Sunday, December 26, 2010

Thursday, March 25, 2010

MySpace/Imeem Deal Leaves Thousands of Artists Unpaid

Independent artists who sold their music through imeem’s Snocap music storefronts on MySpace and other sites won’t be paid what’s owed even after MySpace Music’s acquisition of some — but not all — of imeem, has learned.

MySpace Music bought “certain assets” from imeem, and they do not include imeem’s liability to more than 110,000 independent artists with Snocap storefronts, according to a source with inside knowledge of the deal. Those artists’ contracts mandate they be paid each month if they’re owed more than $20. Some artists have been owed money for more than a year, and the chance of them seeing any money now is, for all intents and purposes, zero, the source says.

Artists attempting to get paid for songs sold through Snocap stores — many or most of which were on MySpace itself — must get in line with imeem’s bank and other creditors. MySpace Music paid less than $1 million for imeem, so it’s doubtful much will remain for the artists.

“MySpace Music bought a limited set of imeem’s assets including the domain name and certain technology and trademarks,” a MySpace spokeswoman said in an e-mail to “The asset sale to MySpace Music was part of a foreclosure process which resulted from the lien certain secured creditors had on all the assets of imeem. MySpace Music did not acquire imeem’s outstanding debts, including the money imeem owed to artists under the Snocap relationship. Upon closing, users trying to access the Imeem website were redirected to MySpace Music. We did not acquire imeem’s contracts or relationships as we have our own in place. MySpace Music has its own distribution platform, which includes relationships with prominent aggregators and indie labels, that provides indie artists ways to monetize their music on our site.”

One source with inside knowledge of the deal said MySpace Music’s rushed purchase of imeem’s assets forced it to “leave behind anything that either had explicit liability or potential liability,” including Snocap and its debts to thousands of independent artists and bands.

Napster creator Shawn Fanning co-founded Snocap in 2002 to let artists sell their music through an embeddable storefront widget. At one point, the service was marketed as the exclusive way for artists to sell music on MySpace. Imeem bought Snowcap last summer. But because MySpace left most aspects of Snocap out of its acquisition of imeem’s assets, all 110,000 or so of those storefronts are gone. The server that hosts them is offline and so is the Snocap website.

Possibly the last band to be paid by imeem for music sold through a Snocap store embedded on MySpace was Javelin, which happens to be my brother’s and cousin’s band. After they inquired about money listed as owed in its online account, imeem sent them a check for about $400 for approximately a year and a half of sales.

That may not be “a princely sum,” as Tim Quirk put it. But for growing bands — many of whose income trickles in from a variety of sources — it matters, especially when you consider that imeem’s payments to major labels helped drive it out of business in the first place.

There’s nothing technically wrong with MySpace Music only acquiring certain assets from imeem, and teams of lawyers scrutinized the deal before it was done. Regardless, in this latest round of digital musical chairs, independent artists who set up music stores in good faith have been left holding the bag.

Monday, February 15, 2010

Producers Resources & Tools

A collection of links and such to help any aspiring producers out. Some of the things you can grab:

  • Bookmarks for musicians, producers & DJ's - Download these bookmarks that are all categorized neatly. Links to many sites that are useful to a DJ, music producer or musician. Simply import this file into your favorites in your browser. You will need to right click over the link and choose 'Save Target As' or the link will open as a webpage.
  • Various Contract Templates - This zip file contains 17 various contract templates. Great for Producers, DJ's and Artists. Some of the templates are Remix for Hire, Mobile DJ, Artist Management, Songwriter, Tour Sponsorship, Producer for Hire, Graphic for Hire, and many many more...

Monday, September 28, 2009

Ignoring RIAA Lawsuits Cheaper Than Going to Trial

Jammie Thomas-Rasset and Joel Tenenbaum captured the nation's attention when they were defendants in the RIAA's first two trials against accused online infringers. But here's the mind-warping reality: both defendants would have been far better off monetarily if they had simply ignored the complaint altogether and failed to show up in court.

That counterintuitive logic played out again this week in Massachusetts, where federal judge Nancy Gertner issued four default judgments against accused P2P file-swappers who never bothered to respond to the charges against them. Their failure to appear meant an automatic loss, and though the judge does have some discretion in setting penalties, judges often pick the minimum awards in such cases.

That was true in all four cases, where Gertner accepted the record labels' claims and awarded them the minimum statutory damages of $750 per song. The defendants were accused of downloading an average of ten songs, putting total awards in the $7,500 range, in addition to a few hundred more for court costs.

Having $7,500 in damages assessed against you by a federal court is no picnic, but it pales in comparison to the two twenty-somethings who actually showed up to court, got attorneys, went through a multiyear process and a nationally covered trial, and came out the other side owing far more money.

The chart below illustrates the point by graphing the various damage awards per song:

When it comes to total damages, the disparities are even greater. Thomas-Rasset's retrial ended up with a $1.92 million award, while Tenenbaum faces $675,000 in damages. Those who didn't show up owe around $7,500.

In fact, this might well have been Tenenbaum's fate. He was actually included in a massive complaint consolidated into a single docket, and it was only when he showed up to a court hearing that Gertner stopped the default judgment proceeding against him and actually helped find him a lawyer—Harvard Law prof Charles Nesson. Now, Tenenbaum faces a life-altering damage award and the prospect of bankruptcy if not reduced or overturned on appeal.

Update: I was interested more in what happens within the federal court system for this article, but several commenters rightly point out that "not showing up" isn't the cheapest way out of such situations. Settling with the RIAA usually leads to payments of between $3,000 and $5,000, lower than the default judgments issued here by Judge Gertner. Convincing a jury that you're innocent could be cheaper still (if you find a pro bono lawyer), though it comes with certain obvious risks.

Saturday, August 1, 2009

Jury Awards $675K in Boston Music Downloading Case

A federal jury on Friday ordered a Boston University graduate student who admitted illegally downloading and sharing music online to pay $675,000 to four record labels.

Joel Tenenbaum, of Providence, R.I., admitted in court that he downloaded and distributed 30 songs. The only issue for the jury to decide was how much in damages to award the record labels.

Under federal law, the recording companies were entitled to $750 to $30,000 per infringement. But the law allows as much as $150,000 per track if the jury finds the infringements were willful. The maximum jurors could have awarded in Tenenbaum's case was $4.5 million.

Jurors ordered Tenenbaum to pay $22,500 for each incident of copyright infringement, effectively finding that his actions were willful. The attorney for the 25-year-old student had asked the jury earlier Friday to "send a message" to the music industry by awarding only minimal damages.

Tenenbaum said he was thankful that the case wasn't in the millions and contrasted the significance of his fine with the maximum.

"That to me sends a message of 'We considered your side with some legitimacy,'" he said. "$4.5 million would have been, 'We don't buy it at all.'"

He added he will file for bankruptcy if the verdict stands.

Tenenbaum's lawyer, Harvard Law School professor Charles Nesson, said the jury's verdict was not fair. He said he plans to appeal the decision because he was not allowed to argue a case based on fair use.

The Recording Industry Association of America issued a statement thanking the jury for recognizing the impact illegal downloading has on the music community.

"We appreciate that Mr. Tenenbaum finally acknowledged that artists and music companies deserve to be paid for their work," the statement said. "From the beginning, that's what this case has been all about. We only wish he had done so sooner rather than lie about his illegal behavior."

Tenenbaum would not say if he regretted downloading music, saying it was a loaded question.

"I don't regret drinking underage in college, even though I got busted a few times," he said.

The case is only the nation's second music downloading case against an individual to go to trial.

Last month, a federal jury in Minneapolis ruled that Jammie Thomas-Rasset, 32, must pay $1.92 million, or $80,000 on each of 24 songs, after concluding she willfully violated the copyrights on those tunes.

The jury began deliberating the case Friday afternoon.

After Tenenbaum admitted Thursday he is liable for damages for 30 songs at issue in the case, U.S. District Judge Nancy Gertner ruled that the jury must consider only whether his copyright infringement was willful and how much in damages to award four recording labels that sued him over the illegal file-sharing.

In his closing statement Friday, Nesson repeatedly referred to Tenenbaum as a "kid" and asked the jury to award only a small amount to the recording companies. At one point, Nesson suggested the damages should be as little as 99 cents per song, roughly the same amount Tenenbaum would have to pay if he legally purchased the music online.

But Tim Reynolds, a lawyer for the recording labels, recounted Tenenbaum's history of file-sharing from 1999 to 2007, describing him as "a hardcore, habitual, long-term infringer who knew what he was doing was wrong." Tenenbaum admitted on the witness stand that he had downloaded and shared more than 800 songs.

Tenenbaum said he downloaded and shared hundreds of songs by Nirvana, Green Day, The Smashing Pumpkins and other artists. The recording industry focused on only 30 songs in the case.

The music industry has typically offered to settle such cases for about $5,000, though it has said that it stopped filing such lawsuits last August and is instead working with Internet service providers to fight the worst offenders. Cases already filed, however, are proceeding to trial.

Tenenbaum testified that he had lied in pretrial depositions when he said his two sisters, friends and others may have been responsible for downloading the songs to his computer.

Under questioning from his own lawyer, Tenenbaum said he now takes responsibility for the illegal swapping.

"I used the computer. I uploaded, I downloaded music ... I did it," Tenenbaum said.

Associated Press writer Jeannie Nuss contributed reporting from Boston.

Monday, May 4, 2009

Surprise! Study Shows Few Indies on Radio

Artist advocacy group The Future Of Music Coalition has released a new report “Same Old Song" confirming that indie music is not getting its fair share of airplay on broadcast radio.

In April 2007, the FCC found widespread payola and ordered the four largest U.S. radio groups (Clear Channel, CBS, Citadel and Entercom) to pay $12.5 million in fines and work with the American Association of Independent Music (A2IM) to draft 8 “Rules of Engagement" and an “indie set-aside" including 4,200 hours of unsigned and indie label music.

But FMC's new survey of Mediaguide airplay data shows little has changed in the 2 years since the FCC decree. Indie music did make slight gains at AAA Non-comm. and Country radio. But at all 5 other dominant radio formats (AC, Urban AC, Active Rock, CHR Pop, and Triple A Comm.) the share of indie music played remained stagnant at 78-82% despite ndies comprising 30-40% of the marketplace.

Not surprisingly, the FMC also found that there were very few slots for any new music .There too, new major label songs typically receive more spins than indies. Finally, FMC looked at the indie labels...

themselves and found that only a handful of indies have the resources and clout to garner airplay consistently. For the remaining indies, airplay is infrequent and modest, if it happens at all.

“As this report dramatically shows, we are still haunted by the ghost of payola, whether real or imagined." commented Peter Gordon of Thirsty Ear Records and indie music's lead negotiator with radio.

Rich Bengloff, President of A2IM adds, “Independent music accounts for approximately 38% of digital sales in the U.S. and over 40% of audience impressions at internet radio ,but consistently receives only slightly more than 10% of traditional commercial radio airplay. It's obvious that music fans want independent music, and commercial radio programmers continue to ignore that demand at their own peril."

Tuesday, April 28, 2009

Wax on the Come Back? Best Buy is Giving Vinyl a Spin?

The consumer-electronics giant, which happens also to be the third-largest music seller behind Apple's iTunes and Wal-Mart, is considering devoting eight square feet of merchandising space in all of its 1,020 stores solely to vinyl, which would equate to just under 200 albums, after a test in 100 of its stores around the country proved successful.

Though vinyl represents less than 5 percent of Best Buy's music sales, the format is growing while CD sales continue to shrink.

Vinyl sales grew 15 percent year-over-year in 2007 and 89 percent in 2008, making the 1.9 million vinyl albums purchased last year the most since Nielsen SoundScan began tracking sales in 1991. This year is shaping up to be even better, with 670,000 vinyl albums sold through mid-April.

By contrast, CD sales have fallen at a roughly 20 percent clip for the past few years.

To be sure, the growth in vinyl, even when combined with digital sales, isn't enough to offset the decline in CD sales. But it does show that consumers haven't abandoned the physical format.

And the fact that a retailer of Best Buy's size is willing to expand vinyl offerings is an incremental positive for the beleaguered music industry. A typical Best Buy store features about 16 square feet to 20 square feet of music merchandise and displays about 8,000 CDs.

"Our goal is to occupy as much square footage as possible with music products," said Atlantic Records CEO Craig Kallman, whose personal vinyl collection numbers more than 300,000, making it one of the largest private collections in the world.

Hoping to capitalize on the renewed interest in vinyl, all of the major record labels have combed through their catalogs to remaster and re-release marquee titles with their original artwork and packaging -- both of which are essential elements for the vinyl consumer.

For instance, EMI in September 2008 launched its "From the Capitol Vaults" vinyl initiative with such titles as The Beach Boys' "Pet Sounds," Jimi Hendrix's "Band of Gypsies," and Radiohead's "OK Computer."

Compared with a CD, vinyl costs more to make and retails for a higher price -- $22.95 vs. around $13.99 for a CD -- but has lower margins.

Both Kallman and Jason Boyd, EMI's senior director of catalog sales, said profits made from vinyl were acceptable enough to warrant producing the format.

The situation is the reverse for Best Buy. Chris Smith, the company's senior music merchant, said margins on vinyl sales are "healthy enough" to mitigate the risk that comes along with not being able to return unsold inventory like it can with CDs.