Goodbye LimeWire?
A New York judge ordered LimeWire to stop distributing its file-sharing software, agreeing with the plaintiffs that LimeWire’s service is used “overwhelmingly for infringement.”
Judge Wood of U.S. District Court in Manhattan said that LimeWire “intentionally encouraged direct infringement” by users of its site, and also “marketed itself to Napster users, who were known copyright infringers.
The LimeWire site shut down its service Wednesday, displaying only a legal notice announcing that that company “is under a court-ordered injunction to stop distributing and supporting its file-sharing software.” Nonetheless, the company insisted that it has not been permanently put out of business.
Digital Music: Spotify, Google and Grandfathering Label Deals
Last year, around the time that Apple acquired music service Lala, Google and Spotify were deep in acquisition discussions, says a source with knowledge of the negotiations. Ultimately no deal happened, and the two companies tried to negotiate a deal to have Spotify pre-installed on all Android phones instead. But the deal almost happened, says our source, and Google was going to pay nearly $1 billion for the service. Ultimately the deal went sideways because Google was demanding that all label deals be grandfathered in. And Spotify wanted a $800 million+ walk away fee if the deal faltered (Google had a similar provision in their Admob acquisition).
Here’s what “grandfathering” label deals means: The deals that music labels do with online music companies contain a provision that if the company is acquired, the deals terminate. That’s exactly what tripped up Facebook when they were looking to acquire or partner with a music startup a few years ago.
- How Spotify Almost Sold To Google For $1 Billion, Plus New Apple Rumors
Cassette Goodbyes: Sony Is Shutting Down Production Of The Walkman
Photo courtesy of edvvc
Slate has a great article on the history of the Walkman. We’re feeling a little sentimental to see Sony shut down production, and we’d like to see the lowly, now-obsolete Walkman get a little credit for the impact it had on how people experience music. Contrast this with how teenagers experience music now.
Consider this: The first Walkman model, the TPS-L2, introduced in the summer of 1979, was equipped with two headphone jacks. Sony’s ads showed pairs of very different people—for instance, a short old Japanese man and a tall, young American woman—both wearing headphones plugged into the same Walkman. The TPS-L2 even featured a button that let the sharers filter out the music for a moment, so they could talk to each other through the headphones.
“Up until the Walkman, listening to music was a shared experience,” Bob Neil, a Sony vice president told me back in 1999, when I was writing a story for the Boston Globe about the player’s 20th anniversary. Nobody could imagine people buying something that would let them listen all alone; the whole notion would surely strike the people around them as “rude.”
Stanford Law School’s Fair Use Project Asks Supreme Court To Rule On Constitutionality Of Restoring Copyrights In Foreign Works
Photo by Horia Varlan
Lawyers from Stanford Law School’s Fair Use Project (FUP) and Wheeler Trigg O’Donnell LLP filed a petition for a writ of certiorari, asking the United States Supreme Court to review the constitutionality of a federal statute that removes thousands of foreign works from the Public Domain and places them under copyright protection. The FUP filed the petition on behalf of orchestra conductors, educators, performers, film archivists and motion picture distributors who relied for years on the free availability of works in the Public Domain, which they performed, adapted, restored and distributed. A 1994 amendment to the Copyright Act, the Uruguay Round Agreements Act (URAA), removed these works and many others from the Public Domain and placed them under copyright protection in conjunction with the implementation of intellectual property treaties. That amendment affected the copyright status of thousands of works by foreign authors that had been in the Public Domain in the United States for decades, including symphonies by Sergei Prokofiev, Igor Stravinsky, and Dmitri Shostakovich; books by C.S. Lewis, Virginia Woolf, and H.G. Wells; films by Federico Fellini, Alfred Hitchcock, and Jean Renoir; and artwork by M.C. Escher and Pablo Picasso, including Picasso’s masterpiece Guernica.
Reality Check: Teen and Music
Photo by Nicki Varkevisser
We’ve negotiated and administered music licensing deals for virtual worlds in the past and are intrigued by this recent survey from the makers of teen virtual world Habbo Hotel.
- 33% of teens prefer to download music without paying for it. Young people in Chile are the least likely to pay – 51% favor this approach. 21% of US and 20% of UK teenagers download music without paying. Also, 21% of teens prefer to purchase downloaded music. And record labels in Australia will be pleased to learn that teens favor the paid-for approach; 37% of Australian teenagers would pay-to-play.
- A fifth of teens (20%) still buy CDS. Teens in Sweden (40%), Germany (37%) and Denmark (35%) are the most likely to buy a CD. Only 14% of U.S. Habbos polled still buy CDs.
- 26% of teens favor streaming services. These are most popular in the Netherlands (53%), Finland (45%) and Belgium (46%).
- Radio and TV are still the dominant music taste makers. 38% of teens worldwide take music recommendations from these traditional channels. Of the U.S. Habbos polled, 52% get their music recommendations from radio and TV.
On Money, Music Startups and Failure: Imeem Tells All
Dalton Caldwell, one of the co-founders of Imeem, spoke recently at a Y Combinator event about lessons learned from Imeem’s depreciation and subsequent firesale. The lecture was a revealing discussion of a number of topics, including music business models, tools for independent musicians, download stores, subscriptions, and revenue models.
Of course, the issues that Caldwell dealt with during his time with Imeem still very much impact entrepreneurs today. We are frequently approached by startups that have built amazing products premised on the ability to stream, download or otherwise include music. The inability to effectively and affordably secure those rights can lead to a failure to launch or a failure to create a viable business. VentureBeat has a great article summarizing the pifalls discussed by Caldwell:
For one thing, each licensing deal with the music labels tends to include a minimum quarterly payment that startups have to pay, even if their revenue doesn’t meet expectations. Also, in most models, Caldwell pointed out, the costs are high enough and the margins are low enough that you’d have to sell an unrealistically high amount of music to break even. Plus, most of these offering types are already saturated with competition. Finally, even if you want to sell your startup to another company, there’s a big problem: In every licensing deal Caldwell said he has seen, the record label has the right to renegotiate or pull out of the deal if you get acquired.
All of this reminds of a recent infographic outlining the operating costs of Pandora, created by former MP3.com CEO Michael Robertson.
Pandora Brings Mobile Advertising to Small Businesses
In a bid to further expand its local ad revenue, Pandora has opened up its mobile advertising platform to small to mid-sized businesses.That means that advertisers can now run both banner and audio campaigns across Pandora’s mobile applications, which the company says account for more than half of its 65 million users daily listening.Those ads can be targeted by location, though at the moment, that targeting is based on the zipcode users provide to the service as opposed to a physical location shared by a GPS-enabled smartphone. Still, the format represents a new challenger to terrestrial radio stations, and Pandora is actively targeting local businesses – think car dealerships, banks and local universities — around the U.S. that currently advertise there.
Martin Scorsese Involved in Legal Dispute Over Rare Jimi Hendrix Track
Reuters reports that Martin Scorsese, Jimi Hendrix’s estate and a saxophonist named Lonnie Youngblood are involved in a legal dispute over the rights to a song called “Georgia Blues.”
Hendrix was a member of Youngblood’s band in the mid-1960s before hitting it big on his own. The pair reunited in 1969 to record “Georgia Blues,” which was used in Scorsese’s 2003 PBS special The Blues.
The track was also released on the album Martin Scorsese Presents the Blues: Jimi Hendrix. Youngblood sued Hendrix’s estate, Scorsese and MCA Records earlier this year, claiming the song was released without his permission.
- Martin Scorsese Involved in Legal Dispute Over Rare Jimi Hendrix Track
The Economist Is The Latest To Recognize The Music Industry Is Thriving
We’ve been making this point for years now, but as more and more evidence comes from the recording industry itself, it’s nice to see mainstream publications like The Economist finally willing to admit that the music industry is actually thriving, contrary to the stories you keep hearing in the press. It covers many of the same data points and stories we’ve seen before, but highlights a few others — including a rapper who set up a clothing line before he even made his first video, but is making more money selling clothes (which he wears in his videos) than selling music. As the article says: “Scorcher is not so much selling music as using music to sell. ‘If you buy into me musically, you will also buy into the clothing and the lifestyle.’”
- The Economist Is The Latest To Recognize The Music Industry Is Thriving
I don’t know if I agree with the statement that the music industry is thriving, but I do think that there are many ways an artist can monetize the music other than selling the music itself, such as song licensing. Those who recognize and embrace this will benefit.
ASCAP Loses Major Music Download Appeal Case; Blanket License Fee Calculation Remanded to District Court
Is a song download a public performance?
In a strongly worded opinion coming out of the US Second District Court of Appeals last week, the court ruled against ASCAP and remanded the case, which involved Real Networks and Yahoo.
The court (decision available here in full text via Film Music Magazine) analyzed existing copyright law and precedent extensively. The meaning of the word “perform”, defined in Section 101 of the US Copyright Act as “to recite, render, play, dance or act it, either directly or by means of any device or process,” had a significant impact on the decision.
As Film Music Magazine noted, the decision “in large part hinged on the fact that a download does not include a ‘contemporaneously perceptible event’ – that during a download, the musical work could not be heard or listened to.”
We’re looking forward to seeing how this decision will impact our new media and technology clients, for whom the difference between a download and public performance can sometimes mean thousands in royalties.