Vevo, Noel Gallagher and the RIAA News February 11, 2012

Vevo, Noel Gallagher and the RIAA News February 11, 2012

Last week, Vevo’s real benefit to artists and the music industry was called into question by music publisher Matt Pincus amidst news of its revenue boom in 2011. And Noel Gallagher and music industry experts weighed in on the factors that lead some popular bands to quickly fade into obscurity. Also, the president of the Recording Industry Association of America (RIAA) criticized Wikipedia and Google for their part in taking down SOPA and PIPA.



2011: A Boom for Vevo and Major Labels, a Bane for Indie Artists and Publishers


The thriving online video service Vevo – which provides about 40% of the content streamed on YouTube — earned $150-million in revenue in 2011, causing many to be hopeful about the future of music video monetization and another potential area that could rebound in the music industry. However, according to a piece written by Matt Pincus, the founder and CEO of the independent publishing firm Songs Music Publishing and published on The Wrap,  independent artists and publishers have yet to see a dime, and it is time for everyone to rethink what is fair.


As Pincus pointed out, what isn’t being said about Vevo’s boom is that despite this $150-million gain, most independent publishers and their songwriters have not ever been paid by Vevo. He says this is because major record labels have stated they have the right to license songs to Vevo on publishers’ behalf, stating that if they are paid, they will take on the responsibility of passing money onto publishers in the same way they do with revenue from tracks on iTunes. But in the case of Vevo money, they have failed to actually come through on that promise.


According to Pincus, record companies are able to get away with this because of the “Controlled Composition Clause” that is within their artists’ recording contracts that usually features unclear language and applies to songs that are written specifically for artists’ records and “controlled” by the artist as well as producers, co-writers, etc. This clause claims to give labels a free sync license that allows them to use music videos that feature the “controlled” songs for promotional uses (uses that don’t bring the labels direct payments). The language was originally added in order to cover videos shown on MTV, but now labels are able to use it to avoid paying indie publishers for videos aired on streaming music sites like Vevo.


Pincus’ article noted that the purpose of videos has changed significantly since the early MTV days, when labels were not paid by broadcasters. Now, videos represent a very real source of revenue for labels, which calls into question the idea of giving labels the right to manage licenses with Vevo for controlled songs. (Incidentally, Songs Music Publishing represents over 300 songwriters, many of which are recording artists. And none of the Controlled Composition Clauses these Songs songwriters have grant a free license to labels for Vevo videos.)


Pincus concluded that labels are not actually legally sanctioned to issue a gratis license for videos featuring songs that are not controlled, whether to Vevo and other streaming sites or to any other entity. When there is no contract between a label and a songwriter, music video rights cannot be granted to the label. And while the case settled between the National Music Publishers Association and YouTube last year finally gave independent publishers some much-deserved net ad revenue from YouTube, Vevo was somehow left out of this decision.


So, as Pincus asked, “Are record companies to blame for relying on shoddy language to withhold royalties, or is it Vevo’s responsibility to insure that the songwriters that helped it pull in $150 million this year share in their success?”


Noel Gallagher and the Industry, on Adele and Why Artists “Fall off Cliffs”


Singer/songwriter Noel Gallagher recently told the Mail that, despite Adele’s huge success the past few years, he predicts she – like so many other female artists before her – will have a short shelf life:  “I feel sorry for girls in the music industry. They do have a very short shelf life. For instance, Duffy: who? Gone. She was massive. And I don’t doubt for a second that the same thing will happen to Adele.”


While Gallagher expressed his belief that female artists have a shorter career trajectory than male artists, a music industry lawyer interviewed by The Guardian stated the situation is not unique to women; wildly popular artists on both side of the gender line often fizzle out, and often with good reason:  “Duffy is an interesting case … because her story applies to a lot of artists. Buoyed by success, they immediately think, ‘Why am I giving 6% of record royalties, a third of my publishing and a 20% management commission to other people? I am a genius! I will do it myself!'” And this thinking is what led Duffy to leave her record label, manager and her producer, who had co-written and performed on a majority of her platinum-selling album. As the lawyer pointed out, artists that fall out of the spotlight often go on to make “a bad record without any guidance from professionals. And then they wonder why it’s all gone wrong.”


The article “When bands fall off cliffs,” written by Rob Fitzpatrick in October, 2011 explored the many reasons for the “band collapse syndrome” and pointed out that a lot of bands and artists that have exploded onto the scene and received critical acclaim have faded away in the 2000s, citing examples including the Kaiser Chiefs, MGMT and Glasvegas.


Interestingly enough, when approached by The Guardian to discuss how it feels for record sales to drop, none of the bands discussed in the article would comment, likely, as the Fitzpatrick speculated, because “admitting a failure is tantamount in the eyes of the music industry to condemning yourself for ever,” but also possibly because the artist is typically the last one to realize it’s over. However, an unnamed A&R rep for a label put it this way:  “Well, I’ll tell you precisely what it feels like … It feels shit. But the second album by every single band I’ve ever signed has flopped miserably, and no one really understands why. When you sign a band, everyone at the label is very excited, but as soon as it starts going wrong every bastard runs to the hills and the A&R man is the only one left.”


Wikipedia and Google Targeted by RIAA President


Wikipedia and Google are in charge of the future of how copyrights, infringement and anti-piracy legislation is handled, according to an op-ed piece written by RIAA president Cary Sherman in The New York Times on February 7. In his critique, Sherman called out the guilty parties and blamed them for sinking SOPA and PIPA, each of which he sees as a solid and well-balanced piece of legislation.


As Sherman stated – and what became the center of his argument, “Misinformation may be a dirty trick, but it works …Wikipedia, Google, and others manufactured controversy by unfairly equating SOPA with censorship.”


He added that policy makers were not going into the process of working out this new legislation without considering all sides of the argument or with the intent of promoting censorship or anti-constitutional values, or to further cripple the already ailing music industry:  “Policy makers had recognized a constitutional (and economic) imperative to protect American property from theft, to shield consumers from counterfeit products and fraud, and to combat foreign criminals who exploit technology to steal American ingenuity and jobs. They knew that music sales in the United States are less than half of what they were in 1999, when the file-sharing site Napster emerged, and that direct employment in the industry had fallen by more than half since then, to less than 10,000. They studied the problem in all its dimensions, through multiple hearings.”


Sherman pointed the finger at Wikipedia founder Jimmy Wales for riling up the under-informed masses to protest, creating a “digital tsunami” that stopped legislation that on many levels could have been a positive step towards bringing more money to artists and creators and taking it away from undeserving parties. He asked, about the “11th hour” shutdown of the legislation, “Was this the result of democracy, or demagoguery?”


And Sherman continued his argument by pointing out that Wikipedia and Google’s rallying – “as two of the world’s most popular Web sites” – was an “abuse of trust and a misuse of power:”  “When Wikipedia and Google purport to be neutral sources of information, but then exploit their stature to present information that is not only not neutral but affirmatively incomplete and misleading, they are duping their users into accepting as truth what are merely self-serving political declarations.”


And finally, Sherman presented a rallying cry/call to action of his own:  “Perhaps this is naïve, but I’d like to believe that the companies that opposed SOPA and PIPA will now feel some responsibility to help come up with constructive alternatives. Virtually every opponent acknowledged that the problem of counterfeiting and piracy is real and damaging. It is no longer acceptable just to say no …We all share the goal of a safe and legal Internet. We need reason, not rhetoric, in discussing how to achieve it.”

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