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RIAA highlights vKontakte and others in Notorious Markets submission to USTR

October 28, 2013

The RIAA submitted our recommendations in connection with U.S. Trade Representative’s annual “notorious markets” cycle, an initiative designed to expose businesses who operate illegally, whether by profiting directly from the sale or other distribution of illegal materials or from facilitating such theft—in many cases through the sale of advertising space. The common thread shared by these notorious markets is that they unfairly deny creators the opportunity to generate revenue from the commercial use of their works.

 

In our 2013 submission, we highlight certain sites that are so central to the activities of a particular society that they almost single-handedly prevent the development of a legitimate online music marketplace—sites such as Russia’s vKontakte, Ukraine’s ex.ua, or Vietnam’s Zing. Others actively champion their supposed subversiveness by proclaiming to be advocates for freedom of expression while undermining the careers of creators whose very existence is based on expression—sites like the Pirate Bay, FilesTube (which proclaims “Download Everything!”) or Brazil’s Degraçaémaisgostoso.org, the English translation of which is “Free is much better.” 

 

To be clear, this is not an exercise that takes places in a vacuum. Music labels today are aggressively working to create and expand partnerships with various platforms in all parts of the world to ensure that fans have access to their favorite music when they want it and how they want it. As highlighted in the 2013 IFPI Digital Music Report, “At the start of 2011, the major international [digital music] services were present in 23 countries. Two years later, they are in more than 100. Many countries, such as Kenya, Sri Lanka and Vietnam saw their first digital music service open in 2012. Globalisation is opening up new markets, with record companies now able to reach consumers in territories where there was little previous retailing infrastructure. There are now more than 500 licensed digital music services operating worldwide, offering 30 million tracks to consumers.

 

That’s real progress. But no matter how we innovate, we are operating in the shadow of a problem that dwarfs the legitimate sector. This illegal activity undercuts legitimate services, prejudices the careers of artists, harms investors in content production, and cheats law-abiding consumers. Despite so many advancements in the music marketplace, and despite targeted, successful enforcement efforts by both the creative industries and the U.S. government, many avenues remain that enable profiteering from infringement. As long as these avenues are open, America’s economy and culture – which tremendously benefit from creative works – will be harmed. These avenues will not be closed without the commitment and cooperation of all responsible players in the online ecosystem.

 

We hope that by addressing these illegal markets, we can take a big step towards creating greater accountability that will expand opportunities for legitimate commerce. Quite simply, there is no place for open and notorious theft in a civilized world. Addressing the conduct of these notorious markets for piracy will go a long way towards promoting the rule of law, fueling creativity and innovation, and maintaining US economic competitiveness.


Neil Turkewitz
EVP, International

 

Note: A copy of RIAA’s submission is available upon request. Please contact cduckworth@riaa.com.


Music: The Ultimate Expression of Free Speech

October 21, 2013

What better occasion than Free Speech Week to pause for a moment to recognize the incredible importance of free expression, especially to music makers.  We don’t take it for granted.  Lyrics mean different things to different people.  And music, perhaps more than any other content, is highly subject to interpretation.  We make and use music to express our joy and anger, to protest and to empower.  Throughout history, there have been many efforts to squelch selected songs based on some people’s interpretation of another person’s music. 
 
For example, John Denver’s song “Rocky Mountain High” was banned from many radio stations as a drug-related song in the ‘80s.  As John Denver himself noted, “this was obviously done by people who had never seen or been to the Rocky Mountains and also had never experienced the elation, celebration of life, or the joy in living that one feels when he observes something as wondrous as the Perseides meteor shower on a moonless, cloudless night, when there are so many stars that you have a shadow from the starlight, and you are out camping with your friends, your best friends, and introducing them to one of nature's most spectacular light shows for the very first time.  Obviously, a clear case of misinterpretation.”
 
Equally compelling was Dee Snider, of the heavy metal rock band Twisted Sister, when his song “Under the Blade” was charged with “encouraging sadomasochism, bondage, and rape.”  Snider publicly explained the impetus for the song and the meaning of the words.  Turns out the band’s guitar player had to undergo surgery, and the song was about people’s fear of going “under the blade.”
 
Or more recently the collective Pussy Riot in Russia, a punk group whose members were jailed and currently serving two-year sentences on charges of “hooliganism.”  Their music contains such themes of anti-government and LBGT rights, making them unpopular with the Russian government.  This unjust sentence stings the conscience of all democratic peoples, and we hope for quick release of the jailed artists.
 
The truth is, nothing preserves our culture more than our constitutional right to free speech.  Music is a powerful tool.  It moves people and captures a point like no other medium.  So this week we’re proud of all our music makers, and the country that allows them to write, sing, and perform as they see fit.  Creativity in America is strong because the First Amendment is strong.  In many countries that don’t have our freedoms, the first thing people do after gaining freedom is sing.  Here’s to celebrating this great freedom, and to all creators who give us their gift of music.

Cary Sherman, Chairman & CEO, RIAA


Did UK Copyright Policy Study Misstate Music Revenue Data?

October 10, 2013

Like others interested in copyright policy issues, we noticed the new academic paper by professors at the London School of Economics.  The biases and policy wish lists of the authors are abundantly clear, which we have no objection to, so long as they are properly noted.  Much of the paper retreads familiar – and widely debunked – criticisms of copyright enforcement.  Others have leveled various criticisms of the paper (see here, here, here, here, and here for examples).
  
One aspect that we found particularly frustrating, based upon initial review, is the basic misstatement and mischaracterization of the figures for music industry revenues presented in Figure 1 in the paper.
 
The most glaring issue is that the authors appear to double-count revenues to make them appear higher than they really are.  The figure shows numbers for “Recorded Music” and “Publishing” separately, and adds them up to arrive at the total.  But in the United States and many other countries, the Recorded Music figure already includes significant amounts of the publishing figure (such as for mechanical royalties that are paid for physical products and digital downloads).  Based on the data sources listed, it does not appear that the authors took this into consideration, so they’re basically double counting large amounts of revenues. 

So if we remove the inaccuracies from the data presented by this policy brief, what’s been really happening?  In the U.S., according to Pollstar, total concert ticket revenues were just $1.8 billion in 2001, but more than doubled to $4.3 billion by 2012.  Conversely, recorded music sales fell over the same period from $13.7 billion to $7.1 billion.  Note the recorded music component includes all major forms of music sales including physical products, digital downloads, subscriptions, streaming revenues, ringtones, ringbacks, synch royalties, and internet radio royalties.  Combining these revenue streams, total recorded and concert revenues in the U.S. were $15.5 billion in 2001, but $11.4 billion in 2012, a decline of 27%. 

As we’ve stated often, we welcome additional perspective – data and research – to this important conversation, even if it may be a viewpoint we do not totally share.  At the least, though, shouldn’t data be accurately characterized and understood? 

Joshua P. Friedlander
Vice President, Strategic Data Analysis, RIAA