BY:

              Researching legal findings and Relevant Industry specific Podcasts.

   There have been many issues  which pertain to my business aspirations which have been decided recently in courts around the country. As an artist who has been relying heavenly on the Internet and digital distribution and streaming, music royalty issues stand ant the forefront of my personal and entertainment company’s attention and portfolio. In my research of these issues I encounter legal blogs and newsfeeds which at times contribute valuable information. The Entertainment Law Update podcast series with Gordon P. Firemark has given me background on these issues. Episode 30 delves into Music Royalty Issues, Crowd funding and other interesting subjects.

(http://www.entertainmentlawupdate.com)

                NEWLY DECIDED MECHANICAL ROYALTY RATES

The music royalty issues decided recently in courtcases between the RIAA(Recording Industry Association of America) the trade group who represents recording distributors in the united states and the DiMA(Digital Media Associataion) a national trade organization devoted to the online audio and video industries, decided what would be the Mechanical Royalty rates paid to publishers by cloud services and digital storage services. The Labels will be paid certain statutory rates which they will pay royalties to publishers on. These issues pertain to section 115 of the Cumpulsory licenses  section of this law creating new statutory rates which were the same as the previous Mechanical license rate of 9.1 cents. This is significant because there was not previously an established statutory rate for cloud services, streaming and ringtones. Licensing has been being issued since 2001 for these kinds of services but retro-active payments will be issued  dating back from 2001 to July 1, 2009. New reports on license usages will be issued for every 45 days since then for accounting purposes. This is good for independent self published artists such as my self to account for and track usage, plays and mechanical royalty rate payments from distributors.

THE JOBS ACT

         The Jumpstart Our Business Startups Act makes it easier for emerging business to utilize crowd funding platforms, for investor equity stakes, which yield a return on investment as opposed to exclusive perks for campaign contributors. Some think the new act also creates a greater opportunity for abuse on behalf of these Investors and groups. There are five modules which are included in this act, three of which I will discuss here.

Module 1 pertains to crowd funding and Investrors being allowed to contribute 10% of their gross adjusted income(up to One Million dollars) to activities like this for  various returns.

Module 2 addresses changes to Regulation D Rule 506 of the previous code pertaining to fundraising  securities for film. The previous rule only allowed fundraising solicitation to individuals which had relationships with those seeking funds,the changes now allow fundraisers to post public notices of fundraising opportunities for film securities online and in print. It also raises the amount investors can contribute to these securities  without reporting to the SEC(Securities and Exchange Comission) from 5% million to 50 million dollars.

Module 3 is in reference to the IPO-Onramp. This section applies to emerging business grossing under 1 billion dollars a year. This provision allows these business to embark on and IPO(Initial Public Offering) activity  more economically than ever before. In addition  Businesses who have up to  500 private shareholder investors were previously required to  become public companies. The limit has been raised to 2000 private shareholder investors provided they are not accredited investors.

These issues pertain to emerging companies such as my own ,some sections more than others, The crowd funding section especially pertains to some of the projects my company is  developing in film.These new developments may enable fundraising for my projects.

Episode 32 Lawyers, Libel Logos and Lollipops-Actual Knowledge Vs. Redflag knowledge

In The case of  UMG VS. VEOH (that is Universal Music Group versus the  online video platform VEOH) in the ninth circuit court  in 2010 it was decided that in order for their to be  actual  knowledge of infringement of copyrighted material  on the ISP(Internet Service Provider) video site, the Copyright holder must  notify the ISP of the infringement on their site. In light of the recent decision in another case, (Viacom VS YouTube) the ninth circuit has asked the parties to determine whether the second circuit court (which has decided the case in the YouTube dispute) is utilizing the same definition for infringement in terms of actual knowledge?  The other issue is if there is no  actual knowledge of the infringement does the copy right holder need to show that the video site has more than the ability to block, take down or control the access to the infringing material? The answers were given via supplemental briefs. The decision has since been made proving VEOH was legal and not–infringing. This however did not save their business due to legal fees and bankruptcy.

The point is to establish aligning decisions in cases to establish what makes a video site liable for hosting infringing materials under safe harbor in the DMCA(Digital Millennium Copyrights Act.). If in one court they decide the case based on different criteria than the other, then the  precedents are in conflict and the case can be taken to the supreme court. Not having correlating decisions doesn’t establish clear precedent and can enable infringement on different sites.

I follow this issue because when you are a Copyright holder such as myself it behooves you to know how others may infringe on your rights and how you may infringe on the rights of others. When artists publish material and expect compensation for the use of the material, honoring copyright is imperative to the argument and principle. These issues and court cases are all relevant to my business and future projects. I encourage any aspiring entertainment entrepreneurs to regularly research and educate themselves on the issues relevant to their industry.

                                                            Additional References:

http://www.aimp.org/education/articles/1/Librarian_of_Congress_Publishes_New_Digital_Era_Mechanical_Royalty_Rates

https://www.eff.org/cases/umg-v-veoh

                                                                   IMAGES:

 http://forum.belmont.edu/muzzbuzz/2012/04/11/heads-up-entertainment-law-counseling-professionalism-coaching/

http://www.safemusiclist.com/article/how-can-i-legally-use-copyrighted-music-in-my-film/

http://techcrunch.com/2009/02/04/judge-tells-umg-no-you-cannot-sue-veohs-investors-for-copyright-infringement/ 

http://www.vanderbilt.edu/vumix/

http://ventureburn.com/2012/02/crowd-funding-pushes-lon-startup-into-spotlight/

                                      THE GOD

MY NEW VIDEOFrom the ESCAPE VELOCITY ALBUM ON ITUNES CDBaby, Spotify,Rhapsody Pandora and many more cop that!!!!

This Video is filmed edited and directed by me, I am a man of many hats Yes I know, I am the mad hatter!

ENJOY!

The Challenges Facing Everyone In The Music Business Today, From The Conglomerates to The Independent Guys. (Editorial)

 BY:

The Challenges Facing Everyone In The Record Business Today, From The Conglomerates to The Independent Guys.

Judging by the millions of music videos by wannabe content creators on YouTube, and free to download “mixtapes” on Datpiff.com and sites like it, you would think that the music business is undergoing an incredible renaissance. Everyone must be making money hand over foot because people are fighting to get in to this business huh? Some do, most aren’t . Here are a few reasons why.

In recent times there have been several issues which have come to define conflicts, limitations and the lack of the law’s enforceability in the new information age paradigm. Cloud storage, digital streaming algorithms, which fail to adequately compensate content creators and unenforceable laws all highlight these discrepancies. It seems that for cloud services such as Google’s Music Beta Storage system and Amazon’s Cloud Drive web storage system, “Innovation”  and breakthroughs in technology have become more about how to creatively circumvent actually licensing content than true technological innovation(Menell, 2011). Cloud storage services  enable consumers to upload illegally obtained content  and continue to enjoy it and share it. Though illegal activity is not the focus of these services they are however, optimally prepared for it.

 An example of  the problems existing today in the laws and statutes which allow these kinds of loopholes is The United States Court of appeals for  the District of Columbia case:

No.11-1083.

  INTERCOLLEGIATE BROADCASTING SYSTEM, INC., A RHODE ISLAND NON-PROFIT CORPORATION, APPELLANT v. COPYRIGHT ROYALTY BOARD AND LIBRARY OF CONGRESS, APPELLEES COLLEGE BROADCASTERS, INC. And SOUNDEXCHANGE, INC., INTERVENORS

 In the above case The Intercollegiate Broadcasting system  argued what royalty rates should be paid on music played in educational environments. The court  found and all parties agreed the statutory rate should be paid, except when it came to smaller and “very small” non commercial webcasters. The Court Vacated the judgement on appeal and remanded it’s determination. And no decision was reached because of issues to the court and Library of congress’  constitutionality in making the decision. It seems that the laws are out dated as to  how to proceed on these new issues and are at a loss as to who can even make decisions.

In 2003-2004 the RIAA’s very public lawsuits brought against infringing consumers  changed how the law is enforced. The RIAA brought suit to 5,460 individuals who shared files through services such as Napster and Kazaa, stiff penalties in the tens to hundreds of thousands of dollars were imposed on ordinary working individuals with families (Electronic Frontier Foundation, 2008).The reason individuals were targeted is because in the RIAA’s case against Verizon Inc:

RECORDING INDUSTRY ASSOCIATION OF AMERICA, INC., APPELLEE v. VERIZON INTERNET SERVICES, INC., APPELLANT

No. 03-7015, Consolidated with 03-7053

UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

The United States Court of Appeals  For the District of Columbia Circuit  found that Verizon could not be held responsible for users who use Verizon’s service as a conduit to  their activities unless Verizon themselves were housing the illegal material on their servers and  not connecting individuals who were housing infringing material on their personal computers.  Since then, actually penalizing consumers who illegally download and share content which has illegally been uploaded in the first place has come to be seen as “heavy handed” and an abuse of the RIAA’s and the authorities power. In short, though it was legal, and the only remedy the RIAA could seek on behalf of rights holders it was a complete PR nightmare.

The public’s indifference to paying for music has lead to continued infringement on copyright holders rights. The stiff penalties imposed since 2003 have done little to discourage the people’s continued illegal downloads and sharing. When we combine these factors with the recent development of a very grim picture develops for content creators. Artist who would have tried to develop their careers utilizing these technologies are beginning to find that a career in the arts which depends on copyrights being respected, has come to be commercially impractical.

Streaming services such as Pandora, Spotify and Mog operate on algorithms. These equations calculate the numbers of plays by fractions of a cent paid back to copyright owners for streams, utilizing a constant divided by the amount consumers pay for membership into theses services. While these companies like to tout their legality and boast on their adherence to the law, The actual percentages paid to rights holders are said to be fractional and are often ate up in recoupment fees by record labels and distribution, leaving the artist out in the cold at the end of the day.

In addition these services have yet to report a profit and are said to be hemorrhaging millions of dollars in fees paid back to the publishers and distributors of content (Sefton,2012) . Something doesn’t add up.

In 2012 Spotify was sued by Nonend inventions a Dutch company which specializes in P2P cloud type technology patents:

 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

NONEND INVENTIONS N.V. Plaintiff, vs. SPOTIFY USA INC., a Delaware Corporation;          SPOTIFY LIMITED, a United Kingdom Corporation; SPOTIFY TECHNOLOGY SARL, a    Luxembourg Corporation; and SPOTIFY AB, a Swedish Corporation

Spotify was targeted because much of Spotify’s music is housed on many servers of it’s users as opposed to other streaming companies which own their servers and house the music in central locations. Nonend  argues that Spotify is utilizing it’s technology and infringing on it’s patents. None of these parties are discussing the fact that their technology patents are often sidestepping the issue of Copyright infringement by allowing users to share music across the internet and multiple servers without knowing legality of the music or accurately paying streaming fees for shared content (music)which neither Spotify or Nonend, actually own.

As an independent artist who funds my own career, I have found that the best viable option for people like me, looking to create compelling content, is to build my brand by investing in increasing my value. First of all, I create what I consider Compelling well thought out content! I have released my music through digital distributors, which charge miniscule fees in my opinion. I utilize promoters to tweet email and blast my content across the world. I have registered my work with the U.S Copyright office, acquired ISRC Codes for royalty collection and Joined Performance rights organizations like ASCAP, SESAC, or BMI.  I do this in order to differentiate my self and my company from the millions of talentless dreamers who have been empowered to cloud up the airwaves and desensitize the public to good content, through utilizing the very same tool I do, the Internet. I invest heavily in the creation, design and dissemination of my brand yet without the simple honoring of my exclusive rights as a Copyright holder it may all be for naught. Every factor that I have identified, is a factor that an Independent artist and record label must consider in order to be properly informed and plan around to ensure survival in this bleak economy, industry and present day business paradigm.

 In order to harness the public’s indifference to the established covenants of our industry as opposed to fighting them, we must learn to turn window shoppers into paying customers by creating truly remarkable content. There has been a sharp rise in record labels signing artist to either “single” deals or overbearing 360° deals. This seems to be the effort of the ailing conglomerates to either generate as much revenue as they can from one song from an artist they don’t believe in very much, or squeeze the juice out of an established brand or artist.

If these same conglomerates would invest in developing some of those artist they sign to single deals and help them to create never before seen innovative content, maybe the public would be more apt to pay for something they can really respect and feel merits them spending their dwindling disposable income for. Major record labels get their panties in a bunch when they aren’t making as much as they used to from their “Deep catalogue” and their newest content creators seem to be everywhere and popular but are selling fewer units. I think this is because you can put the artists content everywhere and play it non stop on the radio stations with payola, but you can’t truly make the public really, really like and support an artist with no real charisma, persona, stance, relevance or platform other than the one you are giving them. In essence, major record label conglomerates  are spamming the airwaves, internet and email with worthless flavor of the week content that is here today gone tomorrow, while old rockers like U-2 and Paul Mccartney can gross hundreds of millions of dollars on fewer and fewer world tours.

It’s the content. It has always been the content. The only way to overcome any of these challenges is to create truly remarkable, compelling, quality content. Therein lies the solution.

                                                                      References:

351 F.3d 1229; 359 U.S. App. D.C. 85; 2003 U.S. App. LEXIS 25735; 69 U.S.P.Q.2D (BNA) 1075; Copy. L. Rep. (CCH) P28,734; 31 Comm. Reg. (P & F) 438. Retrieved from www.lexisnexis.com/hottopics/lnacademic

684 F.3d 1332; 401 U.S. App. D.C. 407; 2012 U.S. App. LEXIS 13757; 103 U.S.P.Q.2D (BNA) 1337; Copy. L. Rep. (CCH) P30,276. Retrieved from www.lexisnexis.com/hottopics/lnacademic

DELIVERING TO A DIGITAL WORLD. (2012). Music Week, (17), 33-38.

Digital Music Cloud Dilemma: Poker Face, Go your own Way, and Imagine.(2011) The Media Institute.Menell ,Peter S.

Street, J. (2012). From Gigs to Giggs: politics, law and live music. Social Semiotics, 22(5), 575-585. doi:10.1080/10350330.2012.731901

HOW SHOULD WE CONTAIN THE CLOUD?. (2011). Print, 65(4), 46-47.

RIAA VS. The People: five Years Later.(2008) Electronic Frontier Foundation. Retrieved from- https://www.eff.org/wp/riaa-v-people-five-years-later

Spotify Gets Hit With a Patent Suit From Nonend a Dutch Peer to Peer IP Holder(2012) Techcrunch.com –retrieved from- http://techcrunch.com/2012/08/15/spotify-gets-hit-with-a-patent-suit-from-nonend-a-dutch-peer-to-peer-ip-holder/

                                                         Images:

http://www.cmj.com/news/berklee-and-midem-announce-rethink-music-conference/

 http://todaysmusicbiz.com

 http://shanisammonsmarketinggroup.wordpress.com/category/music-business/