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Music News
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Campaign Against Downloaders Broadens Around the World
New Beck Album Ruled Not Eligible for U.K. Chart; Major Labels Jump Into Bed with YouTube; Payola Lawsuits Move Forward
The major label record industry is stepping up its campaign once again against people that download songs from free music sites. Over 8,000 new cases in 17 countries have been announced, including the first cases against illegal file-sharing in the two biggest markets of South America and in Eastern Europe. Over 13,000 legal actions have now been taken outside the United States.
Legal actions are being extended to Brazil, where more than 1 billion music tracks were illegally downloaded last year. Brazilbs record company revenues have been cut nearly in half since 2000. Mexico and Poland are also seeing lawsuits for the first time, while a further 14 countries are launching fresh actions against illegal file-sharing.
As usual, they are targeting casual users, hoping it will serve to dissuade people from downloading. Legal actions are being brought against a laboratory assistant in Finland, a German parson and students everywhere. Many of those are parents whose children have been illegally file-sharing. They are finding that in many countries they are liable for any activities third parties undertake using their Internet connection. In Argentina, one mother made her son sell off his car to pay her back for the settlement fee.
One of the reasons the recording industry was making so much money over the previous 10 years was the widespread conversion of music collections by consumers from album to CD. This was largely responsible for the large back-catalog sales labels enjoyed. In an attempt to once again increase catalog sales, and encourage downloaders to join the fray, the Verve Music Group released 10 budget-priced albums last month from classic jazz and R&B artists. Dubbed the "To Go" series, the albums offer six songs from artists such as Nina Simone, Billie Holiday, Ella Fitzgerald, John Coltrane and Louis Armstrong and are priced at $4.99.
Packaged in a slipcase, the CD covers are designed to emphasize downloading, and Verve is asking retailers to creatively stock the albums. For instance, Best Buy will carry the collections in endcaps near digital media players and accessories.
>Beck<'s new album, The Information, could sell a million copies and still not be considered for placement on the U.K. album chart. The U.K.'s Official Chart Company has ruled that the album contains cover art and packaging that give it an "unfair advantage" and therefore will not be eligible to chart in the region.
The unique packaging includes four random sticker sets designed by artists handpicked by Beck, allowing fans to customize their own album covers. "It's an unconventional package, but it shouldn't be penalized for that," said Beck. "Any art on a CD is an incentive to buy and listen. Ultimately, it doesn't matter. The response from the fans has been so strong, and that is the most important thing." The packaging will not affect its placement on any of the Billlboard charts in the U.S.
Video-sharing website YouTube struck deals with the Universal Music Group, Sony BMG Music Entertainment and >CBS Corp<. Universal said it agreed to give YouTube viewers access to thousands of music videos. The company said it and its artists will be compensated not just for the official videos, but also for user-generated content that incorporates Universal's music.
Sony BMG also said it will make video content available on YouTube, and will also let YouTube users include some catalog songs in their own amateur video uploads. They will share advertising revenue with YouTube for all music videos that incorporate audio or video works from the Sony BMG library.
CBS, meanwhile, will provide short-form video content for a CBS "brand channel" on YouTube's site, including news, sports, Showtime and prime-time programming. Among the offerings CBS said it plans to offer are short clips from top programs, including Survivor, as well as mini-previews for new fall shows.
In a case where a company, Entercom, tried to get out of the charges against it by New York State Attorney General Eliot Spitzer, a New York State Supreme Court judge has denied their motion, clearing the way for the New York State Attorney General's payola case to move forward.
The decision, which comes six months after Entercom's filing, allows Spitzer's first pay-for-play complaint brought against a radio company for fraud and deceptive business practices to proceed to the next phase.
In its motion for dismissal, Entercom cited New York law stating that compliance with federal law is a "complete defense" against state consumer-protection laws. Entercom said it complied fully with federal law in disclosing when it accepted payment for airplay and that Spitzer has no authority to enforce federal payola laws. But the judge said that doesn't preclude the attorney general from enforcing consumer protection statutes that prohibit deceptive business practices.
Among other charges, Spitzer alleges that Entercom's CD Preview is materially deceptive, even though the overnight paid spins program disclosed on-air that record companies were paying for play. But the judge drew a distinction between two types of listeners: the traditional listener, or consumer who was informed, and monitoring services such as Nielsen BDS, which "listen" for the song's inaudible electronic fingerprint to compile airplay charts. Since there was no disclosure to this second type of listener, Entercom helped generate misleading chart information to the detriment of consumers.
Spitzer's lawsuit brought to light a mountain of Entercom
e-mails, which he says show that the company has "repeatedly engaged in a deceptive scheme" of choosing songs for airplay based on payments or non-cash consideration from labels and independent promoters without disclosure to the public and has done so with the "knowledge and encouragement" of its "corporate leadership."
Since Spitzer's sweeping payola probe began two years ago, all four major-label groups have agreed to multi-million dollar settlements and reforms that dramatically alter how they interact with radio stations.
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