Artists: Don't Expect To Get Paid For What Imeem & Snocap Owe You

from the sorry,-too-bad dept

We always hear the record labels and politicians screaming bloody murder over the concept that musicians aren't being paid "what they're owed" due to piracy -- but when there's a situation where musicians might actually not be getting paid what they're owed? Silence. A few weeks back, MySpace "bought" Imeem in a fire sale. But, the details of the deal suggest they didn't actually buy the company, but "certain assets," which means they get to ignore the liabilities. Guess what those liabilities include? You got it: paying artists what they're owed. Now, as the Wired article notes, there's nothing technically wrong with MySpace acquiring just the assets, but it is notable that it's the musicians left without getting paid what they're actually owed (not some theoretical concept like what they might be "owed" due to unauthorized file sharing). And, yet, we don't seem to hear any politicians or record labels screaming about this. Funny, since they keep insisting that they're really just interested in helping artists...


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  1.  
    identicon
    Lobo Santo's Ugly Ferret, Dec 14th, 2009 @ 8:43am

    Sadly, artist royalties are apparently NOT a primary liability, and likely will end up in the pool when the remaining shell is closed out and dispersed.

    It's the nature of the game. Why would you complain about this Mike, considering you are so against these royalty schemes to start with? Perhaps just because you can get an extra slam in on "the recording industry"?

     

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  2.  
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    Mike Masnick (profile), Dec 14th, 2009 @ 8:47am

    Re:

    Why would you complain about this Mike, considering you are so against these royalty schemes to start with?

    Good question. I'm not against contractual royalties at all. I am only against gov't-decided royalties. If two parties reach a willing agreement on royalties, then that's perfectly fine.

    But, the reason for the post (and I apologize if this was not clear) was not about "royalties" but about the fact that the record labels and politicians always talk about artists not getting paid what they're owed -- and in post of those cases it doesn't actually involve anyone being owed anything. Yet, here, when there's an actual case of artists not being paid what they're contractually owed, those same entities are noticeably silent.

    I thought that was telling. Perhaps you disagree.

     

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  3.  
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    :Lobo Santo (profile), Dec 14th, 2009 @ 8:53am

    Re: (I don't have a Ferret)

    Failure to fulfill a contract is failure to fulfill a contract.

    SOMEBODY signed a contract that said "yes, we'll pay you artists." and in the end, the contract was not honored.

    In fact, if there was never any intention to honor said agreement, then that's likely fraud.

     

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  4.  
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    Lobo Santo's Ugly Ferret, Dec 14th, 2009 @ 8:55am

    Re: Re:

    Good question. I'm not against contractual royalties at all. I am only against gov't-decided royalties. If two parties reach a willing agreement on royalties, then that's perfectly fine.

    The government system is just a way to avoid having to negotiate royalties with each individual user, which would just be making money for the lawyers. It also helps to keep a level playing field and avoid sweetheart deals that could put one company at an advantage over another.

    But, the reason for the post (and I apologize if this was not clear) was not about "royalties" but about the fact that the record labels and politicians always talk about artists not getting paid what they're owed -- and in post of those cases it doesn't actually involve anyone being owed anything. Yet, here, when there's an actual case of artists not being paid what they're contractually owed, those same entities are noticeably silent.

    What are they going to say? I suspect this way they will get at least a little more money, as MySpace bought some of the assets, which puts at least a little money back in the pile. Should they jump up and down and say that this money losing system should be forced to stay open? Should they have the owners drawn and quartered for being business failures?

    Heck, do you think they go all wild every time a night club or radio station goes broke? Do they issue press releases and send in the lynch mob?

     

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  5.  
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    Michael, Dec 14th, 2009 @ 8:56am

    Interesting to watch

    It will be interesting to watch this carefully. At some point, they may be forced to disclose exactly how much is owed and to whom.

    It would not be shocking to find out they do not know who they owe. In fact, I think it would be shocking to find out they actually are accounting for who they owe money to and exactly how much they "should" be paying out. I hope they end up having to open their books a bit. We may find out the answer to the big question "Are these collection agencies inept at book-keeping, or do they know what they owe the artists and are actively ripping them off?"

     

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  6.  
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    Mike Masnick (profile), Dec 14th, 2009 @ 9:02am

    Re: Re: Re:

    Should they jump up and down and say that this money losing system should be forced to stay open? Should they have the owners drawn and quartered for being business failures?

    You make a good point. Yet, why is it that they do exactly that for end users who they then argue owe millions?

    It appears there's a bit of a double standard. That is all I was pointing out.

     

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  7.  
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    Esahc (profile), Dec 14th, 2009 @ 9:05am

    Re:

    Weird Harold, is that you?

     

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  8.  
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    Hephaestus (profile), Dec 14th, 2009 @ 9:08am

    "especially when you consider that imeem’s payments to major labels helped drive it out of business in the first place."

    One of the sad things about this is, how this need to be paid now, to prevent any competition, and the general lack of interest and fear of being the first to implement something new, is going to be what causes the death of the labels. They should be hooking up with every music site they can, and not suing these music sites as a negotiating tactic to gain a greater leverage and profits. This again goes back to short term goals (profits) in the end this is ultimately self defeating as it leaves them with no outlets for the sales of their product.

     

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  9.  
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    Richard (profile), Dec 14th, 2009 @ 9:13am

    Re: Re: Re:

    The government system is just a way to avoid having to negotiate royalties with each individual user, which would just be making money for the lawyers. It also helps to keep a level playing field and avoid sweetheart deals that could put one company at an advantage over another.

    Except that it doesn't do any of those things in the cases where the copyright holder is the weaker party - artist's regularly end up signing over their works for very little.
    (and the lawyers still seem to make a lot of money)

    What it does do is to give a veneer of legal respectability to what is to all intents and purposes a cartel.

    If publishers (including record companies, movie studios etc) actually competed with each other in the terms they offered to the public then copyright as we know it would probably wither away.

    At present they are all able to agree on a standard set of conditions (as suggested by copyright law) and that makes it much easier for them to avoid competing in this area.

     

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  10.  
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    Brooks (profile), Dec 14th, 2009 @ 9:15am

    Re: Re: (I don't have a Ferret)

    The company was on the verge of bankruptcy. And, after the sale of assets to MySpace, the company will be wound down, creditors paid pennies on the dollar, and equity holders most likely SOL. Office space will be vacated before the end of the lease. In dissolution, the contracts are void.

    Now, there are plenty of nefarious people in the world, but if you think this was the plan all along (we'll lose a ton of money and nose dive into bankruptcy so we can avoid paying artists), I've got some oceanfront land in Nebraska to sell you...

     

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  11.  
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    Brooks (profile), Dec 14th, 2009 @ 9:20am

    Re: Interesting to watch

    You do realize that Imeem has nothing to do with royalty collection agencies, other than having been driven out of business by the economic model those agencies impose?

     

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  12.  
    identicon
    ., Dec 14th, 2009 @ 9:41am

    Re: Re: Re:

    The government system does exactly what was intended to not do.

    It doesn't pay small artists, it creates a pool of money that favors the big ones. So where is the real gain for artists again?

    There is little, who gains most are corporations, that have sweet deals with collections agencies and get advantages that small ones can't.

    About your referencing that they(comapnies and government I assume) would jump up and down. I don't think you understood what people tried to say to you.

    Because the RIAA always complain that artists are not getting paid and apparently this is a big deal for them, why is that they are not saying anything about a lot of artists that will not receive money? Why are they not screaming bloody murder because those artists are not getting paid?

    Because it is not about artists is it?

    For them is about their profits and artists are just a moral front to justify that.

     

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  13.  
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    Anonymous Coward, Dec 14th, 2009 @ 10:13am

    Re: Re: Re: Re:

    Sorry, I am not understanding you point, would you care to clarify? Who is doing what to who?

     

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  14.  
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    Lobo Santo's Ugly :, Dec 14th, 2009 @ 10:58am

    Re: Re: Re: (I don't have a Ferret)

    It comes to the same thing: The site couldn't exist illegally (not pay royalties) without legal issues, and it wasn't a viable business model when paying royalties. It appears that MySpace would have mostly bought a brand and a customer base, because the business model didn't work.

     

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  15.  
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    Anonymous Coward, Dec 14th, 2009 @ 11:24am

    Re: Re: Interesting to watch

    Sort like blaming the beer companies for making you pay for the beer you sell in your bar. Your bar would be much more profitable if they didn't charge you for the product you are selling.

     

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  16.  
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    Michial Thompson, Dec 14th, 2009 @ 11:43am

    Re: Re:

    Mikee REALLY???? REALLY???? Your all for the contractual royalties that are agreed upon between two willing parties???? But wait how many times have you went on and on and on about how the Labels screw the artist???? Yet the Artist willing entered into the contract that provided them a huge sum up front in exchange for their rights to distribute the music....

    So REALLY now are you REALLY all for the contractual royalties or or ONLY for it when it works for your agenda of spitting out crap from your keyboard?

     

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  17.  
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    Mike Masnick (profile), Dec 14th, 2009 @ 12:14pm

    Re: Re: Re:

    Mikee REALLY???? REALLY???? Your all for the contractual royalties that are agreed upon between two willing parties????

    Yes. Not sure why the caps and the extra ?. They are not needed in polite conversation.

    But wait how many times have you went on and on and on about how the Labels screw the artist????

    I haven't complained about reasonable deals. I can suggest that deals were unfair, but that's different from being against royalties. I'm sorry if that is unclear.

    Yet the Artist willing entered into the contract that provided them a huge sum up front in exchange for their rights to distribute the music....

    Indeed. And I have no problem with such agreements when done properly. My only complaints have been about how some of those deals have been carried out. But for the most part I am perfectly fine with them. I think that, these days, there are more opportunities for artist to get better deals, but I don't believe I've ever suggested that artists in the past shouldn't have signed a reasonable deal when it came to them.

    So REALLY now are you REALLY all for the contractual royalties or or ONLY for it when it works for your agenda of spitting out crap from your keyboard?

    I'm sorry. I think I've been rather clear on this topic. I don't quite see what your complaint is other than that you seem to misunderstand what I have written. I would suggest rereading what I write more carefully, and if you still have questions, let me know (but you could lose a few of the excess punctuation).

     

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  18.  
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    Andrew, Dec 14th, 2009 @ 3:15pm

    Re: Re:

    Sorry to make you spell it out, but telling of what? Are you suggesting the labels don't want to publicize this because it's their fault (for putting imeem out of business by using copyright infringement as a sword to negotiate massive equity stakes)?

    Or are you merely saying that they are so focused on selling the argument that piracy is preventing artists from getting paid that they don't even realize when a legitimate harm materializes?

     

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  19.  
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    Anonymous Coward, Dec 14th, 2009 @ 7:34pm

    Re: Re: Re: Re:

    Of course because it was never about the artists, it was always about the rich and the powerful who exploit both the artists and the public.

     

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  20.  
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    Anonymous Coward, Dec 15th, 2009 @ 8:58am

    Re: Re: Re: Re: Re:

    The point is that they only have a moral panic about the artists when they're not getting money for something but when the artists aren't getting money for something they could care less. They only care about the artist to the extent that it helps their profits, not the profits of the artist. It's not really about the artist and never was, it's only about the profits of the collection societies.

     

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  21.  
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    Gene Cavanaugh, Dec 15th, 2009 @ 10:56am

    Leaving artists holding the bag

    I am missing something. When I was in law school, and so far as I know, still, it was a fraud on the creditors to sell the assets and thereby avoiding legitimate debts.

    Perhaps we are saying "artists are wussies" (civil liabilities have to be enforced by the debt holder), or "the amounts owed were only anticipatory", or "someone doesn't know what they are talking about", or ?????

     

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  22.  
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    Anonymous Coward, Feb 23rd, 2010 @ 5:29pm

    what can i do legally , i need to get my royalties it's not right

     

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