Future of Music Newsletter #25 (April 30, 2003)

http://www.futureofmusic.org

"No longer will corporate media and big money frame the terms of the discussion as we draw together the strongest voices in the Internet and independent music community to reframe these questions with a clear-eyed focus on the interests of the artists."

Welcome to the Newsletter of the Future of Music Coalition.

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April 30, 2003

Dear friends:

Spring has finally sprung on the East Coast. With Congress back in session this week, the FMC crew is ramping up for a busy month as we approach the June 2 deadline on the media ownership rules. Plus, lots of news on the digital distribution front. Read on!

------------------------------------------------------- 1. Musicians' letter urges FCC to retain ownership caps -------------------------------------------------------

On Wednesday, April 30 a letter co-signed by an impressive list of well-known and respected musicians was sent to FCC's chairman Michael Powell. The letter urged the FCC to grant Congress and the public a full opportunity to review any proposed changes of media ownership rules before they are enacted. The rules under consideration currently prevent large media companies ­ newspaper chains, radio conglomerates, TV networks, cable owners ­ from gobbling up other media properties.

To review the rules under consideration please visit: http://www.fcc.gov/cgb/consumerfacts/reviewrules.html

In response to Powell's insistence that the FCC's decision be based on "empirical evidence" and not on anecdotes or hearsay, the musicians cite a list of data-driven reports that articulate the dangers of eliminating these ownership caps. The list includes the FMC's own "Radio Deregulation: Has it Served Citizens and Musicians?" and three other key studies. The letter also urges the FCC to consider the volume of comments submitted by citizens on this issue ­ the vast majority of which oppose any relaxation of the ownership caps.

The letter was co-signed by Jackson Browne, Jimmy Buffett, David Crosby, Neil Diamond, John Doe, Don Henley, Indigo Girls (Amy Ray and Emily Saliers), Billy Joel, Lenny Kaye, Toby Keith, Ian MacKaye, Ray Manzarek, Ellis L. Marsalis, Jr., Mya, Tim McGraw, Paul D. Miller, Sam Moore, Thurston Moore, Stevie Nicks, Joan Osborne, Van Dyke Parks, Pearl Jam, Sandy Pearlman, Tom Petty, Bonnie Raitt, Kevin Richardson, Patti Smith, Stephan Smith, Michael Stipe, Tom Waits, Jennifer Warnes, Saul Williams, and Nancy Wilson.

You can read the letter here: http://www.futureofmusic.org/news/FCCmusicianletter.cfm

or the press release here: http://www.futureofmusic.org/news/PRFCCmusicianletter.cfm

***************************************** MUSICIANS: JOIN US If you are a musician who is equally concerned about media ownership issues, please co-sign this letter. Go to this webpage and type in your name to join the list, and ask your other musician friends to do the same: http://www.futureofmusic.org/news/FCCmusicianletter.cfm

The Future of Music Coalition will re-deliver the letter with an updated list of co-signers to the FCC and key members of Congress in mid-May. The FCC has announced that it will make its decisions on the fate of these rules on June 2, 2003. *****************************************

Wondering what else you can do? Visit this page for ideas: http://www.futureofmusic.org/mediaactivism.cfm

Still not sure about what's at stake and want to learn more? Access a huge list of articles about media ownership and deregulation here: http://www.journalism.org/resources/research/reports/ownership/deregulation2 .asp

------------------------------------------------------- 2. Clear Channel Jettisons Pay-for-Play -------------------------------------------------------

In an unexpected move, Clear Channel announced in early April that it would break ties with indie radio promoters and start dealing directly with record labels. That means the country's largest radio group will drop the longstanding practice of accepting payments from independent promoters who are seeking airplay for new songs. This announcement comes in the midst of increased scrutiny of the radio and concert giant's business practices including allegations of pay-for-play, recent questions about their role in the Univision/HBC merger, and articles charging that they used their stations to organize and endorse "Support our Troops" rallies around the country.

While we applaud Clear Channel's effort to eliminate indie promotion, we are wary of the objectives of this decision and the ultimate outcome. We are particularly concerned about an April 15 article in Radio and Records in which CC's radio CEO John Hogan announced the names of the twelve programmers representing most major formats who will "assist artists and labels in reaching our stations on a multiple or widespread basis."

Whether or not we have seen the end of payola, this announcement means only twelve gatekeepers will determine the playlists for the most popular music formats for the company. Is this better than having indie promoters in the middle of the mix? One thing that is better is that the transfer of money ­ the "pay" part of pay-for-play ­ will probably be diminished as record labels are not forced to hire indie promoters to gain access to radio stations. But as far as access to the airwaves themselves go, we fear that airplay will remain as elusive as ever for the vast majority of artists.

We also take this announcement with a grain of salt, and not just because it was sent out from the desk of a newly employed public relations expert from a reputable a crisis management firm. What stands out for us is the company's new kinder, gentler position on Clear Channel's responsibility to the public. Compare quotes from CEO Lowry Mays. In Fortune Magazine, February 18, 2003:

"If anyone said we were in the radio business, it wouldn't be someone from our company," says Mays, 67. "We're not in the business of providing news and information. We're not in the business of providing well-researched music. We're simply in the business of selling our customers products."

And in the company's April 9 press release regarding the pay-for-play decision:

"Our radio stations have been entrusted by the government to provide the American public with the best news, information and entertainment that we possibly can," Mays added. "So when policymakers express concerns, we believe it's our duty to be responsive."

It's clear that the company is changing its tune, most likely because of the increased scrutiny that it's been facing and the importance of staying in Congress' good graces with the upcoming FCC rule changes on June 2.

Here are some of the best articles about Clear Channel's announcement and the most likely outcomes for musicians, labels and radio listeners:

Habla usted Clear Channel? If the FCC allows the two biggest Spanish-language media companies in the U.S. to merge, it'll create a media conglomerate that will dwarf all competitors -- and could help GOP-friendly radio titan Clear Channel deliver Hispanic votes for Bush in '04. Eric Boehlert Salon.com, April 24, 2003 http://www.salon.com/tech/feature/2003/04/24/univision/index.html

Can't Buy a Thrill "Clear Channel is in the middle of a charm offensive," says Michael Bracy, who founded the Future of Music Coalition with indie rocker Jenny Toomey. "The FCC is right now considering rules that would make this look like child's play." by Josh Goldfein Village Voice, April 16, 2003 http://www.villagevoice.com/issues/0316/sotc.php

We haven't seen the last of pay-for-play ...Instead of funneling money through independent promoters to radio stations, record companies will now have to deal directly with Clear Channel programmers in seeking access to the airwaves. And, as in all things radio, money will talk. The radio giant said as much in a statement announcing the move, in which it promised a "new, restructured relationship with the recording industry . . . on specific group-wide contesting, promotions and marketing opportunities." By Greg Kot Chicago Tribune, April 13, 2003 http://www.chicagotribune.com/features/arts/chi-0304130407apr13,1,668938.sto ry

Embattled channel searching for clear daylight By Abigail Rayner London Times, April 12, 2003 http://www.timesonline.co.uk/article/0,,630-643078,00.html

Clear Channel listens to its critics In a move that could dramatically change what gets played on the airwaves, the country's largest radio station owner, Clear Channel Communications, said Wednesday it will sever ties with independent music promoters. By L.A. Lorek San Antonio Express, April 10, 2003 http://news.mysanantonio.com/story.cfm?xla=saen&xlb=180&xlc=977795

Clear Channel Cuts Ties with Independent Promoters Clear Channel Communications Inc. on Wednesday said it would cut ties with music promoters who are paid by record labels to trumpet songs to radio stations, saying the long-standing practice gives the appearance of "pay for play." Reuters, April 9, 2003 http://reuters.com/newsArticle.jhtml?type=industryNews&storyID=2537052

If you want to know more about the indie promotion system, read Eric Boehlert's series of articles on Salon.com http://archive.salon.com/ent/clear_channel/

------------------------------------------------------- 3. Digital Downloading in the News -------------------------------------------------------

Big news in the digital downloading world this week with two new business announcements and one legal judgment.

First, on April 25 a Los Angeles federal judge ruled that file-trading services Grokster and Morpheus were legal technological tools, protected by law in much the same way as videocassette recorders or copy machines. The ruling did not serve as an endorsement of copyright infringement that takes place using that software, but recognized that peer-to-peer services could be used for legal AND illegal purposes. This ruling, which would shield companies providing decentralized file-swapping software such as Gnutella from liability for the actions of people using their products, will certainly make it harder for copyright holders to put a rein on similar file-swapping services. As expected, the major labels have appealed the ruling.

Judge: File-swapping tools are legal A federal judge in Los Angeles has handed a stunning court victory to file-swapping services Streamcast Networks and Grokster, dismissing much of the record industry and movie studios' lawsuit against the two companies. By John Borland CNET News.com, April 25, 2003 http://news.com.com/2100-1027-998363.html?tag=fd_top

Second, Real Networks announced it was purchasing Listen.com for $36 million. Real Networks is best known for its Real Players, which allow computer users to download and listen to streamed music, news, radio and speech. Listen.com, which started out as a music indexing company, had in recent years been very successful in building their own Rhapsody digital subscription service and obtaining the licenses from major label companies to sell legitimate digital downloads for a reasonable price. Unlike the major labels' efforts ­ Musicnet and Pressplay ­ Rhapsody allows subscribers a decent amount of flexibility with the purchased songs, and a catalog that includes licensed tracks from all five major labels and a lot of indie labels.

The merger has been categorized as a "win-win" in the press releases, with Listen.com getting some much-needed cash and Real getting a well-built and properly-licensed subscription service. But how will this affect Real Audio's involvement with MusicNet?

Real buys Listen.com for $36 million By Dawn C. Chmielewski San Jose Mercury News, April 22, 2003 http://www.siliconvalley.com/mld/siliconvalley/5688485.htm

The other big news is Apple's launch of its own online music service. Called the iTunes Music Store, the service offers legitimate licensed downloads from all five major labels for 99 cents each. And, unlike the deals with Musicnet and Pressplay, the iTunes Music Store allows burning songs onto an unlimited number of CDs for personal use, listening to songs on an unlimited number of iPods, playing songs on up to three Macintosh computers, and using songs in any application on the Mac, including iPhoto, iMovie and iDVD. The drawback for now is that it only works on Macs running OS X, which is less than 3 percent of US computer users, but Apple says they're working on a PC version.

Apple unveils music store By John Borland CNET News.com, April 28, 2003 http://news.com.com/2100-1027-998590.html

Apple Launches Paid Music Service By Leander Kahney Wired.com, April 30, 2003 http://www.wired.com/news/business/0,1367,58656,00.html?tw=wn_ascii

The launch of Apple's online service and the Real/Listen.com begs the question ­ how does the average musician tap into these new digital distribution services? How can we use sites like this to offer our music through a legitimate online service? What are the licenses like? Watch for more on this in the next newsletter.

------------------------------------------------------- 4. Other Articles in the Newsstream -------------------------------------------------------

Articles this month on the outcome of the RIAA v Verizon case, webcasting, a songwriter class action lawsuit against Columbia House record club, and more about the Dixie Chicks!

Courtroom Setback for Record Clubs Reuters/Billboard http://reuters.com/newsArticle.jhtml?type=musicNews&storyID=2614080&

Music Swappers Get a Message on PC Screens: Stop It Now By Amy Harmon New York Times, April 30, 2003 [Registration required] http://www.nytimes.com/2003/04/30/business/30MUSI.html

Online Anonymity Comes Under Fire Invoking a provision of the Digital Millennium Copyright Act, the Recording Industry Association of America subpoenaed Verizon to turn over the name of two of its Internet service subscribers, both alleged file-swappers. By Katie Dean Wired.com, April 26, 2003 http://www.wired.com/news/digiwood/0,1412,58633,00.html

Verizon gets 14 days to ID file-swapper A U.S district court on Thursday ruled for a second time that Verizon Communications must give up the identity of an anonymous Internet subscriber accused of swapping music files online. By John Borland CNET News.com, April 24, 2003 http://news.com.com/2100-1027-998268.html

Internet Radio Makes Bigger Waves More than 100 million listeners have tried Web radio and the number of regular monthly listeners has tripled in the last three years, according to ratings agency Arbitron. Reuters Wired.com, April 25, 2003 http://www.wired.com/news/digiwood/0,1412,58626,00.html

Chick Hunt When does stage banter spell doom for open country discourse? And why? By Chris Parker Phoenix New Times, April 2003 http://www.clevescene.com/issues/2003-04-23/music3.html/1/index.html

Stranglehold on the airwaves is choking country music Could it be that short play lists on country music radio has anything to do with the declining sales and vacant space on Music Row? Could it be that the widening gap between the quality of country songs heard in the clubs of Nashville and the pop country on every Clear Channel country station has anything to do with the decline of record sales? By William Wade The Tennesseean, April 4, 2003 http://tennessean.com/opinion/nashville-eye/archives/03/04/31167444.shtml?El ement_ID=31167444

Music Industry, Webcasters Agree on Royalty Rate SoundExchange, the organization designated by the Librarian of Congress to process royalties for music Webcasts, said in a statement Thursday the sides had agreed on a proposal of 0.0762 cents per performance or 1.17 cents per aggregate hour tuned in for free, advertising-supported services. By Ben Berkowitz Reuters, April 3, 2003 http://reuters.com/newsArticle.jhtml?type=internetNews&storyID=2505461

------------------------------------------------------- 5. Announcements from Friends and Allies -------------------------------------------------------

On May 5, 2003, Columbia Law School's Kernochan Center for Law, Media, and the Arts will sponsor a conference: "Virtual Scores and their MIDI Analogs: Copyright and Licensing Issues." The conference is open to the public, and will provide a forum for: composers and educators; music score software developers; librarians, music score publishers and distributors; copyright academics and practitioners; and principals of digital scholarly information enterprises in other fields in the humanities.

We anticipate a lively discussion of copyright ambiguities in U.S. and international copyright law raised by the digital creation and distribution of music scores and MIDI files. These issues have not yet been explored at any conference or in published scholarship in law, music or computing technology. We believe that this airing of diverse views on these issues will be a significant first step in clarifying and resolving some of the copyright concerns that currently inhibit more widespread adoption of digital score software and the highly manipulable artifacts that this technology makes possible. The conference website at http://library.law.columbia.edu/virtual_scores/conference.html

------------------------------------------------------- 6. What We're Doing -------------------------------------------------------

Jenny Toomey Jenny Toomey has been working with an organization called Free Press to coordinate an up coming conference in November. (More details on the conference as they develop.) She has also been working with other artist organizations to prepare for the upcoming FCC decision. In fact, it's been such a busy month she doesn't remember much of what she has done.

Michael Bracy It's been a long month for Michael, as young Owen's 3-hour feeding schedule has ensured that media ownership and Clear Channel remain close to his thoughts. As the FCC careens toward a June 2 vote on media ownership rules, Michael has been busy explaining to anyone who will listen the lessons of radio consolidation and why Clear Channel backing away from independent radio promoters does not mean they are suddenly the "good guys." Thankfully, it seems like the policy makers and the media are starting to take notice. Will it be too little too late for this round? Too soon to tell. But like we always say, there are no final victories or defeats in politics ­ just a never-ending process that grinds along. Given the make up of this Congress and FCC, it is hard not to be enthused by the remarkable involvement of concerned citizens who have filed comments, attended FCC field hearings and written letters. Media ownership is a tough, tough fight - but it is a fight worth having and a fight we must win in the end.

Kristin Thomson Kristin Thomson has been rivaling Jenny in "I've been so busy I don't remember much" camp this month, though being able to open the windows and take little Riley out to the park sure helps. Kristin is off to Colorado College at the end of this week to speak to the graduating sociology majors about her experiences as an organizer/activist/ musician/researcher/waitress/graphic designer/record label owner/tour manager since graduating thirteen years ago.

Walter McDonough Walter McDonough has been examining the recent court decision in California regarding P2P file sharing. He has recently spoken at the Music Industry Educators Association National Conference in New Orleans as well as at a convention of law librarians at Suffolk University Law School. The FMC is coordinating its research activities in the areas of royalties and international copyright agreements and Walter is continuing to work with other artist organizations to complete the SoundExchange spin off from the RIAA.

Brian Zisk Brian Zisk has been very, very busy. Besides continuing to work on his secret projects, he's been closely tracking the litigation which keeps being thrown by the Copyright aggregators at music fans and technology companies. He finds it extremely interesting to watch the labels litigate over the improper use of works which they control, while at the same time seeing the very same labels shirk their responsibilities to properly pay their artists on the very deals which they are using to claim rights to the music. Brian is also watching artists essentially held in indentured servitude by their labels, unable to continue productively with their recording careers, and then seeing massive layoffs strike employees of these very same labels. Karma anyone? Unfortunately, the layoffs are making it even more difficult for the overworked record company staffs to do their jobs, including that of properly paying their artists. The way the recorded music industry has evolved is unsustainable, and it is clearly overdue for implosion.

------------------------------------------------------- 7. How are we doing? -------------------------------------------------------

You can always send an email to suggestions@futureofmusic.org with your comments.

Thanks as always,

Jenny Toomey Michael Bracy Walter McDonough Brian Zisk Kristin Thomson Peter DiCola

I've written Jenny Toomey and Michael Bracy.

They don't answer, either.

I don't know what their agenda is, but we're not part of it. You can go ahead and join their list, but since we don't get airplay, we don't count at the Future of Music, either.

When the Grokster/Morpheus decision came down last week, I wrote to Wendy Seltzer at EFF. I have already written to Ren Buchold and Lawrence Lessig there as well. EFF represents StreamCast.

They do not understand what value 100,000 authorized, free downloadable songs has to do with their case.

I asked them for assistance in my DMCA presentation.

They said, "Good luck."

Ren Buchold at EFF got a "watch this" e-mail just before and an "I told you so" after we manipulated CNN.

They have offered no help. Neither has the Future of Music.

Ouch. Well, I take back my earlier post on the other article.

Every major industry goes through times of finacial correction. The MOB, and the record companies are maybe the only two spaces that have not seen the same woes that the airlines, tech markets, and telecom sector have been hit by multiple times. I hope they lose thier collective butts, profits drop, and some sorry ass staffer can sit next to a enigneer, or pilot in the unemployment line. Everyone loves music, but damn few of us try to pay our mortgages with it.

I must post a correction.

Jenney Toomey at the Future of Music did write to me today. She says she wrote to me before. I seem to recall that she did.

But they are still not talking about what we're doing, unless it showed up today. We're certainly not mentioned in their newsletter.

You know with an estimated 80 million people sharing music that is a lot of voters. Add in everyone who would be affected if RIAA actually started going after people and that is probably half of America, if not more. Instead of attacking the RIAA why not starts a drive to change some copy write laws?

The copyright laws have already been changed too many times.

But there is something called the Founder's Copyright that I'm looking into. It's part of the Creative Commons and would provide a very interesting alternative to prevent a major label from controlling or owning your copyrights. Ever.

As soon as I hear back the answers to a couple of questions, I'll fill everyone in.