Music News Bulletin - 16/01/09

Talent retains value in publishing: Companies look to grow alternative revenue streams as mechanical income falls
Financial worries may have continued to impact the music industry over the past 12 months but, while record labels have dealt with their diminishing returns through reduced A&R budgets, the big publishers have remained aggressive when it comes to securing new artists. The year’s most sought-after deals – names such as White Lies, Glasvegas and Iglu & Hartly - managed to enter the higher regions of the six-figure price tag, while some of the big songwriter deals eclipsed even this.

As revenue from mechanical royalties continues to fall, however, the publishing sector is beginning to evaluate the validity of those artists worth their signature in new ways. Areas that in the past may have merely supplemented income from record sales can today create key revenue streams for artists and publishers and an artist’s potential in this area can make or break a deal." [MusicWeek]

Sony could post losses of a billion
"I lost a ten pound note the other week and found the whole experience quite stressful, so imagine what it must feel like to lose $1.1 billion. Well, that's the losses Sony Corp might post for the current financial year, ending 31 Mar, according to sources cited by Billboard.

Although some analysts reckon the mainstream entertainment industry will probably be hit less than most by the recession (despite the current turmoil in music retail) as consumers turn to relatively cheap music, film, games and telly to cheer themselves up (instead of more expensive luxury goods or premium pursuits) the economic downturn is already having a big negative impact on those who make and sell consumer electronics, as consumers put off buying that new TV or camcorder amid fears of mounting job insecurity. For an entertainment conglom like Sony, whose electronics business is key, this is not good news." [CMUDaily]

Global digital music sales grow as music industry develops new business models
"The music industry has transformed its business models, offering consumers an increasing range of new services with leading technology partners. Yet generating value in an environment where 95 per cent of music downloads are illegal and unpaid for is still the biggest challenge for music companies and their commercial partners.

The digital music business internationally saw a sixth year of expansion in 2008, growing by an estimated 25 per cent to US$3.7 billion in trade value. Digital platforms now account for around 20 per cent of recorded music sales, up from 15 per cent in 2007. Recorded music is at the forefront of the online and mobile revolution, generating more revenue in percentage terms through digital platforms than the newspaper (4%), magazine (1%) and film industries (4%) combined." [RecordOfTheDay]

US Public Affairs - 30/11/08

In Peer-to-Peer File-Sharing Case, "Distribution" Does Not Mean "Making Available"

"At trial, the plaintiffs sought to prove that the defendant, a single mother in Duluth, had willfully infringed 24 of the plaintiffs' recordings by downloading and distributing them via the peer-to-peer program Kazaa. Finding that the defendant had infringed, the jury awarded the plaintiffs statutory damages of $9,250 per song, for a total of $222,000. The defendant filed a motion for a new trial or, in the alternative, for remittitur, calling for a reduction of excessive damages; the plaintiffs filed an unopposed motion to amend judgment, seeking an injunction. Instead, the court elected sua sponte to address the possibility of granting a new trial because of an incorrect jury instruction." [CyberLaw]

Music Sampling Does Not Infringe on Copyright, But…

"The German Supreme Court (BGH) clarified last week that sampling does not infringe on copyright in the work from which samples were taken for the purpose of creating a new work. There is a catch hiding in the details, though. According to the official press release (in German), the highest judicial authority in Germany ruled that a certain statutory exception principally covered instances of sampling. The relevant exception is anchored in section 24 to the German copyright act, known as “free use” (freie Benutzung). Free use is not fair use, but you can think about it as an extreme version of the transformativeness element familiar from the U.S. fair use analysis. Accordingly, the new work must transform the work of which elements it uses into something independent and wholly different. While using the copyrighted elements taken from the prior work, such use should be so transformative that the first work becomes hardly recognizable as the source." [CyberLaw]

Digital Copyright Issues and the Ubiquitous iPod

"The advent of new technologies has resulted in Copyright law having to adapt to new situations and infringements. These technologies, including music formats that contain compression, as well as the reduction in cost and size of hard drives has created significant new challenges and markets for digital content. Even in the short life of the iPod, it has gone from a music device, to a multimedia device. This article examines some of the issues and case law that is relevant to the content revolution created by the iPod." [SSRN]

The Dangers of the Digital Millennium Copyright Act: Much Ado about Nothing?

"In 1998, Congress passed the Digital Millennium Copyright Act (DMCA), a landmark piece of legislation aimed at protecting copyright holders from those who might manufacture or traffic technology capable of allowing users to evade piracy protections on the underlying work. At its core, the DMCA flatly prohibits the circumvention of technological protection measures in order to gain access to copyrighted works, with no safety valve for any traditionally protected uses. While hailed as a victory by the software and entertainment industries, the academic and scientific communities have been far less enthusiastic. The DMCA's goal of combating piracy is a noble one, but lurking is the danger that it comes at the expense of public access to protected works and future innovation. Despite America's long history of fair use protections in copyright law, many commentators have warned that consumers now find themselves unable to do many of the same things with copyrighted works that they previously could - anyone who might sell them the technology to access a protected work and enable fair use would find themselves in violation of the DMCA. Worse, early litigation dramatically expanded the definition of what constitutes a technological protection measure deserving of the law's respect. As the definition broadened, scholars feared that even modest innovations - ones that would never qualify for patent protection under existing law - could wind up receiving perpetual patent-like protection through the backdoor of the DMCA. Despite the experts' dire predictions, however, subsequent common law interpretation of the DMCA has reigned in many of its potential dangers - the judiciary's focus is rightly on the need to balance innovators' interests with the equally important goals of public access and enhancing overall social welfare. Nonetheless, coherent and uniform protection of fair use under the DMCA is likely best achieved through Congressional action." [SSRN]

Why Emerging Business Models and Not Copyright Law are the Key to Monetising Content Online

"The multimedia Internet is here to stay. Rich media - including videos, music, podcasts, and flash animation - is already a key feature of the Internet experience, and will only grow in diversity and importance. As Internet users increasingly crave - and technology increasingly enables - multimedia content delivered on demand over broadband connections, the number of songs, videos, and other media online will increase exponentially to feed the demand. As online media consumption increases, so will expectations for its capacity to generate revenue for content owners and creators. Analysts boldly predict a bright future for the entertainment industries, especially in Asia, with broadband Internet cited as a key growth driver. Yet, to date, the vast majority of music and video acquired or consumed online is free and uncompensated. Despite the rising expectations for monetizing content on the Web, no clear sustainable, scalable model for monetizing content has emerged that compares to the level of revenues copyright owners have enjoyed in the "physical" (as opposed to online) market." [SSRN]

Music News Bulletin - 30/07/08

Inside Views: A New Business Model For The Music Industry Explained

"The music industry has been in a decade-long death-spiral. This predicament results primarily from insistence by those who benefited most from how the industry operated before the internet arose that the established relationships upon which their past successes were based be preserved as the digital music marketplace develops.

The major record labels have set the industry’s internet agenda overall. They are single-mindedly committed to making the internet safe for sale of recordings on terms and conditions that they alone decide. They risked everything on the false hope that through a combination of DRM [digital rights management] and the force of law they could contain unauthorised internet distribution of recordings." [IPWatch]