Lily Allen: It's Ok To Sell My Counterfeit CDs, Just Don't Give My Music For Free

from the confusion dept

Dark Helmet alerts us to the news that our good friend Lily Allen is back in the news discussing file sharing again. Tragically, it does not appear that she's used her "time off" to better understand copyright issues very much. Unlike nearly everyone else who complains about copyright infringement, she's apparently "all for" infringing on her copyrights, just so long as you pay someone -- even if it's the guy on the street selling the counterfeit CDs. Seriously:

"If someone comes up with a burnt copy of my CD and offers it to you for £4 I haven't a problem with that as long as the person buying it places some kind of value on my music."

Yes, so while some musicians have said they're fine with non-commercial file sharing, but are against anyone selling their unauthorized works, Ms. Allen seems to have taken the opposite approach. Counterfeit all you want, just as long as you profit from it. Yeah. Someone should explain to her the difference between price and value, and also the benefits of word of mouth marketing. But, it doesn't seem like she's much interested in actually understanding this stuff, so if you want to help her understand, maybe go set up a shop selling burned copies of her CDs, and see what happens.

Of course, if we take this seriously, it shows how little she's thought this through. Her earlier complaint was that when people file share, they don't provide money back to the artists and the labels. Of course, when counterfeiters are selling on the street, the same thing is true, but suddenly it's okay? At what point does the world realize that Ms. Allen doesn't know what she's talking about?

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Is It Illegal To Posess Unmarked CDs In Texas?

from the be-careful... dept

btr1701 points us to an odd (and slightly disturbing) story about a prisoner in Texas. Most of the story is about the fact that the guy is ridiculously obese and had been able to sneak a gun into prison in between flabs of skin, which was totally missed on a bunch of searches. But, btr1701 points out that the reason the guy was arrested in the first place was because he was apparently selling bootleg CDs. According to the article, he was "charged with possessing or selling unlabeled recordings." Now, I can sort of, maybe, kinda see why selling unlabeled recordings could be a violation of the law (though, even that seems questionable). But, possessing unlabeled recordings? How is that against the law? Does this mean that anyone who burns some music to a blank CD-R could be in trouble? Anyone in Texas have any more details on the real story here, because I'm hoping there's more to it.

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Radiohead's Thom Yorke Explains How Recording Industry Milked CD Business

from the quotable dept

JJ sends in a short quote from Radiohead's Thom Yorke about the music business:

"There's a process of natural selection going on right now. The music business was waiting to die in its current form about twenty years ago. But then, hallelujah, the CD turned up and kept it going for a bit. But basically, it was dead."

Bingo. The "recording industry" has basically been a "sell plastic discs" industry for way too long, and used the monopoly rents it received from the government to significantly overprice its products, and then lived fat and happy for many years. So, of course, when better, more efficient formats for distribution, recording, promotion and listening came along, it wanted absolutely nothing to do with them, because they didn't present the same sort of monopoly rents.

And, that, of course has been the point we've been trying to make here for quite some time. This has always been a business model issue. The record labels lived off the CD business for so long that it refused to recognize that a better, more efficient system was showing up, because it meant giving up some easy profits.

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Once Again: The Music Industry Does Not Equal The CD Business

from the get-that-straight dept

A bunch of folks have been sending in Charles Blow's NYTimes column about the supposed "death" of the music industry. However, Blow makes the most basic of errors: he appears to equate the music industry with the recording industry. He accepts RIAA numbers of when "sales peaked," not realizing that he's only talking about sales of a segment of the wider music industry. Yet as recent studies both from outside and inside the music industry have shown, the overall music ecosystem has been getting larger in terms of dollar volume. Money may be shifting away from CDs, but it's not shifting away from music-related commerce. But, I guess that's what happens when you rely on just the RIAA for your data...

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EMI Stops Selling CDs To Indie Record Stores

from the you're-on-your-own dept

Apparently, EMI has had enough of independent record stores. Via Digg come reports that EMI has been calling various smaller independent record stores and telling them that it won't sell them product directly any more. Instead, they'll have to source it from third parties -- meaning that it will be more expensive. Basically, this means most of those stores will carry fewer EMI CDs. Of course, some might argue that this won't really mean much, since independent record stores are smaller (and don't always sell as much major label product), but it still seems like an odd choice by EMI. You would think the company would be working overtime to keep the few retail channels pushing its product happy.

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TuneCore, Amazon Team Up To Make It Even Easier & Cheaper For Bands To Sell CDs

from the label?-what-for? dept

Continuing the theme of this week about the new ecosystem of companies out there making it ever and ever easier for musicians to do everything a label used to do for them, comes the news (submitted by zealeus) that Amazon and TuneCore have teamed up to make it incredibly easy and cheap to sell CDs on demand. TuneCore is a very popular service with indie bands, helping them get their content onto various music services -- and now they're adding the ability to do incredibly cheap CDs-on-demand via Amazon. The whole thing costs a grand total of $31/year. Wired does some math, and recognizes that at a price point of $8.98 for the CD, a band only needs to sell nine CDs a year to break even. Nine. While some may say the CD market is dying, if you can offer it at almost no cost to the band, why not have it as an option?

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Coldplay Giving Away Free CD At Shows And Free Downloads

from the that-evil-free-stuff dept

A bunch of folks have sent in the news that Coldplay is doing a promotion whereby they'll be giving away a free CD at every live show and will also make the tracks available for free download on the band's website. The album itself is live tracks recorded during the current tour. As the band notes:

"Playing live is what we love. This album is a thank you to our fans - the people who give us a reason to do it and make it happen."

It's great to see another well-known band learn that "free" can have quite a bit of value, though this does seem a bit more gimmicky than any well-thought-out strategy. Giving away a physical product is nice, but expensive, and unlikely to be a difference maker for those going to shows. Still, it is nice to see a band not freaking out about free and looking for more ways to actually connect with and reward their fans, rather than trying to punish them like some others.

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Despite Declining CD Sales, CD Baby Experiences Growth in 2008

from the not-dead-yet dept

While CD sales dropped 14% overall in 2008, CD Baby -- a popular online music store that lets independent artists sell music directly to fans -- actually saw an increase of 2%. In addition to selling physical discs, CD Baby offers optional digital distribution through iTunes, Amazon MP3, Napster, Rhapsody, eMusic, etc. and directly through their website. Still, almost 30% of albums last year were only offered as physical discs (though, some of these artists probably use other companies for digital distribution). While growth in digital sales was predictably larger (45%), even a small increase in CD sales in the face of the broader crisis is a sign that CD Baby is doing something right.

There are a few reasons why CD Baby could be having better luck with CDs than the rest of the industry. First, a lot of independent artists are discovered through live performances, and the CD has yet to be replaced as the standard format to sell music at shows. The credit card swipers that CD Baby offers artists accounted for $2.4 million worth of revenue last year (though, that includes sales of other merchandise too). Second, CD Baby seems to be taking advantage of the long tail, with minimal setup fees, minimal starting requirements (artists only need to mail in 5 CDs to start selling) and short-run duplication services, though they haven't released enough data to confirm how distributed their sales have been. Lastly, great customer service and a sense of humour can't hurt (e.g. an order confirmation email starts, "your CD has been gently taken from our CD Baby shelves with sterilized contamination-free gloves and placed onto a satin pillow..."). Although it doesn't make any sense to base an entire business model on selling CDs, there's still money to be made for artists and companies using CDs as part of their model.

Blaise Alleyne is an expert at the Insight Community. To get insight and analysis from Blaise Alleyne and other experts on challenges your company faces, click here.

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Canadian Blank CD Levy To Increase By Another 38%

from the you're-a-criminal dept

The Copyright Board of Canada has decided to increase the levy on blank CDs from 21 cents to 29 cents each. The levy is a sort of "you're a criminal tax" that assumes blank CDs are going to be used for unauthorized copying. Blank CDs in Canada are now often more expensive than blank DVDs (which have no levy and hold more data), and most of that cost goes directly to the record industry. In 2006, about 70% went to the labels, but it seems like even more now, with actual price of CD-Rs dropping. With a 21 cent levy, a pack of 50 CD-Rs sells for about $12 before tax. That's 24 cents per CD-R -- 87.5% of the price goes to the record industry. And that's before the 8 cent increase.

The board notes that sales of blank CDs are declining, but justifies the increase by arguing that compression allows people to store more songs on a CD. Meanwhile, there's no levy on digital audio players (the Canadian record industry was worried it would legalize downloading and seemed to prefer to push for tougher copyright legislation instead). What's going to happen when the Copyright Board realizes that blank CD sales are likely declining, not because everyone is using compression, but because less people are using CDs? This "you're a criminal tax" has always been a short-term band-aid solution that's not going to fix the record industry's problem. Do Canadians really need to pay the record industry $30 million a year for the right to burn a few songs onto a CD every now and then? Luckily, the current government has expressed a desire to cancel the levy, though we'll have to wait and see if they can follow through.

Blaise Alleyne is an expert at the Insight Community. To get insight and analysis from Blaise Alleyne and other experts on challenges your company faces, click here.

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Another Band Starts Bundling Scarce And Infinite Goods

from the good-for-them dept

For many years we've been talking about a variety of business models that bands can use to still make money, even if their music is free -- often by focusing on the scarcities that they can sell. A big one, is access to the band. One of the first ideas we pointed out was how bands could effectively set up a fan club that fans could buy into that would give them special features: early access to concert tickets, backstage passes, private concerts, early access to music, view of the music creation process, chance to chat with band members, etc. All of those things are then made more valuable if there are more fans, so giving away the music only helps that business grow.

One of our readers, Kyle, points us to an experiment by the band Mudvayne that doesn't get all the way there, but does seem to move in that direction. The band has started a program called "The Album is The Ticket" that gives people a reason to buy the actual, physical album. When you do, you're given a code that lets them go to a website, get a one-year free membership into the band's "fan club" that includes early access to the best tickets at concerts. The band doesn't appear to have taken it to the level of also giving away and promoting free music, but hopefully they'll recognize that doing so would increase the demand for this kind of program. What the band is doing, effectively, is recognizing that they need to give people a real reason to buy the CD -- and that goes beyond music (because people can get the music for free). So rather than just focusing on the CD itself and what comes in the jewel case, they've recognized that by giving people a code they can also give them access to additional services.

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CD Duplicator Buys CD Baby; Recognizing A Digital Future

from the changing-times,-changing-business-models dept

Lots of folks who follow the music space are aware of CD Baby, who has helped independent artists sell their music for years. It basically was a one stop shop for many independent artists, getting their music available in a variety of different places, for either download or physical CD sale. Earlier this week, the company was bought out by Disc Makers, the aptly named company that manufactures CDs and DVDs for independent musicians and filmmakers. The two companies had worked together as partners for many years. Still, what strikes me as most interesting about this is that Disc Makers clearly is recognizing that relying on the physical disc reproducing business to keep growing is a likely to be a losing bet. So, it appears to have come up with a decent plan for positioning itself for the changing market. If only other businesses were willing to do that.

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Trent Reznor Gives People A Reason To Buy Latest CD Even Though It's Free Online

from the keeps-showing-how-he-gets-it dept

It's getting rather repetitive to show what a good job Trent Reznor is doing in showing how Nine Inch Nails is embracing the new business models available to the music industry, but he's doing such a consistently good job of it, it's so useful as an example. The latest move is that he's now releasing his last album, The Slip, which was offered as a totally free download, as a special limited edition CD/DVD and deluxe vinyl. In other words, like he's done multiple times in the past, he's giving fans a reason to buy the physical media beyond just the music. In this case, it's to get a numbered copy, limited to 250,000 that includes a ton of extras.

Sure, there will be plenty of people who don't want it and are perfectly happy with just the music. And Reznor seems perfectly fine with that. However, other fans will want this unique package for themselves. Given how well Reznor has done with "limited edition" physical media, it seems quite likely that this will also be a huge success for Reznor. And, of course, we're not even touching on all the money he'll make from Nine Inch Nails concert gigs. So why do we have the music industry running around like crazy saying that if music is available for free no one can make any money?

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Newly Independent Pop Band McFly Gives Away Free CD With Newspaper

from the it's-all-in-the-tour dept

Last month we wrote about the British pop band McFly, who had announced that it was ditching its record label, because the label wasn't interested in experimenting with new ways to get music to fans. So now that the band is independent, it's jumped right on the bandwagon of experimentation. In fact, it's following the footsteps of Prince, back before he started freaking out. That is, they've done a deal with a big UK newspaper to distribute copies of their new album for free with the newspaper (thanks to Nick for sending this in). As we've noted in the past, this is a fantastic strategy for both newspapers and musicians. It helps both sides quite a bit, which is exactly what the band sees, noting that they just want to get more fans, and are hoping more will come see them on their latest tour.

Yet, of course, it's not making some happy: specifically those who have based their entire business models around the concept of selling plastic discs. Music retailers flipped out when Prince did this, and it's likely that they'll be upset about McFly as well. But, you don't jump into the next generation by appeasing the old generation. Also, the article quotes a former recording industry exec who complains that if bands keep doing this, record labels will lose money and won't be able to find and promote new bands. That's missing the point, of course. It assumes that it's the record labels skilled hand that is necessary in finding and promoting new bands -- which is not true at all. The same guy also suggests (in a video on the site) that record labels also won't want to give tour support. That's also quite ridiculous. If the band is making so much more money from concerts now, the smart label will still give tour support, after making sure that it gets a cut of the touring revenue as well. And, if the record labels decide not to do it, then have no fear that concert promoters will step in and provide the necessary support in their place.

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Is Selling A CD You Found In The Trash Copyright Infringement?

from the so-sayeth-the-courts dept

Various courts have held that by putting something in the trash, you are relinquishing your ownership of those goods. However, apparently that might not apply to music. William Patry has the story on an unfortunate decision by our court system, suggesting that if you find a CD in the trash and sell it you may be charged with copyright infringement. The story of the case is as follows: BMG famously offers a CD and DVD "club" that sends out new CDs and DVDs on a regular basis to subscribers. Sometimes those subscribers move and cannot be found or for whatever reason the discs are determined to be "undeliverable." BMG so devalues its own discs that it has told the post office to throw out the undeliverable discs, rather than spend the postage to have them sent back to BMG. The post office dumps the discs in its dumpsters -- at which point a Postal Service employee dumpster dives to rescue them. He then goes and sells those discs to local stores, cashing in to the tune of nearly $80,000. This gets discovered, and he gets charged with mail fraud before settling on charges of copyright infringement.

However, what no one seems to clearly explain is where the infringement is? BMG instructed the CDs to be thrown out. The Post Office threw them out. At that point, the property has been relinquished by BMG and the Post Office, so it would appear that anyone who finds the discs wouldn't be committing any kind of infringement (or, for that matter, fraud) in selling them. A lower court ruling was especially bizarre, in demanding that the guy give up all the money he earned to BMG due to the "lost opportunity" to BMG in selling the music. As we've discussed at length before a "lost opportunity" is not an actual loss and it's not a crime. It's simply a marketing challenge. Otherwise, just about any business could be guilty of creating a "lost opportunity" for any competitor. The pizza shop down the street creates a "lost opportunity" every time I eat there instead of the deli. Hell, just buying one musician's CD rather than another's creates a "lost opportunity." So, it's ridiculous to equate a "lost opportunity" to a crime -- and even worse when that "lost opportunity" was self-created by BMG choosing to throw out the discs.

Luckily, the Appeals Court tossed out the "lost opportunity" part, but as Patry notes, it doesn't appear that anyone questioned how the facts of this case could possibly be considered copyright infringement. Selling used CDs is considered to be perfectly legal and non-infringing. How is selling CDs that have been thrown in the garbage any different?

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Downloading Is Correlated With CD Purchases

from the correlation-is-not-causation dept

There's a new study out (via Michael Geist) about the relationship between peer-to-peer downloading and CD purchases in Canada. The authors found a positive relationship between downloading and CD purchasing. That is, those who downloaded more music also tended to purchase more CDs. It's important to keep in mind that correlation does not prove causation. In particular, I suspect that much of what we're observing here is simply the fact that people have varying levels of interest in music, and those who are more interested in music are likely to both download more songs and purchase more CDs. So these results by no means prove that peer-to-peer file-sharing isn't hurting the recording industry. On the other hand, it certainly belies the recording industry's simplistic claim that no one will buy their music if it's available for free on peer-to-peer sites. Clearly, there are a lot of music fans in Canada who have access to peer-to-peer networks and choose to pay money for CDs anyway. That might be because they want the extras that come with the physical CD, because they feel good about supporting their favorite band, or because they expect the audio files on the CD to be higher quality than the music they find online. Whatever the reasons, the recording industry should be figuring out how to capitalize on them, by coming up with new products that offer perks you can't get from a peer-to-peer network.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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