ISP Tax – So Crazy It Just Might Work

March 29, 2008

Source: WikipediaReaders of this blog shouldn’t have been surprised by yesterday’s announcement by Warner Music Group that vocal industry critic and “music-like-water” proponent Jim Griffin is to begin the implementation of a voluntary collective licensing scheme.

The rhetoric against the proposal from the blogosphere has been, as usual, brutal and swift. Techcrunch has called the plan both “extortion” and a “protection racket“. It’s unfortunate that a better job hasn’t been done in tackling the fears generated by such a scheme and it should be priority #1 for the newly founded entity headed by Mr. Griffin.

That said, I think overreaction in this case is unhelpful. I find it interesting that there would be support for this idea when it is purely theoretical, but when movements are made to make it a practical solution, the internet erupts in anger.

There are, of course, plenty of reasons why the idea won’t work, why it will be damaging to independent musicians, labels and long-tail artists.

But first and foremost, I know that the Electronic Frontier Foundation’s 2004 proposal of such a scheme is forming the blueprint for the new entity headed by Jim Griffin. And in my conversations with him in the past, he is well aware of the interests and concerns of small, independant artists and I firmly believe he has the interests of artists of all stripes at heart in this.

I don’t think abstention is an option here. If musicians and labels can’t work together to implement a voluntary licensing scheme in the vein of what Griffin & Co are offering, then government will impose such an agreement on artists and labels. We only need look at the mess the Copyright Royalty Board made of Internet Radio licensing rates to see the advantages of working out a business deal well before government gets involved.

This is where we need to act: The power of the long-tail is, of course, volume. It’s up to independent music businesses like the readers of this blog to take this matter into our own hands.

Please get in touch if you like the idea of forming a collective to ensure fair representation around the negotiating table of this scheme. Jim has ensured such a place exists for long-tail artists and labels, and Penny Distribution is working with a number of other indies to make sure our voice is heard.

After all, the internet provides a voice for us like never before, and our priority should be to ensure we have voice as strong as our collective market share.


South By Southwest – Epilogue

March 19, 2008
As the jet lag fades, I’m left with a thousand wonderful memories of my first SXSW.  And sore feet.  Here’s what’s sticking with me:

a) What I’ll miss:   the people and the attitude to music.  It’s in their bloodstream to love live music, to give it room to breathe and to accommodate what’s become an amazing display of creativity in their city every March.   Bravo.
3) What I won’t miss:  Walking a lot (I’m renting a bike next year – or maybe a Segue? ;).  And the heat. 

d)  Thinking of going to Glasto this year?  Oxegen, Reading or Leeds?  Electric Picnic?  Take my advice and follow me:  Save a bit and go to SXSW 2009 instead.  
If you truly love live music, if you revel in the discovery of new, amazing bands and love talking and/or learning about music, then this festival is for you.  The cost of travel & hotel is about the same as a ticket to Glasto and travel back&forth – and if you want to spring for a badge ($400+) or wristband ($169), go ahead…but they’re not essential purchases.  Most shows are free to all comers.  Registration begins in August of 2008.

More importantly, what you’ll get is the world’s most exhilarating live music experience, some of the world’s best barbecue and a lot of new friends.  Not to mention a bed, a shower and a loo that’s not a toxic dumpsite.
R) Despite what some people have said about the validity of the panels and music conference section of SXSW, there was a lot of good information to be gleaned from this year’s panels for any aspiring music business – just like the live shows, it was about doing some research and separating the wheat from the chaff.

$#) The trouble with SXSW is that there’s so much involved, especially when you’re both working and playing as I was, that you’re left with a feeling that you could’ve done some things better.  Here’s a few thoughts I’d had:

i. Despite #R above, I’d probably make the panels less of a priority next time.  Unless the subject was super-relative to my position as a business, I’d probably skip it to avoid some of the more rambling chats on the schedule.  
ii. Making less of an emphasis on the Convention Center panels means more time for attending a few of the abundant Day Parties – I suspected, then later confirmed, that there was more real “business” getting done at these gathering than in the stuffy rooms of SXSW Central.
iii. is, and always will be, my friend.
\m/)  Finally, I saw about 40 shows at the festival.   Here’s my Top 5:
White Denim:   There was nothing I’d seen all week that was better than the 40 minutes of pure energetic, inventive and raucous music White Denim subjected me to (video here). If the Pixies were 20 years younger and these two bands went head to head, White Denim would certainly give them a run for their money. You’d be mad to miss the chance to see a band like this – The best.
Sybris – Back to Maggie Mae’s Gibson room for an intense run in with Absolutely Kosher’s Sybris. Indie rock with teeth and a passion.  I’ve decided that I only want to see bands that absolutely KILL themselves on stage – it’s just too entertaining to watch and I don’t need to see a band standing on stage looking like they’re filing tax returns.  Yay Sybris!
Man Man – A case in point… this is what I want from perfomers – blood, sweat and tears.  Lay down your health for the audience and they’ll follow you anywhere.  I’m a complete convert at this stage.
Via Audio – A show with a completely different vibe.  Playing to a half-empty room (didn’t see that coming) Via Audio were everything I expected and more.  The record has been my go to record for months and I was happy to meet with Jess (sigh) and the lads after the show.  Despite the lackluster turnout, I did hear Jess chatting to a rep from Arts&Crafts after the gig – You heard it hear first, folks!
Jesca Hoop
KCRW approved, Ms Hoop was truly a revelation.  Folky, sultry wonderfulness – a study in understated glory.  Great.

SXSW Day 4 – Music

March 16, 2008

No panels today because there wasn’t much to merit any of them. Or maybe I’d just had enough. At this point of fatigue and indie-rock overload, I think I’m absorbing the rock n’roll “fuck you” attitude via some sort of osmosis. A good thing, I think you’ll agree.

The Acorn was one of about 10 shows I would’ve completely missed if I hadn’t been glued to Twitter all week. Thanks, twitterers! A playful mix of rock, folk with fabulous rhythmic interplay, I’d heard the Acorn record but didn’t realize they were playing. A great way to start the day. Sadly, it was also a great time to start drinking – more on that later.

White Rabbits were, sadly, indie by numbers. So much good things said, so it’s disappointing they’ve so little to say for themselves.

BUT, the act on right after them, Lykke Li, were great! Prior to the show, the only notable thing I’d heard was that they were Swedish and no one really knew how to pronounce their name. We hoped they’d pronounce it from the stage (kindof like when you can’t remember someone’s name and you continue the conversation hoping they’ll drop it) Anyway, the lady fronting the band was superb, sweet and the music was unlike anything at the festival I’d heard – which is saying something.

It was Jason’s idea to go to see Duffy. Why did I trust his judgement? Well, he’d recommeded both Lykke Li AND Jesca Hoop (still one of the highlights of SXSW for me) The best word to describe Duffy? Since she’s Welsh, I’ll use TRIPE. I couldn’t believe the venerable SXSW crowd didn’t storm the stage and start de-limbing the pseudo-crooner and her label assembled cronies she calls a band. It made me mad. ANGRY, I tell you.

So, I left sans entourage to see Sean Hayes at the SF-SXSW showcase. I lived in San Francisco for 6 years and had yet to see the SF instituion that is Mr. Hayes. I bumped into Paul Schreiber (still amazing I can bump into people at a fest with 20,000+ people) who wittily quoted Mae West “Marriage is an institution. I just don’t think I’m ready for an institution”. Oh, and congrats to the folks at TalkingHouse (SF represent!) records for putting on a swell showcase yesterday!

Another twitter tip (this time from Pandora’s Michael Zapruder) led me to Emo’s Annex for Philly’s The Teeth. A little too quirky for their own good, they brought a lively stage show but no songs. Pity.

I’ve been unwilling to walk long distances over the last day or two because of the state of my feet. It’d take quite a band to get me marching the sort of distance that I endured to see El-P on Tuesday. Thankfully, Oakland, CA’s WHY? were just that band. Frontman Paul is a graduate from the Subtle school of freaked-out hip-hop, and their first album was better than great. The show was astonishing.

And so, my final show of SXSW was upon me. It was a sad moment, but my meloncholia didn’t last long because I’d picked White Denim as a closer to this 4 day orgy of live music. It’s probably a little silly to say I’d saved the best for last, but I REALLY did. There was nothing I’d seen all week that was better than the 40 minutes of pure energetic, inventive and raucous music White Denim subjected me to (video here). If the Pixies were 20 years younger and these two bands went head to head, White Denim would certainly give them a run for their money. You’d be mad to miss the chance to see a band like this – they’re a group that people will be talking about for years to come.

So that was my first SXSW. I learned a lot…I’m planning on a recap, but right now I need to sleep. On the floor. In the airport.

SXSW Day 3 – Music

March 15, 2008

A bit of a lighter day, music wise, yesterday. I think I’m getting the hang of this thing – I’m still missing bands that I want to see, but handily, they usually have another showcase later in the week.

We begin at the NIMIC showcase. The place was PACKED for the Norn Iron lineup (yay!) and Oppenheimer blew the roof off, also showcasing their new 4-piece lineup for the first time (including Angie on keys/vocals and Hornby on guitar). The new material is cracker. I checked out a couple of tracks from The Answer and caught up with a few old friends before heading for the Music, Ubiquity and Media panel. As I mentioned in my last post, I spent a good part of the evening discussing the future of music at dinner.

When I did finally get to the music it was, as always, hit and miss. But following the “3-song rule” ruthlessly paid dividends (if you’re not into a band after 3 songs, leave and go someplace else). As always, the top shows start the list, today a tie for the top spot:

60 Watt Kid – Maggie Mae’s Gibson room has become my little hideout fromt he madness of 6th St. It’s never overcrowded, has cold beer and good bands. It’s around the corner from the main venue and just feels like a wee secret place. This was Absolutely Kosher’s night – 60 Watt Kid and Sybris (below) were both highlights. Animal Collective-esque madness+leadsinger who can robot = highly good time.

Sybris – Back to Maggie Mae’s Gibson room for an intense run in with Absolutely Kosher’s Sybris. Indie rock with teeth and a passion. Half way through one song, a short beardy man jumped on stage to perform a brief death-metal growling accompaniment to the song – the band members seemed surprised but obviously recognized him so just laughed it off. At the end the same guy was handing out samplers – turns out he’s the A&R head at AbKosh who’d signed Sybris!

Statues of Fire – This was a pick I made after hearing half-an-MP3. A poor man’s The Answer, it was a very “what was I thinking?” moment. I couldn’t even be arsed to find a link to the band.

MGMT – Yes, “time to pretend” is an amazing single and is every twenty-something, iPhone toting office workers wet dream. But the live show was too loud so all subtlety was lost and the crowd was so TRYING to like them but were just bored. Despite the massive crowd and line, it was 3 songs and out for MGMT.

These United States – Recently signed to the wonderful What Are Records?, TUS’s record was an instant hit around the Penny offices when we first heard it. Americana-folk with a razor’s edge, the show was understated and wonderful. They’ve been invited to play Glastonbury this year, so can’t wait to see what their UK tour lines up like.

Destroyer – Destroyer’s Rubies was my fave record of 2006 and I was very excited to see Dan Bejar (of New Pornographers fame) perform. Wordy rock with a Dylan-esque streak, it just didn’t translate well on stage. The performers all seemed pissed off to be there and not very interested in even staying in tune. So, with heavy heart, it was 3 songs and done.

SXSW Day 3 – Ubiquity, Music & Media Panel

March 15, 2008

The only panel I attended yesterday was a corker.  Coming off the back of news that labels are warming to the idea of an ISP surcharge to pay content creators (an idea proposed by one of the panelists, Jim Griffin) there was great anticipation for the panel at SXSW.  Here’s what went down:


Peter Jenner – IMF (International Managers Foundation)

Dena LaPolt – Entertainment Attorney (Estates of Motley Crue, 2Pac Shakur)

Jim Griffin – Digital Music Strategist

Eric Garland – Big Champagne

Sandy Pearlman – McGill University (Producer of the Clash and Motorhead)

Moderator – ?

Given the way things have changed, how do we move forward and compensate rightsholders?

EG:  In the US alone there 110 million households with a PC, 1/3 of which have an active P2P software connection.  25 million people are actively taking music for free to the tune of billions of files a month.  You can’t now try an install a system whereby they must ask permission – that ship has sailed.  It’s a huge marketplace that’s not a marketplace.

Moderator:  Jim, give us your reaction to the Wired piece.

JG:  Well, I think that a lot of the “facts” are inaccurate.  I didn’t cooperate with the piece.  But the overall thrust of the idea is there.

That said, I’m against government involvement at all.  I also don’t favor a tax.  The underpinnings of the idea are basically a network licensing model.  If you examine all media today, but the Music Industry in particular, it’s become voluntary to pay.  The whole industry currently functions as a tip jar.  I don’t think a culture can function on a model such as this, but neither can we condition access to the size of one’s wallet.  It’s not just the internet – it’s the exponential growth of networks over the next 3-5 years that presents a major challenge.

We have to make it roughly involuntary to pay.  The sports industry, although a valuable cultural commodity, is roughly free to watch the world over.  Again, what I’m proposing is not a government but a BUSINESS deal.  A kind of volutary blanket license.  Build a base of income to replace that which we’ve lost.

The biggest switch is from a product based model to a service based one.  You simply can’t get 5c for every copy of a song on the internet – it’s not scalable.  In 7-10 years there’ll be 750 mil people with a Wi-Fi connection, and that’s only the US and Western Europe.

I believe a process like this needs to start with Universities – the place to change the net is at the Universities.

DLP:  At the end of the day I’m in favor of whatever pays artists for their work.  We can’t give way to every new technology that comes along.  We must pay creators.  I’d propose  a new copyright model that new business models can build into their plans.  But today we’re not in the recorded music business – we’re building brands and for the first time in 80 years, recorded music is ancilliary to that.

MOD:  So what do we do with the people who survive purely on recorded music revenues?

DLP:  Get a new manager to re-invent you!  I also think the fact that the US doesn’ t pay a  performance royalty, given the fact that the even North Korea does, is a disgrace and it’s important now to have that implemented.

JG:  (in response to DLP) Publishing companies have seen their revenues double, triple year-over year.  We need to stop thinking like a product company.  If music draws a crowd, there should be some kind of compensation for the creator, but we need to stop thinking on a unit-by-unit basis.  The answer to each dilemma is to license.
MOD:  How do we get each party on board?

PJ:  It’ll be on a case-by case basis.  I thought the most interesting thing about Radiohead’s experiment was the realization that there were different markets for the same record.  To be #1 on iTunes, Amazon, Limewire at the same time as giving away your record is amazing.  We need to be smarter in understanding how and why people use music.

JG:  Music 2.0 is about starting relationships that never end.  It’s about the fans…in a product model, when you sold a record, you were reducing the number of copies in the marketplace, but when you share a file you’re actually increasing the availability of  the music exponentially but you, as distributor, don’t lose anything.

DLP:  The access to the artist is very important also.  LiveNation is the biggest competitor to the labels at the moment because it’s embracing new models and empowering the artist.  Labels never saw the artist/label relationship as a partnership (they’d withold information on stores, contacts etc.).  Now I feel like they came in and took a shit on my desk, and I have to figure out how to get rid of it.

MOD:  Eric, how do we get all the parties together?

EG:  Strange bedfellows are made on a cold winters night.  It’s no coincidence that ISPs are meeting with labels – even tech companies (Imeem, LastFM) are realizing that they have a core product that is being devalued.

MOD:  Can you track and pay on this kind of scale we’re proposing?

EG:  Absolutely.  It’s actually easier to account for track movement online than off.  Big Champagne tracks 20 million IPs per month that are active file-sharers and you can not only filter the files by artist and album but by song and version of song.   The technology is there to do that.

MOD:  How do you get an ISP tax without Govt. involvement?

JG:  Before we get involved with the government, we need to get our own house in order.  I think any governmental involvement would be an absolute last resort – as any lawyer will tell you, something you agree to is always better than something imposed on you.


I was lucky enough to have dinner with Jim, Sandy and Brian Zisk (Director of the Future of Music Coalition) after the panel -the conversations I had in that two hour span were the most informed, entertaining and downright enlightening I’ve had in my 6 years in the business.  The short version is that I’m convinced that Jim’s plan is not just a theory, but will before too long become an actuality.

I plan to blog more about it when I get back from SXSW, but I’d advise any musician, music business or music entrepreneur to seriously re-examine their business plans in light of the strong possibility that such a surcharge will be introduced in the not-too-distant future.

SXSW Day 2 – Music

March 14, 2008

OK, this’ll have to be quick – but the best music night so far was last night – the Top 3 shows here were ALL earth-shatteringly great, but in totally different ways, not least that the genres couldn’t be more different.  I suppose that’s SXSW in a nutshell – an amazing concentration of an amazing array of live music.

Man Man – A truly amazing live show – this is what I want from perfomers – blood, sweat and tears.  Lay down your health for the audience and they’ll follow you anywhere.  I’m a complete convert at this stage (pics to come – I didn’t bring my camera’s USB cable)

El-P – The man behind Def Jux blew the roof off the already out-doors Scoot Inn.  The Scoot is a good mile and a half from the SXSW hub of 6th St., so a bit of walking was in order through a REAL Austin neighborhood.  And I mean that in a good way.  Absolutely earth-shattering stuff, El Producto killed it.  (GREAT pics to come)

Via Audio – A show with a completely different vibe.  Playing to a half-empty room (didn’t see that coming) Via Audio were everything I expected and more.  The record has been my go to record for months and I was happy to meet with Jess (sigh) and the lads after the show.  Despite the lackluster turnout, I did hear Jess chatting to a rep from Arts&Crafts after the gig – You heard it hear first, folks! (more pics to come!)

Jesse Harris – A random revelation, Jesse’s a cross between Eliot Smith and Califone, although I’ve yet to hear the record.  Incidentally, his show took place on the 19th floor of the Hilton in Downtown Austin.  It was a wonderful repreive from the chaos of 6th St., with an amazing view of downtown…sweet.

The Answer – I’ve never claimed to be a fan of Answer’s music, but their impact on stage at the BatBar yesterday was undeniable.  Raucous, high-energy, shameless rock.  I don’t care who you are, there’s always room for that.  Brought the house down.   I’d suggest you check them live before you totally dismiss them.

SXSW Day 2 – Music Supervision Panel

March 14, 2008

The real panel of interest for me yesterday was the “On Set with Music Supervisors” panel. It was frustrating at times as the panelists joked among themselves for large parts of the program (as those of you following my twitter know)LINK but it certainly offered some good advice as well.

It should’ve been open to questions from the audience sooner as the place was packed and there was an anticipation in the air, but anyway. Panelists included:

Alison Schneider – Music Supervisor, NBC

Lyle Hysen – Bank Robber Music (Sync placement for Barsuk, Beggars)

Jennifer Czeisler – VP Licensing SubPop

Gary Calamar – GO! Music Services(Supervision)

J. Cohen – (Moderator)

CZ: Licensing income has increased steadily since 2000. As the volume of deals increases, the amount per deal is squeezed a little by licencees. There aren’t as many large licensing deals available

HY: But because of the increase in the use of music by advertisers etc. there are more opportunities to license music than before.

SCH: There’s also been a changing of the guard since 2000 of music supervisors and music licensors at the content owners companies. A younger (35-50) set of people are making the decisions which is opening opportunities for more interesting music to be included.

COH: At what point during production of a show/movie does a supervisor get involved?

CAL: It depends on the project, but the ideal situation is an early viewing of the script so you can think of ideas then a spot meeting with the producer director a week or two after shoot to show ideas. Ideally, they love your ideas and you can go about getting the clearances.

COH: How many people are there who do this kind of job (music supervision)

CZ: We mail to around 240 key players. (SCH thinks that’s a high number, and that it’s closer to 4o. Judging by the tone of the panel – it’s buddy-buddy nature – I’d tend to agree with SCH, Ed.)

CZ: We use licensing now as a much larger part of the overall marketing of a record than before. We have meetings with the marketing dept. and the artist during the release schedule to determine an artists feelings about licensing, what they wouldn’t be comfortable licensing their music for and also to get a feel from marketing about where a licensing synergy might exist.

CZ: Ideally, we’d like a placement in a commercial or show to coincide with a record release date.

HY: I often get that sort of request but given the process, as well as the nature of supervision (i.e. music has to fit the scene) it’s usually very difficult to manufacture that kind of “timed” inclusion, although some networks/producers are more open than others to “bending” the will of the script to fit the song etc.

CZ: That said, any use at all is beneficial – it prolongs the life of the record, even if it’s used 6-12 months after release.

HY: The trouble is licensing has become a last-gasp for some, and by it’s nature, it can’t be used that way. I’ve received calls from folks saying “You’ve got to get me in One Tree Hill because I need to pay the electric bill”. That’s not going to work.

CAL: Overall, though, unless the act included in the show/commercial is of a significant size, my experience is that there’s not a huge sales-bump in the record.

COH: How do you prefer to be approached by potential licensors?

CAL: Do your research. Is it something I could use? What projects am I working on now that it might suit. Just drop me an email and we can talk.

An indie artist at the front then mentioned that she’d been approached for a license by Lionsgate, but they’d asked for her publishing rights in the song. The entire panel agreed that this was only a Lionsgate practice and that it was wrong to ask for such rights.

COH: (TO CZ)You’d mentioned that labels had become more proactive in their licensing efforts lately. Can you describe the process of being more proactive?

CZ: Well, obviously getting the music into people’s hands is important – inviting folks to shows. But overall developing good working relationships with people is key. There are lists that provide information on music supervisors, who they are, what they’re working on etc., but they’re not particularly effective.