Facing the Music

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By Carl Weiss

MP3 Player
MP3 Player (Photo credit: that one doood)
The music biz has always been a tough one to break into.  For years, the record labels had a virtual monopoly on who got on the radio and on the charts.  All that changed with the advent of the Internet. Now struggling artists have a way of generating visibility and selling their cds online.  A number of unknown artists have made the scene when their music videos went viral.  Outlets like i-tunes have put the recording artist in the driver's seat in a way that would have been unheard of a couple of decades ago.  If you are looking to get your groove on, tune in for this episode of  Working the Web to Win on BlogTalkRadio.

It was 50 years ago this month that the Beatles changed the music industry forever when they first made their way to the US.  So I thought it appropriate that I start this week’s blog with a couple of stanzas from their hit single, "Taxman."

“Let me tell you how it will be. There’s one for you nineteen for me.
If five percent appears too small. Be thankful I don’t take it all, Taxman.”

Sandisk e130 512 mb MP3 player
Sandisk e130 512 mb MP3 player (Photo credit: Wikipedia)
The lyrics lamented the fact that British performers at the time were getting hit with incredibly high taxes on the royalties they earned.  However, there was an even more insidious hand taking a huge cut of many recording artists’ pies at the time that had nothing to do with the tax man.  And that was the cut that the record labels were taking from artists under contract.

Here Comes the Judge

While a number of stories about artists who were burned back in the early days of rock and roll are legendary, that doesn’t mean that the practice has stopped.  In fact, the past few years has seen a number of lawsuits against record labels by several notable songsmiths:
  1. In 2007 pop legend James Taylor initiated an audit and lawsuit against Warner Bros. which uncovered underpayment of royalties in the amount of $1,692,726 for the period spanning 2004-2007. (Warner subsequently paid only $97,857 of that balance.)
  2. In 2009 jazz great Chet Baker sued Warner Music Canada, Sony BMG Music Canada, EMI Music Canada and Universal Music Canada for releasing his music on Canadian CD’s without compensating him.
  3. Ytmp3_1b
    Ytmp3_1b (Photo credit: gvgoebel)
  4. In 2011 Pete Frampton sued A&M Records for unpaid digital royalties. He hired music attorney Richard Busch who previously helped Eminem successfully sue Universal, parent company of A&M.
What is even more noteworthy is the fact that many of these suits are seeking compensation for “digital distribution” of music.  Translated, this boils down to “online distribution” of recordings.  And if the recent news feeds is any indication, not all of the ire being vented by recording artists is directed toward record labels.

In 2012, a federal court reinstated a $222,000 damages award against a Minnesota woman accused of illegally downloading 24 songs, Reuters reported that the music industry victory in a case stretching past its sixth year. The U.S. 8th Circuit Court of Appeals in St. Paul, Minnesota, rejected Jammie Thomas-Rasset's argument that the fine – $9,250 per song – was excessive and violated her due process rights under the Constitution. She has said her ex-boyfriend or two young sons were probably responsible for downloading the songs.”

She was hardly alone since some 18,000 people were sued between 2003 and 2008 by the Recording Industry Association of America. It didn’t stop there, as talk show host Ellen DeGeneres found out a year later, when she was sued for copyright infringement when she broadcast more than 1,000 songs during the “Dance Over” portion of her popular show.
Read more: http://www.rollingstone.com/music/news/ellen-degeneres-show-sued-by-record-labels-over-copyrights-20090911#ixzz2wEuSKM9Q

This does not encompass the most litigious online music case of all time: Napster. Launched in June 1999 byShawn and John Fanning, Napster was the first large scale peer-to-peer music sharing site. Wildly popular with the public, the site quickly ran afoul of a number of popular bands (such as Metallica) who took issue with having their music given away royalty free. On top of that the band accused Napster of leaking at least one of their songs (I Disappear) before it was even officially released. Shortly after that a number of other labels piled onto the suit, trying to force Naptster to monitor their service and block access to copyrighted material. A year later, the court of appeals decides in the record labels favor and issues an injunction. In June 2001, Napster is forced to shut down the business in order to comply with the ruling.

What Happened to Napster?

napster (Photo credit: jima)

A side note on Napster: After filing for bankruptcy in June 2002, Napster announced plans to sell the service, since it had hundreds of thousands of members atthis point. However, the judge blocks the sale and orders Napster to liquidate. Less than a month later, Roxio, the digital music software purveyor, buys the Napster brand and logo for $5 million. Roxio then leverages the popularity of the Napster name to revamp a failing music subscription service named Pressplay, later selling Napster once more(in August 2008), this time to Best Buy for $121 million. Best Buy then sells Napster’s customer base and other intellectual property in September 2011 to Rhapsody for an undisclosed sum. (At the time of the sale, Napster reportedly had more than 700,000 customers.)

While the kind of services offered by Napster went against the grain of the music industry, the popularity of being able to download music online did not. What it did was spur the imagination of a number of entrepreneurs to take action in order to capitalize on this efficient means of bringing music to the masses.

“With all the buzz around Spotify and the absolute dominance of iTunes since 2003, it's easy to forget that Napster was the first big name in digital music, and introduced computer users to the idea that they could listen to any song in the universe, any time, on demand. The only problem: the people who made that music wanted to be paid for it, and it took about a dozen years to figure out how that would work to all parties' satisfaction.” Read more: http://www.businessinsider.com/napster-is-finally-dead-heres-a-look-back-at-what-happened-2011-10#ixzz2wFNZ8XOa

Steve Jobs and Apple Get Their Jam On!

No sooner had the fur begun to fly in the courts over Napster when Steve Jobs at Apple Computer realized that if he could find a way to deliver music to the masses in a legal and profitable venue, then he would be sitting on the next killer app. The only problem was the fact that he didn’t want to waste a year or more developing an app from scratch.

After looking at and rejecting another potential solution, Steve Jobs approached Robin Casady and Michael Greene to discuss their SoundJam app. Their program had a couple of things going for it, chief among it benefits where the facts it was powerful digital encoding program that had an interface that looked remarkably similar to Apple’s QuickTime player. After negotiating a price, Casady & Greene sold the rights for SoundJam to Apple and Steve Jobs immediately got ready to jam by creating iTunes.

Courtesy Apple Computers
Excerpt from MacWorld: “About 10 months later, at Macworld San Francisco in 2001, Apple debuted iTunes alongside iDVD and the CD-RW-enabled Power Macs. While it wasn’t exactly a show-stopper (though 275,000 copies were downloaded in the first week), the "world’s best and easiest to use ‘jukebox’ software" definitely raised the bar for music players on the Mac, which were relatively sparse and rather pricey (SoundJam cost $40). By offering iTunes as a free download and installing it on every new Mac, Apple essentially cut down the competition at the pass--or at least put a good scare into them. "Apple has done what Apple does best--make complex applications easy, and make them even more powerful in the process,"  said Steve Jobs at the time. "iTunes is miles ahead of every other jukebox application, and we hope its dramatically simpler user interface will bring even more people into the digital music revolution." 
After racking up more than a million downloads in the first month alone, Apple knew they had a hit on their hands. It also spurred Apple into creating hardware that could give their customers the opportunity to take their tunes with them. Thus was born the iPod. More importantly for singers, songwriters and aspiring musicians, this gave them a whole new lease on life. No longer bound by record labels to produce and more importantly distribute their music, iTunes and other services that soon sprang up alongside it, enabled musicians to deal direct and cut out the middleman.

The evolution of the iPod - Courtesy of Tony Fadell

Since then a number of previously unknown artists have not only sprung onto the scene. But a number of them have done quite well for themselves. Take Corey Smith, a country folk musician, who went from high school teacher to high paid recording artist, grossing more than $4 million in 2010. More importantly, he did it DIY style, without signing up with a record label. Mashable had a feature a couple of years back entitled, “15 Wannabes Who Found Fame on YouTube.” This included Julia Nunez, Chantelle Redman and Justin Bieber. http://mashable.com/2011/01/23/found-fame-youtube/

Music Parodies Make a Big Splash

Some other industrious souls have found online fame by posting musical parodies. One such success story is the Gregory Brothers who turn press conferences into ersatz operas with the help of a little voice altering
computer software.

 The Brothers insert themselves into news footage to sing along with political leaders.Early videos saw Hilary Clinton singing about Somalian pirates, while the US Congress debated climate change turned gospel song. While the Gregory Brothers and other parody producers like them aren’t likely to win any Grammy awards, their large fan base on YouTube makes sure that they earn a comfortable living by monetizing their channel via AdSense ads.  And unlike a lot of starving artists, these talented performances have found a way to face the music and thrive online.  That’s more than most musicians can say.

The Impact of the MP3 music format and the wide spread adoption of MP3 plays has had a profound impact on our society and the whole world. We have moved from Record companies monopolizing artist talents to Artist control of their own talents. Prices and distribution have greatly improved. We have less waste and pollution from packing and products and the laws have started to move away from the DRM model to favoring individual rights, allow users to be able to backup music (and videos) they have purchased. The next few decades will continue to usher in changes that MP3 started. We now have MPEG4 as a video standard and soon the Movie industry will start to feel the same pinch that the record monopolies felt when music moved to MP3. The book industry has already seen drastic changes in how people create, publish and distribute books. Needless to say, the internet has had a big part to play in all of this. I can’t wait to see what comes next. 
In this article I discussed the evolution, if not the revolutionary changes that have occurred because of the invention of the MP3 music compression standard and the MP3 player. Large music empires have fallen and the musician now have a chance to rule the roost. If you found this article to be useful, share it with your friends, family and co-workers. If you feel, you have something to add to this article leave a comment below. Thanks again for reading and sharing.  Until next time.

This week’s guests include Toots Lorraine, Chad Mo and the Traffic.

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Since 1995, Carl Weiss has been helping clients succeed online.  He owns and operates several online marketing businesses, including Working the Web to Win and Jacksonville Video Production. He also co-hosts the weekly radio show, "Working the Web to Win," every Tuesday at 4 p.m. Eastern on BlogTalkRadio.com.

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