october11

Music Business Journal
Volume 7, Issue 1 October 2011
Berklee College of Music
Inside This Issue
Mission Statement
The Music Business Journal, published
at Berklee College of Music, is a student
publication that serves as a forum for intel-
lectual discussion and research into the var-
ious aspects of the music business. The goal
is to inform and educate aspiring music pro-
fessionals, connect them with the industry,
and raise the academic level and interest in-
side and outside the Berklee Community.
(Continued on Page 3)
In 2008, the Department of Commerce
urged Congress to expand the statutory royalty
scheme for digital music streaming to include
terrestrial radio transmissions, arguing that this
would: (1) level the playing field between satel-
lite, Internet, and terrestrial broadcasters, (2) in-
crease the incentives for performers and record
companies to produce new recordings, and (3)
make it possible for U.S. record producers and
performers to receive substantial amounts of
foreign performance royalties that have previ-
ously been held back by foreign PROs. Public
performance royalties would also replace some
of the mechanical royalties that record produc-
ers and performers have lost due to the prolif-
eration of unauthorized downloads.
The Obama Administration’s support
for performance rights in sound recordings is
consistent with the position that the Copyright
Office has argued for decades. However, op-
position from the broadcasting industry has
consistently scuttled legislation designed to
achieve this goal. Until the U.S. enacts a broad-
er public performance right for sound record-
ings, domestic performers and record com-
panies will be unable to claim their share of
foreign performance royalties (a share which
probably exceeds $100 million per year), be-
cause most countries (or their collecting soci-
eties) impose a reciprocity requirement which
U.S. law does not satisfy. It is ironic that the
country that produces the most popular sound
recordings in the world is unable to collect the
royalties from those overseas performances.
The Performance Rights Act
The 2010 Performance Rights Act
(PRA) would have been a large step in the
right direction. At the congressional hearings,
musicians and record company executives
testified in favor of the bill, while represen-
tatives of the broadcasting industry opposed
it. Although both the House and Senate Judi-
ciary Committees approved the bill, it never
proceeded to a floor vote. There is a good
chance that some version of this legislation
will be re-introduced in the 112th Congress.
The House Scene
Page 4
Spotify Blues
Page 8
A Global Register of Songs
Page 10
Facebook F8, 2011
Page 5
Reversion of Copyrights, 2013
Page 11
U.S. Performance Rights
In Sound Recordings
By Mary LaFrance

Table of Contents
Business Articles
Money, Drugs, and Electronica...............4
Facebook’s New Network.......................5
Spotty Spotify..........................................8
BMG and Bug Music..............................9
Summer Music Factoids........................13
Law Section
US Performance Rights Reappraised.....1
The Protect IP Bill..................................6
WIPO’s Global Song Database.............10
Armageddon, 2013................................11
Music and Society
Taking Issue with the World Artist.......12
MBJ Editorial
Mission Statement...................................1
Editor’s Note...........................................2
Upcoming Topics...................................16
Sponsorship
Berklee Media....................................... 15
Editor’s Note
Volume 7, Issue 1 Music Business Journal
It gives me great satisfaction to be able to present this issue to our readers as the new Editor-In-
Chief. I think it is special, and for many reasons.
Firstly, we have received an academic submission from Professor Mary La France, winner of the
best paper at the Rethink Music Conference in Boston earlier this year. Her paper suggests that the
US is lagging behind Europe in the recognition of performance rights in sound recordings.
Secondly, courtesy of Professor Serona Elton, at the University of Miami, we are publishing two
pieces by UM JD students Michelle Ozog and Brenton Williams. Both cover themes at the intersec-
tion of business and society. Ozog writes about underground music and Williams ponders the mean-
ing of artistry. Of course, we invite readers to continue considering us for quality contributions.
Thirdly, the team at the MBJ welcomed a slew of new faces to its ranks. Among them, are first-
time contributors Zosia Boczanowski, Frédéric Casimir, Megan Graney, and Jeremy Moccia. Bocza-
nowski’s article focuses on Spotify, the latest in streaming services available to American consumers,
and questions whether or not Spotify is a sustainable business model. Casimir’s piece reminds us
that income from live music is vibrant, and that the summer is always a hot festival and touring time.
Graney’s article discusses BMG’s recent acquisition of Bug Music, while Moccia shines a spotlight
on Facebook’s new partnerships with streaming services Spotify, Mog, Rdio, and Rhapsody.
Finally, I had the pleasure of working again with longstanding contributors Luiz Buff and Fred
Choquette. Both have written for this issue. Buff’s article discusses the difficulty of keeping track of
rights’ holders at a global level--and a recent WIPO initiative to deal with the problem. Choquette’s
article highlights the conflict between talent and the labels over the reversion of master rights to artists
by 2013. I have contributed my own piece on a potentially important piece of legislation to protect
intellectual property, the Protect IP Act.
I hope you enjoy this issue. Thanks for reading!
Aaron Gottlieb, Editor-in-Chief
Errata: In her article on Lady Gaga (MBJ, August 2011), Vanessa Martinez pointed out that Amazon lost on the Gaga’s
99ç album sale since it had to pay a “statutory rate to Universal, of approximately $7.40 per sale.” A statutory rate, of
course, would be less then a dollar for a full album and would be paid to the publisher and songwriter, not the distributor.
We apologize for the error.
Contributors
Editor’s Note.................................................................................................................................................................. Aaron Gottlieb
Business Articles................................................ Zosia Boczanowski, Fred Casimir, Megan Graney, Jeremy Moccia, Michelle Ozog
Law Section..........................................................................Luiz Augusto Buff, Frederic Choquette, Aaron Gottlieb, Mary LaFrance
Music and Society........................................................................................................................................................Brenton Williams
Staff.......................................................................................................................Haven Belke, Ed Da Hyun Jeong, Bartosz Mrugacz
Staff (cont)........................................................................................................................Sarah Luzietti, Oliver Monaco, Ben Scudder
2 www.thembj.org October 2011

Management
Editor-in-Chief................................................................................................................................................................Aaron Gottlieb
Content Editor.........................................................................................................................................................Zosia Boczanowski
Webmaster............................................................................................................................Itay Shahar Rahat and Ed Da Hyun Jeong
Faculty Advisor and Finance.....................................................................................................................................Dr. Peter Alhadeff
Layout Editor..................................................................................................................................................................Lau Meng Wai

October 2011 www.thembj.org 3
Law Section
which recordings were performed or how
often – information which is necessary to en-
able the AFM/AFTRA fund to allocate roy-
alties to nonfeatured performers. Thus, the
burden falls on the record companies and the
performers to determine these allocations.
This increases costs, and reduces the funds
actually distributed to performers. While
the PRA’s new allocation scheme would im-
prove on current law (under which nonfea-
tured performers typically receive nothing),
it does not guarantee that nonfeatured per-
formers will collect their full legal share.
The absence of recordkeeping re-
quirements in the PRA would also affect the
allocation of the new statutory (i.e., non-ne-
gotiable) royalty for terrestrial radio broad-
casts of sound recordings. Although the PRA
would give both featured and nonfeatured
performers, as well as record companies, a
share of this royalty, it would not assist them
in tracking those broadcasts so that the roy-
alties could be accurately disbursed. Under
current law, digital audio transmissions are
eligible for statutory licensing only if they are
“accompanied, if technically feasible, by the
information encoded on that sound record-
ing,” which identifies the title of the sound
recording, the featured recording artist, and
“related information, including information
concerning the underlying musical work and
its writer.” Because terrestrial radio broad-
casts do not carry digital encoding, record
companies and performers will need some
other way to determine which recordings are
being played, and how often. Unfortunately,
neither the House nor the Senate version of
the PRA would impose any duty on terres-
trial broadcasters to maintain records of this
information.
To monitor usage, radio stations
should be required to maintain logs of their
musical transmissions and deliver these re-
cords to the parties charged with allocating
the royalty. This requirement may be burden-
some, especially on smaller stations. How-
ever, radio stations are already required to
maintain logs — at least periodically — un-
der their blanket licensing arrangements with
ASCAP and BMI. If ASCAP and BMI are
willing to cooperate with SoundExchange,
it may only be necessary to add additional
information to those logs, identifying the
particular sound recordings (as opposed to
merely the musical compositions). Although
some of the burden of tracking usage may in-
evitably fall on the recording industry, other
countries (including Canada) have imposed
rigorous recordkeeping requirements on ra-
dio broadcasters. While the Canadian ap-
proach may be too burdensome, surely some
compromise is possible.
Beyond the PRA
While the PRA would be a tremen-
dous improvement over current law, it would
not give musicians and record companies a
full public performance right equivalent to
the right enjoyed by songwriters and music
publishers. The PRA would not give musi-
cians and record companies a right to receive
royalties from performances of recorded
music in public venues such as clubs, res-
taurants, bars, retail stores, or other business
establishments. Thus, even if the PRA is en-
acted, public performances of sound record-
ings in these venues will continue to generate
royalties only for songwriters and publishers.
While this type of limited progress is typical
of incremental legislative reform, there is no
principled justification for continuing to ex-
empt these businesses, and eventually they,
too, should be required to pay for the use of
these recordings.
With respect to recordkeeping,
however, the expansion of the performance
right to public venues will be even more
problematic than its expansion to terrestrial
radio. In order to allocate royalties (whether
compulsory or negotiated) among the vari-
ous rights holders, the agent in charge of col-
lecting and disbursing those royalties (Soun-
dExchange or a similar entity) will need
to determine which recordings have been
played, and how often. If this burden falls
on the rights holders, this will be even more
difficult than the task of monitoring radio
broadcasts. It is impossible to monitor thou-
sands of individual venues, geographically
disparate, with widely varying music usage
(e.g., dance clubs versus grocery stores).
How, then, will royalties be allocated?
If enacted, the PRA would dramati-
cally change the rights of musicians and re-
cord companies by giving them the right to
receive royalties from public performances
of their sound recordings on terrestrial radio.
In contrast, current law grants public per-
formance rights only with respect to digital
transmissions of those recordings – e.g., sat-
ellite radio and webcasting.
Recognizing that the new per-
formance royalty will increase the cost of
broadcasting –the chief objection raised by
broadcasters -- the PRA would provide re-
lief to smaller radio stations as well as public
broadcasters, giving them the option to pay,
in lieu of the statutory royalty, an annual flat
fee determined by their gross revenues. For
the lowest-grossing broadcasters, the annual
fee was as low as $100 in the Senate ver-
sion ($500 in the House version). This relief
should help niche broadcasters, such as col-
lege radio, to continue to bring diversity to
the airwaves, and to offer a platform for new
and emerging artists. In the next iteration of
the PRA, it would be helpful to extend this
relief to small webcasters as well, since they,
too, can foster diversity and help new artists
find an audience.
The PRA would also improve the
royalty rights of the nonfeatured performers
on sound recordings (both vocalists and mu-
sicians). Under current law, when a statutory
royalty applies to a digital audio performance,
a specific portion of that royalty is set aside
for nonfeatured performers. However, some
digital performances (e.g., Rhapsody and
Spotify) are not eligible for the statutory roy-
alty, because they are “interactive” – mean-
ing that the user determines which recordings
will be played. The royalty for these interac-
tive transmissions is negotiated by the record
company and the company that provides the
streaming service. A nonfeatured performer
receives no share of these negotiated royal-
ties unless the performer’s contract with the
record company so provides; as a result, most
nonfeatured performers receive no payments
at all. In contrast, the PRA would require the
record company to deposit 1% of the negoti-
ated royalty for each recording into the AFM/
AFTRA Intellectual Property Rights Distri-
bution Fund, to be distributed 50/50 between
the nonfeatured vocalists and musicians.
Thus, under the PRA, nonfeatured perform-
ers will be entitled to at least a small share of
the negotiated performance royalties.
Unfortunately, the bill does not re-
quire the licensee to inform record companies
U.S. Performance Rights (cont.)

Business Articles
House Music: A Commercial Underground
By Michelle Ozog
The popularity of Deejay’s (DJ’s),
house music, and rave-like parties has grown
substantially over the recent years. Never
since the late-eighties to early-nineties has
house music been so prevalent in the lives of
America’s young generations. Unfortunately,
consumers have closely linked it to drug us-
age. It is frightening that this dangerous com-
bination may have come back into “style”.
Why is house music involuntarily connected
to drug usage, and what does that mean for the
younger generations who have become inter-
ested in house music and DJ’s?
House music has been alive for a
relatively short time compared to other genres
of music. What began as a counter-culture has
now become mainstream. House music origi-
nated in Chicago in the mid-eighties. The rev-
olution began at the original Comiskey Park,
where a rave-like party was thrown for people
to burn their disco records. During these years
an “underground scene had already stepped
off and was beginning to develop a new mu-
sic style that was deeper, rawer and more
designed to make people dance”. By 1985,
the movement was spreading throughout Chi-
cago, New York City, and Europe where DJ’s
were becoming popular and producing their
own records. Sub-genres of house music in-
cluding deep house, techno and acid house
began emerging in each city where specific
DJ’s would have their own specialty. By 1988,
house music had a strong underground follow-
ing and in Brooklyn, a young man, Todd Ter-
ry, brought sampling into house music for the
first time. In 1989, “house music fused into
raves, especially in London…” There, “orga-
nizers would pass out bags of MDMA tablets
and throw dance parties that lasted more than
thirty-six hours.”
Accordingly, with the rise of raves
and house, the subsequent rise of drug us-
age followed. One of the most prominent
drugs in the house music scene was MDMA,
more commonly known as “ecstasy”. Be-
cause house music so heavily relies on all-
night dancing and light shows that stimulate
the senses, MDMA was the drug of choice for
ravers. “People who use MDMA in clubs and
at raves emphasize its sensual and stimulant
properties, the way it enhances music and
dancing. But they also talk about a sense of
connectedness, especially at raves.” Another
user describes MDMA and house music as
“peanut butter and chocolate.” It is clear that
since the beginning of house, the sub-culture
who embraced this new style of music was
also well aware of the enhancing effects of
MDMA, LSD, and mushrooms and made sure
to take advantage of these drugs.
As the late-90’s passed and the new
millennium settled in, the addictive beats be-
gan evading into the more commercial music
world. Industry men and women realized
that there was money to be made in the un-
derground rave world. “Dealing with permits
and insurance and zoning laws” were all lu-
crative avenues for those looking to cash in
on the movement. “So broke the dawn of the
first commercial parties and, on their heels,
the inevitable oxymoron of a ‘commercial
underground club’”. As soon as money was
discovered in the business of house music, it
exploded.
It is incredible how popular house
music has become amongst today’s younger
generation. The crowds flocking to these
house music festivals and concerts are getting
younger and larger. DJs, such as Avicii, Girl
Talk, Afrojack and Kaskade are now celebri-
ties to this generation. Top 40 radio stations
now play house music regularly. DJs are now
also signing to major record labels, like David
Guetta on EMI. House music has truly in-
vaded the music industry and the young gen-
eration has latched on. It is no longer an un-
derground scene, but now it is the scene to be
involved in. In 2011, Ultra Music Festival in
Miami sold out 150,000 tickets, hosting one of
the largest crowds for their annual electronic
music festival. There is no doubt that it will
only grow this upcoming year.
Perhaps one of the main reasons
our younger generations are so drawn to
house music is the fact that we as a cul-
ture need immediate gratification. Teens
and twenty-somethings have grown up
in a world where access to any sort of in-
formation or person is at their fingertips.
This young generation becomes “bored”
quickly and at least house music provides
that constant change and newness that we
now expect in all other aspects of our lives.
With house music, many DJs, being audio-
virtuosos, are able to be on the cutting edge.
With this new popularity of house music,
however, comes the same drug usage that
occurred in the 80’s and 90’s. As younger
and younger teens turn to electronic music
festivals and concerts, they are being ex-
posed earlier and earlier to addictive and
harmful drugs. Unfortunately, according to
many teens, MDMA seems to be required in
order to enjoy the full effect of house music.
This partnership has proven lethal at times
and is clearly dangerous.
Whether drugs are involved in
this music culture or not, it seems as though
house music is here to stay. It rose from
humble beginnings in the Midwest and now
is a global phenomenon that has reached all
types of people. What was once an under-
ground movement is now a worldwide busi-
ness that is growing and eolving by the day.
Sources
1) “Breaking: Ultra Music Festival 2011 Sells Out,”
Big Shot Magazine, February 18, 2011, accessed Sep-
tember 30, 2011, http://newsflash.bigshotmag.com/
news/us-news/13625/.
2) David Holthouse, “Rave Review,” Phoenix New
Times, December 21, 1995, accessed September 27,
2011 http://www.phoenixnewtimes.com/1995-12-21/
news/rave-review.
3) Jacob Sullum, “Sex, Drugs and Techno Music,”
Reason, January 2002, accessed September 28, 2011,
http://reason.com/archives/2002/01/01/sex-drugs-and-
techno-music/singlepage.
“The History of House,” last modified March 5, 2004,
http://www.house-keeping.com/2004/03/05/the-histo-
ry-of-house.
4)“The History of House Music,” last modified 2011,
http://www.trugroovez.com/history-of-house-music.
htm.
Michelle Ozog is a J.D candidate at the
University of Miami.

Business Articles
October 2011
Facebook Mines Music
Facebook announced it’s highly
anticipated integration of a variety of media
services at its F8 conference last month, put-
ting to rest months of speculation as to what
Facebook was building behind the scenes.
Though the offerings include watching mov-
ies and TV shows with friends, the incorpora-
tion of various music services such as Spotify,
Rdio, MOG and Rhapsody is the main crux
of Facebook CEO Mark Zuckerberg’s inten-
tion to “rethink a lot of industries at the same
time.”
At the conference, Spotify’s CEO
Daniel Ek took the stage to announce the
partnership of Spotify and Facebook relat-
ing the discovery of music to the inclusion
of friends. Music is a social experience, and
with Facebook’s 800 million users, that expe-
rience is now ubiquitous. Do not mistake this
for a new music offering; Facebook did not
launch a music service. Instead, the company
decided to partner with a number of streaming
music based services to create new features of
Facebook that make music more discoverable
and more easily shared.
Spotify, MOG, Rdio, and Rhapsody
are all streaming music services, allowing
their subscribers to stream any song at any
time. They don’t offer ownership, rather the
ability to gain access to a personalized collec-
tion of music from virtually anywhere. Spo-
tify, however, has emerged at the forefront of
these services by offering free music to its
more than 10 million subscribers worldwide.
Pair that with the social offerings of Facebook,
and it creates a new world of opportunity for
free music appreciators everywhere. More
importantly, it opens the world of Facebook
to the subscription based business model of
Spotify, Rdio, MOG, and Rhapsody, and the
potential for hundreds of millions new paying
subscribers plus the aggregation of incredibly
large amounts of consumer data.
Music and Social Networking
The idea behind this incorporation
of services is not only to digitalize the social
experience of music, but to take the advent of
“free-music” and seamlessly turn it into “pay
a little, get a lot” without bifurcating the two.
Facebook CEO, Mark Zuckerberg, explained
it as helping “discover so many songs, that
you end up buying even more content than
you ever would have otherwise.” It’s a con-
cept that has worked for Spotify, as over two
By Jeremy Moccia
million of its ten million subscribers are pay-
ing a monthly fee for premium services that
offer more content and accessibility. The key
behind this model is offering the ability to
discover as much music as possible by giving
users an extensive catalogue available to them
instantly, as well as having a massive user
base. Users will accumulate such an exten-
sive collection of music that it would theoreti-
cally make it easier to pay a small monthly fee
to keep and expand access to that music than
attempt to buy and rediscover their already
available compilation.
Discovery, exploration, and ac-
cess are all concepts Facebook is more than
familiar with. This marriage of music and
social networking seems long overdue, so
how extensive is the integration? There are
a number of features being added, some in-
tuitive, others noticeably absent. The feature
that sets the foundation of the assimilation of
these services is the ability to instantly listen
to whatever music a user’s friends may be
listening to. When a song is being played, a
notification will appear indicating what song
that friend is listening to. By clicking on the
notification, the song will launch and the so-
cial experience is born. In addition to show-
ing the song being played, the notification will
display what service the song is being played
on. This is important, as the one feature that is
noticeably absent is the cross-platform ability
to listen to songs regardless of what service a
user is subscribed to. For instance, if a user
listens to music through Spotify, then the only
music that that the user will be able to listen
to through Facebook will be that of any other
friends using Spotify as well. This is a disap-
pointing omission, as it limits the simplicity
of being able to hear and discover more mu-
sic. However, it is helpful for competition as
it gives the companies the ability to monitor
growth and understand how their service and
music is being adopted. This feature, or lack
thereof, explains why services such as MOG
and Rdio are fast tracking their introduction
of a free music plan akin to Spotify’s. If Face-
book users now have the ability to instantly
listen to music and sign up for a music service,
they would prefer a free service instead of a
paid one--and right now Spotify has the only
free offering. Expect the competition to heat
up when Rdio and MOG jump on that band-
wagon later this year.
Not only are music services such
as Spotify, Rdio and MOG on board with
this new music and social integration, but a
number of progressive music executives are
as well, including Lady Gaga’s manager Troy
Carter. “What we’re looking to do is not just
about selling the CD or the digital file. It’s
how many people can we get the music to.
How many people can experience it?” Har-
kening to the new music integration in Face-
book, he seems to agree with the idea that in
this day and age it is no longer about restrict-
ing access to music through sales, but about
opening every avenue available to get music
in to as many hands as possible. “If it was up
to me, I’d give away the next album and put
it on every handset that I can put it on, to get
that scale” he says, and with Lady Gaga being
one of the biggest stars in the world, its hard to
argue with him. Not only will the new Face-
book features allow even more people to ac-
cess an artists music, but will offer new ways
to stay connected with them as well.
Facebook recently launched a new
feature known as “subscribe”, allowing any-
one, regardless of being a friend or not, to
“subscribe” to a users channel. The user then
has control over what content is shared with
“subscribers” and what isn’t. This, paired
with the new music offerings, opens an entire
new world of connectivity between fans and
artists. Now, instead of having to “Like” a
page, or be friends with an artist, users can get
direct updates from them and artists can now
tailor those updates to them as “subscribers”.
This, along with new ticketing options being
offered on fan pages and the new music in-
tegration makes Facebook an incredibly valu-
able resource for artists.
iTunes ushered in a new era for the
business over seven years ago, and since then
services have been refined, not innovated.
With Facebook bringing the social music ex-
perience to the Internet we may be entering a
new stage.

Law Section
likely the reasons why Senator Ron Wyden (D-
OR) blocked it before it could come to a vote.
COICA had two further provisions,
however, and neither created much contro-
versy. It would have enabled the US Attorney
General to both stop credit card companies and
online advertisers from doing business with
targeted websites. This would take out two
main streams of revenue from infringing sites,
so the two provisions could be effective in the
fight against piracy.
The Proposed Legislation
Protect IP is a more memorably
named and improved upon successor of CO-
ICA. It was approved by the Senate Judiciary
Committee on May 26 and was last revised on
September 17. The bill makes no mention of
domestic domain name seizures but includes
measures intending to alter the DNS system to
block Americans’ access to infringing foreign
sites. It also gives copyright holders the ability
to get court orders that would prevent financial
transaction providers and online advertisement
services from doing business with such sites.
Wyden has again become one of the more out-
spoken publicly elected officials to dispute the
bill. He is particularly concerned that the bill
relies too much on the already-questionable
existing seizure laws combined with the fact
that access to foreign sites could be blocked.
Wyden’s main reason for disputing the bill
is the fact that it leaves no opportunity for a
targeted site to defend itself. Wyden further
argues that certain provisions in the bill would
Protect IP: A Dramatic Step In
give the government the ability to stifle free
speech at will, basically allowing the govern-
ment to act as both judge and jury.
Visa, Google, Copyrights and Trademarks
Despite these points of contention,
Protect IP shows promise. Almost every site
that offers copyright infringing media to Inter-
net users generates revenue through subscrip-
tions, selling advertising space on their page,
or a combination thereof. Visa and other pay-
ment processors along with companies such
as eBay and Google are already involved with
voluntary efforts to deal with online infringe-
ment. These companies have adopted a set of
“Best Practices for Voluntary Measures in Ad-
dressing the Sale of Counterfeits on the Inter-
net.”
Visa, for example maintains a pro-
gram that allows for right-holders to lodge a
complaint if an infringing website is accepting
Visa payments for counterfeit goods, or (not
included in the joint agreement) pirated me-
dia. During a six-month period however, the
program only received a total of 30 inquiries
worldwide. Other participating companies
have also experienced a lack of complaints
from intellectual property owners. In a tes-
timony given at a hearing to the Senate Judi-
ciary Committee in February of this year, a
Visa attorney stated: “Other payment systems
have shared similar experiences. Intellectual
property owners have not explained their re-
luctance to report instances of online infringe-
ment to us.” Reticence on the part of the right-
The Protect IP Act (Senate Bill
S968), short for Preventing Real Online
Threats to Economic Creativity and Theft of
Intellectual Property, is the US Government’s
latest attempt to enforce online copyright and
trademark protection. The bill aims to com-
bat piracy and the sale of counterfeited goods
by using the already existing Domain Name
System. It also takes a no-nonsense financial
approach.
Precedent
The Domain Name System has
been the focus of recent debates over on-
line intellectual property protection. This is
the mechanism that gives memorable names
to various Internet servers, and helps users
browse for content online more easily. Web-
based content is stored on servers, and every
server has a dedicated IP (Internet Protocol)
address. Berklee College of Music’s web
site, for example is hosted at the IP address
192.136.22.15. This set of numbers would
be difficult for most to remember, while a
domain name such as Berklee.edu is much
easier for the user to comprehend.
A previous bill, The Combating
Online Infringement and Counterfeits Act
or COICA, was nearly passed by the Senate.
It aimed to expand the list of circumstances
under which it would be appropriate for law
enforcement agencies to alter the configura-
tion of a domain name that was found to be
infringing upon trademarks and copyrights.
Usually, users seeking content from such a
domain would see a government warning in
place of the site that was previously there.
COICA had encountered--as has
the existing law--strong dissent from com-
puter scientists, civil liberties groups, po-
litical action coalitions, and law professors.
The scope of COICA would have extended
to foreign domains. While the seizure of any
foreign domain would be clearly outside of
the jurisdiction of the US Government, the
bill also sought to block US citizens’ ability
to visit foreign sites hosted at those domain
names by giving the US Attorney General
power to force American service providers to
ignore attempts to visit a targeted foreign site.
COICA’s domain name provisions garnered
most of the public criticism, and were most
By Aaron Gottlieb
US Anti-Piracy Legislation

Law Section
holder might be attributed to a lack of knowing
that such programs exist. More importantly,
such reticence might be caused by the fact
that there is no coordinated effort of enforce-
ment. If a single avenue of payment was shut
down—Visa payments, for example—the in-
fringing site is still able to accept other credit
cards. Furthermore, credit card companies
“cannot permanently eliminate the problem
when unlawful merchants hide behind mul-
tiple shell companies that enter into contracts
with multiple banks to accept credit cards un-
der false pretenses.” The need for legislation
is apparent.
Internet advertising networks are
also taking similar steps voluntarily. Google
does not allow its clients to advertise coun-
terfeit or trademark infringing goods. Google
also claims that it works to “prevent its adver-
tising products from being used to monetize
material that infringes copyright.” Ironically,
one can plainly access plenty of infringing tor-
rent sites after initiating a simple search.
Although Google receives a lot of
complaints from right-holders about
trademark infringement (when ads show up
for counterfeit or infringing goods), the com-
pany “receives very few complaints from
brand owners ” about its advertising being
used to turn infringement into a profit. This
greatly reflects the difference between trade-
mark holders and copyright holders. Where
a trademark is concerned, typically infringers
profit from the sale of tangible goods. It would
not be worthwhile financially for an infringer
to give away bogus goods without earning a
profit. In the context of copyright however,
illegal duplicates of picture, video, and music
files are easily given away at such a low cost—
sometimes for free even—advertising is many
times the sole method that a site of this nature
can use to generate revenue. While trademark
holders pursue the sellers of counterfeit goods,
it makes more sense for copyright holders to
go after the source of income of the copyright-
infringing site. Copyright holders most likely
believe that the sheer volume of ad networks
is so great that it would not be worth trying
to prosecute each infringing site individually
on a case-by-case basis. Again, the need for
legislation is apparent.
Google has been one of the more
outspoken critics, most likely because it stands
to lose revenues from its advertising service
should such legislation ever become law.
Google’s executive chairman, Eric Schmidt, is
wary that government plans to block access to
illicit websites through the DNS system could
set a “disastrous precedent” for freedom of
speech. Schmidt stated that even if the bill
were passed into legislation, Google would
still attempt to fight it.
Musicians and the Law
The bill has received the support of
former presidential candidates, Senators John
McCain (R-Arizona) and Joseph Lieberman
(D-Connecticut). Several associations in the
entertainment industry have also expressed
their support for the bill, including: The Na-
tional Music Publishers Association, Nashville
Songwriters Guild, US Chamber of Commerce,
Viacom, and NBCUniversal. Individuals such
as First Amendment expert Floyd Abrams and
Don Henley of the Eagles have also been vocal
in their support of the bill. Henley, in an edito-
rial piece for USA Today, warns of the dangers
of a free Internet. He cites the ease with which
children can access stolen, harmful, and inap-
propriate goods online. He furthermore goes
on to argue that the stealing of American enter-
tainment products and counterfeit goods is not
simply a federal crime—it threatens the finan-
cial stability of American businesses. Henley
furthers his point by saying: “There is no First
Amendment right to infringe intellectual prop-
erty rights.”
Overall, there seems to be a signifi-
cant mass of support for the Protect IP Act, es-
pecially from musicians. Certainly, altering the
Domain Name System and restricting access
to websites might prove to be a complicated
step to take for the government, as legitimate
e-commerce startups would be threatened if
they were found to be infringing on intellectual
property in any unknown way. So too would
existing Internet-dependent businesses, and
neither would have much recourse in the law.
Yet the financial provisions in the Protect IP
Act are strong and relatively uncontroversial.
That is where the power of the new legislation
is likely to bite with abandon.
Sources
1 ) h t t p : / / w w w. g o v t r a c k . u s / c o n g r e s s / b i l l t e x t .
xpd?bill=s112-968
2) International Trademark Association, Addressing the Sale
of Counterfeits on the Internet, Sept. 2009
3) Testimony of Kent Walker, Senior VP and General Coun-
sel, Google, April 6 Senate hearing
4)http://www.guardian.co.uk/technology/2011/may/18/
google-eric-schmidt-piracy
5)http://www.billboard.biz/bbbiz/industry/digital-and-mo-
bile/business-matters-u-s-senate-s-protect-ip-1005353342.
story
6)http://www.usatoday.com/news/opinion/forum/2011-08-
21-counterfeit-copyright-protect-ip-act_n.htm
(From Page 6)
Find
us
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and
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thembj.org

Business Articles
Spotify: Not Out Of The Woods Yet
Spotify could be in danger of be-
coming just another flash in the pan music ser-
vice. Information about it is hard to track and
inconsistent, and the company’s constant press
releases are arguably a source of confusion.
Many users find the catalog selection insuf-
ficient. Besides, there is little evidence that a
critical mass of listeners will be willing to pay
to stream music. And if more people pay for a
subscription to avoid the ads, the service could
become less attractive to potential advertisers-
-a weakness in the business model. Also, the
more ads it runs, the less attractive it becomes
to music lovers. In fact, granting free access
to users in the hope of attracting larger pools
of subscribers is probably unsustainable, as
advertising in the ‘free’ version is unlikely to
cover costs. Finally, even though the company
may be generating money for Sony, EMI, War-
ner Music Group, and Universal, its long-term
benefits for artists and independent labels are
less clear.
History and the US Market
Spotify is a Swedish-founded, UK-
headquartered, music service offering stream-
ing of selected music from a range of major
and independent record labels. Pirate Bay, a
Swedish website that provided peer-to-peer
By Zosia Boczanowski
content, was the predecessor of Spotify and
allowed resources to be referenced without
the need for a continuously available host—
which made enforcement of copyright protec-
tion difficult. While Pirate Bay was involved
in a number of lawsuits, and eventually found
guilty of abetting copyright infringement, Eu-
ropeans have seen Spotify, which started in
October 2008, as offering a legal way forward.
In July 2011, Spotify launched its US
service after delays and years of negotiation
with the four major record companies. Music
can be browsed by artist, album, record label,
genre, or playlist as well as by track name.
Users can register either for free accounts,
supported by visual and radio-style advertis-
ing, or for paid subscriptions without ads and
with a range of extra features such as higher
bit rate streams and offline access to music.
Spotify is funded by paid subscriptions, pop
up advertisements for non-subscribers, and
music purchases from partner retailers.
Currently, there are three Spotify
account types: Spotify Open, Spotify Unlim-
ited, and Spotify Premium. The different paid
subscriptions are free of ads and for the first 6
months the listening time is unlimited. How-
ever, they only allow 10 hours of listening
time per month after that. A
paid “Premium” subscrip-
tion of $9.99 per month is
the only account type that
allows users to access Spo-
tify on mobile devices.
Rival services Rhapsody
and Grooveshark are no
pushover. Spotify’s search
engine seems to be lacklus-
ter and the availability of all
songs on an album is, for
now, arguably inconsistent
and spotty . In comparison,
Rhapsody has a stronger
search by genre and key art-
ists, and also recommends
similar talent for discovery.
Spotify requires download-
ing an application to ac-
cess their music library,
while Grooveshark allows
streaming directly from a
variety of browsers. A free
Spotify account will peri-
odically interrupt a playl-
ist with an audio ad, while
Grooveshark has just visual ads. On the other
hand, Rhapsody does not have a free account
version and does not work in existing iTunes
libraries, while Spotify has a higher stream-
ing quality of 320k (compared to Rhapsody’s
128k).
Facebook and Song Selection
One of the reasons behind Spotify’s
growth and success in Europe has been its
strategic deals with ISPs. Spotify is currently
the second largest source of digital music rev-
enue in Europe after iTunes and is the largest
digital music retailer in Sweden and Norway.
Digital music revenues grew by 20 percent in
Europe in 2010 (though physical revenues still
account for about four-fifths of total sales).
Spotify’s success was noted by the business
and paved the way for a US startup and a part-
nership with Facebook.
The Facebook partnership is note-
worthy. The idea is that members that listen
to music from Spotify can share a constantly
updated playlist of tracks. Facebook friends
who have access to the same music service
can also play this music simply by clicking on
a link to the track. New Spotify members re-

quire Facebook accounts to log in and access
the service. Although it is early to judge the
impact of this partnership on listeners, Spo-
tify has brought Facebook squarely into the
music business. Spotify is arguably going to
become a significant music distributor, and
will be in a position to make demands from
music companies as well as promote particu-
lar labels, artists, and publishers to millions
of Facebook users. Facebook has more than
800 million active users and Spotify can add
ten million registered users across seven
countries in Europe, including the US. In the
meantime, social media continues to grow in
importance for the record industry.
Spotify might be the right service
for tech-savvy listeners. However, Spotify’s
logo “All the music. All the time.” is not ac-
curate. Well-known artists such as The Bea-
tles, Metallica, Pink Floyd, AC/DC and Led
Zeppelin are absent from the service. When
compared to other streaming music sites, the
pattern of omissions seems perplexing. In a
recent interview, Adele’s label called Spotify
one of their top digital partners globally by
revenue. But Adele’s album ‘21’ is not avail-
able, while Rdio, MOG, and Rhapsody have
it.
Moreover, out of the fifteen mil-
lion tracks that make up Spotify’s catalog,
the majority of the tracks seem to be unusual
takes of known songs. There is a plethora
of instrumental karaoke versions of popular
songs, and many misspelled original artists’
names and track titles. Recently, the heavy
metal/hardcore label Century Media, in
partnership with InsideOutMusic, Superball-
music, Ain’t no Grave Records, Hollywood
Waste and People Like You, said it will be
pulling all its music form Spotify to protect
its artists. Another independent metal label,
Prosthetic Records, has made similar threats;
according to its label head, the income from
the streaming music service is just pennies.
In fact, Spotify may give way to a
new battle line between major and indepen-
dent record labels in the US. Most majors
can likely press for better terms and, indeed,
Spotify has focused primarily on them for the
US launch. Suspicion will not be assuaged
by the knowledge that company has already
sold small ownership stakes to the majors in
Europe.
Business Articles
(From Page 8)
BMG Rights Management
Makes Inroads (In America)
By Megan Graney
The publishing business is vital in
protecting, valuing, and developing new mu-
sic. Publishers are responsible for the business
side. They seek to maximize copyright protec-
tion and collections for their clients and search
for music from composers and songwriters.
They act as a foundation to nurture artists,
composers and songwriters in their creative
process. Two of the leading publishers in the
music world, albeit very different, are BMG
and Bug Music.
Bug Music, which was founded in
1975, has a varied music catalog that allows
music supervisors and ad agencies to procure
usage rights around the world quickly and eas-
ily. This independent music publisher, one of
the largest, owns and/or manages copyrights of
such mega-hits as “Fever”, “I Walk The Line”,
and “The Real Slim Shady”. Some of their cli-
ents include: Johnny Cash, Willie Dixon, Del
Shannon, Muddy Waters, Stevie Ray Vaughn,
Woody Guthrie and contemporary stars such
as Jamie Foxx, Iggy Pop, The Guess Who,
Ryan Adams, Pete Townshend, and Kings of
Leon. Their catalog holds more than 250,000
titles from the Top 40 of Indie, Hard Rock,
Electronica, Pop, Hip-Hop, Jazz, and Country.
They primarily represent independent record
labels and artist-owned masters in the US and
are able to license, account and pay all me-
chanical royalties and collect synchronization,
print, and performing licenses. They can make
any recordings available to all digital stores
safely and legally such as iTunes, subscriptions
services like Rhapsody, ringtone providers,
and mobile music stores. Above all, they are
known for being especially good at marketing
the music of their selective talent roster.
BMG Publishing, a mega-publish-
er long established in the business, was re-
founded in 2008, after BMG Records exited
the record business and bailed out from its
partnership with Sony Music. It counts two
hundred employees world-
wide (compared to Bug
Music’s seventy-five) and
represents the rights of
song recordings by Cross-
town Songs, Cherry Lane
Music Publishing, Stage
Three Music, Evergreen
Copyrights, and Chrysa-
lis group. BMG is a joint
venture between German
media giant Bertelsmann
and U.S. private equity group Kohlberg Kra-
vis Roberts. During the week of Bug’s pur-
chase, BMG was the number one publisher
on the U.S., U.K., and German charts.
The deal between BMG and Bug
Music was worth an estimated $300 million,
with BMG looking to bolster its catalog and
taking advantage of a drop in Bug Music’s
selling price. They beat rival bidders includ-
ing pop idol Simon Fuller, creator of Ameri-
can Idol, and Sony/ATV, which is a joint ven-
ture between Sony and Michael Jackson’s
estate, and Ole Music. Financial terms of the
transaction are expected to close by October.
After the purchase, BMG now controls rights
of more than 300,000 song recordings. The
industry estimates that revenue for the com-
pany in 2011 will be around $272 million.
“With the acquisition of Bug Music and its
vast collection of evergreen and contempo-
rary compositions, BMG further establishes
itself as a leading music rights-management
company,” said Hartwig Masuch, CEO of
BMG Rights Management.
This is a story of bigger and bet-
ter, and BMG’s interest in the US market,
where Bug Music’s presence is strongest.
The Bertlesmann family’s stake in recorded
music may no longer be what it was in the
1990s and the early millennium. But much of
the business knows that publishing monies
are still going strong (in spite of the drop in
collections from mechanical rights), and this
is where the new BMG group wants to head.
Tom McGrath, Senior Managing Director of
Crosstown Songs, another American music
publisher bought by BMG in 2009, points
to the “next generation of music publishers
who can marshal global resources to develop
new writers, showcase the works of estab-
lished writers, and nurture the legacy of…
long term clients and historic catalogs.” In-
deed.

Law Section
WIPO Tallies Song Credits Worldwide
Considering the vast array of music
services that were launched this year, including
Amazon Cloud Drive, Spotify, and Google Mu-
sic, it seems a new order for the consumption of
music is taking shape. Indeed, legislation is be-
ing reformulated to facilitate new forms of mu-
sic consumption, with consumers substituting
piracy practices and moving to legal services.
However, the existing music rights manage-
ment architecture is being challenged. The dif-
ficulty is to know exactly who all the copyright
owners of a song really are--and where they can
be located. Transactions for the appropriate li-
censes cannot happen without this knowledge.
For each song recorded there are two
copyrights involved: one for the composition
itself and one for the sound recording. The first
one is owned and controlled by different song-
writers and publishers, while the other is usually
owned by record labels and performing artists.
When each of those rights are owned by a sig-
nificant large group of people, someone needs
to locate all of them in order to obtain licenses
that need to be negotiated on a case-by-case ba-
sis. Additionally, many popular artists are now
emerging outside traditional corporate struc-
tures, and not having them in the current data-
bases of copyright ownership impedes the legal
consumption of music. Two recent examples are
Choruss and SoundExchange. Choruss, an ex-
periment meant to allow college students across
the country to download an unlimited amount
of music in exchange for a small fee built into
the their tuition, was not able to gain traction
because of the difficulty in finding out exactly
who it had to com-
pensate. Sound-
Exchange, a Per-
formance Rights
Organization cre-
ated to collect roy-
alties from digital
music services,
has had millions of
dollars stuck in its
accounts for some
time now because
it simply cannot
find the appropri-
ate right owner.
Jim Griffin,
founder of Cho-
russ, is a former
label executive that
now is channeling
his efforts to tack-
le this situation.
As he recently pointed to Billboard, “[the]
big problem we ended up facing…is that we
couldn’t find at least half the rights holders.”
He advised that an extensive global registry of
copyright owners be created to facilitate the
licensing process across borders.
Such an ambitious plan started to be
brainstormed at the end of 2010 and took form
as the International Music Registry (IMR), cur-
rently functioning under the auspices of World
Intellectual Property Organization (WIPO), an
agency of the UN. In order to be viable, the
organization needed representation of all the
stakeholders involved in the process of licens-
ing. Indeed, its first Consultative Committee
included Jim Griffin and brought together a
wide variety of players in the music industry.
In its initial planning stage, the IMR will be
an internationally transparent global regis-
try of all rights and right holders sharing all
the necessary information needed to ease the
process of multi-territorial licenses. “This”, it
said “will preserve the public good [character
of music] both [for] culture and commerce.”
The system is designed to be an
inclusive platform, creating a single point of
access for multiple databases already in exis-
tence around the globe, tying the information
together and diminishing overlapping efforts
and conflicting information. In fact, critics of
IMR argue that there are a number of similar
initiatives trying to achieve the same goal,
such as the Global Repertoire Database being
developed in Europe.
By Luiz Augusto Buff
However, WIPO has advantages
over other entities in creating and main-
taining a successful global registry. Being
an agency of the United Nations ensures
worldwide involvement in the project. Fur-
thermore, the agency already developed and
runs established global registries in other in-
tellectual property fields such as patents and
trademarks. WIPO generates most of their
income through the operation of these sys-
tems, but also counts on contributions from
member states. Due to its public character,
the agency is free of antitrust regulations and
can focus on developing such a system with-
out being concerned on an immediate return
on investment – which would usually hinder
the major music companies.
The IMR wishes for a comprehen-
sive geographical representation in order to
facilitate a truly global dialogue. The idea
is to not only focus on the most powerful
countries, but to enforce the inclusion of the
BRICS (Brazil, Russia, Indonesia, China,
South Africa) and other fast developing re-
gions. Brazil for instance was one of the few
music markets that showed growth last year,
despite the fact that it lacks download stores
such as iTunes and streaming services. The
structure and organization that IMR will pro-
vide will be essential to the development of
new services in these countries, shifting the
audience to legal services and therefore re-
energizing the music market globally. (Still,
how fees will be collected, be it by individu-
al entry or by subscription, is yet unclear.)
Overall, the development of this
comprehensive database is a long process
that depends significantly on compromise.
Skeptics will be afraid of losing control over
their information, fearing that data that was
private may go public. A good balance has
to be found between what data will remain
confidential, and thus not hurt licensors and
licensees, and what data can be made readily
available to promote what really is an ailing
music trade. It is not an entirely new problem
for the business. Record industry organiza-
tions, like the RIAA in the US, have long
tallied rival company recorded music sales
promising confidentiality to the individual
labels. Back in the day, trust was good for
business. The hope is that the same will hap-
pen with the International Music Registry.

Law Section
Artists And Their Masters: Looming Conflict In 2013
By Frederic Choquette
2013 will be a defining year for many
artists, record labels, and the recording industry
as a whole. With the clause in the 1978 Copy-
right Act, an author may reclaim ownership of
his work after 35 years. We are on the verge
of witnessing a clash of the titans between
major labels and superstar artists. This rever-
sion of rights debate is of major importance as
it threatens to either redefine copyright law or
allow artists to fully control what they believe
to be rightfully theirs, and deliver a potentially
fatal blow to record labels across America.
The 1978 Copyright Act states that
authors of a specific work may reclaim owner-
ship after 35 years of its creation. Publishing
deals have noted this with little controversy.
However, the Copyright Act also claims that
this reversion of rights does not apply to works
made for hire. There is a specific list of limi-
tations that the work must fall under in order
to be accepted as a work made for hire. These
conditions state that in order to be considered
as such, there must be either an employer/em-
ployee relationship, or the work must fall into
nine specific categories, none of which include
sound recordings.
The debate stems from the labels’
claim that artists, when recording their albums,
acted as employees of the record label, which
would therefore qualify the masters as works
for hire. However, in order to be an employee,
it is generally thought that the recipient must
receive a specified salary, which most artists
don’t. Instead, the large majority musicians re-
ceive cash advances that become fully recoup-
able against artist royalties. Record labels also
crafted contractual clauses specifically stating
that the masters were in fact works for hire.
The problem with these clauses is that sound
recordings do not fall into the specific limita-
tions of works for hire, rendering the language
in these articles legally unsound.
In order to avoid the upcoming con-
flict, the RIAA secretively passed a bill in 1999
stating that sound recordings were once and for
all to be considered works made for hire. This
immediately created conflict with the popula-
tion of songwriters, including the Recording
Artists’ Coalition, who lobbied successfully for
the bill’s cancellation.
The record labels have long been por-
trayed as large, soulless corporations, which
has lead the public to perceive this upcoming
battle as a way for artists to regain ownership
of what is rightfully theirs. But it is important
to gauge the consequences of such legal action
before jumping to any conclusions. The mu-
sic industry is already in a load of trouble, and
further hindering the labels’ business could be
bad for everyone.
An interesting article by Moses Ava-
lon discusses a few popular alternatives that
could leave both parties happy without dam-
aging our industry [1].Of these solutions, the
most attractive encourages labels and song-
writers to use this threat as an initiative to
renegotiate royalty percentages on masters.
This could end up being far less costly than a
never-ending legal battle. In addition to saving
money, artist rights would still be protected by
the labels’ ability to seek out and pursue copy-
right infringers, an activity many artists may
not have the resources to become involved in.

Furthermore, certain clauses in the
recent extension of copyright protection for
masters in the E.U. could be used as a model
for solving the 2013 debate. Just a few months
ago, the E.U. extended its copyright protection
from 50 years to 70 years after the creation of
a master. Although major European corpora-
tions mostly backed this change, the new law
includes a few extremely beneficial clauses for
artists, including the E.U. directive that it is “a
requirement for labels to ensure all recordings
are commercially available, failing which the
artist will be entitled to release their recordings
themselves.”[2] If such a clause were to be in-
cluded in a 2013 rights reversion compromise,
it would allow artists whose masters have been
withheld to release their material and poten-
tially revive their careers.
Many proponents of the reversion
of masters to its original creators believe that
the impact on the labels will be minimal. This
reasoning is backed by the fact that the only
masters whose rights will be reverted in 2013
will be the ones recorded in 1978. Each year,
labels would only lose the rights to masters re-
corded 35 years prior. This means that as long
as a label continues recording artists, its cata-
log should continue to thrive, losing the rights
to only a small part of its sound recordings
collection each year. Although such reason-
ing may seem logically sound, we must not
assume that all masters are equally profitable.
The consequences could be disastrous if a la-
bel were to lose the rights to one of its “gold-
mine” masters.
Another interesting complication
that arises from this debate is the actual own-
ership of the masters. In the eyes of the law,
the proprietor(s) of a sound recording could be
any combination of people having contributed
to its creation. This dilemma would include a
multitude of parties, ranging from songwriters,
featured artists, producers, session players, en-
gineers, etc., all of whom contributed in some
way to the production of a master. Adding all
these people to the already complex dispute
could turn this case into a legal nightmare with
multiple parties fighting each other for partial
ownership.
It is important to remember that the
rebuilding of a successful industry requires the
cooperation of all parties involved. Although
tempting, a long, costly legal battle may actu-
ally hinder the recording industry’s ability to
successfully navigate through the traitorous
waters it already faces. The legal conundrum
that will erupt in 2013 will most definitely re-
shape our industry; let us only hope that it will
be for the best.
Souces
1. http://www.mosesavalon.com/mosesblog/
2.http://www.billboard.biz/bbbiz/industry/publishing/
eu-extends-copyright-term-to-70-years-1005348552.story

Music And Society
By Brenton J. Williams
public relations machine, “artists” don’t have
to be skilled. Couple this with the viral video
and social networking craze almost anyone
can stake their claim to fame. This has pro-
duced a crop of recording artists who cannot
sing, write songs, or play a single musical in-
strument. They simply possess that “it”
factor that for whatever reason garners the at-
tention which generates sales. Now, the
rarities are the child singer we watched prog-
ress or the café singer who got a lucky break.
A career in the music industry is now an op-
tion for every celebrity and public personality
regardless of singing ability.
When one thinks of an artist, one
immediately thinks of the ability to create.
When it comes to recording artist, we expect
them to create a sound and persona that will
entertain us. In short, we expect them to be
able to sing or play and do it well! So if we
are seeing individuals with the inability to do
so being labeled as artists, one must ask: Who
is doing the creating? Who is responsible for
the voices and people now populating the mu-
sic industry?
Not surprisingly, the answer is the
industry itself. Once relegated to the role of
supporting and enabling those who have nat-
ural talent, the music industry has
taken on the task of creating it. Many music
artists are now completely crafted by
highly trained teams of producers, image con-
sultants, managers, coaches, and handlers.
These people even go as far as to feed them
everything from who they
are to what they believe. So by the time the
consumer finally receives the finished
product, it is very rarely an honest reflection
of the individual performer.
Another growing black eye on the
industry is the unabashed abuse of Auto-
Tune. It has given the industry the ability to
create perfectly pitched singing, no matter the
performer’s ability. This radically lessened
the mark of what being a viably successful
vocalist required. It has allowed the industry
to mass recruit and mass produce the artists
we see flooding the market today. It has even
expanded into the celebrity singer fad. In the
past it wasn’t very common for entertainers
and public personalities to venture into the
music business. Outside of Broadway, most
actors shied away from the recording booth.
Now, every Real Housewife and reality show
star can successfully cross over into “pop star-
dom”. It has become a very attractive quick
money scheme to the industry, as these peo-
ple already come with the notoriety that is
needed to make them marketable. Just get
a skilled team of producers and writers on
it and run whatever “vocals” you can get
through the box. They get to add another
“talent” to their resume and record compa-
nies get more revenue. With these practices
in place, we find ourselves inundated with
songs that sound good, instead of singers
who do.
The usurping of artistry from
the individual to the industry is also made
clear when it comes to the issue of artistic
control. It is extremely uncommon for any
music artist to have majority or full artistic
control. The market created by those who
run the music industry is clearly one based
on the exchange of artistic control for ac-
cess to opportunity. The industry has made
it a primary goal to maintain and exert a tre-
mendous amount of power over any “artist”
it produces. It is often said that “more mon-
ey equals less control”. Record labels are
less willing to invest in a product they have
less control of. That is why this desire is a
major factor when it comes to the selection
and progression of the performers who the
music industry chooses to put its weight be-
hind. The largest contracts are often award-
ed to those willing to accept equity deals in
which they almost completely surrender all
control to producers, promoters, marketing
people, and managers. Artists who desire to
be independent and exercise more creative
freedom are often undesired or languish at a
low level of success, no matter how talent-
ed. It has created a situation where the often
less talented and more malleable rocket to
stardom.
Examples of fabrication are not
hard to find either. We can look at the
“Dream Girls” technique that has been
repeatedly used to dismantle groups in fa-
vor of the more acquiescent “star”, or the
“American Idol” method of picking win-
ners. When so-called artists are minted,
sold, and replaced systematically, the true
artist, in short, is the music industry.
Brenton J. Williams is a J.D candidate at
the University of Miami.
Artists are one of the fundamental
parts of the music industry. So much so
they are the chicken to the egg of the busi-
ness itself; no one knows which came first.
This exact question or rather confusion has
crafted the current climate of music today.
Who is the artist? The term itself is styled in
such a cursory manner that anyone who walks
within five feet of any medium is in danger of
being titled so. No industry is more subject to
this phenomenon than the music industry. We
live in an age of instant fame, where attract-
ing tabloids supplements talent more so than
garnering admiration for their craft. It seems
that “artists” are now those who create a buzz
as opposed to creating anything substantive.
It’s for that very reason the music industry
has become complicit in the dilution of the
term artistry and its function.
In the past, the term artist held
enormous weight to a musician. No matter
what genre, anyone who dared to take up that
mantel had to prove themselves worthy. That
was made especially clear when it came to
the music industry. To be an artist, one had
to be undeniably gifted. Although those who
simply performed had similar functions,
those deemed “artists” provided the rare
glimpse of vocal and musical perfection that
all others sought in their craft. The likes of
Edith Piaf, Frank Sinatra, Shirley Bassey,
and The Beatles set the standard for the art-
istry we revere in the likes of Anita Baker,
Elton John, Prince, and Celine Dion. There is
no doubt that these people have actively em-
bodied and expressed a unique and individu-
al talent. The music industry served to foster
and amplify these artists. There was no seri-
ous need to augment, manipulate, or create
the perception of talent through production.
This is not to say that the industry did not
have any direct impact on the development of
their talent, but it was a tangible product that
was easily ready for distribution.
Being informed of the historical
markers of true artistry, how have we found
ourselves in this current predicament? The
title of “artist” is doled out almost indiscrimi-
nately. It very well seems that anyone who
so chooses can be an “artist”. The music in-
dustry recognized the desire of the masses to
be uniquely creative as an untapped market.
It shifted its model from promoting ‘excep-
tionalism’ to feigning accessibility. With the
use of advanced technology and a well-oiled
Usurping Artistry

Business Articles
Reminiscent of the evolution and
survival of life, the music business transforms
and adapts to its environment. Dealing with
ever thinning returns, the music industry
shifts towards investments on profitable alter-
natives other than recordings. Pop artists, now
especially from the female gender, push music
into ever more theatrical boundaries, and time
and money are spent on visual mediums that
give listeners a fuller sensorial experience.
Music Festivals in summer 2011
mirrored this trend onstage, although to a
lesser extent. Lollapalooza, Austin City Lim-
its Fest, iHeartRadio Fest, and Blue Note Jazz
Festival magnetized music lovers. And , for
the first time, YouTube carried live streaming
of Lollapalooza and ACL. Of course, musi-
cians and some superstar acts saw opportunity
to broaden their fan base and support their
livelihood. Still, even then the two top fes-
tivals, Loolapalooza and Austin City Limits,
did not gross together more than U2 collected
between May 11-24, when it played in Mexico
City, Denver and Salt Lake City.
Lollapalooza (Mid-August) is a
yearly three-day festival showcasing popular
rock, metal, punk, hip hop, indie bands, dance
music, comedy and craft booths. The festival
also bestows platforms for non-profit orga-
nizations and political groups. Lollapalooza
takes place at Grant Park of Chicago, Illinois
and helped expose artists such as Arcade Fire,
Metallica, Red Hot Chili Peppers, Lady Gaga,
Foo Fighters, Green Day and other superstar
acts. This summer, 270,000 fans attended the
festival and more than 140 acts performed
on eight stages. Sponsors included Google+,
BMI, Bud Light, Music Unlimited, and Play-
station. Lollapalooza featured greater names
such as Coldplay, Muse, Girl Talk, Christina
Perri, Eminem, Cee Lo, Deadmau5 and Foo
Fighters and rising acts such as Julia Easter-
lin, Big Bang Boom, L1ght and Happiness
Club. The festival grossed $17 million this
year.
Austin City Limits Music Festi-
val (Mid-September) is a yearly three-day
festival that comes to light in Austin, Texas
at the city’s central public park, Zilker Park.
ACL Fest gathers 130+ acts from the do-
mestic and international scene. These artists
perform rock, indie, and electronic music on
eight stages. Sponsors include Google+, Bud
Light, BMI, and Honda. More than 210,000
fans are present at ACL and attract vendors of
food, art and other local merchants. This year
was highlighted by performances from Kanye
West, Colplay, Stevie Wonder, My Morning
Jacket, Cee Lo Green, Arcade Fire and Manu
Chao. Austin City Limits Music Festival
grossed $15 million.
iHeartRadio Music Festival (Mid-
September) is supported by iHeartRadio, the
interactive media social networking platform
outlet. iHeartRadio was crafted by Clear
Channel Radio in order to amass local radi-
os, personalities and on-demand materials in
one smart-phone streaming application. This
In The Summertime, When The Weather Is Hot
By Frédéric Casimir
company is supported by BlackBerry, iPhone
& iPod Touch, Android, webOS and Windows
Phone 7 technologies. As a promotional tool,
iHeartRadio network fashioned a music festi-
val in Las Vegas and gave away hundreds of
trips and tickets to the event. IHR Fest was
held at the MGM Garden Arena for its inaugu-
ration. Inviting the biggest performers of the
music industry such as Jay-Z, The Black Eyed
Peas, Kelly Clarkson, Bruno Mars, Carrie Un-
derwood, Coldplay, Alicia Keys, Sting, Lady
Gaga, Kenney Chesney, David Guetta, and so
forth, the tickets sold out within 10 minutes
of being on sale to the general public. Ryan
Seacrest and Elvis Duran hosted the inaugural
event. More than 10 million fans viewed the
festival through the iHeartRadio website.
Blue Note Jazz Festival (June 1st-
30th) is an extension of the Blue Note Jazz
Club, inaugurated in 1981. As a tribute for its
30th anniversary this summer, the club kicked
off a festival featuring a variety of prestigious
acts such as Dave Brubeck, Chris Botti, Nancy
Wilson, Roberta Flack, Bobby McFerrin, Cha-
ka Khan, Brian Wilson and many more in Cen-
tral Park and other venues in New York City.
These venues included the Blue Note, Beacon
Theatre, Town Hall, B.B. King Blues Club &
Grill, Le Poisson Rouge, and Rose Hall.
Country Music Association Music
Festival (Early-June) was held at LP Field in
Nashville, Tennessee for four days. It was in-
augurated in 1972 and now casts more than 400
artist and celebrities. This summer, more than
250,000 people attended ticketed shows, auto-
graph sessions and free concerts. Visitors from
forty one countries and all fifty states were
present at the CMA Fest. Country performers
such asAlabama, Sheryl Crow, Kid Rock, Lady
Antebellum, Martina McBride, Shania Twain,
Reba McEntire, Keith Urban and many more
performed at the LP field Stadium. Taylor Swift
closed the festival with her hits “You Belong
with Me”, “Love Story”, “Mean”, and “Fear-
less”.
The following tour highlights are noted, in the
US and abroad:
U2 Grossed $32,559,712; May 11-24,
Estadio Azteca, Mexico City (3 times sold out),
INVESCO Field at Mile High, Denver (sold
out) Rice-Eccles Stadium, Salt Lake City (sold
out) 408,606 tickets sold

Law Section
(From Page 3)
ASCAP and BMI do not require ven-
ue operators to maintain records of the music
they play, relying instead on radio airplay and
other proxies to estimate frequency of perfor-
mance. As noted earlier, however, the PRA
would not require terrestrial broadcasters to
maintain records of the specific recordings they
play. Thus, the convenient “radio proxy” would
not be available for sound recordings. This is
another reason why future versions of the PRA
should require radio stations to engage in some
degree of recordkeeping. In addition, operators
of large commercial venues (or the music ser-
vices with which they have contracts) could be
subject to a limited recordkeeping requirement
— perhaps only for a few days per year — and
these records could be used as proxies for the
smaller venues.
Under their blanket licensing ar-
rangements with ASCAP, BMI, and SESAC,
public venue operators normally pay a license
fee that reflects their revenues as well as the
nature of their business, because music plays a
greater role in some businesses than others. If
the statutory license for public performances of
sound recordings is extended to public venues,
then the Copyright Office will need to take sim-
ilar factors into consideration. The statutory
licensing scheme for digital audio services, and
the proposed extension to terrestrial radio, dis-
tinguishes between services only on the basis of
revenues and audience size; this approach sim-
ply will not work for public venues as varied as
dance clubs and grocery stores.
Fortunately, collecting societies out-
side the United States have already developed
methods for estimating usage of sound record-
ings by public venues as well as broadcasters,
and these methods could serve as useful models
for the United States.
Rate-setting will present another
challenge if the performance right is extended
to public venues. To what extent should the
government play a role in establishing the roy-
alty rate? Should public venues be subject to a
statutory license, with the rate set by the Copy-
right Office, or should the rate be negotiated
by the parties? Should the royalty scheme be
modeled after ASCAP and BMI performance
licenses for musical compositions, with a col-
lecting society (such as SoundExchange) set-
ting a blanket license rate, subject to judicial or
administrative oversight?
There are precedents for both ap-
proaches in other countries, and their models
can offer helpful guidance. If there is no gov-
ernment oversight at all, an impasse in negotia-
tions could harm songwriters and publishers,
whose royalty income depends to a great extent
on public performances of sound recordings.
In contrast, if the license is statutory, or if it is
privately negotiated but subject to government
oversight, this would avoid the bottleneck
problem, but it would also mean that the gov-
ernment entity charged with setting the royalty
rates would have to consider the cumulative ef-
fect of the sound recording royalty combined
with the songwriters’ and publishers’ royalty.
If the cumulative royalty is too high, venues
will cut back on the amount of recorded music
they play; some will stop playing music alto-
gether. Ideally, rate-setting authorities should
ensure that the cumulative burden on music
services and broadcasters is reasonable and not
subject to major fluctuations over time. Thus,
the government will need the authority to re-
duce the ASCAP, BMI, and SESAC licensing
fees – an outcome which songwriters and pub-
lishers have vehemently opposed. Indeed, both
the current statute on sound recording perfor-
mance royalties and the PRA contain language
that precludes the government from reducing
songwriters’ and publishers’ royalties in order
to make room for sound recording royalties.
Clearly, there are substantial obsta-
cles on the road to a full performance right in
sound recordings. These obstacles are routed
in the long-standing perception that the cre-
ative work of performers and record producers
does not deserve the same degree of copyright
protection as the creative work of composers
and publishers. This discrimination has been
known to create strife among band members,
some of whom receive substantial songwriter
royalties while others must settle for the lesser
stream of income generated by performing.
The rest of the world grants performers and re-
cord producers a public performance right far
superior to that of the U.S. If other countries
can overcome the obstacles to a full perfor-
mance right, then the U.S. can do so as well.
Mary LaFrance is IGT Professor of Intellec-
tual Property Law, William S. Boyd School of
Law, University of Nevada, Las Vegas. For the
author’s more detailed treatment of this topic,
see “From Whether to How: The Challenge
of Implementing a Full Public Performance
Right in Sound Recordings”, Harvard Journal
of Sports and Entertainment Law 221 (2011).
U.S. Performance Rights
(From Page 13)
Summertime (cont.)
Enrique Iglesias Grossed $5,305,202;
July 23-28 Acer Arena, Sydney (sold out)
Brisbane Entertainment Centre, Brisbane (sold
out),Rod Laver Arena, Melbourne (2 times
sold out), 37,598 tickets sold
Sade Grossed $4,711,593; Aug. 19-21,
Staples Center, Los Angeles (3 times sold out),
40,810 tickets sold
Katy Perry Grossed $2,332,319; Aug.
13-21; Santa Barbara Bowl, Santa Barbara,
Calif. (2 times sold out),Sprint Center, Kansas
City (sold out), Bridgestone Arena, Nashville
(sold out), Scottrade Center, St. Louis (sold
out), Allstate Arena, Rosemont, Ill. (sold out),
60,437 tickets sold
Keith Urban Grossed $3,090,932; July
28-Aug. 16, Verizon Center, Washington,
D.C., Arena at Gwinnett Center, Duluth, Ga.
(2 shows) , Bridgestone Arena, Nashville (sold
out)
U.S. Bank Arena, Cincinnati, Thompson-Bol-
ing Arena, Knoxville, Tenn., INTRUST Bank
Arena, Wichita, Kan. (sold out), 60,783 tickets
sold.
________________
All the information in this article is from Bill-
board’s Boxscore and Pollstar.

c/o Dr. Peter Alhadeff
1140 Boylston St. FB-359
Boston, MA 02215
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Topics in the next issue:
Facebook Music
Record Company
Valuations
Global Music Rights
The Music Business Journal will be
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times in the Spring, and once in the
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Volume 7, Issue 1 October 2011www.thembj.org
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