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Money For Nothing ($90 Million Plus)
January 14, 2011
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"While counterfeiting and piracy in the physical world are serious problems, these issues are growing at a significant rate online and pose unique challenges in remediation, due to the inherent nature of the Internet with its global reach, cost efficiencies and anonymity."
-- Brand protection company MarkMonitorLet's first start off with this old joke: Santa Claus, the tooth fairy, an honest lobbyist, and an old drunk were walking along when they simultaneously spotted a hundred-dollar bill laying in the street. Who gets it? The old drunk, of course, the other three are mythological creatures.
Last week I wrote about the money the major labels have funneled into their (alleged) industry association, the RIAA, for lobbying efforts in 2010. What they spent last year was just a proverbial drop in the bucket compared to what they spend in the past decade.
This week comes the news that "According to a Center for Responsive Politics analysis based on data collected from the United States Secretary of the Senate Office of Public Records (SOPR), the recorded music industry and the Recording Industry of America (RIAA) have spent over $90 million in lobbying efforts in the United States alone since 2000." (Source: http://tiny.cc/z1htu )
So, somewhere between $90-$100 million spent in the past decade and what are the results? Well, brand company MarkMonitor found traffic levels of 53 billion visits a year on some 48 pirate websites. "Traffic to sites suspected of offering pirated content was over 146 million visits per day," the report claimed. The top-three websites classified as 'digital piracy' -- rapidshare.com, megavideo.com, and megaupload.com -- collectively generate more than 21 billion visits per year. (Source: http://tiny.cc/tszq4 )
The report is not focused just on pirate sites offering music and film content; it deals with websites offering counterfeit goods as well. But, the fact is abundantly clear that despite the best efforts of politicians, lawyers, and industry associations, piracy is still rampant, still on the increase, and all the king's horses and all the king's men can't remake the Internet again the way they would like.
$90 million is an awful lot of money. But then again, we shouldn't be surprised.
"The very first time a major music industry executive heard about Napster and got nervous, they turned left and went down and talked to their lawyers instead of walking out of their office and turning right and heading down to the business section," said Corynne McSherry, intellectual property director for the Electronic Frontier Foundation. "That was the fundamental mistake."
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THE 'A-SIDE' - TRACK 2
A SIGN OF THE TIMES
CD sales continue to decline and this week Sony DADC it's closing its CD manufacturing plant in southern New Jersey and laying off about 300 employees by March 31. ( http://tiny.cc/piy7e )
Lisa Gephardt, a spokeswoman for the subsidiary of Sony Corp., said in a statement released Tuesday that the closure is coming because of what she called "challenges facing the physical media industry."
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THE 'A-SIDE' - TRACK 3
THE SUPREME COURT ALLOWS MUSIC PRICE-FIXING SUIT TO PROCEED AGAINST MAJOR LABELS
The U.S. Supreme Court has rejected the major record labels' request that it block a lawsuit lodged by consumers who claim they colluded years ago to fix prices on music sold on the Internet, Bloomberg News has reported.
"Units of Sony Corp., Vivendi SA, Warner Music Group Corp. and EMI Group Ltd. argued unsuccessfully that the allegations in the consumer complaint aren't sufficient to suggest the companies engaged in misconduct. A federal appeals court in New York said the allegations were enough for the case to go forward, and the Supreme Court left that ruling intact."
Read the rest here: http://tiny.cc/e7oqb
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THE 'A-SIDE' - TRACK 4
MORE BAD NEWS FOR NEWSPAPERS
A national survey by the Pew Research Center for the People & the Press, conducted Dec. 1st-5th, 2010, finds that more people continue to cite the Internet than newspapers as their main source of news, reflecting both the growth of the Internet, and the gradual decline in newspaper readership (from 34% in 2007 to 31% now). The proportion citing radio as their main source of national and international news has remained relatively stable in recent years; currently; 16% say it is their main source.
Currently, 41% of Americans say they get most of their news about national and international news from the Internet, up 17 points since 2007. Television remains the most widely used source for national and international news, down from 74% three years ago and 82% as recently as 2002.
And Now For Some News ...
Google And Merlin Are Talking
DIGITALMEDIAWIREMerlin, a group formed to represent the rights of independent record labels, is in talks with Google on licensing tracks for a forthcoming Google music service.
Read more about it by clicking here.
Canadian Labels Will Pay $45 Million To Songwriters & Publishers
EMI Music Canada Inc., Sony Music Entertainment Canada Inc., Universal Music Canada Inc. and Warner Music Canada Co. have reached an agreement to pay songwriters and music publishers for outstanding "pending list" claims and to resolve a proposed class action lawsuit.
Read more about it by clicking here.
HMV Will Close 60 Stores In The U.K.
NMEIn yet another sign of the downturn of physical music sales, HMV this week announced they will close 60 UK music stores in 2011.
The music retailer has seen shares fall drastically recently, with Christmas sales also down 10%. By closing the stores, it is hoped that the company will be able to control its costs more efficiently.
Read more about it by clicking here.
Pandora Has Doubled Its Audience To 75 Million
PANDORABLOGIn a blog post on the Pandora site, founder Tim Westergren announced that Pandora has doubled its audience to 75 million.
Read more about it by clicking here.
ELVIS MIGHT HAVE LEFT THE BUILDING, BUT YOU STILL OWE HIM:
Elvis Presley Enterprises is suing music publisher Chrysalis Music Group, claiming they owe them as much as $5 million in royalty payments.
GEFFEN HONORED:
The Recording Academy, NARAS, revealed that the 2011 Grammy Salute to Industry Icons will honor David Geffen, who'll be presented with the President's Merit Award on Grammy eve (2/12) at the Beverly Hilton.
VEVO ANDROID APP:
Vevo, the music video portal joint venture between Universal Music, Sony Music and Abu Dhabi Media Company, on Wednesday announced the launch of a free app for Android smartphones.
LIVE GREEN DAY:
Earlier this week, Green Day announced their forthcoming live CD and DVD, "Awesome As F**k." The discs are due out March 22nd. The CD will include selections from every stage of the band's career.
BLUE TUNES GOES BYE-BYE:
BlueTunes, a service that let users upload and store their digital music collections in an online locker, has announced that it will shutter its service.
UMG DONATES MUSIC TO LIBRARY OF CONGRESS:
The Universal Music Group is donating more than 200,000 master recordings to the Library of Congress, according to The Hollywood Reporter.
AMC CONFIRMS MAD MEN RETURN:
Good news for "Mad Men" fans: The Emmy-winning series will return for Season 5. No date was announced for its season premiere. AMC also promised that "Breaking Bad" would begin production for its fourth season on Jan. 13th.
MYSPACE HAS PLENTY OF OFFICE SPACE NOW:
News that MySpace plans to layoff more than half of its remaining 1,000 employees is no surprise, but what it means for the company's future remains an open question.
GRAMMY LINEUP THIS FAR:
Eminem, Arcade Fire and Lady Gaga are among the first wave of performers confirmed for the 53rd Annual Grammy Awards ceremony on February 13th. The initial lineup also includes Katy Perry, Cee Lo Green, and Miranda Lambert.
PASSING:
Bobby Robinson, 93, the founder of one of the first rap labels, Enjoy Records, and the first record man to sign hip-hop act from the streets of the Bronx in Grandmaster Flash & the Furious Five, died last Saturday.
The Music Industry Past, Present & Future, And The Internet I answer questions on EconTalk
I did an interview about the industry and the Internet at EconTalk with host Russ Roberts. Russ is also a professor of economics at George Mason University, blogs at Cafe Hayek, and has written three novels that teach economics. He's also the co-creator of the Keynes-Hayek rap video. (And if your understanding of the economic meltdown that occurred needs to be enlightened, this video will do it)
In the interview we talk about the evolution of the music industry, the impact of the digital revolution, and I give my reasons for believing in the virtues and potential of the Internet in enhancing the music industry. I point out, as I have many times here in the newsletter, that the internet allows numerous artists to make money from their music and it can enhance revenues from live performances by expanding an artist's base. We also discuss the challenges facing record companies and I suggest that the full potential of the Internet as a distribution channel has yet to be fully exploited. There's a lot of ground covered, but based on the comments already posted of those who have tuned in, they've enjoyed it.
Read more about it by clicking here.
Quotes of the week
"When you're a fat girl in Hollywood, it's not fun."
-- Kelly Osbourne, who has slimmed down to a size 2. Gee, how profound, Kelly."I've never been drunk in my life. I don't use recreational drugs. But, I am goofy."
-- Paula Abdul, explaining her sometimes seemingly odd behavior, on CBS' Sunday Morning show. If "goofy" is all we've witnessed, I can't imagine how incoherent Paula would be on drugs or alcohol."Singing like someone else is not particularly attractive to a label. We have four or five great producers [including Rodney Jerkins, Ron Fair, Timbaland and Alex Da Kid] making sure they don't sound the same every week. In the past, they weren't getting the proper help to make sure they were getting better."
-- UMG's Jimmy Iovine on the new-look on 'American Idol'"Senior sex tape."
-- Kathy Griffin, predicting Kim Kardashian's future job opportunities, on Anderson Cooper 360°."I'm trying to rally the guys together. We're having trouble getting Joe [Perry]. I don't know where he is, but just come down to L.A. at the end of January sometime. I've had enough downtime. As far as Joe goes, look, the guy's got LSD - Lead Strummer Disorder. We've been brothers forever. He's just going through his thing. I think the rings of Saturn are composed entirely of unrecorded Joe Perry licks floating around in the ether somewhere."
-- Steven Tyler talking about Aerosmith lead guitarist Joe Perry in Rolling Stone"When you're sitting there talking about that and one of the band members knows full well he's signed a contract that's taking him out of the music business for seven months of the year -- that kind of throws a wrench into things. It's a reality show designed to get people to watch that station and sell advertising. It's one step above Teenage Mutant Ninja Turtles. When we put this band together, this is not something that [Steven Tyler] would do. It's his business, but I don't want Aerosmith's name involved with it."
-- Joe Perry in an interview last September, talking about Steven Tyler's involvement with 'American Idol'
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
FCC To Fine Americans Who Don't Keep Up With TV Shows
WASHINGTON-Announcing that it would no longer allow Americans to fall behind, the Federal Communications Commission introduced a plan Monday to levy steep fines on anyone failing to keep up with the nation's TV shows. "Our economy lost more than $200 billion in productivity this year with people taking time out of their day to explain what happened last night on Mad Men," FCC chairman Julius Genachowski said.
Read the rest here and laugh: Click Here.
The Blogs
Check out Jerry Del Colliano's (the founder of INSIDE RADIO) daily blog, by clicking here: http://www.insidemusicmedia.blogspot.comWebsite
Check out attorney Ray Beckerman's website at: http://recordingindustryvspeople.blogspot.com where he prints news about the RIAA's ongoing activities
Smart Marketing Consulting Services
Smart Marketing Consulting Services has been in business sixteen years, and consults clients in the music, entertainment, attraction, media, and technology industry on branding, marketing, online exploitation, maximizing new media, and more.
"And the beat goes on, the beat goes on ... drums keep poundin' rhythm to the brain."
"Work is life, you know, and without it, there's nothing but fear and insecurity." -- John Lennon
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