The recorded song is the  perfect marketing tool. Everybody wants it (if the song is good) and it now costs nothing to get it to them. I am confused as to why more companies haven’t utilized this model and sponsored the creation of music for the sake of promoting their brand. To me, this is better advertising than a billboard on Hollywood Blvd. or the banner spot on a popular website. People are listening intently out of choice and getting pleasure from the music they listen to. Throw a few brand names in the mix and that brand has automatic credibility.

The issue here is “fear of change”. The business has been in one place for so many years that it has rusted to the floor. We need my blog plus 100,000 more like it to make the push into the future. If the visionaries continue to support innovative ideas and stay open-minded about our changing world, the big dogs WILL take notice. My favorite motivational quote is: “Time, plus effort, equals results”.

-DJ MAGIC

The core principle of copyright is that the creator and copyright owner has the right to reproduction, distribution, public performance and the creation of derivative works of his or her creativity. Take that away and copyright is meaningless. Some would like that result. Others want to keep placing limits on those rights by expanding fair use. Fair use is a limit on a copyright owner’s rights, after all. But in the digital age companies like Viacom (disclosure, one of our board members) long ago teamed with a bunch of user-generated sites to develop uploading principles that would allow fair use while still respecting copyright owners.

As the disclosure documents surface from the Viacom-YouTube case, and the emails reveal how YouTube was what we always knew it was, a site designed to maximize “eyeballs” by posting copyrighted works without permission. They knew Viacom content like clips from MTV and Comedy Central would attract more attention than a video of a sleeping cat sliding off of a windowsill. In fact, they said so themselves: “Steal it! … We have to keep in mind that we need to attract traffic. How much traffic will we get from personal videos?” And they were right. They even acknowledged that “[i]f you remove the potential copyright infringements… site traffic and virality will dropt to maybe 20% of what it is.”

As long as there has been a commercial presence on the Internet, there has been a sea of “entrepreneurs” looking to profit from others’ work. Egregious cases like Napster and Grokster were shut down in federal court. Others tried to go legit. But as a fellow speaker on a panel of mine back in 2007 at South by Southwest said, when he went to Silicon Valley and met with venture capitalists looking to invest in the Internet, more than 90% were investing in sites generating traffic through copyrighted works they had not licensed. Less than one in ten had shown any interest in licensed distribution models.

Those seeking to profit from creators’ works without asking permission have also long put consumers in danger of spyware and identity theft, as the Federal Trade Commission recently pointed out and as I pointed out in testimony at an FTC-hosted event recently.

So what comes next in the case between Viacom and YouTube, now that we know what we already knew, that YouTube was operating consciously as an egregious violator of not just the rights of Viacom but countless studios, recording artists, composers, visual artists, and others? That’s left to folks smarter and more informed than me.

Here are some interesting perspectives from Ben Sheffner at Copyrights & Campaigns, who breaks down the legal aspects and reminds us that there is another suit against YouTube featuring the Premier League and the National Music Publishers Association, among others. (NMPA is also a Copyright Alliance member, and served on the board in 2007). Scott Cleland sees antitrust implications for Google. Andrew Orlowski highlights the fact that Google knew YouTube was in the wrong, but bought it anyway despite its do-no-evil mantra. A summary of useful materials from Viacom is here.

Let me quote one important passage from Sheffner here, a way for the judge to rule properly without shutting down a popular site:

But Viacom gave Judge Stanton an easy out in footnote 1 of its brief. In that footnote, Viacom says it is not pursuing any claim based on YouTube’s activities after May 2008, when, according to Viacom, YouTube began filtering for Viacom content without requiring Viacom to license its videos. While Viacom is careful not to formally concede that YouTube’s post-May 2008 activities are not infringing, it’s effectively letting YouTube off the hook as of that date.

Whatever you think of the settlement Google reached with authors and publishers, that settlement creates the hope that Google in some cases will consider adjusting its pursuit of a legal perspective of copyright that basically says take first, respond later. (Many authors objecting to that settlement would take issue with that assessment.) This opt-out vs. opt-in view of copyright that Google has embraced was the shining principle of YouTube as well. It turns copyright on its head, and it’s good to see that for now, anyway, the principle is still preserved in law.

I encourage you to leave your comments on this article as it is a very prevalent issue in our immediate realm as students…

-DJ MAGIC

If you haven’t noticed, more and more songs on YouTube are harder to find and often have disclaimers that read: “Content removed for copyright violation”. Labels ARE creating their own channels on YouTube and uploading selections from their catalogs in high quality for the public to view. But why can’t my friends make a slideshow from our trip to Vegas, embed the latest Jay-Z song as the soundtrack, and upload it for the world to see? Music is a gift to the world and should be shared, regardless of the cost.

If the use of copywritten music on YouTube DOES become more regulated, who will pay the price? The model is based off of ad-supported revenue, so the consumer isn’t going to pay. YouTube could pay royalties but on what scale and with what parameters? ISPs could foot the bill and tack it onto our Internet bills since computers are the main place where YouTube is displayed. But that lets other services that stream YouTube videos off the hook such as BluRay’s new BD-1590 player and the Apple iPad. None of these options can solve the issue. It is only possible to adapt and move forward. More on YouTube coming soon…

-DJ MAGIC

The facts are there. People ARE pirating music and most of them don’t feel bad about it. In 2003, the RIAA began suing individuals who partook in the pirating festivities, regardless of the amount of songs or content downloaded. Since then, more than 35,000 people have been sued by the RIAA at a rate of per song that was downloaded. This clearly hasn’t scared consumers enough to stop the freight train since piracy currently causes $12.5 billion of economic losses every year, 71,060 U.S. jobs lost, a loss of $2.7 billion in workers’ earnings, and a loss of $422 million in tax revenues, $291 million in personal income tax and $131 million in lost corporate income and production taxes.  For copies of the report, please visit www.ipi.org.

This number should have an impact on those losing the money, and it does, but it has yet to drive them to adopt a new model. Yes, these new web phenomena are giving us hope and the RIAA is investigating new methods, but it’s time to make a decision and press on. So please Mr.. Sherman, seriously consider adopting a new method for making money in this new music  market…

-DJ MAGIC

Music Think Tank (musicthinktank.com) is one of the most respected, accurate, and innovative blogs on the web pertaining to discussions of the music business. Whenever I receive their newsletters, I study them in-depth because they are always on the cutting edge and usually one step ahead of the game. Below is an interview with Dave Kusek for musicthinktank.com. Words by Ariel Hyatt…

Dave Kusek, the author of The Future of Music, is a man who needs no introduction but just in case you don’t already know him he’s Vice President at Berklee College of Music and he is responsible for managing the online music school, Berkleemusic.com.  He also  recently launched a  new service that helps musicians empower themselves called, Music Power Network.

Since he is a prolific blogger, futurist and strategist, I wanted to ask him his opinion about some of the hottest buzzwords in the Music Business Today: The Cloud, Topspin, Hype Machine, SoundCloud the death of MySpace,

Ariel: OK Dave, here’s how this will work. I am going to throw some one-sentence statements at you pertaining to the music industry. I’d like you to state whether you think each statement is true or false, and then provide an explanation for your choice.

Dave: Sounds good. Shoot…

Ariel: “The Cloud” will change the way we think about music ownership.

Dave: True. I think it’s all about access rather than ownership; that is truer every day, as there is now much more music in the market. Just knowing what is out there is a challenge. It is going to become more important to find music and listen to it than it is to “own” it.

Just look at SXSW. There are 2 or 3 thousand bands playing. There is no easy way to figure out which ones I really want to go to listen to.   I am counting on recommendations from my friends and buzz in the media to help pick what I should listen to.  That is true at SXSW and also true on a daily basis.  Knowing what to listen to is more important than having it in your collection.  That is becoming more true every day.

There are lots of people currently working on this challenge. Someone is going to find a really slick way to find music that we are truly interested in, and that software will become invaluable.

The Echo Nest is getting close. They are combining what people are talking about on the public web, with purchase data and behavioral data. They are also providing a very sophisticated musical analysis of the songs and relating that to the social graph.

I am really looking forward to what they and other similar companies are going to come up with.

Ariel: MySpace is dead. It will never return to prominence.

Dave: True…probably. The reason that I hesitate is because they are well capitalized, massive, and known for music. There is a bunch of smart people still working there, so I wouldn’t write them off completely; but it’s probably true. People are so interested in new things that MySpace will be eclipsed by something that we probably haven’t seen yet.

Ariel: All the hype around Topspin is deserved.

Dave: True, but it’s not about Topspin it’s about direct-to-fan marketing tools. Topspin just happen to be doing a really good job of creating buzz and their software is really extraordinary.  But it is the idea of direct-to-fan that is really compelling.

I don’t know if it’s possible for any one company to provide all of the necessary tools that you will need. Just look at what Peter Gotcher, the financial guy behind Topspin, did as the founder of Protools. That software has been a staple in the audio industry since it’s creation, but it’s certainly not the only audio tool that anyone would use.   Most people combine Protools with Reason, Ableton, Cakewalk, Waves and other programs to complete the suite of tools they use to create music.

The same is going to be true with the new generation of direct marketing software being developed.  I also think about Salesforce from the corporate sector.  Salesforce is customer relationship management software used by thousands of companies to help manage their user bases. Topspin is not all that different.  If you are using Salesforce in your business, you are most likely using other tools along with it to track your sales and engage with your customers.

Ariel: If you are not a cool, indie rock band, you can’t approach Hype Machinebloggers.

Dave: Hmm…that’s more false than true.

The reason I say that is bands can waste incredible amounts of time and energy trying to promote themselves when their music sucks. With Music Power Network (MPN), we are encouraging bands focus on their art and to find good managers and marketing people, so they can concentrate on making great music, practicing, writing, touring, etc.

To go to Hype Machine to try and build buzz is probably a waste of time.   If your music is wonderful, people are going to know about it and spread the word.

So I think it is way more important to practice, write great songs, and develop your craft than it is to try and generate buzz.  If you don’t have great music, you aren’t going anywhere.  And if your music is truly great, people are going to spread the word for you.

Ariel: SoundCloud is the best possible way to move music around the Internet.

Dave: At the moment, true.  They are the YouTube of audio and are making it easy. I love the way their system is open. You can tap into their API and link SoundCloud into your own application and website.  That is how they are going to grow their importance.

If they stay focused on just delivering audio, SoundCloud could become ubiquitous. If they try to compete with the people who are supporting them, it will get problematic. If they just work hard to be the very best at storing, streaming and accessing audio, they will do very well.   It’s a great service.

Ariel: Having engaged fans, followers, and friends are more important than “press” coverage.

Dave: Sure we just talked about this.  Great music is more important than anything. If you are great, people will find you and many will know about you.  It really is that simple.  You will have 1,000 fans, then 10,000 fans, and so on because you are great. If you are writing music that people can relate to, you will find an audience. Great music will lead to all the press coverage, and word of mouth promotion and a huge fanbase.

If you get press coverage and you suck, it won’t do much. It may make your mother happy, but that’s not the name of the game.

By Ariel Hyatt

For more insight into  the present and future of the online music market, visit Music Think Tank or just stay tuned for my next post…

Dave’s Blog: http://www.futureofmusicbook.com

Twitter: @DaveKusek

-DJ Magic (with an interview by Ariel Hyatt)

“Guvera has drawn comparisons to Atlanta-based FreeAllMusic’s service, which is still in private beta. That site offers an MP3 in exchange for watching a video ad of your choice. I’ve enjoyed FreeAllMusic for a couple of months, especially because I know the artists whose music I download are compensated, although I’ve felt little engagement with most of the ads I’ve seen. In fact I’ve already figured out which one of the available ads is the shortest, and I’ve chosen it repeatedly even though it’s hawking a product I’ll never buy. If advertisers are really paying $2 for each video ad impression they serve up as I fill out my jazz collection, in my case, they’re overpaying.”  -Paul Bonanos (gigaom.com)

The innovators in the industry are learning quickly where to find money in the current state of the music biz. However, it is going to take the adoption of these new business models by larger decision makers to truly make history…

…-DJ MAGIC (with a review by Paul Bonanos)

Guvera has already teamed up with ASCAP, the first and leading U.S. performing rights organization, as well as a handful of labels such as Universal Music Group, EMI, INGrooves, and IODA. For more about the ASCAP merger, click here. Guvera will be up-and-running in the U.S. shortly, but in the meantime, check out the Australian site and familiarize yourself with its function, this is the future of free (but paid for) online content…

-DJ MAGIC

On the first of April, President Obama’s Commerce Department sent a letter to the Senate Judiciary Committee that expressed the administration’s “strong support” for specific legislation that would require radio stations to pay royalties to recording artists. There has been an on-going battle between the RIAA (Recording Industry Association of America) and the NAB (National Association of Broadcasters) on this topic and this letter is a significant win for the RIAA. Read the letter here.

If this bill goes through, the fees will hit the (already struggling) terrestrial radio industry hard. In fact, this could be the blow that K.O.s terrestrial radio as we know it. Online and satellite stations have been paying performance royalties since day one, and in fact, these are some of the only fees associated with running a non-terrestrial station. The cost of running a station like KISS FM or KROQ can reach hundreds of thousands of dollars a year before these proposed fees. This, plus the addition of growing support for online radio may sink “old-fashioned” radio into the history books. I say good riddance. The monotony that has become modern, terrestrial radio is killing creativity and musical tastes anyway. I’d like to see artists like Ke$ha and G@ga survive without their songs being blasted into the ears of our generation on repeat without any discretion…

What do you think?

…DJ MAGIC

Just like any other product, anyone trying to sell music needs to adapt to the modern market. In today’s marketplace, consumers are barraged with so many messages convincing them to buy something, that this has become the ONLY way to sell a product. An item must be “good”, AND its potential purchasers must be given an incentive to buy. With the availability of literally every song for free online, consumers are running out of incentives to spend their hard earned money. Go ahead, try it. Go to Google and type in the name of any artist and song, followed by “free mp3″ or “free download”. I am positive that you will be rewarded with a list of sites that offer the illegal download of that song. So why would you buy it? Just for the principle of it? Sure, but our society is running out of morals if they haven’t run out already. So, record label execs, RIAA execs, Cary Sherman (Board President of the RIAA), I simply ask you to look into alternatives to the current model. It is possible for this industry to make the same if not more money by giving music away for free while using it to sell something else. It is possible to bundle music with other products and services. It is possible for ticket sales, merchandise sales, and other content sales to make up for the lack of music sales. It may hurt the artist for a breif moment, but in the long-run it will save a dying industry…

More thoughts and ideas to come… Until next time…

…DJ MAGIC

CONFUSION writes…

A conversation on Twitter got me thinking (thanks to Luis). It started with me making the statement that musicians shouldn’t be making millions of dollars a year. Teachers and social workers struggle to pay bills, yet some of the richest people in our country make millions by recording music. It ended with me being called a communist.

The idea of capitalism rests upon the assumption that the market is dependent on the consumer. If customers have options and information, the value of products will be adjusted to fit the consumers’ demand. When an industry is dominated by a few very influential players in a market with high barriers to entry, this concept goes to shit. Right now, you’ve got four major labels (Sony BMG, Universal, EMI, & Warner) deciding your options for you. Instead of having thousands of artists to choose from, the majority of the population is force fed 50-100 options in each segment. This means most artists never make it. Very few make it big. Some artists seen as marketable get huge pushes and end up making millions. Most end up broke.

It’s the same concept that fucks with our whole economy. Look at the stock market. The idea of investing in a company should be determined based on whether or not you think that company will be successful and profitable. This isn’t true. The value of a company’s stock can easily be manipulated by mutual fund managers and hedge funds based in Greenwich, CT (no shots CT). You have a very select group of people with a high level of information making millions of dollars off the stock market, while most people are sitting in the dark with no real idea of why the fuck a stock’s value is changing from day to day.

The concept is there. If music reaches people, the artist should be rewarded. But who is controlling what music reaches the people? Is Soulja Boy making millions because his music “touches the people”, or is he making millions because someone’s marketing plan panned out? And does this even matter?

I say that yes, it does matter. Demand should be controlled by the consumer, not the supplier. Hopefully, resources like the internet will allow the consumer to be more informed and less dependent on sources like radio and major label marketing that has a stronghold on what ends up hitting your eardrum. With more choices, I think it’s only fair that wealth will be spread out, and instead of having 100 artists making millions a year, you will have thousands of artists making a decent living and providing the average person with plenty of listening options.

What do you think? Is this wishful thinking? Am I a Communist/Socialist? Does Soulja Boy deserve to be a millionaire? Do you think labels have too much control over what music gets heard? Let me know. This is still a topic I’m struggling to figure out, and I’m definitely open to new opinions. I’m not trying to come across like I know it all, because I dont. These are just my thoughts.