Online music consumers likely to pay more if ASCAP and BMI succeed in download revenues grab
On April 7 of this year, the American public did a double take when the prodigious increase in select iTunes music was finally implemented. Prepare for a repeat performance. In a recent CNET report, various music associations including the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music Inc. (BMI) are currently lobbying Congress for legislation that would make it mandatory for anyone selling a download to pay performance fees. If passed, this delegation of payment would likely bring a second hike in music prices — a hike that will again test consumers’ devotion to the music industry.
Last Spring, iTunes announced their plan to create a “flexible” pricing structure after their dealings with three major music labels — Sony BMG, Warner Music and Universal — exempt Apple from complying with the corporations’ copyright protection software. These negotiations resulted in the categorization of iTunes songs into three types: current and classic hits, midline songs (moderately popular) and older songs. This proved to be a regrettable decision on the labels’ part; Digital Music News reported the major labels’ noticeable drop in sales in the following weeks.
Apple rivals have been quick to use iTunes’ supposed indiscretion to their advantage. Danny Stein, Chairman and CEO of eMusic, tried to subdue the flare-up by publicly pledging to never raise the price of a song above 99 cents, as long as he held his position at the company. With a monthly subscription of $11.99 and every song priced at 50 cents or below, eMusic consumers would actually stand to benefit financially, depending on their personal purchase volume.
With the dynamic of mass media in constant upheaval, the way music is produced and distributed will continue to change, as will our methods of obtaining it. The complaints about iTunes’ last price augmentation have not yet died down as this new situation is thrown into perspective. A Business Insider poll indicates that a majority of media consumers have started searching for alternative download sources after April’s fee fiasco; a prospective increase in already inflated music prices will undoubtedly make the iTunes Store even less popular.
According to CNET, ASCAP and BMI are focusing on elevating revenues by imposing fees in three discrete areas: music downloads, movie and television show downloads, and those 30-second song samples that have become a great resource to the hesitant buyer.
The opposition is fronted by Jonathan Potter, executive director of Digital Media Association (DiMA), a group that represents a variety of Web media corporations, Apple among them. CNET quotes Potter on the proposed performance fees:
“These guys are afraid that the business model is shifting away from public performances to a model of private performances … Songwriters are getting paid. They’re paid sync rights and [mechanical] rights. They aren’t getting paid for the public performance in a download because there is no public performance in a download.”
A 2005 verdict in a similar court case favored Web media companies, affirming that music downloads were not considered public performances, therefore were not chargeable. Apple in particular is a major target due to their larger-than-life profits and strict copyright laws.
David Renzer, Chairman and CEO of Universal Music Publishing Group, sides with songwriters and composers on the imposition of obligatory fees. In an interview with Encore, he publicized his support:
“[On iTunes] you can stream radio, and you can preview (tracks), things that we should be getting paid performance income for.”
In theory, we as consumers want nothing more than the artists and songwriters of our generation to benefit from their music. Without their dedication and talent we wouldn’t have any music to pay for. What I cannot write off as acceptable, however, is the “performance fee” on a sample of digitized music. Potter makes a compelling point in his argument against the music association’s suggested policy when he states plainly that we should not be paying for a non-existent public performance. Approving this policy will put pressure on Apple once again to shift the burden to music buyers, a prospect that will not bode well for the future of iTunes or the pocketbooks of its customers.
Apple is countering the inconvenience of raised costs with newer, more effective versions of the iPod, iTunes and MacBook laptops. Notably, chief executive Steve Jobs returned to the public sphere to the tune of lowered starting prices on Apple products, such as the iPod Touch, now starting at $199, down from $229. New iTunes software includes updated digitization called iTunes LP, an application that provides simple music sharing within households. These revisions to the Apple world are motivated not only by anticipated reaction to price swell, but also by competition from other music device suppliers, such as Microsoft.
In the end, it all comes down to how much we as consumers of mass media are willing to pay for technological advancement and how receptive corporations stuck in the past will be to the digitization of media in the future. Today, the debate is concerning music and movie download fees; tomorrow, the Internet will pose new problems to solve and crises to conquer. The world as we know it is changing; adjustment is imminent. The only uncertainty lies in who will be forced to adjust.
Source
Monday, September 28, 2009
British Music Industry Split on Whether to Constrain or Terminate File Sharers’ Bandwidth
During a three hour meeting in London on Thursday night, a group of prominent British recording artists voted overwhelmingly to support a plan to warn music file sharers twice, then restrict their bandwidth. Although this debate directly concerns the U.K., legislators in other countries will likely watch how the situation plays out and could adopt similar legislation if Britain deems it a success.
The Featured Artists Coalition, including Lilly Allen, George Michael, Ed O’Brien of Radiohead, Billy Bragg, Badly Drawn Boy, Kate Nash, Robbie Williams, Mick Jones, Nick Mason of Pink Floyd and others, voted strongly in favor of a proposal to limit repeat infringers’ internet access, but stopped short of Lord Mandelson’s proposal to boot file sharers from the internet entirely.
This represents a more united front than these artists had presented in the past, when some members backed booting file sharers from the net while others (especially O’Brien and Mason) proffered a more tolerant view of file sharing. Their opposition to terminating infringers’ internet access is derived from research indicating that file sharers spend more money on music than other segments of the population.
However, much of the rest of the British music industry agrees with Mandelson that repeat infringers should be kicked off the net — at least temporarily. The Musicians’ Union, the royalty organization PRS, and several groups representing labels, managers and musicians support the idea of warning then temporarily suspending the heaviest infringers’ internet accounts “as a last resort.”
Regardless of whether heavy file sharers will have their accounts restricted or terminated, British ISP British Telecom claims that monitoring, warning, and restricting the bandwidth of file sharers would cost them $1.6 million a day, raising the rates of British internet subscribers — regardless of whether they’re music fans — by $38 per year, while adding no direct revenue to the music industry.
Considering the high cost of policing and disciplining internet subscribers, some wonder whether the money would be better spent directly compensating copyright holders for music being traded, rather than spending the money on enforcement. However, Geoff Taylor, chief executive of the British Phonographic Industry, called BT’s $1.6-million-per-day figure “unsubstantiated” and told the Guardian UK that the ISP should “recognize that reducing illegal use of its network is a cost of running a socially responsible business.”
One of the main stars to come out against file sharing, Lilly Allen, changed her tune after TechDirt pointed out the hypocrisy of her anti-file-sharing stance. The pop star had uploaded several MP3 “mix tapes” to her website containing the work of other artists and encouraged her fans to download them for free without compensating anyone. (If using bit torrent to access music results in getting your internet privileges limited to “basic e-mail and web access,” then putting free MP3s on a well-publicized website to boost your profile among fans should probably be grounds for losing cellphone access too.) Allen responded by deleting the MP3s. Then, after fans posted arguments against her position on her anti-file-sharing blog, she deleted just about all of the content on the website and threw her support behind the Featured Artists Coalition for last night’s vote.
“The last week or so there has been a perceived split in our opinions as artists… [but] we all came together,” Radiohead’s Ed O’Brien told The Guardian UK. “I think everyone has listened to one another and been human beings and reasonable
Source
The Featured Artists Coalition, including Lilly Allen, George Michael, Ed O’Brien of Radiohead, Billy Bragg, Badly Drawn Boy, Kate Nash, Robbie Williams, Mick Jones, Nick Mason of Pink Floyd and others, voted strongly in favor of a proposal to limit repeat infringers’ internet access, but stopped short of Lord Mandelson’s proposal to boot file sharers from the internet entirely.
This represents a more united front than these artists had presented in the past, when some members backed booting file sharers from the net while others (especially O’Brien and Mason) proffered a more tolerant view of file sharing. Their opposition to terminating infringers’ internet access is derived from research indicating that file sharers spend more money on music than other segments of the population.
However, much of the rest of the British music industry agrees with Mandelson that repeat infringers should be kicked off the net — at least temporarily. The Musicians’ Union, the royalty organization PRS, and several groups representing labels, managers and musicians support the idea of warning then temporarily suspending the heaviest infringers’ internet accounts “as a last resort.”
Regardless of whether heavy file sharers will have their accounts restricted or terminated, British ISP British Telecom claims that monitoring, warning, and restricting the bandwidth of file sharers would cost them $1.6 million a day, raising the rates of British internet subscribers — regardless of whether they’re music fans — by $38 per year, while adding no direct revenue to the music industry.
Considering the high cost of policing and disciplining internet subscribers, some wonder whether the money would be better spent directly compensating copyright holders for music being traded, rather than spending the money on enforcement. However, Geoff Taylor, chief executive of the British Phonographic Industry, called BT’s $1.6-million-per-day figure “unsubstantiated” and told the Guardian UK that the ISP should “recognize that reducing illegal use of its network is a cost of running a socially responsible business.”
One of the main stars to come out against file sharing, Lilly Allen, changed her tune after TechDirt pointed out the hypocrisy of her anti-file-sharing stance. The pop star had uploaded several MP3 “mix tapes” to her website containing the work of other artists and encouraged her fans to download them for free without compensating anyone. (If using bit torrent to access music results in getting your internet privileges limited to “basic e-mail and web access,” then putting free MP3s on a well-publicized website to boost your profile among fans should probably be grounds for losing cellphone access too.) Allen responded by deleting the MP3s. Then, after fans posted arguments against her position on her anti-file-sharing blog, she deleted just about all of the content on the website and threw her support behind the Featured Artists Coalition for last night’s vote.
“The last week or so there has been a perceived split in our opinions as artists… [but] we all came together,” Radiohead’s Ed O’Brien told The Guardian UK. “I think everyone has listened to one another and been human beings and reasonable
Source
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