Industry information that you can actually use
November 2003
 iTunes inspires new song sharks. Destiny's Child accused of stealing songs - again.
BMI
at war with Karaoke bars.
UNI set to slim down: forces Jimmy Iovine to change his baseball
cap.
DISCLAIMER: This is not news. News is allegedly objective. This is
anything
but. This is about interpreting the news into information that you
can use.
Facts may occasionally be exaggerated to make a point. The key to
predicting the future is in learning from our past. In real terms,
this
means understanding how the big players evaluate their mistakes and
their
recent acquisitions. Let's take a look. But first…
BMI BEATS UP ON KARAOKE BARS
I want to thank BMI. For years I have had to listen to God-awful amateurs
try to sing "Born in the USA" via a Karaoke machine in just
about every
local bar I go to. BMI is going to put a stop to that.
Jealous that the RIAA gets to sue everyone for piracy, BMI is sending
their
own type of litigious message; they sued an Indianapolis Karaoke bar
for
not paying them licensing fees for the pop tunes that are part of the
karaoke juke box in the bar.
The lawsuit claims that Parrotheads Bar and Grill failed to pay licensing
fees for using songs such as ``God Bless the USA'' and ``Old Time Rock
and
Roll," during their weekly Karaoke night.
Many songwriters view BMI as the cops of performance royalties, without
which, songwriters would see virtually no money from juke boxes, radio
play
and arena performances. However, in a climate where the record industry
has appeared overly litigious, this action will likely be met with
some
public retaliation. Especially in light of the fact that BMI lost some
significant ground some years back in Federal court; restaurants argued
that people come there for the food not the music and so the they should
not have to pay performance fees for the tunes they play while you
dine.
BMI
argued that they should then try selling food & drinks without
music
and see how well their business does. A logical argument that courts
did
not buy. They decided that a restaurant with only 14 tables or under
1500
square feet was exempt from payments to BMI and ASCAP. This decision
has
cost songwriters tens of millions a year according to BMI spokespersons.
So, after sitting at the losing end of one can't lose argument, let's
hope,
for the songwriters' sake, that BMI has changed lawyers for their Karaoke
campaign and hired a decent PR company.
Will this mean we can kiss Karaoke nights goodbye? Please, don't tease
me.
Many legal-eagles will be watching this one. Considering that the
maximum
damages that I think BMI can seek is about $1000 per venue, I'm not
sure
this has the same sharp, sexy teeth that the RIAA suit does with its
potential claims of $150,000 per infringement.
DESTINY'S CHILD
ACCUSED OF SONG THEFT-AGAIN
Proving one of my older theories, that having a hit song is like putting
a
bull's eye on your back that says "sue me," it seems that
the bulls-eye on
R&B group Destiny's Child, is quickly becoming one that is in need
of
reupholstering.
Producer T-Rob of Miami (real name Terrence Robinson) has filed a
$200
million lawsuit against the group's singer, Beyonce Knowles, and fellow
group members alleging they stole his music for the hit song ``Survivor.''
This suit is only one of several that the superstar group has had to
sustain regarding song-theft and defamation, and the third suit related
specifically to authorship of "Survivor."
Representing Robinson is Peter J. Clarke who claims his client--who
was
essentially an un-known--heard stolen pieces of his material used in
a
commercial and felt dissed. ``I know right now I would be one of the
biggest, most sought-after producers,'' said Robinson, alleging what
would
have happened if he received credit.
Knowles'
father and manager righteously insisted, "Somebody has
got to be
lying.'' He said the group wrote the lyrics and let State of Mind Muzic
producer, Anthony Dent do the rest.
"Survivor," was
a No. 2 hit and earned the group a Grammy in 2002 for best
R&B performance.
ITUNES INSPIRES NEW ON-LINE SCAMS: WHO CAN YOU TRUST?
With the massive exposure and publicity of the iTunes music store,
several
companies have crafted "offers" to convince independent artists
that access
into this coveted pipeline is available for a price. Fees have ranged
from
$40 to $150, depending on the offer and require that the artist sign
over
rights EXCLUSIVELY for years at a time. During the month of August
I spoke
directly with executives at Apple about the companies who are offering
Digital Distribution deals "through iTunes" and which ones
were
legit. Here is what I found out:
Apple has been consistent in telling me that only the five major record
distributors are authorized to announce that a deal exists between
them and
iTunes. These conversations took place about a month ago, so some facts
MAY
have shifted, but at that time Apple indicated to me that NO ONE other
than
the five major labels has their blessing to announce that an iTunes
deal
exists between Apple and any distributor, label or indie artist.
This is a bit inconsistent with their website that says they have
deals
with 200 indie artist/labels. What should you believe? Here's some
theory
to help you sort it out:
SOBERING REALITY
Announcing cross-marketing deals with Pepsi, a bundling deal with
AOL and
their new Windows version of iTunes, makes the California computer
company
the Cadillac of digital distributors. Apple will do whatever they have
to
to protect the integrity of this new pipeline, and so will Major Labels.
Diluting it with "amateur" product simply would not suit
either party's
agenda.
The 200 independent artists mentioned on the store's homepage are
not
accessible in the search engine by typing in a word like "indie" so
there
is no way to determine if the artists are ones that Apple simply calls
"
indie" because they have a distribution deal through a major or
significant Indie, or if they are ones that are actually selling records
without ANY form of formal distribution. Hopefully, in updates to the
site
Apple will make this clearer.
I'm not suggesting that Apple is doing anything dishonest. They are
simply
protecting the dependability of their product with a similar dynamic
to
that of Top 40 radio. Example: In theory, one can send their CD to
a radio
station and they might play it. And it's in the best interest of a
radio-station to create that image (which they bolster with creative
hoaxes
like "all request weekend"). Reality is that Top 40 radio
almost never
plays anything that is not part of a well financed label promotion
campaign.
Likewise,
e-tailers or so-called "on-line labels" claiming
that they can
get your song on iTunes for $100 is no different than an offer from
an
indie promotion company saying "Give me $100 and I'll get your
music on pop
radio." Is it possible? Yes. Is it likely? Very hard to say at
this point.
My guess would be, no. If you have doubts, employ an old adage that
is not
repeated enough in this business: if it sounds too good to be true,
it
often is.
WHAT SHOULD AN ARTIST DO?
Exclusive digital distribution rights are considered to be some of
the most
important rights to an artist's music. They should be taken just as
seriously as copyrights to songs. Here are three things indie
labels/artists can do to ensure that they are not being hoodwinked
into a
bogus iTunes deal.
1) INSIST ON CLARITY: Read the contract they offer very, very
carefully. Make sure that the language specifically states something
like,
"
in agreement with iTunes," or some version thereof. Don't accept
ambiguous language. To those who have already signed over their digital
rights thinking that an actual iTunes deal was in place at the time,
you
are well within your rights to demand a cancellation if you thought
the
company had a deal with Apple when they did not. Ask them outright
and
accept no conditional or evasive answers.
2) CHECK THE CONTRACT AND THE WEBSITE: If they claim that a deal actually
exists, I would ask to the see the "signature page" of the
contract they
claim Apple has signed with them. Make sure the page is co-signed by
an
Apple representative. FACT: Companies claiming that they cannot fax
you
this page due to "confidentiality" are mistaken about how
confidentially
works. The final signature page of Apple's agreement is standard
boilerplate language and does not reveal anything that is unique,
proprietary or confidential, unless they are not authorized to announce
the
deal to begin with.
3) WAIT AND CHECK: Check the iTunes music store from time to time
and see
which indie artists are listed in the iTunes catalogue. Also check
the
website of the company offering the "iTunes deal" and look
for links
directly to iTunes. If a company has had success getting songs on iTunes
why wouldn't their site have a link taking you to it?
And, like all deals that require you to grant anything exclusively,
think
it over carefully and show it to a lawyer or qualified expert first.
GET THE FACTS
So
far, I am aware of at six companies purporting to offer "iTunes
deals"
that Apple will NOT confirm. There is a report analyzing the iTunes
digital
distribution deal offered by one on-line company. It provides examples
of
key questions that should be considered before signing a digital
distribution deal with anybody. The report has been requested by:
--The American Federation of Musicians
--Associates for the American Bar Association
--The Berkley School of Music (Career Development Office)
--The law firm of Loeb & Loeb
--Sole practitioners with clients considering digital distribution
deals.
You can get the free copy by sending a request to MosesAvalon3@aol.com.
UNI ON THE BLOCK? UNI-ver KNOW
(With apologies to Jimmy Iovine)
So here is the part where I riff a bit and just have some fun. This
piece
is definitely NOT journalism.
Universal has been dominating the trades so much that you could do
an
entire newsletter devoted to their activities: merging with GE, cutting
CD
prices to $10, discontinuing POPs, dumping the music division, dumping
Emusic.com, paying off $61 million in damages for blocking Ja Rule's
release, and on top of everything, being sued by former Temptation
member,
Barrington Henderson, for back royalties and defamation because they
accused him of being a "bad singer."
Yes, it's been a rough quarter for our beloved 300-pound gorilla.
So, it's
no surprise that this month's announced cut back of over 1000 jobs
designed
to trim their bottom line of tens-of-millions in overhead, all spells
real
trouble for the "World's Largest Record Company." But their
biggest
problem: they are for sale and nobody wants to buy.
With GE in formal talks to buy a majority share in Universal Entertainment
from Vivendi, many thought that their previous statements about wanting
to
carve out the music division from the acquisition was posturing. But,
it
seems now they really don't want it.
My guess is Jimmy Iovine (president of Interscope-- the crown jewel
of the
UNI empire) is frantically looking for buyers or strategic partners
to take
the music division solo. Hoping to show GE that he can fire people
en mass
with the same vigor as he can choose his baseball caps, he made some
tough
decisions in the past month. But there are still no takers.
To bolster the worth of the record division he purchased DreamWorks
Records this week. That's David Geffen's contribution to the deadly
trio
that makes up the DreamWorks dream-team of executives (Spielberg,
Katzenberg and Geffen).
Whether this move means taking on more debt or more profit for UNI
remains
to be seen. Regardless, I think UNI (a company that reported net earnings
of only $83 Million last year) will be going for fire-sale prices by
the
beginning of next year. So, I'm starting a fund. I figure that if every
one pitches in $100, with million or so people in the music business
we
could assemble a fund and buy the label for $100,000,000 and allow
Jimmy to
keep his well-deserved seven-figure salary. Let's help save Jimmy's
job
and turn the "World's Largest Record Company" into the first "People's
Record Label."
Any takers?
Send a Czech to:
"Save Jimmy's Job" (a
501c3 corp in California)
1000 Nevergonnahappen Rd.
LA CA 90022
OBITUARY
Slim Dusty - Australian country music singer whose cowboy songs captured
the laid-back culture of the Outback, has died at age 76.
Warren Zevon - Singer-songwriter, recording artist, passed after a
long
struggle with cancer. He was 56. He recorded with too many major recording
artists to name here, including: Everly Brothers, Jackson Brown, and
REM. He will be most remembered for his hit, "Werewolves of London." He
was 56.
Elliott Smith - was found dead with a single stab wound to the chest
that
appeared to be self-inflicted. Most known for his songs on the soundtrack
to ``Good Will Hunting," which lead to two commercial releases
on
DreamWorks: ``XO'' (1998) and ``Figure 8'' (2000). He was 34.
Bobby Hatfield - One half of the Righteous Brothers' famous for, ``You've
Lost That Lovin' Feeling," died in a hotel room in Kalamazoo of
a
heart-attack. He was 63.
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