filled with content, and monetizing that content through advertising, then logically you would pay the people who are giving you the content that enables this business model to work at all. This is such a basic concept to understand that it’s almost unbelievable that an adult could twist it so much.

As for the belief that radio stations should own the intellectual property that they broadcast, again, that’s so far off the mark as to be almost offensive. Even if radio stations created value in recordings – which they don’t, they merely expose recordings which have intrinsic value – this has nothing to do with intellectual property. Should a book publicist be considered the co-author, or even the author of the book she promotes? Should grocery stores be entitled to the formulas and recipes of food products (a form of intellectual property) because they advertise them in circulars? This suggestion is beyond stupid.

Coloff and other radio advocates like him are only able to get away with posting such obviously nonsensical and illogical arguments because they are using a logical fallacy which is often effective: “Person A believes Idea X, and Person A is bad, so therefore Idea X is wrong.” One typically sees this in political discourse as a basic smear tactic, but it makes no sense. A murderer can state that rape is wrong, and he’d be correct. His status as a murderer has no bearing on his statement.

Likewise, the RIAA advocates a performance royalty in radio. They are correct. Just because they’re a generally sleazy organization with widely-unpopular legal tactics and a bad public image doesn’t mean that everything they support is wrong.

Don’t succumb to the vapid arguments of Coloff and others like him.

Why the Record Labels Are Wrong [Radio World]

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Napster Practically Gives Away DRM-Free Music

Since its rebirth through Roxio in 2003, Napster has been trying to recapture its original audience of young adults who want lots of convenient music for a low amount of cash. Though it has generally lagged behind iTunes, Amazon and Rhapsody, a new change to its pricing scheme may very well tip the balance and put Napster back in the spotlight.
For only $5 per month, users can gain access to unlimited streaming music for as long as they have a subscription, the lowest cost of any comparable service. However, what’s more notable is that this subscription tier also comes with five free song downloads a month. As Rick Broida pointed out at cnet, that’s basically getting unlimited, free streaming music with your five single song downloads.
As an independent artist myself, I’ve found that Napster is surprisingly lucrative, relatively speaking. iTunes is by far where I sell the most music through third-parties, eclipsing Napster, the third most popular service for my music, by a factor of at least 12. Still, Napster beats out Rhapsody and eMusic by a long shot and just about matches sales on Amazon.
(A fun little side note: after over a year of streamed plays on last.fm, my royalties from that company haven’t even amounted to 25 cents.)
Napster cuts music plan to $5 a month [Associated Press]

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