Apple, Google music clouds can't snub publishers
NEW YORK--Those in digital music should take notice of the olive branches being extended by David Israelite, the president and CEO of the National Music Publishers Association. Israelite advised NMPA members Tuesday in Manhattan during the trade group's annual conference that it was in their best interest to help legal music sites thrive, Billboard reported. To do this, Israelite wants to streamline the process of licensing rights, a time-consuming task for Internet services that has frustrated managers from SpiralFrog to Apple to Google. Still, Israelite's comments about bridge building with the tech community could surprise some there. For much of his six years as chief of the NMPA, the group that represents publishers and songwriters, Israelite has generated more notoriety in Silicon Valley for his condemnation of those he accused of distributing music first and asking permission second. He engaged in a war of words with the Electronic Frontier Foundation, the technology advocacy group. A former deputy chief of staff for U.S. Attorney General John Ashcroft, Israelite has filed suit against illegal file-sharing networks on behalf of publishers and lobbied Congress for more copyright protections.Certainly, Israelite's statements reflect how important Internet distribution has become to the overall music industry. But the comments also come from a man who is quickly becoming one of the most influential in digital music. Over the next couple of years, Israelite could have much to say about the kinds of features cloud music services offer as well as how much they cost consumers. For decades publishing was a less lucrative business than recorded music and often had to follow the lead of that sector when cutting deals. Only now, in a post-Napster world, has publishing closed the revenue gap and has earned more respect within the industry. So, now Israelite prepares his group to vie for a larger piece of the digital pie. To help achieve that goal, he has displayed a greater willingness to exercise some of his newly acquired and hard-won clout.CNET reported last September that Apple planned to announce that it would extend song samples from 30 seconds to 90 seconds. After reading the CNET piece, Israelite and his lawyers informed Apple managers that they couldn't legally offer longer samples without the NMPA's permission, according to an NMPA attorney. "The old saying is that records are a dollars business and publishing is a pennies business," said Neil Gillis, a longtime industry exec. "David wants to help change that."Greg Sandoval/CNETApple backed down and only released the longer samples months later after negotiating with the publishers. This spring, the Recording Industry Association of America was trying to force Lime Wire founder Mark Gorton to pay big damages after defeating Gorton in a copyright case, it was Israelite who swooped in at the last minute and negotiated a settlement with Gorton first. And more recently, Israelite was working behind the scenes during the publishers' iCloud negotiations with Apple. He wasn't actively participating in the talks, but multiple music industry sources said Israelite made his presence felt by advising publishers to play hardball--something that displeased the major labels. In the end, it was the top four record companies that appeared to take a little less to get a deal done. Music industry sources told CNET that revenue from iCloud, a service announced on June 6 that enables users to store and access music libraries from Apple's servers, will be split like this: top four record companies (58 percent), Apple (30 percent), publishers (12 percent).It is these kinds of tactics that have not endeared Israelite to some in tech circles or in corners of his own industry but has won him a loyal following among NMPA members. Fans of the NMPA chief, these Israelites, hope that their leader can lead them to greener pastures. Related links• iTunes song-sample plan runs into music publishers• Music publishers accuse XM of copyright infringementE• Lime Wire settles copyright suit with publishers"The old saying is that records are a dollars business and publishing is a pennies business," said Neil Gillis, a longtime industry exec who recently helped found his own publishing house, Round Hill Music. "David wants to help change that."Gillis isn't being overly dramatic. The statutory rate for a mechanical license, which is set by Congress, requires that a songwriter be paid 9.1 cents for each composition sold. This is what songwriters earn for each download sale and when a CD is sold that features the writer's song (why Apple had to negotiate with publishers for iCloud instead of just paying the statutory rate is that cloud-music rights are new and aren't included in mechanical licenses).Israelite wants to work with the top labels and digital music services to convince Congress to split a $1.29 download more evenly. "For every $14 that Pandora pays the record labels, the company pays us $1," Israelite told CNET. He also wants to see more online music retailers enter the market. To do this, he knows he must remove a significant obstacle that confronts anyone who wants to offer music over the Internet.Speaking before hundreds of composers, music publishers, and lyricists at the NMPA's annual meeting in Manhattan, Israelite said the process of licensing music must be streamlined. Before a distributor offers a song for download or streaming, multiple rights must be acquired. Often, multiple composers and songwriters must sign off on a single track. The different parties sometimes aren't represented by a publisher and are difficult to find. Some publishing companies own the rights and sometimes they just administer them for creators. To give some idea of how daunting a task it can be, a former SpiralFrog employee told CNET that the company once hired four women to secure the publishing rights for the millions of songs the company wished to offer. After several months, the now defunct company gave up. Managers concluded that it would take more than 20 years for the team to complete the process. Gillis said this hurdle represents lost revenue for publishers."There is no centralized repository of metadata, no one place to license our music," he said. "I want to license to all these (digital services)."
Music publisher blocked iPhone 5 music service, report says
Music publisher blocked iPhone 5 music service, report says
A Pandora-like streaming service could have debuted with last week's iPhone 5 launch if negotiations between Apple and Sony/ATV had not failed, according to a published report. Sony/ATV, which is owned by Sony and the estate of Michael Jackson, wanted Apple to pay a higher fee for each song played than Apple was willing to shell out, according to the New York Post. News broke earlier this month that Apple was considering the idea of creating a streaming-music service similar to that of Pandora, the online-radio service. Typically, a music distributor will just pay the statutory rate that has been set for playing songs on Web radio and will not have to negotiate with individual rights holders. That's what Pandora does. Related stories2009 PC shipments inch into positive territoryMicrosoft brings kids developer tool to the PCApple's Mac shipments up 23.3 percent in the U.S.Reports: Tech recovery driven by developing nations, cloudAT&T to sell Moto Backflip March 7?But Apple wants to do more with the songs than the statutory agreement covers and this required the company to acquire tailor-made licensing, according to the Post's story. If you were wondering how Apple planned to compete with Pandora, the front runner in Web radio, this is how: Apple wants to enable users to play a "selected artist more times" than Pandora is allowed to under the statutory agreement, the Post reported. According to industry sources who spoke with CNET, the music labels are not crazy about Pandora's business model. The service doesn't supply labels with a whole lot of revenue, and managers believe Pandora cannibalizes sales. They have hoped Apple would find a more lucrative way to enter the streaming-music business.That said, the labels are on board with Apple's plan. They realize that Apple is going to do what it wants anyway and that the company has plans to use the streaming service to promote sales. Insiders say Pandora has a Buy Now button that nobody pushes. The music publishers, however, are still miffed about what they consider Apple's attempt to bypass them in initial negotiations over 90-second song samples back in 2010, a story first reported by CNET. Apple co-founder Steve Jobs had been preparing to announce extended song samples at a media event, but the publishers raced in and threatened legal action if Apple didn't negotiate a new fee with them. More important, though, is that music publishers don't like Pandora's model either and don't want to see Apple launch an identical service. If the publishers aren't careful, Apple's leaders could just decide to pay the statutory rate -- the same fees that Pandora pays -- if they can't close a deal with rights holders. Those rates don't leave much room for profit, but Apple could try to wait the publishers out. This would mean the publishers would see less money from Apple than the company is prepared to pay right now. Music sources say the talks continue.Update: 9:40 a.m.:My Colleague John Falcone notes that in iOS 6, the songs in iTunes Match can now be streamed, just like in Amazon Cloud Player, so that you don't need to download it before beginning to listen.
A Pandora-like streaming service could have debuted with last week's iPhone 5 launch if negotiations between Apple and Sony/ATV had not failed, according to a published report. Sony/ATV, which is owned by Sony and the estate of Michael Jackson, wanted Apple to pay a higher fee for each song played than Apple was willing to shell out, according to the New York Post. News broke earlier this month that Apple was considering the idea of creating a streaming-music service similar to that of Pandora, the online-radio service. Typically, a music distributor will just pay the statutory rate that has been set for playing songs on Web radio and will not have to negotiate with individual rights holders. That's what Pandora does. Related stories2009 PC shipments inch into positive territoryMicrosoft brings kids developer tool to the PCApple's Mac shipments up 23.3 percent in the U.S.Reports: Tech recovery driven by developing nations, cloudAT&T to sell Moto Backflip March 7?But Apple wants to do more with the songs than the statutory agreement covers and this required the company to acquire tailor-made licensing, according to the Post's story. If you were wondering how Apple planned to compete with Pandora, the front runner in Web radio, this is how: Apple wants to enable users to play a "selected artist more times" than Pandora is allowed to under the statutory agreement, the Post reported. According to industry sources who spoke with CNET, the music labels are not crazy about Pandora's business model. The service doesn't supply labels with a whole lot of revenue, and managers believe Pandora cannibalizes sales. They have hoped Apple would find a more lucrative way to enter the streaming-music business.That said, the labels are on board with Apple's plan. They realize that Apple is going to do what it wants anyway and that the company has plans to use the streaming service to promote sales. Insiders say Pandora has a Buy Now button that nobody pushes. The music publishers, however, are still miffed about what they consider Apple's attempt to bypass them in initial negotiations over 90-second song samples back in 2010, a story first reported by CNET. Apple co-founder Steve Jobs had been preparing to announce extended song samples at a media event, but the publishers raced in and threatened legal action if Apple didn't negotiate a new fee with them. More important, though, is that music publishers don't like Pandora's model either and don't want to see Apple launch an identical service. If the publishers aren't careful, Apple's leaders could just decide to pay the statutory rate -- the same fees that Pandora pays -- if they can't close a deal with rights holders. Those rates don't leave much room for profit, but Apple could try to wait the publishers out. This would mean the publishers would see less money from Apple than the company is prepared to pay right now. Music sources say the talks continue.Update: 9:40 a.m.:My Colleague John Falcone notes that in iOS 6, the songs in iTunes Match can now be streamed, just like in Amazon Cloud Player, so that you don't need to download it before beginning to listen.
Bandwidth '08 notebook
Bandwidth '08 notebook
The Bandwidth music tech conference in San Francisco attracts folks from all corners of the music industry: from label owners and musicians, to Internet radio broadcasters and mobile phone software developers. This year, the conference featured panel discussions on topics such as the future of music gadgets (a subject dear to my nerd heart), developing music services for mobile phones, and the realities of running a label in today's fractured music industry.One of the more popular themes drawing heated discussion across all panels was the idea of ditching the paid download model dominated by iTunes in favor of giving music away for free. Throughout the day I heard several compelling arguments for and against moving toward a free music download model, but my sense is that economic times will need to get a little tougher before the industry takes a serious look at a free music strategy. That said, with the decline in CD sales drastically outpacing the uptake of MP3 sales, a future of legitimate free music downloads may arrive sooner than you think.As the nation's premier music phone, the iPhone and its App Store garnered plenty of discussion as well, with comments from Tom Conrad from Pandora connecting to an audience eager to leverage the iPhone's popularity and potential. During the same mobile music panel, Cindy Lundin Mesaros from Moderati spoke on the plateaued, yet profitable business of selling ringtones, software, and games for phones.A discussion of emerging trends in consumer electronics was slow to gain momentum, but paid off handsomely with razor-sharp comments from Dave Goldberg, former VP of Yahoo Music, who stated with no uncertainty that MP3 player manufacturers competing with Apple are doing it all wrong (listen to an audio excerpt at the end of this article). CNET's own Kurt Wolff (Download.com Music) also used the panel as an opportunity to tease to Juke.com, a new CNET music Web site in development that has been veiled in secrecy (even to me).One of the last panels of the evening brought together representatives from Rhapsody, Sony/BMG, and TAG Strategic to discuss the state of the music download sales model and its viability going forward. While never reaching a consensus, alternative models such as variable song pricing, flat-rate music subscriptions via ISP, high-fidelity downloads, and bundled incentives (concert tickets, T-shirts, etc.), were all thrown around. The only idea everyone agreed on was the suggestion that artists need to work on building unique, packaged experiences for their fans if they want to increase revenue through music sales (Metallica's Mission Metallica microsite was cited as a prime example).Having just finished my review of the Edirol R-09HR portable recorder, I brought it along to capture a few great comments overheard at Bandwidth:Dave Goldberg on why iPod alternatives fail: Ted Cohen on why the subscription music model is broken: Tom Conrad on the appeal of internet radio:
The Bandwidth music tech conference in San Francisco attracts folks from all corners of the music industry: from label owners and musicians, to Internet radio broadcasters and mobile phone software developers. This year, the conference featured panel discussions on topics such as the future of music gadgets (a subject dear to my nerd heart), developing music services for mobile phones, and the realities of running a label in today's fractured music industry.One of the more popular themes drawing heated discussion across all panels was the idea of ditching the paid download model dominated by iTunes in favor of giving music away for free. Throughout the day I heard several compelling arguments for and against moving toward a free music download model, but my sense is that economic times will need to get a little tougher before the industry takes a serious look at a free music strategy. That said, with the decline in CD sales drastically outpacing the uptake of MP3 sales, a future of legitimate free music downloads may arrive sooner than you think.As the nation's premier music phone, the iPhone and its App Store garnered plenty of discussion as well, with comments from Tom Conrad from Pandora connecting to an audience eager to leverage the iPhone's popularity and potential. During the same mobile music panel, Cindy Lundin Mesaros from Moderati spoke on the plateaued, yet profitable business of selling ringtones, software, and games for phones.A discussion of emerging trends in consumer electronics was slow to gain momentum, but paid off handsomely with razor-sharp comments from Dave Goldberg, former VP of Yahoo Music, who stated with no uncertainty that MP3 player manufacturers competing with Apple are doing it all wrong (listen to an audio excerpt at the end of this article). CNET's own Kurt Wolff (Download.com Music) also used the panel as an opportunity to tease to Juke.com, a new CNET music Web site in development that has been veiled in secrecy (even to me).One of the last panels of the evening brought together representatives from Rhapsody, Sony/BMG, and TAG Strategic to discuss the state of the music download sales model and its viability going forward. While never reaching a consensus, alternative models such as variable song pricing, flat-rate music subscriptions via ISP, high-fidelity downloads, and bundled incentives (concert tickets, T-shirts, etc.), were all thrown around. The only idea everyone agreed on was the suggestion that artists need to work on building unique, packaged experiences for their fans if they want to increase revenue through music sales (Metallica's Mission Metallica microsite was cited as a prime example).Having just finished my review of the Edirol R-09HR portable recorder, I brought it along to capture a few great comments overheard at Bandwidth:Dave Goldberg on why iPod alternatives fail: Ted Cohen on why the subscription music model is broken: Tom Conrad on the appeal of internet radio:
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