CIA & Sound Exchange Create Agit-Prop For Fed Regulation


If you’re in the music business, many of you probably got the link in an email and thought it was kinda a great name for a site and the GUI is neat as well.

But behind the colorful web site with hip lingo could lurk a very serious agenda; one that involves a connection between the CIA and the “non-profit” performing rights agency (PRO), Sound Exchange (SX). seems banal on the surface.It hosts an interactive Chart that shows a relationship between piracy and lost music revenue. Scenarios can be explored based on how you set up its parameters.Switches like “estimated growth” and “deductions” are adjustable.But hidden behind the colorful interface could there be an unseen force persuading us to let the Fed regulate the music space?

The purpose of the Chart is, according to its co-creators, Leron Rogers, partner in the law firm, Hewitt and RogersandBryan Calhoun, Vice President, New Media & External Affairs for SX, to act as an “open discussion tool” and stimulate a dialogue for the proposed but controversial ISP blanket music license; sometimes called a “compulsory license” because the ISP would be compelled to either collect it from subscribers (like sales tax) and pay it forward, or pay it out of their revenue directly.

Rogers purports that the Chart’s logic is politically neutral, serving only to calculate raw data. Except that the Chart’s data makes several very biased assumptions, 1) that digital piracy is rampant and 2) the business of music is declining fast because of this. According to, without an ISP license music biz revenue will be swallowed up by piracy in the next few years (just in time for the Mayan Apocalypse.)

Compulsory licenses are not new to the music business. The nine cents for each record sale that is paid by record companies to songwriters, often called the “Statutory Rate,” is the most famous in the US (established in 1909) and is collected/audited by The Harry Fox Agency. Such a license in the case of ISPs would, just like the Statutory Rate, require legislation as well as some regulation of record companies; a thought that seems outrageous and dangerous to many.

Now, aside from the financial logistics that will be challenging, to say the least, even if a compulsory license for internet use were to be instated; and aside from the fact that artists will probably not see any significant amount of this revenue without an audit– even if it could be collected, the Chart’s assumptions are way off base and suggest an agenda that is anything but an “open discussion.”


Across the top of the Chart is text reading: “This chart shows the historic and projected revenues of the US music business.”Except that nowhere on the site does it break out revenue from airplay/public performances or synchronization licenses: two of the industry’s core revenue streams.

Despite the fact that ASCAP/BMI took in over $1 Billion last year and have had three record-breaking years in a row for collections, and despite the fact that master placements in movie and TV soundtracks are at a historic high in both uses and fees, the Chart’s creators omitted these statistics when calculating “US music business revenue.”

Mr. Rogers admitted to me that the headline should be something more accurate like, “Revenue from US record sales.” He called it an “oversight” and said he would change it.

But even if he does, in the area of US record sales the Chart still gets a flunk because the Chart’s assumptions are based strictly on RIAA statistics.


Which means it doesn’t take into consideration indie label sales which account for about 25% of the physical product in the US market place.Nor does the Chart seem to account for Mobile or G3 Network sales, which add millions of singles sold each year.There is also no slider to adjust for migration to or from subscription services, or cross-over of a person using both, and let’s not forget the soon-to-be-flowing revenue from webcaster advertising (roughly 25% of all internet radio profits) estimated to be worth unknown millions over the coming years.

Nope.None of these are in the mix.The Chart’s raison d’êtrerests entirely on its definition of the “US music business revenue” which it limits to the tortured sales of RIAA distributed CDs and some types of digital sales.


Mr. Rogers defended, saying that he and Calhoun created the chart with guidance from “high level music executives and consultants.” They would not tell me who their consultants were because, according to Rogers, the consultants wanted to remain anonymous “as a condition of working on the project.” (If this is the type of junk-work they provided, I can see why.)

But in an email exchange I had with Detica (the corporate espionage company that engineered the Chart’s brain and whose clients include the CIA) they wrote that they based the assumptions not on any consultation with people but only RIAA published statistics and information supplied to them by… Calhoun and Rogers!In essence, Detica is saying, we’re not to blame: Bad data in equals bad data out.

Perhaps Calhoun and Rogers or whoever worked on this thing, don’t believe that revenue from publishing is very significant.Or, perhaps it’s because if you added publishing and mobile revenue to sales of physical product (which last year was over 550 million units in the US) the music business would not look like it’s in such bad shape, and thus the argument for compulsory ISP fees would seem silly.I mean, why hide that you helped create something enlightening, unless there is another reason for this Chart; one that creates an entry point for someone to gain a foothold in the music space.

Could someone new be knocking on our industry’s door but hiding beyond our preview of the peek hole?


Without the ability to vet who worked on the program’s logic or how the algorithms “think”, this Chart is nothing more than a propaganda tool, and a rather conniving one at that. It enters the subject from a place where we can all agree–should artists get compensated if their revenue is being attacked?Sure.Artists are cute and cuddly, like a Panda, and shouldn’t we stop the killing of Pandas from the evil cosmetic industry?Or rabbits from the Oil Industry, or the Spotted Owl, or whatever the hell that issue is?

It’s propaganda 101. All great campaigns have an “entry point” that seems universally rational; WMDs sold us the Iraq War and–in the extreme–the most historic of all propaganda campaigns: Hitler’s “economic reform discussions” that were the entry point for the Final Solution.Intention is the key: if we knew who was behind this Chart, it might be more helpful.

So, who’s connected to wish I knew. They have four “partners” listed on their site but aside from SoundExchange, and Detica, the two other partners’ hot links on the site don’t connect to any information pages.Even Rogers’ own law firm–listed as a partner–has no information about them, or their clients.


Not surprisingly, the site doesn’t discuss the inevitable down-side of a compulsory license: that since US ISPs will not voluntarily opt into this system the Fed will have to make it happen with legislation and… say it with me folks– regulate.Do the secret “high level consultants” who created an “open discussion tool” have a vested interest in letting the Man into our front door? I’d like to know.

Rogers says he’s not for government regulation. “I would hope that ISPs voluntarily opt into a compulsory license system.” (Who said lawyers are cynical?) But, few would agree that this is a reasonable expectation and so, in essence:

The Price For Music is a veiled and covert argument for government oversight of the music biz, which, if it happened, would be a very heavy price for music, indeed!

Some good news: my heated interview with Rogers and Calhoun (sounds like a song-writing team) sparked a reaction.I received this in an email from SX shortly after: “…we already spoke with the guys at Detica and are compiling our lists of [your] comments, suggestions and concerns to update the site. Thanks.”

We’ll see.I doubt this will level the playing field. Detica’s interface doesn’t allow users to change “quality scores” of each parameter, which, along with RIAA’s so-called “Historical data” is the heart of’s assumptions.Without the ability to adjust quality scores little room is left for any rendering other than that a music business melt-down is in progress and the compulsory license is a good way to return money to our decaying economy; an easy argument to make, when you rely solely on RIAA data and omit several billion in revenue streams.

Reporting from the front and keepin’ it real for over ten years now,

Moses Avalon

For more on’s retarded assumptions see section six in this PDF.

For more info on the screwed upway the RIAA calculates “sales” watch this 2 minute video or read this article.

Don’t like what I wrote about your company? Tell me. Like most journalists, I enjoy a good argument, and our discussion might make for a nice follow-up story. Twittering that I am a moron is a) news to no one, and b) unlikely to further your cause.–Tip # 116 from

13 responses to “CIA & Sound Exchange Create Agit-Prop For Fed Regulation”

  1. Moses, once again you niald it! I havent seen that website before but its good that I read your statement before. I question anything the authorities may have on their agenda, especially the rumors until I’m proven wrong. Obviously now that site is an in-your-face agenda site and who else if not the (who are they anyway?) see-IA could bebehind it? Anyway, if theya hide their faces they mos def have selfish motives.

  2. Jim Kahl says:

    Excellent work and thanks for letting all of us in on this information. This actually does not surprise me. I have said for years that the US government is pushing us closer and closer to a socialist society. They do it a little piece at a time and tell us that it’s for “our” benefit. This would simply be one of those pieces.

  3. Calvin Gomes says:

    As long as were keeping it real
    Lets be Real Moses
    your quote:
    “It’s propaganda 101. All great campaigns have an “entry point” that seems universally rational”

    Sounds to me like Obama is going down that path in fact I know he is why didnt you use that in your example???
    Instead you said WDMS were for the Gulf war which was incorrect that would be the war in IRAQ
    So if your going to keep it real
    and understand I own your books and love what you stand for
    Understand whats going on in the Government currently
    Seems to me its Propaganda 101 instill Fear come to the Rescue and then offer a solution that must be done RIGHT Away !
    hows that stimulus working for ya?
    Anyway lets stick to music business next time I know you and I dont agree Politics wise and thats ok I am glad your out there making it better for all of us and stepping on some toes!

    • Moses Avalon says:

      Nice catch, I’ll change the Gulf War to the Iraq War. The rest of your points don’t make sense to me. I’m not keeping it real b/c I’m not talking MORE about Obama, but, on the other hand I should stick to the music biz and avoid politics? I’m lost.

  4. Dar.Ra says:

    You need to take some R + R after writing that piece, see you back at the front!
    Private D

  5. phil moffa says:

    Moses, you’re always slugging it out for the real folks in the biz. thanks.

  6. Adrian Cornes says:

    Moses, I haven’t gone on the website but I am sure from what you say that the basis of calculation is flawed.

    However I question your viewpoint that regulation of any kind is a bad thing. As a UK based in house lawyer at a music company with both music publishing and recorded music interests it seems to me that in Europe we have less of a problem with regulation because it makes things a lot easier for all concerned and music publishers and songwriters know what they will receive with certainty for mechanical royalties. The 9 cent “minimum” rate you mention in relation to US mechanicals is a joke, because all you have to do is have a controlled compositions clause between artist and record company and it results in the artist songwriter being forced to agree to be paid at 75% of a so-called “minimum statutory rate”.

    By the same token a wild west free for all on what gets paid for streaming music on websites etc. in my experience usually results in artist and music companies ending up with very little and the tired old argument put forth by MySpace / YouTube or some other media giant or IT giant company claiming that the use is “promotional”. For that read we do not want to pay you very much if at all.

    First MTV and now the internet. The US music community must not fall into the limited viewpoint that all regulation is bad, without looking at the possible benefits.

    If the proposals put forward are flawed, it is because (as you rightly point out) the figures are skewed in favour of the big 4 record companies. If it took into account indie labels, music publishers and artists and their managers opinions also so that everyone’s voice is heard surely there is strength in unity?

    Thought provoking article as usual though I disagree with your reaction and overall viewpoint.

    Adrian Cornes
    In house lawyer

    • Moses Avalon says:

      This is a good point. So good in fact I agree with it. I never wrote that regulation was bad. Just dangerous. Adrian, lives in the UK, where they’ve been tweaking Socialism for many years. We in the US seem to feel that such measures are as slippery slop and one that would torture our already burdened government budget. I don’t know if this is true, but it’s how we feel.

      So, let me be clear. I’m not necessarily against compulsory ISP licenses. What I’m against is people making bad, stupid, one sided arguments, and worse yet, covert forces trying to persuade us towards one side or another with those arguments.

      I’m against this… even if the covert forces are on MY SIDE of the argument.

      Democracy functions best with open discussions. in my opinion is not really an open discussion because it selectively doesn’t factor in a lot of relevant data and because you can’t really adjust the controls to an unbiased point.

  7. todd mccarthy says:


    Enjoyed this post. After reading, I took a few minutes to check on Sincere Management out of curiousity.

    A quick check on reveals an address and a phone number registered to “”:
    Sincere Inc
    12624 Victoria Place Circle
    Orlando, FL 32828
    (323) 338 2740

    Also, there are these two myspace accounts that appear to be connected:
    Both in Orlando and on each other’s friends list.

    On the surface, seems like an odd partner for “apriceformusic”.

    Anyway, keep it up. It’s great to hear from you on a regular basis.
    Looking forward to the next post.

  8. max davis says:

    I found the CIA article very interesting. They have probably been reading stuff we’ve been saying about the “industry” missing a massive opportunity to have a statutory rate legislated back in the 90’s. The difference is the rate would have been for ALL multimedia and the only thing the gov would have regulated was making the ISP’s participate. It would have been up to the industry players to work together and democratically divide up the pie the downloading would have generated. Massive missed opportunity.

    We are at a similar benchmark for data right now. To put things in perspective and give you a glimpse of our vision of the future here is a letter we send out to prospective members in our grass roots efforts;

    “How are you? It’s been a few weeks since we last communicated and I am following up so that you don’t forget about our progressive initiatives. We are definitely moving forward and most recently have found a way to include the newspaper industry in the loop, We expect enthusiastic participation by that industry.

    With all that’s going on, (The Performance Rights Act, Webcasters (resolved) etc)… our initiatives speak to the future of all multimedia. That is a major difference. We want our governing board to reflect the diversity of multimedia.

    Please accept our invitation to take a seat as a governing member of our association. Our website was launched within the last 90 days so we are very new but garnering a lot of attention. It is basically a win win situation even for the wireless carriers.

    Getting started is always the hardest thing. We’ve done that. If you have a vision of inclusion in what we are promoting and developing, please help us by becoming a member and/or donating to the cause. You will put your organization in a prime position to help us administrate as a collective should we succeed. Thanks for your considerations.”

    Best regards,
    /max davis/

  9. shredder says:

    hey Moses!
    this truly is most disturbing news, but it definitely lines up with prophetic events today even from the tanakh. i checked out that site DEmontaukTICA and there are a ton of red flags there for sure.
    when i first read the subject title of your email, i thought you were perhaps writing about my late friend ian copeland or one of his brothers, but then it hit me, their companies had names of other agencies, but not that one. funny they were always suspected of working for that one though and i know some of that rumor to be true in a way.
    another funny, not so ha ha as funny strange, thought i had when i read the words ‘statutory rate’ my mind changed the ‘t’ in rate to a ‘p’ and that would in a way describe what the majors are doing when they pay that 9 cents to there artist.
    i still hope that someday we can meet in person, and talk in analog where conversations belong 😉

  10. Everyman says:

    Sincere Management is Peter Jenner, the socialist manager. The spreadsheet came out of his private Kristiansand music conference in 2008. Calhoun attended.

    (Todd, try using Google)

  11. Angela Beasley aka Lois Lane says:

    Wow…My mother used to say this all the time when she was living “Moses Supposes his toes smell like Roses” LOL, and then a friend of mines recently led me to your site. I am a former recording artist who is now attempting to help upcoming independent artists achieve some level of success. I am also trying to educate them to the best of my ability about the music business. I am digging around and what I’m finding it ridiculous. The payola, the racism, and everything else I am sure you are aware of. For example why are there hardly any events for rap artists with BMI? Isn’t Rap or “Urban” music as they like to call it making them tons of revenue? Why is it that everything geared towards hiphop artist including huge fees? Who the hell is TJ’s DJ’s and why is he and his befriended organization Ozone Magazine charging hip hop artist hundreds to thousands of dollars to perform in front of each other – and then providing them with little or no information or education on the business?

    The level of ignorance about what goes on in this country is phenomenal. Most of us have basically turned into an army of sheep! I was in the army and witnessed 4 kids between the ages of 18 and 22 die. Two of them committed suicide and 2 more keeled over out of exhaustion. Have you ever heard about that in the newspapers? NOT! I, personally, am going to do something to make some of this “music biz” change. We can talk about it all day, but somebody needs to be about it! If you or anyone reading this has any suggestions on tactics that might be useful, please let me know. And Thanks so much for the informative and educational information and this blog.

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