What the 1984 Betamax ruling did for us all – latimes.com.

It had no precedent and while Sony’s Betamax format lost out to VHS this groundbreaking US Supreme Court ruling, 30 years ago today, in favor of Betamax is why we can rejoice about much of the technological innovation we benefit from today.

There is much talk today about how the US Supreme Court is set to hear the Aereo lawsuit brought on by broadcasters and the many parallels to the Sony Betamax case.  As Aereo CEO + Founder, Chet Kanojia, stated in the company blog:

“This case is critically important not only to Aereo, but to the entire cloud computing and cloud storage industry. The landmark Second Circuit decision in Cablevision provided much needed clarity for the cloud industry and as a result, helped foster massive investment, growth and innovation in the sector. The challenges outlined in the broadcasters’ filing make clear that they are using Aereo as a proxy to attack Cablevision itself and thus, undermine a critical foundation of the cloud computing and storage industry.

“We believe that consumers have a right to use an antenna to access over-the-air television and to make personal recordings of those broadcasts. The broadcasters are asking the Court to deny consumers the ability to use the cloud to access a more modern-day television antenna and DVR. If the broadcasters succeed, the consequences to consumers and the cloud industry are chilling.

What many may not realize is how the Betamax ruling influenced the birth of the digital music industry and helped a little known company, Diamond Multimedia, defeat an RIAA lawsuit against its Rio MP3 player.  The year was 1999 and the way we consume music has never been the same since.


No Al Gore didn’t invent the internet, however, some little known Frenchman — Louis Pouzin — played a major role in the birth of the Internet that greatly influenced Vint Cerf and Bob Kahn (the birth fathers of TCP/IP).

What I like most about this Wired magazine article is how it acknowledges “simple” as a prerequisite to the open nature of the world wide web: Without Pouzin’s work on datagrams, plus Cerf & Kahn’s work of course, we wouldn’t have networks capable of freely exchanging information.

What did you set out to do as an artist with a label deal — create? connect?? and collect???  Use to be all you had control over was the creative process, then again that was seriously compromised because of the money you were borrowing from your label to connect with your fans; touring, videos, press & promo junkets, radio promotions, etc. – all of it costs money and you pay for it because of the recoupable clause in your recording agreement.  And forget about collecting the money you earned, you’re entirely at the mercy of the labels, publishers and their PRO cronies (ASCAP, BMI, SESAC, Harry Fox, and now SoundExchange) which should explain your paltry royalties.

Record labels are banks today, and the terms of their loans are still as bad as they were years ago. Create on your own time and dime; connect directly with your fans; collect directly from your fans, and their friends, and friends of their friends.  Embrace technology; be digital; create content not just music; speak directly and daily to your fans; give some of it away and it will come back to you tenfold.

Remember this tip from my uncle Pouzin: keep it simple stupid ;-)

Knock knock.  Who’s there?  Spotify.  Spotify who? Right, did you spot who’s got my royalty check!

If you’re a recording artist looking for a payout from music streaming services like Spotify, Pandora, Grooveshark, Last.fm, MOG, Rdio, iTunes Radio (in the works) and the list goes on — have you heard of Soundhalo, that’s the UK start-up Thom York & Nigel Godrich ditched Spotify for? — and you’ve only now begun to complain about the lack of dollars on your royalties checks, then I’ve got one simple question for you: Where the fuck have you been?

Bye bye Thom and Nigel… What’s that Mr. Lowery (of Camper Van Beethoven & Cracker fame), you don’t like the internet “exploitation economy”?  Come again Pink Floyd, Pandora’s founder TIm Westergren is deceitful because he wants to cut Pandora’s royalty rates!!!

Dave, Roger, Nick WTF you’re Pink Floyd, what’s wrong with you guys? I realize you’re just a tad removed from your progressive heyday but that’s no reason to shit on Westergren because the poor bastard is trying to run a business against entrenched radio titans like Clear Channel and Cumulus, who by-the-way (in case you didn’t know) still do not pay a dime of royalty to the artists performing the songs on their airwaves, let alone to the labels.  Did you know the US is the only industrialized nation that does not have a terrestrial broadcast performance right for sound recordings?  This puts us in the same league as Cuba, Iran and North Korea.  I know you think nothing of charging $1,000+ for a concert ticket today and that it’s because of your demi-god status that Pandora should have split its IPO raise 50/50 with you to justify Pink Floyd’s presence on their service, but c’mon!!!

The National Association of Broadcasters (NAB) recently took out newspaper advertisements claiming having to pay performers when playing their music is “bad for radio, bad for artists and bad for listeners.”  Pandora’s operating at a loss of $36MM for last year and Spotify has shelled out over $500MM since launch.  So where is all this money from streaming services going if not in your artist pockets?

It’s paying to maintain this broken, antiquated, lardish, myopic industry starting with the labels, who this time said we’re getting paid no matter what, and the artists, well, fuck the artists… we (the labels) working in cahoots with our PRO (Performance Rights Organization) partner, SoundExchange, are going to make sure this piggy gets fed right and first… and the artists, well fuck them!  But the industry failing doesn’t stop with the labels.  If a home purchased by Pandora’s CTO is news, then when are the gluttonous salaries of label, music publisher, and PRO Presidents & CEOs going to be news?  The entire edifice is crumbling because no one wants to change.  ASCAP, BMI & SESAC are supposed to be not-for-profit PROs for crying out loud, at the service of their songwriters & publishers membership, yet their collective enforcement power is clearly in NAB’s pocket and they too like radio programmers must be bought.

Artists, when are you going to start talking about boycotting radio and pulling music from the terrestrial airwaves so you’re finally and fairly compensated by an industry that has been milking you dry, sucking at your teet for decades?  Don’t you see the problem isn’t solely Spotify, or Pandora or any of these other streaming services?  When are you going to ask the labels to provide you with transparent accounting so you can see how much they’re skimming from the top?  When are you going to have the guts to say “Fuck this” and find ways to connect with your fans directly and once-in-for-all disintermediate this flailing music industry instead of sending off lame-ass tweets like “It’s up to streaming providers to come back with a better way of supporting new music producers..” (Nigel Godrich)?  In fairness to Godrich this tweet is part of a series in which he points to the salacious behind the scenes deal making major labels did with Spotify to both own a piece of the company and get more favorable royalty rates, but still.

Until that time, do not complain until you’re actively doing something to personally shake up the status quo, and enjoy the simple fact that your music can now be heard by millions more people because Spotify, Pandora and others are actually carrying it.

extraHoly shitballs, can you believe it?  Lucky 13 has finally hit the music business square in the face as IFPI declares the global music industry up in 2012 by a whopping 0.3% to US $16.5B, the first growth the industry has seen since 1999.  That’s 13 long years!!!

And Clive Davis, CCO of Sony Music Entertainment who turns 81 this year, finally admits to the whole world in his new memoir that he’s gay.  D’oh!  Really?  Oops, sorry bisexual – “To call me anything other than bisexual would be inaccurate.”  You go girl!

And, Doug Morris, the 74 years old CEO of Sony Music, reveals in Bloomberg Businessweek that Steve Jobs called him “a f—ing moron” and why.

But did you know Warner Music Group recorded music division CEO, Lyor Cohen 52, was shitcanned last Fall by WMG CEO Stephen Cooper, age unknown?  Stephen who?  You know, the bald headed corporate turn-around artist who’s a member of the Supervisory Board for LyondellBasell Industries N.V., one of the world’s largest olefins, polyolefins, chemicals and refining companies.  I couldn’t make this shit up if I tried.

And what’s the 53 years old Lucian Grainge, CEO of Universal Music Group, been up to?  Well, he bought the EMI Music Group for US$1.9B last Fall and just sold off the Parlophone Label Group to WMG for US$765M and sold the popular music compilation series “Now That’s What I Call Music!” to Sony for about US$60M, turning UMG into the world’s largest music company along the way and confirming my long held belief that the music industry would boil down to 3 major labels.

To help you, artists, better understand the zeitgeist of all this news, let me quote here the exchange between Doug Morris and Steve Jobs pulled from the B-berg bizweek piece:

“Are you a f—ing moron?” Jobs asked.

“How could you say something like that?” Morris asked.

“Because you are going to do the same thing three times over,” Jobs said. “You are going to be the CEO of one of these big stupid companies.”

“Well, I guess that’s what I do, Steve,” Morris said.

“Yeah, well, do it for me,” Jobs persisted. “Come here, and let’s start a digital music company.  These old things will break up, and we’ll buy them for a song.”

There you have it.  This short and embellished soliloquy between Sony Music CEO Doug Morris and dearly departed Steve Jobs is what awaits when you do business with the remaining three major labels – your music, sold for a song!!

Senators Grovel, Embarrass Themselves at Dimon Hearing | Matt Taibbi | Rolling Stone.

Politics and music don’t mix… with what’s happening on Wall Street and with our financial institutions today being such a charade, every time I read a Matt Taibbi piece in RS that reminds me of the f***ed relationship between our politicians and bankers I am inevitably reminded of the equally f***ed relationship between artists and labels and the shenanigans the labels continue to dish out.

The (New) New Music Seminar was in full swing at Webster Hall in NYC last month.  They held a panel aptly entitled – Music Labels The Businesses Formerly Known as “Record Companies” – with 8 label execs (from both indie & major labels) there to discuss the decline of the record business and rise of the music business.  I’m encouraged, 18 years after the first MP3 files made their way onto the Internet, to see such a distinguished group of label execs finally trumpet the demise of the record business.  Well done guys!  The best statement belongs to Benjy Grinberg, Rostrum Music President, who astutely said “The power is with the artist…” followed by “but the infrastructure and guidance [of a label] is still important.”  Nicely done Benjy, you get it dude!

A label is there to help you do two things – make your music and sell your music.  Most artists today can make music for a fraction of the price, so they’re really only beholden to their label for their marketing & promotional efforts, which comes down to what today:

- album recording budget (100% recouped from artist royalties);

- radio promotion (also 100% recouped from artist royalties);

- video production & promotion (check! 100% recouped from artist royalties too);

- tour support (100% recouped from artist royalties & usually capped with a ceiling);

- licensing (split 50/50, but any money you make here will be used to recoup the above costs so you won’t see any of it unless you actually wrote your own music)!

If you the artist end up paying for most everything, then why do you the artist still continue to give away more than 80% of your ℗erforming Rights to labels with zero guarantees from your labels that they’ll even honor their Recording Agreement with you, let alone actually do any fuckin’ work to market & promote your music?

Why is it that your label keeps the ℗-house after you’ve paid the loan back on it?  No bank in the land treats you this way once your home loan is paid off…  Think artists THINK!  And don’t be scared to go it alone, especially today when there are so many easy and powerful ways to connect with your fans!

Puttnam’s Law and the threat to the American imagination – latimes.com.

“Puttnam’s Law: It is more acceptable to fail in conventional ways than in unconventional ways. And its corollary: The reward for succeeding in unconventional ways is less than the risk of failing in unconventional ways. In short, you can screw up with impunity so long as you screw up like everybody else.” – Neal Gabler, Senior Fellow at the Norman Lear Center at USC

I know you’re out there talented geniuses and music demi-gods, purveyors of sound and taste.  I know how hard it’s gotten for you to be heard, to rise above the morass, the banal, the dull, the lame, the putrid, but I have faith in you…and your fans are waiting.  Then along comes Zya Music to remind us that Matt Serletic and his brother Dean with their Wall Street partners Bo & Terry are going to set the music world aflame with their venture backed start-up Zya Music.  You might remember Matt as the producer of Matchbox Twenty who set the music world on fire, but I remember him as the clueless executive who buried my Virgin Records America company into the ground with the help of his brother.  Not content to stop there, him, baby brother & the Wall Street boyz are now giving us Zya Music and I quote:

I couldn’t make this shit up if I tried!  As a producer friend of mine said when I showed him this stillborn of a website: “This is exactly what the problem is with this generation…no real skills just nonsense.”  Ironically like Puttnam’s Law states, when vultures have nothing left to pull from the carcass of this company, the Serletic brothers will continue to ride their taste makers coattails of yore into the sunset only to meet with another pair of Wall Street dummies to fleece.

And all of this they will be able to do thanks to you foolhardy artists, musicians, songwriters who continue to wreak havoc on our cultural landscape because you unwittingly play into the hand of Puttnam’s Law.  You’ve been warned!

Pebble: E-Paper Watch for iPhone and Android by Pebble Technology — Kickstarter.

Crowdfunding while not yet part of the investment vernacular, has gotten a major boost from the recent success of the E-Paper Watch by Pebble Technology and its Kickstarter campaign.  What started for Pebble Technology as a funds raising project looking for an initial jolt of capital to the tune of $100,000 over 6 weeks has ballooned to over $6M coming from over 42,000 backers, with nearly a month still left to go before the funding is closed.  I wouldn’t be surprised, when it’s all said and done, if this project closes with over $10M and a 100,000+ backers proving the point that when a product is hot, it’s hot, period.

There’s nothing harder for any start-up than to find seed capital.  It usually comes from family & friends, brave and slightly foolish angel investors.  What distinguishes crowdfunding from buying an equity position into a company and parlaying that position for stock, is how the crowdfunder instead buys into the promise of receiving a tangible reward (be it music, a film, a watch) once funding for a project in question has met its financial objectives.  Should it not, then no funding takes place and the crowdfunder gets his money back to keep or invest elsewhere.  Most crowdfunders invest $20.00 – $60.00 into Kickstarter projects, but this E-Paper Watch has clearly exceeded everyone’s expectations and created a huge buzz for this watch and a windfall for Pebble Technology.  It’ll be interesting to see how Kickstarter doles out such a large amount of cash to a company that’s still very much in its infancy, and with no regulations on how the money should and will be spent.

Naturally if crowdfunding works for the production of a watch, then it will also work for the production of music.  And actually it already has, many many times!!!  Except now here comes the JOBS Act signed into law by President Obama earlier this month and with it comes the heavily reworked CROWDFUND Act (Bill S. 2190), which should allow for small, even micro investors to hold equity (stock) in the crowdfunded companies they support.  The SEC has this under review for the next 9 months before it’s law, so for all of you indie artists who’ve always wanted to have your own label, here’s a perfect opportunity to rally all your musical peers and all your fans to motivate them to own a piece of the label dream with you.  And that my friends are chaordic principles in action!


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