by Mike Masnick
Tue, Jan 25th 2011 4:05am
Journalists Don't Do Math: How Does Buying 6,000 Songs With Stolen Credit Cards Get You £500,000 In Royalties?
from the doing-the-math dept
First off, something appears to be way off in the numbers. The reports claim that the teens downloaded their own songs approximately 6,000 times over the course of a year and a half. Yet, they claim they made $773,000 (£500,000) in royalties? I know that Apple now allows slightly higher prices on some songs, but they're not that high. The math doesn't add up at all. iTunes songs in the UK cost £0.79 per song, so 6,000 songs would mean £4,740 spent in total. Take Apple's (approximated) 30% cut, and you're left with £3,318 -- a far cry from £500,000. Even if you assume these songs got the "premium" pricing of £0.99, we're still orders of magnitude off (hat tips to Dave W & Stephen for UK iTunes pricing info). I've gone through the news reports -- and a whole variety of press reports and blogs all report the story exactly the same way: 6,000 total downloads (2,000 by this one guy, Lamar Johnson, who pled guilty to the crime) but not one report that I've found which seems to question the math.
I guess it's entirely possible that buying a bunch of songs yourself would boost the songs onto some lists, that would drive additional "real" sales, but if that were the case, that would be a much more interesting story -- and you would think that the press would point that out. We've certainly heard claims of "real" music releases where labels have dumped money into getting people to "buy" thousands of copies of songs to try to push a song into a hit list but none of the news on this story suggests that's the case.
Separately, despite the claim of the original article that this is a crime, I fail to see how that's the case at all. It's clearly an attempt to launder money via iTunes, but there seem to be multiple serious problems with it. First, as soon as the stolen cards are discovered and the false charges are made clear, it has to be incredibly easy to track down the likely suspect: whoever uploaded the music. On top of that, given iTunes' 30% or so cut, it seems like a somewhat costly way to launder money... in a way that is incredibly traceable, so the money isn't even that well laundered.
by Mike Masnick
Tue, Nov 23rd 2010 6:12pm
from the quality-songs dept
Then they showed the Apple software we’d all have to use to send them each album. It required us to put the audio CD into a Mac CD-Rom drive, type in all of the album info, song titles and bio, then click [encode] for it to rip, and [upload] when done.After the meeting, Sivers wrote up the notes he took from the meeting and posted them to his blog... only to get angry messages from people at Apple about how the meeting was confidential (something Sivers claims he was never told). Either way, they got the contract from Apple, signed it immediately, and got to work. In realizing they had to rip and upload 100,000 CDs all over again, and that it was going to be costly, they asked CDBaby musicians to pay $40 to get their songs onto iTunes. Because of the iTunes activity, all the other major music services also asked for all of CDBaby's music as well -- Rhapsody, Yahoo Music, Napster and eMusic. Apparently 5,000 musicians paid the $40 and CDBaby started ripping all those CDs.
I raised my hand and asked if it was required that we use their software. They said yes.
I asked again, saying we had over 100,000 albums, already ripped as lossless WAV files, with all of the info carefully entered by the artist themselves, ready to send to their servers with their exact specifications. They said sorry - you need to use this software - there is no other way.
Ugh. That means we have to pull each one of those CDs off of the shelf again, stick it in a Mac, then cut-and-paste every song title into that Mac software. But so be it. If that’s what Apple needs, OK.
They ripped and ripped and ripped... and at some point realized that Apple had never returned the contract. Months went by. Sivers contacted Apple... and nothing. Finally, five months later, Steve Jobs did a keynote where he announced that iTunes was doubling the number of tracks available, from 200,000 to 400,000... and in the middle, he made a crack about how they were trying to be selective, focusing on quality, rather than quantity, and specifically noting that anyone could just pay $40 to have music uploaded to competing sites, but that Apple only wanted the best. Sivers realized: "Whoa! Wow. Steve Jobs just dissed me hard! I'm the only one charging $40. That was me he's referring to." You can see the clip below:
The very next day? CDBaby received the signed contract from Apple with details about how to upload their 500,000 tracks.
by Mike Masnick
Tue, Nov 16th 2010 4:05am
Beatles & Apple Finally Going To Let You Pay Money For The Beatles Songs You've Been Pirating For Years
from the well-that's-compelling dept
by Mike Masnick
Thu, Sep 2nd 2010 10:24am
from the it-helps-you-sell-more dept
The latest comes from rumors that Apple was going to double song sample lengths in iTunes from 30-seconds to 60-seconds. There's apparently plenty of good reasons for this, as research has shown that 60-second samples lead to more purchases.
And yet, despite the rumors, you'll notice that Steve Jobs did not announce the expected doubling of samples. Why? Apparently Apple had the approval of all four of the major record labels... but he forgot to go groveling and beg for permission from the other side of the coin: the music publishers. Apparently, various music publishers read the rumors of the doubling and were quite upset that Apple hadn't asked for their permission, and even started lawyering up to sue, in case Apple announced such a plan without first getting permission from various music publishers.
And people say we're exaggerating when we show just how ridiculous music licensing is. This isn't about copyright or revenue or anything. This is just childish foot-stomping by a group that demands that everyone ask permission before helping them make more money. Stunning.
by Mike Masnick
Wed, Aug 11th 2010 2:25pm
from the that-would-be-nice dept
Michael Robertson, who runs just such a music locker company, MP3Tunes, notes that Apple appears to be quietly enabling this feature without making a big deal of it, perhaps because of ongoing negotiations with music labels over the widely rumored "iTunes-in-the-cloud" service. The newly enabled offering isn't iTunes-in-the-clouds, but does allow some basic music streaming functionality for users who have music files stored on an iDisk account. This seems perfectly reasonable, of course. It's your music, and your storage locker -- why shouldn't you be able to stream it without involving the record label?
The labels, particularly Universal Music, apparently disagree:
One company sure to be miffed at this new capability is Universal Music Group (UMG) the world's largest music company. They have told net companies who have inquired about offering personal cloud music services that backing up and downloading music files is OK with limitations, but streaming music files requires entering into a license and paying a per stream fee. Apple's service allows unlimited sharing (no username or password required) and now background streaming - all without a license from the record labels.As Robertson notes, this is Apple "testing the limits" of what they can do before the labels freak out (expect that shortly). However, the question really is how far will Apple go to fight this issue with the labels. In the past, Apple has seemed perfectly willing to cave to certain aspects of record label demands in an attempt to harm Apple's own competitors -- and I could see the same thing happening here as well. Even if Apple doesn't want to pay per-stream fees to the labels for previously purchased music, it might realize that it's still better situated than competitors. Unfortunately, Apple doesn't have much of a reason to fight for consumer rights in this scenario, even if it's testing the boundaries quietly.
by Mike Masnick
Fri, Apr 30th 2010 4:16pm
from the can't-have-competition... dept
Instead, it looks like Apple bought Lala to shut it down. Just five months or so after purchasing it, Apple has announced that Lala will be closing at the end of May, pissing off lots of users. Now, it's entirely possible (or even likely) that Apple is timing the shutdown with a launch of a totally new streaming iTunes-in-the-cloud type service, but it does seem weird to buy a company and shut it down so quickly, and raises questions of whether or not the purchase was really about building out Apple's offerings, or about shutting down a nascent competitor just before Apple launched its own version. Also, if the plan is to launch its own version, why "shut down" Lala? Why not just transfer them over to the new service?
In the meantime, Spotify still hasn't launched in the US, but you would think that now might be a good time to step in and sign up disgruntled Lala listeners -- before Apple really enters the market...
by Mike Masnick
Thu, Feb 11th 2010 3:16pm
from the that'll-show-them dept
You may not use or otherwise export or re-export the Licensed Application except as authorized by United States law and the laws of the jurisdiction in which the Licensed Application was obtained. In particular, but without limitation, the Licensed Application may not be exported or re-exported (a) into any U.S. embargoed countries or (b) to anyone on the U.S. Treasury Department's list of Specially Designated Nationals or the U.S. Department of Commerce Denied Person's List or Entity List. By using the Licensed Application, you represent and warrant that you are not located in any such country or on any such list. You also agree that you will not use these products for any purposes prohibited by United States law, including, without limitation, the development, design, manufacture or production of nuclear, missiles, or chemical or biological weapons.And, as Nate Oman notes:
Notice, as I read this clause not only are terrorists -- or at least those on terrorist watch lists -- prohibited from using iTunes to manufacture WMD, they are also prohibited from even downloading and using iTunes. So all the Al-Qaeda operatives holed up in the Northwest Frontier Provinces of Pakistan, dodging drone attacks while listening to Britney Spears songs downloaded with iTunes are in violation of the terms and conditions, even if they paid for the music!Now wouldn't that be a great lawsuit? Seeing Apple take those on the US terrorist list to court for breaking their iTunes terms of service?
That'll show 'em...
by Mike Masnick
Wed, Feb 10th 2010 2:22am
warner music group
from the like-you-couldn't-predict-that dept
from the well,-how-about-that dept
"Artists receive fixed residuals for music sales based on individual contracts via their respective record companies," says Max Clingerman, a music executive for MixJam Records who explains "the staggering price increases are not for the artist interest, rather intended for executive pockets."While I'm sure the intention was very much for exec pockets, I was under the impression that most major label contracts included royalty rates based on retail price. And while most signed musicians never recoup their advance, and thus never see any royalties whatsoever (no matter what the price), I do wonder if it's really true that musicians don't get a larger cut of higher priced digital sales (at least in the fictional accounting systems the labels use).
Of course, the larger point made by the article is almost certainly true. In increasing the price to $1.29, the demand for such songs has been driven down significantly, leading people to look for alternative sources for the same music.