Rolling Stone on Music Economics

The New Economics of the Music Industry [pdf] (some nice charts with revenue distributions here)

In the old days, it was much easier for pop stars to keep up with how much they were getting paid. Somebody would buy a CD at a Tower Records for $15 and a few dollars would appear months later on the stars royalty sheet. Then iTunes took over the record business, and it was even easier if not more profitable – every time somebody bought a 99-cent track, a few pennies went into the artists bank account.

Those were such simple times. Today, music fans play free music videos on YouTube, stream songs for free on Spotify, MOG or Rdio, customize Internet radio stations on Pandora or Slacker and consume music a zillion different ways. The fractions of pennies artists make for each of these services are nearly impossible to track – at least for now. “People like to simplify this and say, Theres no money in it,” says Jeff Price, founder of TuneCore, which charges artists to place songs directly into iTunes, Spotify and others. “But its complex, its complicated and its still being worked out.”

Artist’s Resale Royalties

This is going to be quite a case: Artists File Suit Against Sotheby’s, Christie’s and eBay [pdf]

When the taxi baron Robert Scull sold part of his art collection in a 1973 auction that is considered the beginning of today’s money-soused contemporary-art market, several artists watched the proceedings from a standing-room-only section in the back. There, Robert Rauschenberg saw his 1958 painting “Thaw,” originally sold to Scull for $900, bring down the gavel at $85,000. At the end of the Sotheby Parke Bernet sale, Rauschenberg shoved Scull and yelled that he didn’t want to work so hard “just for you to make that profit.”

The uproar that followed led the California legislature to pass a law, the California Resale Royalties Act, requiring anyone reselling a piece of fine art who lives in the state, or who sells the art there for $1,000 or more, to pay the artist 5 percent of the resale price.

That law is now at the center of a pair of class-action suits brought by the artists Chuck Close and Laddie John Dill and the estate of the sculptor Robert Graham against the auction powerhouses Sotheby’s and Christie’s and the online auction site eBay for failure to pay royalties.

“It’s a question of basic fairness,” Mr. Close said recently in an interview. When purchasers are getting extraordinary returns on their investment, he said, a royalty resale law allows the artist to share, at least in a small way, in the increase in value. (Under the California law, no payment is due if the price drops.)

[…] John Henry Merryman, a law professor at Stanford University and an expert on art and cultural-property law, said that advocates of the droit de suite ignore how the art market operates. The increased price for Rauschenberg’s “Thaw” at the Scull auction was due not only to the artist’s continuing creative efforts, he said, but also to the dealers, collectors, auction houses and critics who took a risk in supporting and buying Rauschenberg’s work before he was famous. He noted that the increased price for a single painting simultaneously raises the value of all the artist’s work.

Mr. Merryman dismissed the argument that the droit de suite was analogous to music or literary royalties. “The idea that somehow artists are hurt because they don’t have copyright is nonsense,” he said. Artists retain copyright and must be compensated if their work is reproduced. The difference, he explained, is that “the realization of a work of art is in exhibition, not in duplication.”

The Whitney Museum of American Art at one time compensated artists for exhibiting their work. The idea never caught on, but it makes more sense, Mr. Merryman said.

I look forward to an explanation of exactly how this constitutes “fairness” in this context. Absent a finding that US copyright law is going to move toward a wider application of European droit d’auteur (and, as the article states, droit de suite), I cannot imagine this is going to go very far — but never say never…..

Hope Springs Eternal

I still don’t believe in psycho-history — but I do believe in the infinite attractiveness of the surveillance state: U.S. Intelligence Unit Aims to Build a ‘Data Eye in the Sky’ [pdf]

It is intended to be an entirely automated system, a “data eye in the sky” without human intervention, according to the program proposal. The research would not be limited to political and economic events, but would also explore the ability to predict pandemics and other types of widespread contagion, something that has been pursued independently by civilian researchers and by companies like Google.

Some social scientists and advocates of privacy rights are deeply skeptical of the project, saying it evokes queasy memories of Total Information Awareness, a post-9/11 Pentagon program that proposed hunting for potential attackers by identifying patterns in vast collections of public and private data: telephone calling records, e-mail, travel data, visa and passport information, and credit card transactions.

“I have Total Information Awareness flashbacks when things like this happen,” said David Price, an anthropologist at St. Martin’s University in Lacey, Wash., who has written about cooperation between social scientists and intelligence agencies. “On the one hand it’s understandable for a nation-state to want to track things like the outbreak of a pandemic, but I have to wonder about the total automation of this and what productive will come of it.”

Democratization of the Surveillance State

Help Wanted – Busybodies with Cameras [pdf]

Known here sarcastically as paparazzi, people like Mr. Im stalk their prey and capture them on film. But it is not celebrities, politicians or even hardened criminals they pursue. Rather, they roam cities secretly videotaping fellow citizens breaking the law, deliver the evidence to government officials and collect the rewards.

“Some people hate us,” said Mr. Im. “But we’re only doing what the law encourages.”

[…] “I’m making three times what I made as an English tutor,” said Mr. Im, 39, who began his new line of work around seven years ago and says he makes about $85,000 a year.

Bounties have a history in South Korea; for decades, the government has offered generous rewards to people who turned in North Korean spies. But in recent years, various government agencies have set up similar programs for anyone reporting mainly petty crimes, some as minor as a motorist tossing a cigarette butt out the window.

Snitching for pay has become especially popular since the world’s economic troubles slowed South Korea’s powerful economy. Paparazzi say most of their ranks are people who have lost their jobs in the downturn and are drawn by media reports of fellow Koreans making tens of thousands of dollars a year reporting crimes.

Another OnStar Challenger

It looks like typical Senatorial grand-standing, until you get to the last paragraph of the quote below: NY Sen. Schumer accuses OnStar of invading privacy [pdf]

The OnStar automobile communication service used by 6 million Americans maintains its two-way connection with a customer even after the service is discontinued, while reserving the right to sell data from that connection.

U.S. Sen. Charles Schumer of New York says thats a blatant invasion of privacy and is calling on the Federal Trade Commission to investigate. But OnStar says former customers can stop the two-way transmission, and no driving data of customers has been shared or sold.

“OnStar is attempting one of the most brazen invasions of privacy in recent memory,” said Schumer, a Democrat. “I urge OnStar to abandon this policy.”

But the General Motors Corp. OnStar service says customers are thoroughly informed of the new practice. If a customer says he or she doesn’t want to have data collected after service is ended, OnStar disconnects the tracking.

And although OnStar reserves the right to share or sell data on customers’ speed, location, use of seat belts and other practices, a spokesman says it hasn’t done so and doesn’t plan to.

… until OnStar gets a subpoena or a National Security letter, for example.

Ya Think?!

Well, they’re still probably ahead of the music industry — Movie studios give up the DVD ghost, look to the Internet [pdf]

After desperate attempts to prop up the industrys once-thriving DVD business, studio executives now believe the only hope of turning around a 40% decline in home entertainment revenue lies in rapidly accelerating the delivery of movies over the Internet.

[…] “The days of baby steps on the Internet are over,” said David Bishop, president of Sony Pictures’ home entertainment unit. “It’s now critical that we experiment as much as possible and determine how to build a vibrant market for collecting digital movies.”

New Advances in “Works for Hire”

Computer-Generated Articles Are Gaining Traction [pdf]

The company’s software takes data, like that from sports statistics, company financial reports and housing starts and sales, and turns it into articles. For years, programmers have experimented with software that wrote such articles, typically for sports events, but these efforts had a formulaic, fill-in-the-blank style. They read as if a machine wrote them.

But Narrative Science is based on more than a decade of research, led by two of the company’s founders, Kris Hammond and Larry Birnbaum, co-directors of the Intelligent Information Laboratory at Northwestern University, which holds a stake in the company. And the articles produced by Narrative Science are different.

“I thought it was magic,” says Roger Lee, a general partner of Battery Ventures, which led a $6 million investment in the company earlier this year. “It’s as if a human wrote it.”

Experts in artificial intelligence and language are also impressed, if less enthralled. Oren Etzioni, a computer scientist at the University of Washington, says, “The quality of the narrative produced was quite good,” as if written by a human, if not an accomplished wordsmith. Narrative Science, Mr. Etzioni says, points to a larger trend in computing of “the increasing sophistication in automatic language understanding and, now, language generation.”

As usual, the reason it’s impressive is that it works at all, not that it’s producing deathless prose. But, it seems like it would be a great tool for first pass writing, with a human cleaning it up afterward. Of course, at that point, the question of whose writing it is also starts to get very murky….

A Nice Comment on the MPAA from Pajiba

A rant from one of my favorite websites for movie reviews: Box Office Records and Whining Twatwaffles of the MPAA discussing this MPAA infographic/propoganda [local copy]:

So according to the MPAA, piracy cost them $58 billion last year, making movie piracy a bigger industry than the GDPs of 10 American states. To put it even starker perspective, look at it this way. The film industry gets about $10 billion from the box office, and about $30 billion from the after market of DVDs, streaming, etc. So they’re claiming that piracy costs them almost two-thirds of their business. At $10 per DVD, every household in the United States would be buying an additional 50 DVDs per year if they weren’t so busy downloading. The technical term for a statistic like that is “fictional.”

[…] There are a couple numbers on that infographic though that do matter, the figures about employment and jobs. Sure, they’re victim to hyperbole as well, seeming to count every one who ever sold a cup of coffee to an actor, but there’s a hint of truth in there. The film industry is one of the rock solid cornerstones of the American economy. 96% of tickets sold in America are for American films, and even more tickets are sold overseas. Industries have faded, factories have closed, but movies still get made here. That’s the angle the MPAA should take instead of this exhausting and alienating shame show. Play to the pride and patriotism of being the place that makes the world’s dreams.

For Your Daily Dose of Irony….

Kind of like discovering that Martin Luther King’s “I Have A Dream” speech is not a part of the public domain; another piece of “owned” culture: Masked Anonymous Protesters Aid Time Warner’s Profits [pdf]

When members appear in public to protest censorship and what they view as corruption, they don a plastic mask of Guy Fawkes, the 17th-century Englishman who tried to blow up the Houses of Parliament.

Stark white, with blushed pink cheeks, a wide grin and a thin black mustache and goatee, the mask resonates with the hackers because it was worn by a rogue anarchist challenging an authoritarian government in “V for Vendetta,” the movie produced in 2006 by Warner Brothers.

What few people seem to know, though, is that Time Warner, one of the largest media companies in the world and parent of Warner Brothers, owns the rights to the image and is paid a licensing fee with the sale of each mask.

More On Recording “Works for Hire” and Termination Rights

This is a strange one. Certainly, Rep. Conyers has been around long enough to know how difficult it is to legislate around copyright law (see Jessica Litman’s Digital Copyright) So you have to wonder what’s the real agenda here — is it really just about pre-empting judicial review and limiting the associated transactions costs for everyone?: Representative John Conyers Wants Copyright Law Revision [pdf]

Arguing that Congress has an obligation “to preserve fairness and justice for artists,” the senior Democrat on the House Judiciary Committee has called for a revision of United States copyright law to remove ambiguities in the current statute about who is eligible to reclaim ownership rights to songs and sound recordings.