A look at indie distribution

            Independent record labels are being credited with helping the music industry. For only two weeks of the last three months of 2012, a non-independent label album topped the Billboard 200. The two records were Unapologetic by Rihanna on Def Jam and Girl on Fire by Alicia Keys on RCA. This is important because it was what sold the most during the ever-important holiday season. The albums leading the charge included Babel by Mumford and Sons on Glassnote, Night Train by Jason Aldean on Broken Bow Records, and Red by Taylor Swift on Big Machine Label Group. Also fitting the trend, the last 5 Grammy Album of the Year winners, Raising Sand by Robert Plant and Alison Krauss, Fearless by Taylor Swift, The Suburbs by Arcade Fire, 21 by Adele, and Babel, have all been independent label releases.

            But how independent are these releases? How do a small band like Mumford & Sons and an indie label like Glassnote get so big they are industry darlings? The truth is they get there with the support network major label releases get. Most independent labels have a distribution deal with one of three distribution companies owned by a major label. The most prominent one is RED Distribution, owned by Sony Music. The company began its start in 1979 distributing hard rock records as Important Record Distributors. IRD then formed a label called Relativity that became one of heavy metal’s biggest labels. In 1990, new management arrived and skewed the label toward hip-hop. Sony also acquired 50% of the company at this point, laying the groundwork for it’s current position. The company was renamed Relativity Entertainment Distribution as well. The company then began to acquire more labels for distribution in the 1990s. Sony took over full control in 2007. Following the success of RED, Warner Music Group founded its own distribution in 1993, called Alternative Distribution Alliance. Universal Music also has a distribution arm but it is not as large or successful as the previous two.

            Now, some might say that the majors having a hand in independent music be a bad idea but so far, it was worked perfectly. The independent labels and the artists they work with continue to do the work they desire. They in turn take their product to these distribution arms that do the hard work of promoting and marketing he album. They also take out a lot of legwork of manufacturing and getting physical copies to stores. This is why Taylor Swift may be an independent artist but can have her record be a Target exclusive and have billboard everywhere. I think it’s a fabulous idea in an era where the bottom line has become too important a force in how records are made and artists are selected. It allows indie labels to take a chance because less overhead is needed to launch their career. Without, I think many of the current trends in music, such as New Folk, crooner Frank Ocean and the Odd Future collective, and indie bands such as Arcade Fire and The Black Keys wouldn’t have the outreach to breakthrough.

The Grammys Sales Boost is still in effect

           Last week, some of the best records of 2011 and 2012 competed for music biggest awards, the Grammys. Whether you believe the show is an old irrelevant milestone of the industry or has started to push mainstream music, you can’t deny the awards still have pull among music buyers. In an article from the New York Daily News, Grammy winning albums, except for a few exceptions, again experienced a sales boost. The award ceremony was interesting because it presented a situation where there was no clear winner for many of the major categories, unlike the previous where Adele dominated for her album 21. The pre-telecast ceremony seemed to clear some of the mystery as the Black Keys picked up Best Rock Album, Best Rock Performance, and Best Rock Song and Mumford & Sons losing their album’s category, Best Americana Album to Bonnie Raitt. It is unusual that an album that loses its genre category and wins larger awards. However, Grammy voters turned out to spread the awards around. Record of the Year went to Gotye for “Somebody That I Used to Know,” Song of the Year went to fun. with Janelle Monae for “We Are Young,” and bucking award trends, Mumford and Sons won Album of the Year for “Babel.”

            “Babel” rode the win to boost sales 242% and put the record back atop the Billboard 200. The album’s sales went from 54,000 a week before to 185,000 the week after. The band fun.’s album “Some Nights” went up 188% to go from 14 to 7. Gotye’s “Making Mirrors” rose to number 75 boosting 100%. The Black Keys’ “El Camino,” which was released in December of 2011, rose to number 14, representing a 135% boost in sales. Even those who didn’t win any awards managed to get a boost as well, Jack White and the Alabama Shakes managed to have huge boots for their records, “Blunderbuss” and “Boys and Girls.” These numbers don’t lie and prove that while some see the Grammy awards being irrelevant, the awards clearly still have a huge impact on mainstream music buyers.

Copyright and Trademarks Podcast Lessons

            Copyright and Trademarks are two very important aspects of any business agreement. It is very important to protect those items that make a business unique so that the business continues to stand off and fight off copycats. The following podcasts took a look at these aspects and passed on some good ideas and warnings on these aspects. ARC Law Group’s Business, Entertainment, Sports, and Technology Law Blog podcast sets up the basics of a trademark. According to attorney Mark A. Pearson, a trademark could be word, design, or sound that give a person the origin of goods or services and not the goods or services alone. This gives the consumer of where the item is coming from. A totally made up word is a great trademark because it’d be hard for anyone else could be close. You can register a trademark with the US Patent and Trademark Office. Basic common law protection but really needs to be registered. The mark "™" is for common law usage of term. The mark “®” means that the trademark has gone through the application process with USPTO. This is important because it is important to research what marks are registered so that and realted trademarks cannot be used. It also means that our merchandise would not be trademarked just the fact that it’s coming from the Phishsonian.

            Entertainment Law Update’s podcast from July 5, 2012 had two interesting cases relating to trademarks. The first was that Lady Gaga wants the US Patent and Trademark office to cancel the “Gaga Pure Platinum” mark so that she can register “Lady Gaga” and “Haus of Gaga” but the cosmetic company continues to say it is in use.  This would relate to my business plan because see if there are related marks that would make it hard to trademark the name “Phishsonian”. The second case is that the University of Alabama is in a lawsuit with artist Daniel Moore over his paintings that portray moments in the school’s football team’s history. The school claims that the portrayal of the uniforms is a violation of trademark. The lawsuit found that the trademark was not infringed. This could be important in that that artwork of the museum or band may not infringe our trademarks and there would be no legal precedent to go after these items.

            The Nicholas Talks at Duke University had an interesting conversation with Kevin Smith, the director of the Office of Copyright and Scholarly Communication at Duke. He stated that short amounts of text such as quotes cannot be copyrighted but tweets can be copyrighted if unique enough.  This can be important to the business plan because social media may be used both in museum content and for marketing so it’s important copyright what is possible. January 1^st is Public Domain day. Any expired copyrights from the previous year enter the public domain. This is important to follow as it opens up what can be displayed. A big question that Smith also proposed is should our website have a Creative Commons license? Can we let people use our materials? This is a great question about how our museum is presented on the Internet. Register all copyrights as soon as required so if litigation is necessary, it will be viewed in a better light. You can register a copyright later but it weakens the case presented.

Industry Legal Roundup

            One of the hardest things of working in the music industry is steering clear of legal problems. Year after year, artists fund themselves with some unforeseen issues that ties up resources and runs up expenses. Whether it’s copyright issues, fan relations, or trouble with royalties, the range of issues that can spring up if the terms and guidelines are not carefully created or the wild nature of live performance takes control. Here some legal issues hitting major artists in the past month.

            Live performance is always a wild time regardless of the act you’re going to see; be it a thrilling jazz improvisation or one of the hottest teen acts today. The latter brings us this story. Teen trio the Jonas Brothers are begin hit with a lawsuit from a fan. According to TMZ, Ashleigh Johnson was “agonizingly crushed” in a guard fence due to an uncontrolled crowd at the Grove shopping center in Los Angeles and claims to have suffered serious mental, emotional, and physical injuries. This is something that in most cases could be prevented, if the artist and the venue had planned better. More likely than not, security was only discussed on the side of the artist and not the fans. Sure, the event was in the middle of one of America’s largest cites but shows like this go on all the time with artists just as large as the Jonas Brothers. Just look at the Today Show’s Rockefeller Plaza concert series. They go off every year without problems. The key there is planning. They work with local law enforcement and plan adequately to make sure the event is safe.

            The spark of creativity usually cannot be contained but sometime it can unsuspectingly pick up other people’s work. Singer Alicia Keys is feeling the heat from her smash song “Girl on Fire” as songwriter Earl Shulman has filed a copyright lawsuit against her. Shulman claims the song is too similar to his 1962 composition “Lonely Boy” which went to #2 on the Billboard charts as “Hey There Lonely Girl” by Eddie Holman. Shulman get the idea when music critic Roger Friedman stated that Keys “sings a couplet or two of “Hey There Lonely Girl” and it was an uncredited sample. It is unclear what the result will be. In themost famous case of plagiarism, George Harrison was ruled to give a large portion of royalties to the copyright holder of the song “He’s So Fine” due to similarities. The line that whole lawsuit came due to the writings of one critic due make it a little flimsy but this is a suit that’ll probably take a long time to reach a verdict, tying up resources for Ms. Keys. This is the rare case where a lawsuit could not have been avoided by the artist.

            Artists also have to be careful of satisfying everyone they work with, no matter how far back they may have done so. P!nk has been hit with a lawsuit by the producers of two songs from her 1999 debut album Can’t Take Me Home. Specialists Entertainment states they are still waiting for half their royalites from two songs on the album, the title track “Can’t Take Me Home” and “Hiccup.” A representative for P!nk states that it is up to Sony, her record label, to pay royalties. I don’t know what the contract looks like between P!nk, Sony, and the producers but P!nk may be in the right here. If Sony did in fact arrange the producers for her album, then they would be in charge of royalties but if P!nk selected the producers herself then she might be liable because the agreement would be between her team and them. This could be avoided by making sure all parties are present at a negotiation and making sure it has terms for years past the recording’s determined shelf life.

12.12.12 and Scalpers

           Aside from the recent Grammy award nominations, one of the hottest topics in the music industry is the upcoming 12.12.12 concert for the Robin Hood Sandy Relief Fund. The show is being held at Madison Square Garden and reads like a who’s who of pop music history. Performing is Paul McCartney, The Rolling Stones, Eric Clapton, The Who, Roger Waters (of Pink Floyd), Bruce Springsteen and the E Street Band, Billy Joel, Bon Jovi, Eddie Vedder (of Pearl Jam), Dave Grohl (of Nirvana and Foo Fighters), Chris Martin (of Coldplay), Alicia Keys, and Kanye West. Of course, not all the attention is on the star power.

            A darker issue that has come to light is the secondary market. Like any other major event at Madison Square Garden, the event sold out within minutes. Also like any other event at the Garden, tickets began to appear on the secondary market minutes after the event went on sale. Ticketmaster actually addressed this action by posting on their blog that they were trying to take steps to combat this by cancelling orders believed to be run by scalper BOTS. Scalper BOTS are computer programs used to flood Ticketmaster.com with orders as soon as an event on sale to yield a high number of tickets. Ticketmaster also banned listings from their own secondary markets, TicketsNow and TicketExchange, stating that all the proceeds should go to the Robin Hood fund. This leaves one major secondary market selling tickets to the event, Stubhub. Stubhub has dedicated all their fees from the sales to the charity but says it has no way to make sure profits go to charity. Senator Chuck Schumer (D-NY) has alsogotten into the debate, sending letters to ticket resellers for help not allowing scalpers to profit. Right now, tickets for the event on Stubhub range from $635 up to $32,000. Then again, who knows if the tickets are real or not? This is a factor that no one is talking about. On StubHub especially, often scalpers create fake listings with abnormal prices to make the demand seem higher, yet another unsavory tactic by scalpers to extract profits.

            But are scalpers the problem? Industry pundit Bob Lefsetz recently wrote a new blog post about why most concertgoers can’t get a ticket at a fair price. He says that income disparity is causing the current ticketing crisis in the live entertainment industry. Secondary markets have high ticket prices because the rich can afford it and will pay to get into an event at any cost. He also believes that the industry executives don’t care because they’re raking in the cash. Do I agree with Bob? Yes and no. I do think that ticket prices are higher because people are willing to blindly pay through the nose to be at an event. I’ve seen friends and family do it all the time. I don’t believe the industry is turning a blind eye to it, at least not as a whole. I am a bit suspicious that most events in New York City, and Madison Square Garden in particular, quickly sell out and then are on secondary markets. I’ve been to a few events that do this; coming to mind quickly are LCD Soundsystem’s final show and Phish’s New Year’s Eve shows. Instead of calling out secondary ticket websites, I’d like to see Senator Schumer look inwards towards venue owners within New York to see if they’re having a hand how tickets are distributed. I’d also like to see New York lift its ban on paperless tickets. The state’s inability to embrace the future has made it a haven for the secondary market.