Tag Archive for: Music Industry

written by Jeff Scheese

Law on the Row is making the jump from digital to “old skool” hardcover. Barry Neil Shrum’s article The Magical Ring of Gyges: Why Illegal Downloading is So Rampant in the Age of Cyberspace was selected by author and editor Thomas J. Hickey, responsible for the Taking Sides book series published by McGraw-Hill.  Mr Shrum’s article is set to appear in the next edition of his Taking Sides: Clashing Views in Crime and Criminology . This will be the third edition oclip_image002f Mr. Hickey’s book. The books are set up in a “point/counterpoint” debate structure, and Mr. Shrum’s article will go toe to toe with an article from famed singer Janice Ian on the issue of illegal downloading of intellectual material from the internet.

As we all know, Piracy is becoming more and more of a problem in recent years due to many advances in technology. Shrum’s article takes the side that it is human nature to steal and take the plunder if they know they can get away with it and cites the famous mythological story “The Ring of Gyges” written by Plato. However there are those that know right from wrong and will remain from engaging in the piracy. It is his hope that if people choose to respect others intellectual property by not stealing it then it will encourage others to be creative without the worries of their own works being stolen. It is a very well written article that brings a lot of truth to the issue and really digs down into people’s motivations and discouragements of music piracy. Ian’s article The Internet Debacle – An Alternative View takes the opposing view that all music should be free to download from the internet.  The books thus establishes both positions, allowing the reader to “take sides,” i.e., see both sides of the argument and can then make their own judgment about the issue at hand for themselves.

The publication date is set for October 12, 2012. You can purchase either the hardcover edition or, for those of you with a Kindle, the Kindle edition. Both will be available on Amazon.

 

Jeff_Scheese

Jeff Scheese, a senior at Belmont University which an emphasis in music business, is currently interning with Shrum & Associates.

 

By Jeff Scheese* (with Barry Neil Shrum, Esq.)

Great news for those of you who listen to The Music Row Show on WLAC Nashville! The show features my clients, Scott Southworth and Heino Moeller, who recently announced that starting June 3rd the weekly radio program will make the Photo2leap to WSM, the 86-year-old 650 AM station known fondly as the “Air Castle of the South.” Along with this change on the radio “dial”, the team also announced an agreement with BlueHighways TV (responsible for programs such as American JukeBox Theater and Dry Creek) who plans to film the program and begin airing the show on its cable network in July.

“We can’t even express how excited we are to bring The Music Row Show to WSM and BlueHighways TV!  It’s an honor to be even a small part of WSM’s 86 year history and its musical legacy,” says co-host Southworth. Moeller added, “…to become a member of the BlueHighways TV family and its commitment to celebrating American music, art and culture is more than Scott and I ever imagined when we started the show.”

For those of you unfamiliar with The Music Row Show it is a weekly, two-hour radio show that airs every Sunday. Southworth and Moeller host the program while interviewing guests, listening to performances, and informing viewers on the happenings of the Music Row community. The Music Row Show began airing in November of 2007, and has since gained mass popularity and established an international fan base. This popularity has been attracting an array of guests that include some of the music industry’s most notable decisionmakers and recording artists, including legends Dolly Parton and Vince Gill.

WSM, the Air Castle of the South, has a rich history. It is known worldwide as a leader in the country radio genre. Its first program, WSM Barn Dance, began airing in 1925. The Barn Dance was a weekly Saturday night program at the Grand Ole Opry, WSM has been credited with shaping Nashville into the recording industry capital it is today. The stations’ historic, massive antenna, located in the suburb of Brentwood, gives it one of the largest footprints in the country. This extensive reach gave WSM a massive audience, giving many musicalPhoto1 acts from around the country incentive to come to Nashville in hopes of getting their performances played on the legendary station. The term “Music City USA” was coined by one of the stations disc jockeys, David Cobb, and since then the name has been adopted as Nashville’s unofficial nickname.

BlueHighways, based in Hendersonville, Tennessee, was started by Stan Hitchcock in 2009. It is an independent network celebrating original American roots music, culture, and events. Hitchcock is no stranger to running successful networks, as he founded Country Music Television (CMT) in 1984. BlueHighways, Hitchcock’s 3rd such venture, features shows such as Cooking Outdoors, Mule Training, Your Home Studio, and a slew of music programming. It’s goal is to offer a window into the experiences, music, neighborhoods, art, festivals and celebrations that define America’s vast culture as well as character.

Tom English, the General Manager for 650 AM WSM expressed his excitement for the duo to join his station:

Scott and Heino have done an amazing job building such a loyal international fan base for The Music Row Show. We are very proud to now bring the duo to our legendary airwaves and introduce this video version of the show exclusively on BlueHighways TV.”

Stan Hitchcock, Chairman and CEO of BlueHighways TV is also eager for the two to get started:

Our viewers will love this video version of Scott and Heino’s The Music Row Show. Their entertaining delivery and keen knowledge of the music industry will connect with the BlueHighways TV audience. We are also pleased to partner with WSM, as it brings strong credentials to our television version of this popular radio program.”

In reference to the deal, Scott and Heino added:

Barry Shrum has been instrumental in navigating us through the completely new waters as far as television negotiations. Not only did he go through the contract line by line with us (translating to english), he also helped us change some of the sections to take into account upcoming technology for future protection. There is no "Fear Factor" as we take The Music Row Show to a new medium with Barry in our corner!

Catch The Music Row Show on Sunday evenings on 650 AM WSM from 7-9 PM CT starting June 3.

Jeff_Scheese

 

*Hey folks, Jeff Scheese here just wanted to introduce myself. I’m currently enjoying the summer in Nashville before my Senior year at Belmont University. I’m a Music Business major currently and loving the realm of opportunities the city of Nashville offers. Upon graduation I plan on attending Vanderbilt’s Law School to further my education on the legal side of the music business. My ultimate goal is to become a lawyer in the music industry, mainly on the litigation side of things. I’m currently interning with Barry Neil Shrum, Entertainment Attorney, at his location in downtown Nashville. I’m learning a lot about the industry and enjoying my experience so far. Look forward to more pieces from me in the future.

Source:

Harr, Dan. “The Music Row Show Finds New Home on 650 AM WSM & BlueHighways TV”. MusicNewsNashville.com. May 16, 2012. http://www.musicnewsnashville.com/the-music-row-show-finds-new-home-on-650-am-wsm-bluehighways-tv

DSC_0628Nashville, Tennessee.  Lance Songs announces that he recently inked a deal with Barry Neil Shrum, Esquire of Shrum & Associates to represent him in the entertainment industry.  Lance is an emerging artist whose music is very soulful and whose writing is inspiring.  Lance’s album Rise and Shine Hero sold over 50,000 units, and he has been features in Billboard Magazine (June 13, 2008 issue) and Business Week (June 6, 2008).  Lance recently landed a tour of all Hot Topic stores across the Southwest, which will begin in early April and continue through the summer.   This is in addition to his already full touring schedule.  Lance is currently on tour at various venues in California, but will be back in the Nashville area to appear on Borders Books & Music in Brentwood, Tennessee on April 20, 2011.  Find out more about Lance and his tour on his website.

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I Wish You Were Here (ME My Mine Publishing/BMI)

Clarence Spalding

Rascal Flatts is arguably one of the most successful bands in recent history, selling more than 20 million albums as the headline act on Disney’s Lyric Street Records until that label succumbed to the effects of illegal digital downloading that has a stranglehold on the music industry.  When that happened, the band moved to the wildly successful label that the Swift family and Scott Borchetta built, i.e., Big Machine Records.  Now, Flatts is making another significant move.  Just a few short weeks ago, they parted ways with the management company that took them to the top, Turner Nichols & Associates.  Now, they have inked a deal with Clarence Spalding and his firm, Spalding Entertainment, for personal management.  Spalding is, perhaps, a bigger icon in the industry than Rascal Flatts, as he begin managing the career of Brooks & Dunn in 1991 and continued during their heyday.  He continues to manage the post-B&D solo career of Ronnie Dunn, as well as the musical careers of Jason Aldean, Terri Clark, Pat Green, and Ashley Monroe.  Spalding serves on the board of the Country Music Association,  the Academy of Country Music, Vanderbilt’s Bill Wilkerson Center, and is a member of NARAS.  He received CMA’s President’s Award in 2009 for his service at the helm of that organization.  In an article by Peter Cronin for American Chronicle, Mike Dungan, President and CEO of Capitol Records Nashville said that Spalding was “at the top of his game.”  Dungan described him as a “people person,” and as a “very bright guy who has a firm grip on all aspects of our industry.”

imageBelmont University’s Mike Curb College of Entertainment and Music Business will honor the International Entertainment Buyers Association and one of its founders Harry “Hap” Peebles with the 2011 Robert E. Mulloy Award of Excellence.

Established in memory of program founder Bob Mulloy,the annual Award of Excellence recognizes an individual or organization that has achieved a level of excellence in the music business and entertainment industries with notable service to Belmont University and the Nashville community. Previous recipients include last year’s recipient, Vince Gill, and Donna Hilley, who was the first recipient in 2009.

Harry Peebles, or “Hap” as his friends called him, was one of  a founders of both IEBA, originally known as the International Country Music Buyers Association, as well as the Country Music Association.  Peebles started booking artists when he was 18 years of age.  He served the country industry over 60 years, working with Barbara Mandrell when she was only 11 years old.  As Ms. Mandrell says, he was “country when country wasn’t cool!”  In the formative days of country music, Hap booked some of the early favorites among country music performers into fairs and festivals, including such well known legends as Tex Ritter, Red Foley, Kitty Wells, Ernest Tubb, the Wilburn Brothers, Roy Acuff and many others.  Hap has been nominated for the Country Music Hall of Fame and inducted into the Hall of Fame in Arkansas, Louisiana, Oklahoma, Kansas, Colorado, Nebraska, South Dakota, and North Dakota, as well as named “Fairman of the Year” in several states.image Through his involvement with the industry, Hap is credited with giving big breaks to such stars as Johnny Cash, Roy Clark, Loretta Lynn, Carl Perkins, Jerry Lee Lewis, Ray Price and Johnny Horton, just to name a few.

The International Entertainment Buyers Association was formed by Hap and Hubert Long in 1970 as a non-profit trade organization for talent buyers, promoters, agents, managers and artists.  Hap and Hubert were two among a growing list of country music promoters – Hap in Wichita, Kansas and Hubert in Texas – that included the likes of Abe Hamza, Don Romeo, George Moffett and Smokey Smith – men who knew one another but rarely communicated their needs or struggles to each other.  Peebles and Long felt that the country music talent buyers needed some means of formal communication between the talent buyers, as well as a voice in the fair and festival industry, which didn’t see the potential of adding country music entertainers to the roster of the larger state fairs and therefore relegated country music to the smaller county and city fairs.

“The first meeting I knew anything about was held in Hubert Long’s office in Nashville,” says Wilson Sparks, who managed the Mid-South Fair in Memphis.

We met and talked about an organization for people who buy and sell  country music. I guess that was in 1970. I think we talked about it for six months or more before it ever got off the ground.

Don Romeo, whose Omaha-based agency bought a number of country music acts for fairs in the Midwest at the time, remembers that the other country music buyers were concerned then with many of the same problems that are being addressed today:

Hubert Long and Hap . . . were very concerned that the cost of talent was getting out of line, and they wanted a stronger voice in the industry.  By having a buyers’ association to get together to discuss these issues with the agents and the acts, they felt we would be able to get a fairer price and would be able to make our concerns known.

Johnny Matson, who worked with Hap at the time IEBA was formed, remembers that Hap’s primary consideration was a little bit of buying power for small producers.

At that time, the big agencies had the buying power, and the smaller agencies didn’t have the respect that we have now. As far as fairs were concerned, we usually got Sundays; the big agencies got the choice dates.  There would be one night where country music was featured.  I think that a few fellows who booked fairs and one-nighters saw a need for an organization where they could share ideas about what was going on within the country music industry.

Smokey Smith, another talent buyer based in Des Moines, recalled:

I think Hap’s idea was that we needed an organization of the people who were buying country music who could go to the managers and talent agencies and say, “Look, we need a better price on this talent—what if two or three of us go together and offer you a string of dates, could we get a lower price?”

Long died an untimely death shortly after ICMBA was formed, and it was Hap that took up the slack as a major force in its formation.  He served as president of ICMBA for six years and was chairman of the board for the organization for nearly twenty years.   By the time it celebrated its 10th Anniversary, the organization had grown from its humble beginning to include almost 300 members.  Peeples dies in 1993 at the age of 80.  In 1995, IEBA celebrated its 25th imageAnniversary with honors as Tennnessee Governor Don Sundquist commerated the occasion by proclaiming June 2-5, 1995 as “International Entertainment Buyers Association Week.”

Tiffany Davis took over the helm as Executive Director in 2008.  Commenting on the Mulloy Award of Excellence, Davis said:

IEBA is very proud to be recognized by Belmont. Our founder, Harry Peebles, left a great legacy in the talent buying community, inspiring many leaders like Don Romeo, George Moffett and JP Williams. IEBA is thrilled to help students through these scholarships while also honoring four great pioneers of the entertainment industry.

IEBA established the IEBA Scholarship Endowments Fund in 1991 in honor of Peeples.  Since IEBA has established three additional endowed scholarships for Belmont students in honor of Don Romeo, J.P. Williams, and George Moffett. Collectively the endowments represent over $300,000 in investments.

IEBA celebrated it’s 40th anniversary in 2010.  Currently IEBA has well over 800 members. The organization’s annual conference, attended last year by well over 500 people, stands alone in the entertainment industry by showcasing the most diverse entertainment options available while striving to be the go-to organization for the entertainment community by offering continuing education and networking opportunities to its members.

The presentation will take place at the Mike Curb College of Music Business’ Best of the Best showcase, March 26, 2011, 7 p.m., at Belmont’s Curb Event Center.


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CRS 2011 Research Study Finds State of Country Music Healthy, New Media Engagement Growing
Country Radio still king for consumers, new music discovery

 

 

The results of the CRB Country radio research study presented recently at Country Radio Seminar 2011 in Nashville.  The comprehensive study was sponsored through a partnership between Country Radio Broadcasters, Inc. and the Country Music Association and was conducted by North Carolina-based media research firm Coleman Insights.   You can review the actual study here.

 

Coleman Insights polled 5,000 country radio listeners, or “partisans,” regarding their consumption habits and the state of Country Music in general.  The list of partisans was obtained from twelve country music stations in in Atlanta, Austin, Baltimore, Charlotte, Minneapolis, Philadelphia, Phoenix, Portland, Salt Lake City, Seattle, Tampa and Washington, D.C.  In addition, 171 radio industry professionals were also polled to gauge their insight and perceptions about the country format versus those derived fro the consumer survey.  The study surveyed a sample of 12- to 64-year-old P1 Country radio listeners across the U.S. and their usage of new media devices, including social media websites, smartphone applications and radio station and artist websites.  Participants in thradioe study were polled between Feb. 7-18, 2011 via email and online questionnaires.

The “big picture” findings from the study,  Coleman Insights, concluded that consumers perceived the overall state of country music as significantly more positive than the professionals in the industry did.  Additionally, radio is the medium which makes consumers feel “most connected” to Country Music and remains the most consistent means of new music discovery for them.  New media usage – use of Internet streaming and social networking for example – continues to increase among all age demographics polled, showing growth patterns consistent with those in other formats.   Some of the key findings reported in the study were as follows:

  • The country music radio partisans polled are very satisfied with what they hear on their favorite country stations and are happier than ever with the choices available for country listening.
  • Their listening momentum remains very strong, as 83% of those polled perceive they are “listening more” to country radio now as compared to a year ago.
  • Those polled perceive that “country music is better” (51%), that they are “listening more to radio” in general (45%), that country radio is “more family-friendly” (33%) and that their “country station has gotten better” (32%).  The overwhelming majority of those polled (50%) believe that the “country music coming out today” is better than it was a few years ago by a five-to-one margin over those who think today’s country music “is worse” (10%).
  • The top ten most popular artists of those evaluated by consumers are Brad Paisley, Tim McGraw, Lady Antebellum, Kenny Chesney, Zac Brown Band, George Strait, Jason Aldean, Carrie Underwood, Alan Jackson and Blake Shelton.  Interestingly, Taylor Swift ranks in the bottom tier of the most popular artists, suggesting her large fan base lies predominantly outside the Country radio P1 audience.

Contrary to these findings among consumers, the industry professionals polled believed the following:

  • that more than half of country music radio patrons are listening less to country radio than a year ago due to increased media choices and lack of time;
  • that today’s country music has achieved equilibrium and is no better or worse than it was a couple of years ago; and
  • that radio consumers are only moderately satisfied with the choices they have for country radio.

Significant data reported by the study concerned the use by country radio listeners of new technology and the wide array of options available to the consumer these days, which leads to the fragmentation of the target audience.  A brief sampling of the statistics from the polled consumers indicates:

  • Three-quarters own an Internet-connected PC or Mac;
  • Two-thirds own a game console;
  • Half own an iPod or mp3 player;
  • Nearly half own a smartphone;
  • Nearly two-thirds have watched country music videos on YouTube;
  • Half are using Facebook;
  • More than one-third have used Pandora streaming Internet radio.

In this regard, I found the following conclusion in the report to be very informative:

The industry has pretty accurate perceptions of the adoption and usage of new media and technology by [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][country music radio patrons], with a few exceptions. One noteworthy exception is how the industry overestimates the importance of radio relative to other devices. The industry believes [country music radio patrons], , if forced to choose only one electronic or entertainment device, would choose AM/FM radio as the most important device. In fact, radio ranks a distant third behind Internet-connected portable computers and smartphones. This underscores how critical it is for Country radio and Country music to have a significant Internet and mobile media presence.

Another misconception by the industry professionals is that the overwhelming majority of country music radio patrons wake up to a clock radio:  in reality, country music radio patrons are just as likely to wake up to a smartphone, suggesting radio is already engaged in a battle for the nightstand.  This has tremendous implications for morning radio listening and immediately suggests an opportunity for country radio to possibly preserve its wake-up utility by adapting to this phenomenon and creating wake-up apps that allow listeners to continue waking up to their favorite country stations through their smartphones.  The study further reveals how the content country radio stations and country music artists post on Facebook and share on their websites is somewhat out of synch with the needs and desires of country music radio patrons . This suggests the industry is missing an opportunity and not fully capitalizing on the potential of these tools.

The industry also has a few misperceptions about Pandora streaming Internet radio as well. More than one-third of country music radio patrons have used Pandora and they have been using it for a longer period of time and more frequently than the industry believes.  A key finding is that country music radio patrons already using Pandora say they are highly “likely” to use it in the car as it becomes available there.  When Pandora exists side-by-side with AM/FM radio on the dashboard, current Pandora users are almost equally as likely to prefer Pandora as AM/FM radio, with 25% undecided.  This forecasts a looming challenge to country radio from Pandora for in-car listening, a place that has long been radio’s almost-exclusive domain.

Lastly, the industry greatly underestimates interest among country music radio patrons in apps that would allow them to listen to Country radio stations on their smartphones or tablet computers (iPad, etc.).

The study was nonetheless seen as encouraging news for country radio and the country music industry.   CRB Board member and Chair of the CMA Research Committee, Rusty Walker, said

I was extremely excited about the research data presented at CRS this year. As a result of the study’s innovative approach and its thorough questionnaire process, the findings by Coleman Insights will help all facets of the Country Music industry in better serving its customers, listeners and fans.

Perhaps the most encouraging aspect the study revealed was that, despite the explosion of new media and new technology, country radio is overwhelmingly perceived as the medium that most “connects” consumers to country music by its fans.

Coleman Insights President and COO Warren Kurtzman

This year’s study confirmed that the overall perception of Country Music by its core consumers was extremely positive, and the general health of Country radio is still strong.  Listeners are continuing to find new means of consuming Country Music through emerging technologies, but this study seems to indicate they are not undermining Country radio’s connection with its listeners.

Findings from the study were presented March 3 at the CRB research panel during CRS 2011.  Coleman Insights VPs Chris Ackerman and Sam Milkman presented the data, and CMA Market Research Director Greg Fuson announced the study as a piece of CMA’s continuing research to help identify and define the Country Music consumer.

For more information about the 2011 CRB Country Radio P1 listener research study, visit www.CRB.org or www.ColemanInsights.com[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Mark Twain had a lot to say about statistics, ranking them as the highest of all lies:  “There are three kinds of lies:  lies, damned lies, and statistics.  Twain is also attributed with the more insinuated saying that “statistics are like ladies of the evening, once you get them down, you do anything with them!”   It’s been quite awhile since I’ve seen a manipulation of statistics that illustrates Twain’s philosophy about them more than what is found in the article posted by self-styled “political evangelist” and anti-copyright activist, Rick Falkvinge, this week entitled Kill Copyright, Create Jobs. Absent three very slick and attractive graphics, the only “facts” that Falkvimark_twain_pic_440_1_nge offers in support of this conclusion is statistics which, as far as I can tell, are made up!
 

In an effort to defeat the claims of the United Kingdom’s “copyright industry” that 1.2 million jobs will be lost by 2015 if stricter enforcement of copyright laws is not enacted, Falkvinge begins with the exaggerated conclusion that “for every job lost (or killed) in the copyright industry due to nonenforcement of copyright, 11.8 jobs are created in electronics wholesale, electronics manufacturing, IT, or telecom industries — or even the copyright-inhibited part of the creative industries.”
Falkvinge reaches this absurd conclusion through a somersault of logic involving segregating the “creative industries” into various categories of groups subdivided into “copyright-dependent” and “copyright-inhibited” sectors.  Of course, these phrases are never precisely defined but, reading between the lines, the reader can gather that the latter sector includes industries “fueled by a lack of copyright monopoly enforcement,” while the former we must assume includes some form of enforcement.  Once he groups the various creative industries according to this loosely defined structure, he asserts that “the contribution of the copyright-inhibited industries outweigh the copyright-dependent industries by a factor of 11.8,” and then draws the leap of faith that when a copyright-dependent job is lost, a copyright-inhibited job is created.  He then forms this general conclusion: “Prevent copyright enforcement, or weaken or kill copyright, and create jobs. Lots more of them.”  Wow!  Please, Obama, take note of this staggering feat of intellectual prowess!
There are so many errors in this article, it’s hard to begin, and I don’t intend to address each one.  But as you start to examine the sectors of industry that Falkvinge places into these divisions, you can easily see where his analysis falls apart.  Seriously, I don’t think it’s intended so much as analysis as it is rhetoric.  Nonetheless, let’s look at some examples.
In the first instance, Falkvinge erroneously relies on the conclusions of Peter Higgs in Beyond the Creative Industries for his foundational argument that the “creative industries” of the U.K. only account for 7% of its GDP, which he divides into three categories:  copyright-dependent, copyright-inhibited and copyright-agnostic.  I say he relies on this statistic “erroneously” because the 7% figure contained in Higgs’ report is based on what Higgs calls the “creative core” of the industry, not the entire industry.  Higgs’ defines the creative core as the “pre-creative and creative stages of the value chain” (p. 27).   This approach, Higgs establishes, only focuses on those involved in the initial stages of creation, i.e., the musicians, the dancers, the producers, etc (p. 28).  Thus, by default, the analysis does not factor in the post-creation employment of the creative industry and, thus, cannot be used in support of Falkvinge’s overall asssertion that on 7% of the GDP of the United Kingdom is based on the creative industries.
Second, in one sweeping yet unexplained fell swoop, Falkvinge places the entire advertising and marketing industry in the “copyright-inhibited” category.  Last time I checked, the advertising and marketing industry relied in large part on the creation of intellectual property, much of which is copyrighted work which relies on enforcement.   In another breathe, again without laying any factual foundation, he states that only 25% of the software, electronic publishing, games, film, television, radio and photography industries are “copyright-dependent.”  Twenty five percent?  Seriously?  Then he “estimates” than only 50% of the music and performing arts sectors of the creative industry are dependent on copyright protection.  Again, really?
With regard to his category of “architecture, visual arts and design,” Falkvinge’s “analysis” is totally off the mark.  First, again, he simply asserts that 100% of the architecture industry is copyright-inhibited, meaning it does not rely on copyright protection for enforcement.  He doesn’t define whether he is referring to architecture as a visual art or whether he is referring to the more intellectual and abstract protection of the actual structure which the U.S. Congress protected in 1996 with the Architectural Works Copyright Protection Act.   One can only assume that Falkvinge is unaware that the U.S. and most other Berne Convention signatory countries protect such works, since he groups architecture with the visual arts.
Secondly, Falkvinge lumps all of the “visual arts and design” industry into “fashion design” and then asserts that it is “copyright agnostic,” since fashion design is not entitled to copyright protection.  Ignoring the fact that there are many other arts to be considered in the visual arts and design sector of a country’s industries, let me just address the last assertion about fashion design.  There are several nations that actual do offer copyright protection for fashion design, namely the European Union, and France individually, and Japan, just to point out a few.  The U.S. currently has legislation pending that would follow in the footsteps of these country and protect U.S. fashion designers whose designs are pirated as soon as they are released.  (See this post on Law on the Row regarding the pending legislation).
As Falkvinge draws to a long and painful conclusion, he states that U.K’s “monopolized entertainment [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][industries’]” claim that they will lose 1.2 million in jobs by the year 2015 is “deceptive, dishonest and bordering on fraudulent,” which he uses to link to another self-aggrandizing article in which he claims that we as a culture are creating now more than ever, that copyright monopolies are an obstacle, and the copyright abolishment would only intensify this effect.  All I can say to Falkvinge’s claim is bull$^!+.  Isn’t that something akin to the pot calling the kettle black?  Is it really deceptive to say that most of my songwriting clients, the people who write the music, are struggling to feed themselves and have to take full time retail employment to make ends meet?  Is is dishonest to say that those same songwriters do not create as much music as they did before they were forced to work 10-12 hours a day to support their families?  And how can you deny the decline in sales of recorded music?  How can you deny the falling profits of the world’s entertainment conglomerates?  I certainly don’t pretend to know about the music industry of the U.K., but I do know that the local economy in Music City U.S.A., Nashville, Tennessee has suffered dramatically as a direct result of illegal downloading of copyrighted works.  I certainly know that this has a trickle down effect on all sectors of the music industry here, including my own practice!  If any of these claims are fradulent, then call me a fraud.
Long before Falkvinge began spinning his  illogical analyses, a company of men including Jefferson, Madison and Pinkney and other great thinkers of their day dealt with the issue we are dealing with – should creative ideas be entitled to protection as individual property?   These men debate natural law versus utilitarianism, and ultimately derived what is arguably a very workable system of protecting intellectual properties.  The U.S. system is based on theories like those of Thomas Hobbes and John Locke, who believed that we should “give to every man his own,” and that man acquired the ownership of property by exerting labor and converting nature – in this case ideas – into something that benefits society.  In fact, Locke believed that because a work created by an individual enriched society in general, and would theoretically continue to do so in the future, the author should have the right to be compensated as long as that benefit to society continued.  But, our Forefathers also wisely saw that in order to create, it is helpful to have a thriving public domain, so they placed certain limitations on these rights, namely granting the monopoly for “limited time.”  The “monopoly” of copyright protection – Falkvinge derisively refers to it as the “copyright monopoly” as if it’s a bad thing – is merely a reflection of these ideas.  If we believe that one should benefit from his or her own creation, his or her own expression of an original idea, then laws and rules are the only way to enforce that in a developed society.  Because of the wisdom of our Forefathers, we have that in Article I, Section 8, Clause 8 of the U.S. Constitution.  For my money, the logic of Locke, Hobbes, Jefferson and Madison surpasses the diatribe of Falkvinge at least by a factor of 11.8 to 1!
So, in summary, I am quite certain that Falkvinge, if he even takes note of my existence, would categorize me as just another one of the “lawyer who advocate maximization of the copyright monopoly.”  He would likely also allege that my claims are misleading if not bordering on fraudulent.  Regardless, I think that it is evident that Falkvinge’s assertion that for every 1 job lost to copyright infringement, 12 more will pop up to replace them is unfounded and, frankly, completely manufactured.

 


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NBC Universal recently hired a company called Envisional to study counterfeiting activity over the Internet. The results of this study – despite the fact that it is industry funded – are literally astonishing: 24% of all global Internet traffic involves digital theft!  Stated another way, one in every four people surfing the Internet are stealing intellectual property, i.e., illegally downloading either copyrighted or trademarked materials.  According to the International Federation of the Phonographic Industry, 95% of the music downloaded from the Internet is downloaded illegally!  Imagine how our society would react if one out of every four people in retail malls were carrying out stolen merchandise on a daily basis, or if 95% of the product leaving the mall was stolen.  It would be chaos.

Ring of FrodoNow consider whether these people who so quickly download a song or a movie on the Internet without paying for it would also walk up to an artist selling their painting in the park and steal one of their painting.  I firmly believe the answer to that question is a resounding no!  But why? What is different about the world wide web, i.e. cyberspace, that gives these consumers the feeling that they are entitled to download music and movies through mechanisms like BitTorrent without compensating those who created such product?  What are these people thinking?

I think the answer can be found in the writings of Plato.  In the second book of his Republic, Plato’s student, Glaucon, poses the illustration of the “Ring of Gyges.”  In the story, Gyges is a shepherd who finds a magical ring in a chasm created by a lightning storm.  The ring gives him a cloak of invisibility.  Using his newfound power, Gyges seduces the Queen of Lydia, murders the King, and takes the throne, gaining power, wealth and fame.  In the Republic, Glaucon argues that given a similar opportunity, any person, whether or not they were previously just or unjust, would use the power to commit as many crimes as necessary to get what they want [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][Book II, 359d].    Glaucon was responding to Socrates’ refutation of arguments put forth by Thrasymachus in Book I of the Repbulic, i.e., that “justice is nothing but the advantage of the stronger”  [Book I, 338c].

I believe Glaucon’s experiment in thought informs us as to why someone who would not normally steal a tangible object in the physical world is nonetheless more than willing to download music or movies, intangible objects, on the Internet for free: because the fear of being punished or getting caught is eliminated in the evanescent world of Cyberspace.  The Internet, like Gyge’s ring, confers upon its users a seeming cloak of indivisibility as it were.  As one astute commentator surmised in response to an interview with Alice in Chain’s lead singer, Sean Kinney, “The real reason people steal music is that they CAN and very easily.”  That this is a truth is evident from the plethora of “how to” guides on the Internet, teaching people “How not to get caught.” There you have it in a nutshell.   All of the commentary about how the record industry has been thieves and how the RIAA unjustly goes after the defenseless people, these are mere justifications for actions people otherwise know in their hearts are wrong.

It’s important to read Plato’s response to his student to understand fully, as Plato did not agree with Glaucon.  Plato’s argument in the remaining portion of the Republic is that the just man would not be tempted by this cloak of invisibility to commit crimes.  Rather, the just man understands that crime itself makes a person unhappy and that he is better off to remain just.   I frequently discuss this issue with my college students at Belmont University when teaching a course on Copyright Law.  One of my students made the following observation, which confirms Plato’s conclusion.  She said:

I do not follow the rules because I am scared of the RIAA busting me for illegal downloading. I follow the rules because I have respect for the people who wrote and recorded the songs, and even more, because I want to work in the music industry.

Another relevant opinion is offered in the excellent blog article found on arbiteronline entitled Illegal downloading: The real cost of ‘free’ music.” In that article, a student at Boise state, Ammon Roberts, is quoted as saying:

“I don’t do it because I don’t feel it’s right.  If I were making the music, I’d be upset if people were downloading it for free.”

For these two students, following the rules is not about whether or not they’ll be caught, it’s about doing the right thing.  It’s about honoring, i.e. compensating, the people who created the music. 03-20-invisible_full_600 This illustrates Plato’s point precisely:  a just person understands that even with a cloak of invisibility, doing the right thing makes a person happy or, in the words of Roberts, makes the person “feel right.”

The Internet is also very much the Land of Oz.  In addition to this cloak of invisibility endowed on us by the Internet, it also deceives us with illusions of anonymity – not so much that the user is anonymous, as that’s merely another form of invisibility – but in the sense that it’s difficult to know who’s behind the curtain.   As Trent Reznor said in an interview, “there is a perception that you don’t pay for music when your hear it . . . on MySpace.”  Because of its sheer vastness and its mysteriousness, Cyberspace gives people false perceptions that their actions on the Internet do not affect real people.   This, in turn, creates an illusion that “resistance is futile.”  Everyone is doing it, so I can too.  In other words, Cyberspace alters our reality in that it makes the real people behind the music an amorphous, anonymous entity.  The result is that it’s much easier to steal from an amorphous, anonymous entity – the man behind the curtain – than it is from a struggling songwriter, particularly when all your friends are doing it.

I truly believe that most of the people who are illegally downloading music from the Internet have no idea who they are affecting or how widespread the effect is.  Most of these people would not even think about walking up on stage after a singer/songwriter in a nightclub takes a break and stealing his guitar, but that very same person doesn’t think twice of taking that same singer/songwriter’s song from the Internet.  They wouldn’t steal the filmmaker’s camera, but downloading the movie doesn’t phase their consciousness.  In fact, many who contribute to the  dialog would argue that these two thefts are not analogous.  But one analysis conducted by the Institute for Policy Innovation states otherwise.  The report indicated that music piracy causes $12.5 billion of economic losses every year.  It further concluded that 71,060 U.S. jobs are lost, with a total loss of $2.7 billion in workers’ earnings.  Such reports abound throughout the industry, yet many of the people guilty of illegal download continue to view these reports as industry-driven and, therefore, skewed.  Take this comment by blogger Michael Arrington as an example:

Eventually the reality of the Internet will force the laws to change, too. One way or another the music labels will eventually surrender, and recorded music will be free.  Until it is, I refuse to feel guilty for downloading and sharing music. Every time I listen to a song, or share it with a friend, I’m doing the labels a favor. One that eventually I should be paid for. Until that day comes, don’t even think about trying to tell me that I’m doing something ethically wrong when it’s considered quite legal, with the labels’ blessing, in China.

resistanceBut what this illusion of anonymity, and such misguided opinions, miss is the fact that very real people – not amorphous masses – are being affected.  And the effect is devastating.  I have clients who are songwriters who are no longer creating art because they are forced to take odd jobs to support their families.  The performance royalties they used to receive from ASCAP, BMI or SESAC are down by half or more from a few years ago.  Their mechanical royalty checks are virtually non-existent.  They simply cannot afford to create simply for the sake of creation.  And now, working sometimes two jobs, they don’t have the time to create.  What will become of the art of songwriting if Mr. Arrington has his way and all recorded music is free?  I believe we will not have the quality of music in this country that we have enjoyed throughout the last millennium.  In this instance, I do not believe that resistance is futile.

Now, getting back to Plato and the Ring of Gyges, in answer to Glaucon, Plato would say that the root of all trouble is unlimited desire.   How true is that in this world of Cyberspace, in this world of rampant illegal downloading.  The wheels really fell off the wagon when the RIAA sued Diamond Multimedia, bringing the MP3 into society’s field of view.  Then, Napster exploded and almost everyone found that almost every song they ever loved was available for free.  It’s as if they were Harrison Ford and discovered the treasure room in an unknown, ancient tomb: everything your heart desires is within your grasp.  It’s yours for the taking.  With its cloak of invisibility and its illusion of anonymity, what the Internet has done, in short, is to return the power – i.e., the control – back to the people.  Everyone is now a creater, a publisher, and distributor.  No one needs the conglomerates anymore – the people have the power.  But, as Lord Acton said, beware:  “Power tends to corrupt, and absolute power corrupts absolutely.”  With power, therefore, comes responsibility.   Unfortunately for the music industry, the power is currently being abused and will, ultimately, mean the end of the recording industry as it existed through the 20th century unless the creators regain that power.

So what does this mean for those of us who have chosen to make our living in the world of creation?  Does it mean the end of our industry?  Does it mean an end to copyright law as it exists?  If we examine the origins of copyright – i.e., the protection of an original idea expressed in a tangible format – as passed down to us from our forefathers, we find a concept on which we can continue to build.  In the now famous Radiohead experiment in which Reznor and crew allowed consumers to pay what and only if they wanted to, 18% of the consumers chose to do so!  That to me, is an encouraging statistic, and one that confirms a believe in the viability of creating art.  At least one in five people, even with the cloak of anonymity provided by the Ring of Gyges of this era, i.e., Cyberspace, chose to pay the creators for their creation.  Take that Glaucon!  Take that Arrington!  What does that say for our society?  It says that there are people who still chose to do the right thing, even when the tide of conformity rises above their heads.

The bottom line is that it really doesn’t matter what laws are passed by society, there will always be a certain percentage of people who will chose to steal, take and plunder, whether it be because they are more powerful or because they are cloaked with invisibility or shielded by anonymity.  But – and here is the important thing – there will also always be a segment of society that recognizes the idea that Thomas Hobbes first advanced hundreds of years ago, i.e., the idea of “giving to every man his own.”    If a man bakes a loaf of bread, is it not his right to trade that to the artist for whose painting he wishes to barter?  This idea was later incorporated by our Forefathers into Article I, Section 8, Clause 8 of the U.S. Constitution, which gives Congress the authority “[to] promote the progress of science and useful arts, by securing for limited times to Authors and Inventors the exclusive rights to their respective Writings and Discoveries.”  Without this Constitutional right, a creator has no hope of protecting his or her property against plunder.  And as long as a segment of society believes this proposition to be beneficial to society as a whole, it will hopefully continue to motivate creators to create, and so profit from their creations, despite the efforts of those who choose to destroy it under a cloak of invisibility and unjustly take for themselves the kingdom of Lydia.

Quotations from Republic are taken from the W.H.D. Rouse translation, Great Dialogues of Plato, Mentor Books, 1956, a quoted in this fine article on the topic.

 


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My friend and client, Dr. Jimmy Eugene Pollard, performed a sampling of his music in front of a sold-out crowd, performing as the opening act for Gary Allan’s immensely successful Get Off On the Pain tour.  The Pavillion at  the Coushatta Casino Resort welcomed over 4000 people for the February 19th event.  Allan’s tour has earned a spot on the New York Times Top 10 year end list and earned rave reviews in People, USA Today, Country Weekly, American Songwriter, Billboard, Associated Press among others.

Jimmy Eugene is most known for his interesting life story captured in his book, On the Journey Back.  Jimmy was a teenage runaway, joining the military after lying about his age at 17.  After service to his country, Jimmy returned to complete a degree in dentistry.  He serve another stint in the Navy, achieving officer status, and then retired.  Later, he entered medical school and became a maxillofacial surgeon, building a huge practice in Lake Charles, Louisiana (and another in Texas).  It was almost twenty years later that Jimmy started writing music.  He was in a severe automobile accident, injuring his spine.  While in traction, Jimmy had a dream and began hearing music for the first time in his life.  He learned to play the guitar and begin to write song.  Through a series of connection with Nashville, Jimmy became a client.

Saturday night’s performance was only Jimmy’s third time on stage.  “I was a little disoriented when the lights hit me up there,” Jimmy told me in his back stage motor coach.  Jimmy performed songs from his new album, Joy of the Journey. He was backed by a team of A-List players from Nashville, hand selected by Steve Tveit of Omnisound and veterans Pat McCrath on guitar, Dug Grieves on electric,  Dow Tomlin on bass, Dennis Wage on keyboard, and Steve Hinson on steel guitar, among others.  The Louisiana fans seemed to enjoy the performance.   A special thank you goes out to our musicians, and to Randy, Jay and all of the other fine staff members at Coushatta for making our visit there extremely enjoyable.  Loved the crawfish étouffèe!

Visit Jimmy’s website for more information.

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By Nathan Drake & Barry Neil Shrum

Warner Music Group’s (“WMG”) year-end financial reports for 2010 came as little surprise when you take into account two factors:  (1) the general economic downturn in the U.S. and (2) the continued piracy in the global music industry.  See the report on WMG’s website here.  WMG has been the third largest record company in the world since at least 2004, when Time Warner spun off its music-related components.    WMG’s stock was trading at $5.92 per share as of the date of this posting, 2/21/2011.

Although WMG posted positive revenue returns in the third and fourth quarter of 2010, WMG claims that total revenue in 2010 decreased sharply as compared to 2008 and 2009.  This represents the eighth straight quarter that WMG has posted decreased earnings, a trend that is concerning to many in the music industry.  To wit, the demise of EMI Music – currently No. 4 in the music world – as it crumbles under the weight of its massive debt, is a poignant lesson to WMG – and to Universal Music Group and Sony BMG (Nos. 1 and 2 respectively) – that no  music conglomerate  is immune to hardships and winds of change currently facing the music industry.  The wide moat of physical sales that once protected the record labels’ castle from ultimate destitution now fails to provide a comfortable defense.WMG Downturn2

imageAs a result, a new kind of business model has emerged on Music Row and throughout the music industry, and this business does include “traditional model” involving radio marketing or “physical distribution/sales.”.  Rather, ingenuity and innovation include the most pertinent qualities of this business model.  See my post, New Formula for the Music Industry. And though the “major record labels” while may be slow to adapt, revenue losses like those reported by WMG, is quickly teaching the behemoths that transformation is essential if they want to stay afloat and competitive in today’s music market.  There are constant rumors afoot in Nashville that several of the major labels are shifting away from the traditional type deals toward more reasonable, tech-savvy and partnership-based approaches that fit the model better.

According to WMG’s reports, released on February 8, 2011, revenue totaled $789 million for the fourth quarter of 2010.  Even though it reported positive cash flow for the fourth quarter, the reported revenue represents a 14% decline from the 4Q 2009.  The impact of this comparative decline becomes clearer when you compare the reported digital revenues for WMG for the same periods.  Digital revenue for 4Q 2010 accounted for a staggering 25% of the total revenue, or $187 million.  This total represents an increase from the $184 million in digital revenue reported 4Q 2009.  Thus, it is obvious that digital revenue continues to be an integral, and fast growing, aspect of the business model for record labels.

The growth in digital revenue and the effect it has had on WMG’s revenue stream is also highlighted in the international sales posted by the company for 2010.  While domestic recorded music digital revenue declined 3% in 2010, international recorded music digital revenue grew 12.3% during the same year.  International digital purchases of recorded music accounted for 19.7% of total revenue in 4Q 2010, increasing from the previous year’s quarterly earning of of 14.6% in the same sector. WMG’s figures show that marketing internationally provide great opportunities for augmentation, at least for the time being.

emi460The impact of these trends in the music business on the future business model of WMG is also evident from the report for those willing to consider them.  First, the news reported by WMG that it is hiring Goldman Sachs to investigate and explore the potential sell of the company offers tremendous insight.  WMG has also proposed the option of selling only portions of the company in an effort to alleviate the debt and mere size of the company.  Going in totally the opposite directino, a third proposed option in consideration is that WMG would acquire its struggling little sister, EMI Music.   According to 2009 Nielson SoundScan® sales figures for each of the major conglomerates, the acquisition of EMI would position WMG as the largest record label in the music industry, with 32.72% of the U.S. market share, leapfrogging both UMG and Sony BMG to take the crown.

As noted earlier, EMI is the fourth largest music conglomerate, representing some of the largest acts in music today, including Katie Parry, Coldplay and Radiohead.   Despite its stable of well-known artists, Terra Firma, EMI’s current owner, has been treading water for almost a year now to to repay CitiGroup, from whom it borrowed millions to acquire EMI a mere 2 ½ years ago.  But as the repayment prospects for EMI are beginning to dim, as they reported massive losses of nearly $2.5 billion last year.  So, while things may look gloomy for EMI, Warner Brothers views EMI’s plight as an opportunity to expand its catalog and artist repertoire.  An opportunity of this magnitude is rare; therefore, acquiring EMI yields the potential for Warner Brothers to transform itself into a more profitable and diverse music industry conglomerate.  I’m sure EMI hopes the third time is the charm here.

So, the music industry continues to morph and adapt into something that will not resemble the traditional “record label” models of the past.  Gone are the days when such conglomerates are the only ones who will be able to produce multi-platinum superstar artists, sold through radio marketing and mass retail distribution on which they have a stronghold.  The days of the Internet revolution are upon us and the industry is starting to see its effects.  This drama will continue to play out over the course of the next few years.

NathanMy co-author, Nathan Drake is a senior at Belmont University from Northville, Michigan who graduates in May with a degree in Music Business from the Mike Curb School of Music Business. Nathan currently clerks for Mr. Barry Neil Shrum, Esquire at Shrum & Associates in Nashville, Tennessee. He plans on pursuing a law degree after graduation.  Nathan is author of his own blog entitled “My Thoughts.”

Further Reading & References:

http://thedailyswarm.com/headlines/warners-planning-buy-emi/

http://www.wmg.com/newsdetails/id/8a0af8122de5d32c012e028916cb03a6

http://finance.yahoo.com/q/is?s=WMG

http://www.time.com/time/business/article/0,8599,1962165,00.html

http://thedailyswarm.com/headlines/warners-planning-buy-emi/

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