It's not like people didn't warn everyone what would happen with various three strikes laws. The costs for ISPs were widely discussed, even if the recording industry lobbyists insisted they were overblown. Yet, here we are, a few months into France's HADOPI implementation of three strikes, and French ISPs are already warning users that they need to jack up fees to pay for compliance with HADOPI. And, of course, no one has provided any evidence that kicking people off the internet for file sharing makes anyone any more likely to buy. So, now, not only are people less inclined to buy just in general, but they have less money, because they have to pay more to their ISP. How's that going to save the recording industry's old business again?

A few weeks back, Verizon finally admitted what the press had reported for years (and which Verizon Wireless had denied for years): that it had erroneously charged 15 million customers $1.99/month fees for supposedly accessing data on their phones, even though many had specifically declined to allow data services on their phones. At the time, Verizon Wireless said it would pay back "up to $90 million." The FCC noted that it wasn't satisfied with this response, and now it's come out that Verizon Wireless will also pay a $25 million fine to the federal government over these actions. That's separate from paying back customers, but the amount Verizon Wireless will have to pay seems to be shrinking. The original report was "up to" $90 million, but now people are saying "a minimum" of $50 million in refunds. So, it's still possible it'll pay $90 million in refunds, but it seems unlikely.

Of course, as Broadband Reports points out, something in the math doesn't make sense. This apparently went on for 2 to 3 years and impacted 15 million customers. While not every customer was charged the fee every month, many claim they did see it pretty much every month. So, start doing the math. Even if we assume that, say, one third of the users saw it every month for just one year and the rest saw it only once, we're already talking $90 million. But if it's true that many of them saw it for multiple years, and even if you throw in the $25 million fine, it sounds like Verizon Wireless could come out ahead in the end... Oh, and in case you were wondering, Karl Bode confirmed that no one at the FCC audited Verizon Wireless's estimates for how many people were charged this fee, so it's going on faith that Verizon Wireless -- who for years denied this fee existed -- is telling the truth about how many times it was charged.

Last week, Verizon got some attention for plans to charge customers $3.50 to pay their bill if they paid by credit card or debit card. From an industry that specializes in ridiculous made-up fees, even this seemed beyond ridiculous. Given the consumer outcry about this, days later, Verizon decided it was just kidding about the charge, and that "this charge will not take place as scheduled." Of course, that sounds like it's just waiting for another chance to introduce it when people aren't paying as much attention.

The RIAA and the IFPI have been going on and on for years about just how ridiculous it is for people to suggest music should be "free." They will go on, at great length, to talk up the "value" of music and how it should be paid for. But, apparently, they don't think that applies to anyone else. They're apparently screaming angry at Google because Google (gasp) responded to their request to provide them tools to help them track down unauthorized copies, by quoting their standard prices for how much it costs to use Google's API. So, RIAA, please explain: why is it sacrilege for you to demand people pay up, but it's even worse if Google asks you to pay to use its resources?

For a while now, we've been covering attempts by some banker-types to get housing developers to add a resale fee to homes so that if and when you resell your house, you have to pay a percentage of the sale price back to the developer. Of course, the real plans is for the main company behind this plan, Freehold Capital Partners, to securitize and sell off these fees, giving developers a chunk of money upfront. As with any such thing, what this really does is drive down the value of your home and make it more difficult to sell. And, these terms are often slipped in with little to no notice.

A bunch of states have banned these fees, but now a federal bill has been introduced in the House to ban such things nationwide, as a predatory transfer fee. I'm not sure an overall ban makes sense, but at the very least, these sorts of deals (and their serious implications) should be made clear to home buyers well before they decide to purchase a house.

Well, well, well. For over a year now there have been widespread reports of how Verizon Wireless would charged users $1.99 for data services, even if they have data services turned off. This was happening sometimes to users with phones turned off or even batteries drained. The whole thing was incredibly questionable. Verizon customer service folks insisted that the people in question clearly accessed the internet, but there were so many reports that they had not, that this response didn't fly. Then, after the NY Times reported about it, the FCC finally woke up and asked Verizon Wireless to explain. Its response was basically a non-response, insisting that it had done nothing wrong -- and when David Pogue from the NY Times pushed the company about the over 400 accounts of it happening to his readers (and himself), Verizon Wireless' response was "I'm going to let the letter to the F.C.C. speak for us," repeated for every question Pogue asked.

That was in December of last year. Now, ten months later, Verizon has just announced that it's going to pay back "up to" $90 million in such bogus fees that it never should have charged to about 15 million subscribers. Apparently, those claims of not having done stuff wrong... well... it looks like that wasn't the case. It looks like they incorrectly charged people to the tune of perhaps $90 million (the company apparently thinks it could be more like $50 million once they've found all the false charges). Seems like a pretty big "accident," which they denied for so long. The latest statement suggests that Verizon Wireless "just" noticed these errors while "reviewing customer accounts," but given the number of complaints, and the fact that it's been going on for so long, including massive press coverage and an FCC investigation, you would think the company would have figured this out sooner.

Speaking of the FCC, it appears that it's not entirely satisfied with this customer refund, as the head of the FCC's enforcement bureau (or some PR staffer working there) amusingly quipped that the FCC was: "gratified to see the repayment, but for millions of Americans it's a day late and a $1.99 short."

If you follow the music business, you probably already know about or follow Ticketmaster boss Irving Azoff's Twitter feed, which he kicked off earlier this month by calling two different reporters "jerks," and generally jousting with some of his critics. He went quiet for a bit, but caused a bit of a stir over the weekend by announcing (sort of) that Ticketmaster had "full disclosure pricing." Considering just how much hatred there is towards Ticketmaster's "service charges," this certainly picked up some attention.

The only problem? While the tickets Azoff pointed to highlighted prices that included fees (amusingly, the fees on the cheapest ticket markup the official ticket price by a whopping 50%) some quickly discovered that this wasn't, at all, what they expected. That's because despite the implication that these prices now showed you full fees, some noticed another $6.50 fee tacked on at the end. After people pointed that out, Azoff again responded by claiming that Ticketmaster simply can't show you all the fees until it knows how many tickets are being bought and what the shipping method is.

A few hours later, Ticketmaster launched a blog, where the first post tries to delve into this by suggesting that the problem isn't the fees, it's that you don't understand the fees. Yeah, really. This is incredibly tone deaf on Ticketmaster's part. People understand fees just fine. As Eliot Van Buskirk at Wired points out "each dollar that comes out of their wallets is identical." No one cares that Ticketmaster has to pay various third parties, such as "promoters, venues, teams, artists" out of those fees.

Years ago, we discussed a nearly identical situation with phone bills, showing how people were incredibly annoyed with massive unexplained fees, and the telcos insisted they were necessary to "recoup costs." But, as we pointed out, in most businesses you recoup the costs in the list price and don't break out fees. Otherwise, we'd have lots of companies doing this sort of crap: Want a pizza pie? It's just $3, but there's a $3.50 "crust fee," a $9.38 "oven fee," a $4.50 "service fee," and a $2.18 "cleanup fee." Plus tax.

That, of course, is ridiculous and would piss people off -- just as telco fees do and just as Ticketmaster's fees do. If Ticketmaster wanted to make people happy it would stop telling people they need to be better educated about fees -- a subject they don't care about -- and just offer straight up, all-in, pricing. If Ticketmaster has to pay a bit more to some third party because of this, well, why not figure out a way to bake that into the overall price. It's called forecasting, and most other businesses predict their cost of goods sold using various forecasting methods, and it seems rather silly that Ticketmaster apparently cannot.

Recently, we'd been discussing how the concert business for (non-arena) musicians was still doing well for some, but that everyone was getting more and more frustrated about fees and services charges added to ticket prices. We also wrote about how the band The Pixies went direct to fans with concert ticket sales, avoiding some of the annoying middlemen. It looks like more artists are starting to wake up and take notice.

Singer Joe Pug, who you may recall took part in our CwF+RtB experiment last year, and has been experimenting with more fan friendly business models for a while, is trying to do the same with a new $10 Tour. The idea is that all of the shows (with a couple of specific exceptions) on his next tour will cost only $10 -- and he's testing out selling at least some of the tickets directly with no fees at all, and if that goes well, will try to do so for other shows.

There is some precedent here. Corey Smith, who we've written about many times in the past, has used $5 tickets to many of his shows to help him build up his fanbase. In that case, the story went that this helped him connect with many more fans because at $5, it was easy for an existing fan to convince friends to go (or even pay for them to go), leading to many more people getting to see Corey live.

Still, what's most interesting to me is that more and more artists, like Joe, are recognizing how much people hate some aspects of the concert-going experience (mainly dealing with the middlemen who lump on all those fees) and realize that there's a really good way to better connect with fans: which is to cut out that middleman:

A few months back I bought tickets for a concert- which shall remain nameless- only to get manhandled by service charges and by their Newspeak cousins, "convenience fees". The actual price was nearly double the face of the ticket. Half of my money was going to the band I loved, the other half to horse-thieves. Reining in ticket fees has been notoriously difficult, even for artists of great influence. But in a small step, we negotiated to do SOME of the tickets directly through our website. We're going to try this for the Chicago show on 10/16. The first 50 tickets will be available exclusively at my website with zero fees. The amount charged to your credit card will be exactly 10 bucks per ticket. If all goes well we hope to roll out the no-fee ticketing for entire tours.

Whenever we discuss examples of successful bands who utilize live shows as part of their business model, or when we point to data about how live revenue is growing, people often focus just on the data available for "big concerts" in arenas and amphitheaters. For example, last year, we wrote about a research paper claiming that live revenue couldn't replace recorded music sales revenue. While an interesting bit of research, there were a few problems with it. First, we certainly have never claimed that live alone is the business model for musicians. Live is one component that seems to work well for many, but most of the business models we talk about involve a variety of revenue streams. Second, as we've shown recently, the "recorded music" revenue tends to go almost entirely to the record label, not the artist. So, from an artist's perspective, they're usually not "replacing" very much. But, most importantly, the data itself seemed to only focus on giant concerts: the kind that plays at arenas and amphitheaters. This sort of data is out there, but it's not everything. Yet, with various reports of financial problems at Live Nation, some critics are rushing around to claim that all the folks who said "live" would "replace" recorded music revenue were clearly wrong. In fact, we've had one critic submit about 30 such stories.

But, of course, while Live Nation has something of a death grip on arenas and amphitheaters, that's not how most musicians play live. Ian Rogers points us to a wide-ranging, but quite interesting, interview with indie band booking king Tom Windish, where he notes that in the realm he's working in, things are fantastic. It's in the middle of the interview, where he's asked about whether the business is "hurting":

Are promoters hurting this year?

We're not. It seems that Live Nation is. I don't really pay attention to the side of the business that is arena or amphitheatre driven. People are excited about seeing a lot of our bands. I hope more of them get popular. That would be great.

What's hurting the live business overall?

It's a combination of things. The price (of shows), and the surcharges; I think that's what is souring people the most. They are ridiculous.

Most of your roster works with cheaper ticket prices.

Yeah, I would say that most work in the $15 to $20 range before service charges are applied which are very high.

There are two key points in there concerning live music. The first is that his business -- which represents a ton of top independent acts, isn't hurting. We've spoken to a bunch of musicians who fit into that same category, and keep hearing basically the same story. If you're in the range where you're performing clubs and small theaters at $15/$20 a head, and have a decent fanbase, you can do quite well.

The second point, of course, is the sheer inefficiency of the ticketing process that has allowed middlemen to add all sorts of annoying fees and surcharges. It still seems like that's an area ripe for change.

Later in the interview, Windish makes another point that we've discussed in the past as well. "Live" doesn't necessarily mean having to go all the way around the country. It can really mean building up a really strong local audience, and gradually expanding it. That was a key part of Corey Smith's successful strategy, in that he kept touring locally, and kept slowly expanding his geographic footprint. Even today, his (massive) success is still located mostly in the southern US, and he's admitted that the next step is to slowly start to expand into the northeast. In the interview here, Windish makes a similar suggestion for bands. After talking about how many bands mistakenly just focus on playing big "festivals," the interviewer and Windish point out that building up a local audience (i.e., the old fashioned way of doing things) still works:

If a band doesn't land a festival, it can work within a region and explore opportunities.

That's a good way to do it, too. That's kind of an old school way of doing it. We have a lot of bands, especially foreign bands, that will come here and focus on New York for a week. Then, they go home to France or the U.K. and keep playing where they live. Then they come back here, play New York more, add in L.A. and, maybe, add in Toronto. Then they will go back and work in Europe again. The buzz that is generated in Europe will trickle over here pretty much immediately.

The point is, there are lots of interesting strategies that various acts can use to be successful well playing live shows -- and simply assuming that "live doesn't work" because Live Nation is having a down year sort of misses the point.

You may have seen some of the rather popular videos by Common Craft, which has built a rather large following based on these videos about technology and social media using paper diagrams on whiteboards. What the videos are really good at is simplifying things in a way that's easy for people to understand. For example, the video, Twitter in Plain English has received nearly 1.7 million views and is often sent around to people who are trying to understand Twitter.

Like most viral video efforts, the videos are hosted on YouTube, which makes them easy to embed and share. Except, apparently, that's not working within Common Craft's business model. An anonymous reader sent over a story about how the company has set up a new licensing scheme for embedding its videos on websites, and the fees get pretty high pretty quickly. Digital Inspiration notes that embedding one of those videos on a popular website or blog could cost thousands, since the prices are based on views. Lee LeFever, of Common Craft, responded in the comments that this was targeted at companies, rather than "bloggers." However, it's not clear if this means the videos will remain on YouTube -- in which case, companies can just embed them automatically -- or if they'll keep them off of YouTube.

Either way, it's difficult to see this working out. I'm sure some companies will pay, but on the whole, it seems to break the value chain here. Common Craft could, instead, offer up the ability to make custom videos for companies, but on its website, it says that they'd rather just focus on their own videos -- and points anyone who wants custom videos to a series of other video producers. The thing is, if you want your video to be viral, you can't also charge for it. There are three options that I can see, and none of them seem that good:

1. They leave the videos on YouTube as embeddable, and just hope that companies will pay them anyway.
   
   In this case, many companies would likely embed the videos anyway, not even realizing that CC wanted them to pay up. That leads to confusion and no legal basis for CC's request. After all, it put the video on a video sharing site and allowed embedding. That seems like a pretty clear authorization to embed the video.
   
   
2. They leave the videos on YouTube, but not as embeddable, and make companies pay to embed
   
   As we saw with the band Ok Go, when EMI disabled embedding for the band's videos, traffic plummeted 90%. You don't go viral if you don't allow embeds.
   
   
3. They stop using YouTube altogether, and don't release the videos publicly themselves
   
   It's hard to be viral when the videos aren't anywhere online.

So with all of that, I'm still confused as to how this offering works. It seems like an attempt at the honor system to pretend that an abundant resource isn't abundant. Instead of doing that, why not focus on the scarcities -- such as creating custom videos (as mentioned), consulting (scarce knowledge) or advertising/sponsorship (selling the scarcity of attention). It just seems like other models would make a lot more business sense.