Eminem Victory - Industry Changing? Only Time Will Tell.

Within the next 60 days a lawsuit that has been circulating for a few years will finally draw to a close, but only after the Supreme Court refused to hear an appeal. The dispute at the center is based on the rate of royalties Marshall Mathers (Eminem) and his producers are entitled to for the sale of online music. The original producers who discovered Eminem (F.B.T. Productions) sued Universal Music Group (UMG) after an audit of accounting records that FBT and Eminem conducted back in 2005. The question at the center of the debate – is a song sold online considered a sale or a license?

Sale or License? Is it really such a big deal? You bet it is – for contracts that predated the digital era; they spelled out smaller royalty payments for music sold in physical form than music licensed. Eminem’s contract for example stipulates that he receive 50% of the royalties for a license, but only 12% for a sale. A federal jury originally ruled in favor of Universal in 2009, but that decision was overturned by the 9th Circuit Court of Appeals in San Francisco last year. Refusal to be heard by the Supreme Court means the decision by the Appeals court stands. In the lawsuit FBT argued that a record companies’ arrangement with digital retailers resembled much more of a license than it did a sale. The appeals court agreed and ruled that downloads from iTunes weren’t purchased, but rather ‘licensed’ to the buyer, stating that, “iTunes downloads (even the DRM-free variety) are encumbered by enough restrictions that they can’t be considered sales at all”.

So what does this mean for the industry? Currently not much. UMG issued a statement in regards to the matter. “The case has always been about one agreement with very unique language. As it has been made clear during this case, the ruling has no bearing on any other recording agreement and does not create any legal precedent”. While that might be true, record labels might find themselves having a harder time tying to renegotiate older contracts, as artists will demand higher royalties or might find themselves fighting similar cases in court. Industry observer’s think that as many as 90% of all contracts signed before 2000 predated the digital era and therefore didn’t incorporate digital downloads as ‘sales’. Only time will tell if this case will have a dramatic impact on the industry. In the meantime, both parties are due back in court within 60 days to discuss damages.

It’s important to note that Eminem himself wasn’t a party to the suit, but the way his contract with FBT was written he stands to earn millions from it.

For those of you interested in reading the original court opinion from the 9th Circuit Court of Appeals you can do so here.

References
Federal Court Sides With Eminem in Royalty Dispute; Record Business Does Not Impode
Eminem Lawsuit May Raise Pay for Older Artists
U.S. Supreme Court Denies Appeal on Eminem’s Music Royalty Dispute
Eminem’s Court Case May Set Music Standard

National Music Publishers Association & Net Neutrality

There are over 86,000 registered trade and professional associations – and for a young professional it is important to network and perhaps join, if not follow, the associations that work on your topic of interest. For me, my passion is in licensing and royalties – the backbone of the music publishing industry, and there’s a trade associate for that.

The National Music Publisher’s Association (NMPA) is the leading trade association in the United States for music publishers. According to the association’s mission statement, “the goal of NMPA is to protect its members’ property rights on the legislative, litigation, and regulatory fronts”. The NMPA also owns and controls the Harry Fox Agency, which is the largest mechanical rights collecting society in the United States.

According to the most recent newsletter sent out by NMPA, one of the initiatives that NMPA is working with is that for ‘net neutrality’. Net Neutrality is the principle that all Internet traffic should be treated equally and that all Internet users should be able to use the Internet without any restrictions by the Internet Service Providers (ISP). The NMPA filed reply comments that stressed that the Federal Communications Commission (FCC) should make it clear that ISPs can use management practices in order to address abuse that is occurring on their networks. They went on to say that ISPs must have the ability to create a warning system and penalties for those violators in order to prevent unlawful activity. The NMPA also believes that any forthcoming regulations should not prohibit the development of new technologies to fight digital theft. The NMPA signed on to a letter written RIAA on what Net Neutrality as it stands today was doing – “The current legal and regulatory regime is not working for America’s creators. Our businesses are being undermined, as are the dreams and careers of songwriters, artists, musicians, studio technicians, and other professionals. That’s why we look forward to working with you . . . to make the distinction between lawful and unlawful relevant in the marketplace…”.

 I think it’s important that NMPA has voiced its concerns on this issue. ISP’s should be able to take measures in order to discourage unlawful activity such as copyright infringement. I think it is important that the NMPA align itself with different initiatives and legal matters that affect music publishers. Copyright infringement not only affects songwriters and musicians, but publishers as well because it dwindles down the royalties that publishers are received as well as the amount of licensing opportunities that present itself.

So where do you stand on net neutrality today? Should there be some amendments to the principle? I think so. And in case you’re wondering what kicked off this whole net neutrality debate – well Comcast was accused of blocking BitTorrent, a site that holds a plethora of pirated content, back in 2007. 

References:
The National Music Publishers Association
National Music Publishers Association - The Note: Fall 2010
RIAA: Google Should Include Copyright in Net Neutrality Plan

TED - Robert Gupta: Music Is Medicine, Music Is Sanity

Can music really be sanity? Robert Gupta believes so as he gives his presentation on TED.

Robert Gupta begins his presentation by telling a story that many are already aware of - that of Nathaniel Anthony Ayers, the Julliard trained basset who's career was cut short due to a battle with schizophrenia, and who's story was portrayed on the big screen in the movie 'The Soloist'. Robert Gupta himself had a chance to meet Nathaniel at Walt Disney concert hall. Shortly after meeting him, he heard word that Nathaniel wanted a violin lesson with him.

Gupta describes the day in which Nathaniel and himself started their first lesson, and the way Nathaniel was acting that day in a way that allows you to visualize the event in your mind. On that day, Gupta describes Nathaniel as having a "manic, glint in his eyes, he was lost". All the while Nathaniel talked about "invisible demons, and smoke, and how someone was poisoning him in his sleep". Gupta admitted that he was scared, yet not for himself. He explained how he was more afraid that if he began speaking to Nathaniel about scales and arpeggios he might ruin Nathaniel's relationship with the violin due to this 'episode'. How do you overcome such an obstacle, during what is supposed to be a violin lesson? The wrong step could send Nathaniel into a raging episode that could cause him to disappear for days, as he was prone to do. Instead of saying a word, Gupta decided to simply pick up the violin and begin playing. Gupta described how as he played, he could see a change in Nathaniel's eyes, how the rage disappeared and transformed into "understanding, curiosity, and grace". Soon afterwards they began talking about music, both with extreme passion. Gupta explained how Nathaniel transformed, almost as if there was two different people in front of him. Nathaniel went from "the paranoid, disturbed man" that had originally stepped in front of him, to a "charming, brilliant Julliard musician".

Gupta's passion in telling his story inspires everyone to believe that music really is medicine. To many people music provides a busy mind with calm. He strives to deliver his message that music gives you an escape form your reality, that it is the reason we make music in the first place. The reality of the expression created is what moves everyone and inspires him or her. He ends his presentation by stating that Nathaniel reminds him why he became a musician in the first place. That escape from our problems is the 'sanity' to which Gupta refers too.

So can music really be mental medicine? After listening to Robert Gupta's passionate encounter with Nathaniel Ayers, I believe it truly can.

If you would like to see the presentation in it's entirety, here's the video: