Some of you may have noticed that an increasing number of music videos on YouTube have had their sound stripped away and replaced with… nothing. Beneath these muted videos you’ll see the following notice:

“This video contains an audio track that has not been authorized by all copyright holders. The audio has been disabled. More about copyright”

So, what’s the deal? YouTube posted today saying that they’ve added the muting option for users whose video has an audio track with a copyright claim from another author. This would be, for example, a record label like Warner Music Group who recently has been unhappy with YouTube for financial reasons.

Previously, copyright claims would immediately result in the video getting taken down. Users could apparently dispute the claim or sub out the audio for a pre-cleared track from YouTube’s library, though frankly neither of those things seemed to happen very often.

…

Wait a minute. Let’s go through that again. Previously, videos with copyrighted music that had third party copyright claims were immediately taken down. Now, the videos can remain up if the user so chooses. Many videos that have become muted are from major labels, namely WMG. But… doesn’t YouTube make money from advertising, which in turn is based on lots of people coming to their site and viewing videos?

And wouldn’t leaving videos up (albeit muted) still fool lots of people into at least visiting the page, especially since there is no indication a video is muted until you’re actually viewing it? Which would mean, of course, more ad views from those super popular major label videos…

I see what you did there!

Users, not labels, silence YouTube music videos [cnet news]

This entry was posted on Wednesday, January 14th, 2009 at 10:17 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Oops! In an entirely expected turn of events, the Recording Industry Association of America apparently went back to suing people no more than eight days after their announcement where they said they’d stop. You can even read the court summons, dated December 26th, 2008, right here. Oh, and the defendant is apparently currently in the military.

On a related (and hilarious) note, when Wired tried to find major ISPs who had agreed to the RIAA’s new ISP partnership plan, they couldn’t find any. In fact, a Verizon spokesperson explicitly said, “We are not working with them on this.”

For some reason I keep imagining a bunch of executives high-fiving each other and yelling “PSYCH!”

RIAA breaks ‘We won’t sue’ promise [p2pnet]

This entry was posted on Tuesday, January 13th, 2009 at 3:17 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

While iTunes has featured some music without its proprietary digital rights management (DRM) mechanism for over a year, Apple has just announced its plans to completely eliminate DRM across the board for all music and video content in the iTunes store. 80% of the ten million songs available for purchase have been converted to a standard, DRM-free AAC format and the entire library will be converted within the next few months. Existing purchases can be stripped of their DRM for a small fee (30 cents per song), much like how iTunes Plus originally functioned.

In addition to this change, Apple will now sell music at three price points; 69 cents, 99 cents, and $1.29. This move shatters the consistent 99 cent pricing of music in the iTunes store, though Apple exec Phil Schiller promised that more tracks will be available for 69 cents than $1.29.

This is a welcome decision by Apple, who had previously indicated that they were not ever fans of DRM to begin with, but had been pressured by the major labels to implement it. However, since it was first created, iTunes has become the biggest music retailer (digital or otherwise) and many competitors have arisen who do not use DRM, like eMusic and Amazon MP3. These factors have no doubt all contributed to Apple’s negotiating leverage.

iTunes Store goes DRM-free [Macworld]

This entry was posted on Thursday, January 8th, 2009 at 3:25 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

After prolonged, unsuccessful licensing negotiations with YouTube, Warner Music Group has demanded the removal of all its music videos currently uploaded to YouTube. Warner’s previous licensing agreement, which had expired several months prior, was similar to that of the other major record labels; YouTube paid a fee per play of any given label video as well as a share of advertising revenue. This decision affects not only official WMG videos, but any user-uploaded videos that include music owned by the label.

If Universal Music Group’s $100 million in revenue from online music videos since 2005 is any indication of the profit Warner was (or could be) making, they seem to be shooting themselves in the foot here. This is perhaps all the more obvious when considering their net loss of tens of millions of dollars last year.

What do you think?

Warner Music Removes Its Videos From YouTube as Licensing Talks Stall [NYTimes]

This entry was posted on Monday, December 22nd, 2008 at 11:17 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Microsoft has recently announced that it will no longer support digital rights management (DRM) authentication for songs purchased through its now-defunct MSN Music service. The company, which is now focusing on its Zune music player and accompanying Marketplace, has previously allowed MSN Music customers to re-authenticate their purchases for use on different devices since the service stopped selling music in November 2006.

Without the ability to authorize their purchased music collection, MSN Music customers will be unable to move their songs on to new devices, or new operating system installations. According to Rob Bennett, the Microsoft MSN executive who issued the announcement to MSN Music customers, the primary reason behind the decision to cease operation of the DRM servers was the difficulty in maintaining the authentication across new platforms.

“…every time there is an OS upgrade, the DRM equation gets complex very quickly. Every time, you saw support issues. People would call in because they couldn’t download licenses. We had to write new code, new configurations each time… we really believe that, going forward, the best thing to do is focus exclusively on Zune.”

Bennett also stated that it was not Microsoft’s decision to use DRM to protect the songs available on MSN Music; the record labels who provided the catalog insisted on it.

—

I think the most obvious lesson that can be learned from this situation has already been stated on numerous blogs and news sites already; when companies use server-based DRM, consumers are left out in the dust if those companies either go out of business, or stop supporting the authentication mechanisms. This much is pretty clear, and I’m sure anyone who purchased anything from MSN Music is very upset that their money is essentially wasted (after all, 160kbps audio, while not incredibly lossy, is not an ideal format to convert from.)

However, there are a few finer points to consider. First of all, how much of this is really Microsoft’s fault? Can they really be blamed for ceasing support for a service that has been defunct for a year a half? It costs them both time and money to provide the support needed to ensure the DRM-protected files will continue to work on new systems. At the same time, they’re also managing Zune, which uses a separate set of technologies that must also be continually upgraded and maintained.

Microsoft might be rich, but they aren’t exceptions to the fundamental principles of economics, the most relevant of which is that businesses do not have unlimited resources. If Microsoft continued to invest more resources into maintenance of the “PlaysForSure” DRM technology used by MSN Music, those resources would be unavailable for use in other areas, such as Zune - and this type of resource expenditure does not yield any revenue, either, as it is merely ‘legacy support’.

In some way, had MS elected to continue supporting PlaysForSure, the consumer base as a whole would still be affected negatively - the loss of some development or maintenance for other, non-legacy software and hardware for example. Or perhaps they would simply compensate with a price increase to some other product or service. In any case, while unfortunate that major label spending forced MS into this situation to begin with, it is not really Microsoft’s “fault”.

The issue of DRM is just as hot in the field of audio software as in audio itself, though it is referred to as “copyright protection” (CP) in that industry. Professional and hobbyist musicians alike have endured CP methods ranging from simple serial numbers printed in instruction manuals, to complex systems that use hardware and software keys and internet verification to ensure the product is being legitimately used.

The difference, at least in the audio software industry, is that some companies (including the larger, more successful ones like Native Instruments) have promised to consumers that if they ever close down, they will release some sort of patch or tool enabling all users to remove the copyright protection on their software, allowing them to use it indefinitely - or at least, as long as operating systems are capable of running it.

It’s a shame a similar agreement couldn’t have been reached with the major labels in the case of MSN Music, with the labels allowing Microsoft to “unlock” all their distributed music which would otherwise no longer be accessible. The labels should not have had any problem with this, given that they sell their music elsewhere without any form of DRM, and after all, MSN Music customers did pay for it.

This entry was posted on Sunday, April 27th, 2008 at 11:52 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Major record label Warner Music Group (WMG) has recently proposed a mandatory fee to be built into the monthly service charges for a home internet connection. This “music tax” would be collected by a new, independent organization which Warner hopes to form.

Warner has recently employed the services of Jim Griffin, a music business consultant whose company (OneHouse, LLC) is “dedicated to the future of music and entertainment delivery”. The vision for the mandatory fee system, according to Warner, is a market where consumers do not buy music in physical or digital form at all; the fee would replace any existing payment systems. Consumers would instead be allowed to freely (and legally) download any music they want.

WMG, which is currently the third largest record company in the world, reported a revenue of $3.385 billion in 2007, and a net loss of $21 million. In comparison, the company believes the mandatory fee would result in collections of up to $20 billion that would be dispersed throughout the industry.

—

Hmm… sound familiar? ;) As expected, more companies in the business are thinking about music taxes and/or point-of-connection fees as a serious alternative to existing models, including large and powerful conglomerates like WMG. Unfortunately, the concept isn’t any more appealing, even on paper, since I last wrote about it in January.

To reiterate the underlying problem: the basic premise of a point-of-connection charge, mandatory or not, in and of itself is not a bad idea. It ensures a very large revenue stream, one larger than any in the current recording industry, it eliminates the entire problem of piracy and file-sharing, and vastly improves consumer value-for-money, as $1-5 a month gets them unlimited music downloads.

So, once all the money from the point-of-connection charges are collected, how is it going to be distributed? Clearly, if WMG wants to be the one founding the new collection and distribution agency, there is a special interest at work already. In fact, given their track record, I’m pretty sure that ANY major label involved in the creation or operation of such an agency would do their very best to create a system that siphons the most money to their pockets - maybe giving a slight cut to their artists, and a pittance to anybody else. The ideal collection agency would need to be truly independent of special interests, or at least evaluate them all equally, via board members and employees collected from majors and true independents alike, as well as distributors like CD Baby.

The other issue is monitoring. How can you even track what people are downloading? People send me music on internet relay chat (IRC) all the time. It’s a different protocol than simple HTTP downloads, so that would have to be tracked. But do I really want people to be tracking every file someone is sending (or trying to send) to me? What if they name the file or tag the MP3 wrong? What if it isn’t an MP3 to begin with? If someone sends me “track01.mp3″ and it’s actually a Jonathan Coulton song, how will any sort of monitoring system know? There are probably hundreds if not thousands of other situations I can think of where even a well-designed system of tracking downloads would fail.

Without monitoring, it’s not possible to figure out fair payments to begin with. Some significant technological advances will have to be made before WMG’s idea will be of interest to unsigned, independent artists like me, who comprise the bulk of the recordingd industry.

This entry was posted on Wednesday, April 16th, 2008 at 5:43 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

The United States Justice Department has recently approved the pending multi-billion dollar merger of satellite radio competitors XM and Sirius. Though no other satellite radio providers exist, officials from the DOJ stated that the merger would not constitute a monopoly, since there are other alternatives to satellite radio itself; consumers can select options such as digital recordings, internet radio, and high-definition radio.

This is not the final roadblock to the merger, which was proposed in February 2007. The FCC, which typically follows the opinion of the Department of Justice, must give its seal of approval for the deal to be finalized.

There has been some opposition to the DOJ’s decision, such as from Senator Herb Kohl, chairman of the Judiciary Committee’s subcommittee on antitrust and consumer rights. Khol has accused the Justice Department of “failing to oppose numerous mergers, which reduced competition in key industries [in recent years]” and has encouraged the FCC to block the merger.

—

I was actually quite pleased when I heard this decision. I have yet to hear any decent arguments for why XM and Sirius should not be allowed to merge; sure, they might be the only satellite radio providers in existence, but most detractors of the deal seem to forget how small satellite radio is.

Wikipedia (for what it’s worth) claims that the merger will result in a service with 17.3 million subscribers. OK, not bad… but the vast majority of people in the United States listen to terrestrial radio. We’re talking well over 150 million people, and terrestrial radio still has a significant impact on record buying, to boot.

This isn’t even considering internet radio, which, thanks to sites like Pandora and Last.fm, is even more convenient than satellite for honing in on the kind of content you want. Plus, as the Justice Dept pointed out, there’s always the acquisition of the actual recorded media for yourself. No matter how appealing various kinds of radio are, people still like to possess music, be it physically or digitally.

As far as I’m aware, XM and Sirius have been hemorrhaging money recently, and I for one hate to see companies suffer because of frivolous competition that could hurt the consumer, too. Competition is great for some things, but since satellite isn’t anywhere close to dominant in terms of radio market share as a whole, it makes since for the only two companies that are doing it to consolidate and focus their efforts on making it better.

It might result in some layoffs and condensed programming at first, but I predict that when and if the merger goes through, within a few years we’ll see the state of satellite radio much improved.

This entry was posted on Wednesday, March 26th, 2008 at 11:18 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

The Recording Industry Association of America, which represents the major labels of the United States music industry and hundreds of other smaller labels, may be going to court again in the near future. However, this time, the organization will be the defendant in a malicious prosecution lawsuit. The complainant is Tanya Andersen, a single mother who was previously (but wrongly) accused of illegal file-sharing by the RIAA. The case against her was dismissed abruptly.

Andersen contends that the RIAA’s method of prosecuting individuals suspected of file-sharing is deeply flawed. During the course of the proceedings against her, Andersen claims that the RIAA “acted negligently” and engaged in “fraudulent conduct”, using deceptive and distressing tactics throughout.

This is not the first complaint Andersen has filed. Her first was dismissed last month on what was essentially a technicality, but the judge allowed a one-month window to refile, and stated to both parties that no further motions to dismiss would be granted. The next stage of the complaint is the discovery process, wherein the involved parties begin a thorough search for information pertaining to the lawsuit, followed by trial.

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In the post-Napster years, the RIAA and its members have become notorious for their relentless legal assault on anyone contributing to copyright infringement of their music. By far the most controversial aspect of this continued anti-piracy plan has been the tens of thousands of lawsuits filed against individuals thought to be uploading music on P2P networks. This has caused a huge uproar among music fans of all ages, though it incited particular rage among younger generations.

But I’m sure if you’re reading this you probably know all that, so you don’t need me to explain how much this could potentially shake up the RIAA. Major players in the music business have typically been good at getting themselves out of legal trouble, but it seems like the RIAA really has no place to run this time. Now, they do have a well-funded legal team, but public opinion is not on their side and the extremity of the measures they have taken to initiate litigation against anyone from young children to grandmothers will certainly not help their cause.

Though I don’t support music piracy at all, it’s hard for me to really side with the RIAA given the exorbitant settlements they have asked for in the past. Best of luck to Andersen on this one.

This entry was posted on Tuesday, March 18th, 2008 at 10:08 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Industrial rock/electronic group Nine Inch Nails has just announced the release of their new album, Ghosts I-IV, and are using a multi-faceted model of distribution to get the release to fans.

Much like Radiohead’s In Rainbows, or the Trent Reznor & Saul Williams collaboration The Inevitable Rise and Liberation of NiggyTardust!, Ghosts is available in high-quality, DRM-free MP3 format for only $5 via the band’s website. The download comes with a PDF of additional content. Fans can also pick up about 1/4 of the album (which has 36 tracks total) as a free download. However, these are not the only available purchase options.

A physical two-CD set with 16-page booklet and immediate digital download will start shipping April 8th of this year for $10. The “deluxe edition”, which sells for $75, includes a hardcover fabric slipcase, a data DVD with all songs in multi-track format, and a high-def Blu-Ray audio disc; however, it will not ship until May 1. Lastly, an “ultra-deluxe limited edition” can be had for $300: only 2,500 copies will be made (shipped on May 1), but each comes with a set of vinyl LPs and Giclee prints, and is personally signed and numbered by Reznor.

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Trent Reznor did not make secret his disappointment with how the Radiohead approach to NiggyTardust turned out. Sales were not as high as he had hoped - too many people went for the “free” option. It seems that he has adjusted his approach for his own personal album release, and I think that this new model is absolutely right on the mark.

I actually tried a “pay what you want” system for the release of my EP, The World Circuit. I told fans on my mailing list that they could Paypal me any dollar amount ($7.99 being the “list price”.) Most people paid the list price, some people paid more, a few people paid far more (over 2x), and a decent amount paid nothing. In the end, the average price paid was around $6.40. While it would not be wise to take the results of this experiment as scientific and representative of how any given fans of any band would act, they are still interesting.

NIN’s new approach makes more sense. Offering 1/4 of the album for free is a great way to hook people, and a $5 download is a great value for many people who may only be casually interested. By also selling products at $10, $75, and $300, Reznor is taking advantage of the fact that some fans are more dedicated and have more money than others. Maybe 90% of fans aren’t willing to pay more than $10 for a CD, but if one only sells a CD for $10, they are not taking advantage of the remaining 10% of fans that would pay more.

Of course, it’s not really “taking advantage” of fans in the negative sense, because the more expensive versions of the album come with more value. $5 more than the digital download gets you two physical CDs and a nice booklet. $70 more and you’ve got a deluxe package that some fans would really love. Everyone wins.

I am hoping that more bands will use this type of model when selling their music. It doesn’t devalue music, which offering it for free can, but at the same time appeals to people not willing to pay the standard “list price.” It should be interesting to see how other artists react to this development.

This entry was posted on Monday, March 3rd, 2008 at 10:38 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.