Moses Avalon Archives

Moses Supposes: NAMM Slam 2012 — Can 92,000 be wrong?

Moses Avalon is one of the nation’s leading music-business consultants and artists’-rights advocates and is the author of a top-selling music business reference, Confessions of a Record Producer. More of his articles can be found at www.mosesavalon.com.

Generally, NAMM is described by me as a 100,000-square-foot Guitar Center with about 70,000 people playing “Stairway to Heaven.”

Not this year. Aside from a record-breaking 92,000 attendees, NAMM has grown with the times, expanding from mere trade show to conference, power broker meet-‘n’-greet.

Moses Supposes: SOPA opera and the anti-music media bias

With piracy affecting all areas of commerce, why does it seem like only the music biz is whining? Well, because the mainstream media is only “reporting” about them and ignoring the massive extra-music industry support for SOPA. But why? Is SOPA really such a huge threat to media outlets’ revenue that they would sell out on a bill that is designed to keep themselves alive?

The other day I read a story about how the E-book trade is being rifled by piracy. The journalist postulated that the reason pirates have been ripping and burning E-books is because the public doesn’t want to pay the “high price” offered by Kindle, Nook, Kobo, etc. A reader posting in the comments section sympathized, hoping that the “fledgling” E-book trade would not be too badly hurt by piracy. Then a lawyer for a website that sells counterfeit designer handbags and is presently under indictment was quoted. He defended his client with intimations that the world is entitled to designer style without paying designer prices.

High prices causing piracy? Entitlement to quality goods and services? It all started to sound familiar. Where had I heard these defenses to theft before?

That’s it!! The music business! According to just about every paper and blogger, those bastards are charging $15 for one song. No, wait, it was $15 for 12-15 songs, but only one song is good, right? No, wait, it’s the record company’s greed that makes artists release only one good song on an album. Wait, I’m starting to get confused again, because someone smart once taught me that theft had little to do with the quality of content; people steal bad records too, right? (Britney Spears was one of the most illegally downloaded artists at one time.)

I thought theft was caused by a person not wanting to pay for something they perceive they have a need for, or a right to. Yeah, that rings true.

Now, can you imagine these same absurd arguments of “high price = theft” being printed about any other industry but music?

Moses Supposes: Goodbye, Edgar; We Hardly Knew Ya

Is the Bronfman exit the sign of great things to come in the record biz?

So Warner Music Group chairman Edgar Bronfman quit. Who cares? Well, I do, and so should you if you’re an artist or anyone who services one.

I never met Mr. Bronfman. The closest I came was to sit a table away from him at an awards function years ago, and here is the embarrassing part: I didn’t even know it was him.

Ed changed the music business, and though we could argue for another ten years as to whether he changed it for better or worse, the truth is that it’s now irrelevant, because it’s his departure and this particular time that has meaning. Now that the most significant (albeit not the largest) label, Warner, is in control and positioned to be the most influential distributor in the game, what is the Russian guy who bought it gonna do? He’s going to clean house as step one.

Ed didn’t just quit. He was fired. Not with a pink slip, but by the natural merger and acquisitions attrition of a golden parachute and planned obsolescence. If you didn’t see this coming, you’re not paying close enough attention to the recent music-biz math.

Moses Supposes: The big opt-out — Steve Jobs’ E-mail from the other side

I was not really affected by the death of Mr. Steve Jobs until the other day when I got an E-mail from him — about a week after he passed. Well, clearly it could not have been from him — he’s in an important meeting right now, I’m sure — but rather someone at Apple cleaning up his affairs.

As many might know, Steve did not believe in putting many layers between him and his customers. For several years well into his worldwide fame, anyone could E-mail him at steve@apple.com. And for about six years now, that addy and another that led to his inbox have been on my mailing list along with the other 14,000 (+/-) of you all.

It seems he’s carrying this policy of staying in touch, even in the after life.

Moses Supposes: Did the Digital Music Forum West justify the price tag?

I suppose there is something refreshing about going to a music conference and not seeing too many familiar faces. Sure, I knew many of the panelists from the scene, but the attendees…? Who were these people? Young, cool haircuts, mannered. Was this a music conference?

Digital Music Forum West (#DMFW) was held this year at the Hollywood Roosevelt hotel in Los Angeles on October 6-7.

About 350 registrants filtered in and out of attendance for two days’ worth of 15-minute speeches by people on the tech cusp. Attendees were split between artists on their way up the food chain of the LA music scene and technology providers who navigate on the periphery of the music business.

Unlike every other conference, instead of multi-person panels, DMFW chose to do it more “TED” style. No, this does not mean that music consultant Ted Cohen, of TAG Strategic, decided who speaks and who doesn’t (although, as the moderator, it did have that feel). It means that the format was more in line with the famous TED Conference, where each speaker takes the stage for a short time to give their presentation. It leaves little room for questions and was supposed to discourage speakers from pitching their company. Did it?

Moses Supposes: “Termination of masters” — bringing new life to classic recordings or helping us lose them forever?

Many artists claim that, given the opportunity, they would take back their recordings from their money-grubbing labels. Well, hundreds of acts will get that chance soon. Recently, the subject of “reversion of masters” surfaced in the New York Times. But when push comes to shove, many artists might opt to keep their hit recordings right where they are.

This excerpt is based on a chapter from the latest book by industry expert Moses Avalon, 100 Answers to 50 Questions on the Music Business.

While many in the music space have known about the coming copyright Armageddon (known as “reversion” / “termination of master rights”) for several years, most artists still have no idea exactly what it means for them and what they can do about it. Though the idea of artists taking back their classic recordings might seem great, given that many feel mistreated by their labels, my bet is that the “devil you know is better than the devil you don’t” philosophy will prevail when the time comes. Here’s why, and a brief guide to help with this decision.

First, what is reversion?

The Copyright Act states that after 35 years, the license or transfer of a work to a publisher (or label) can “terminate” and revert back to the original author. Under that law, artists who recorded material after January 1, 1978 are eligible to reclaim their masters in the year 2013. If the copyrights were created/transferred in 1979, then they are eligible for reversion in 2014; if created in 1980, they are eligible in 2015; etc.

Sounds simple, but for those that recorded/released prior to 1978, things get a bit more complicated. Copyright law has changed several times from 1972 to the present, resulting in several important exceptions to the “termination of masters” provision. For example, because of the change in law that occurred in 1978, artists whose recordings were registered between 1972 and 1978 will need to wait 56 years before they can reclaim their masters; and artists whose masters were recorded before 1972 can never reclaim their masters, because — believe it or not — no sound-recording copyright existed before 1972.

To make matters even more confusing, the window to submit a “termination of master” claim varies in length for each of the zones listed above. Ugh!

With so many variances in the law, we really need a computer to keep track of what masters will become available (isn’t there an app for that?) — especially when one considers that the albums immediately affected are some of pop music’s most successful recordings.

Moses Supposes: Why you should think twice before joining ASCAP, BMI, or SESAC (Part II)

In part I of our three-part series, “Why You Should Think Twice Before Joining ASCAP or BMI, or SESAC,” we covered the basics of why you might be better off waiting to join one of the PROs. In part II, we are going to examine the widely held belief that these performing-rights organizations are “nonprofit” entities, and how this fallacy affects the way that they both operate. And while we’re un-spinning that, we’ll learn a thing or two about actual nonprofits that might surprise you.

On any music-business panel where the PROs have a presence, this question always comes up: “Why should I join ASCAP/BMI instead of SESAC?” Reps from both ASCAP and BMI will robotically respond, “Because unlike SESAC, we’re a nonprofit organization.”

Is that true? If so, does being a nonprofit mean that you, as member, will get more cash? What if it was all a lie? All of it. Would that lie make you leery of other claims that ASCAP and BMI make about your benefits?

It’s not too hard to figure out why someone would claim to be a nonprofit; when people think of nonprofits, the word “charity” is usually not far behind. It also fosters the image of employees flying coach, eating bag lunches, and working tirelessly at a thankless job.

But, in truth, ASCAP and BMI are among the richest entities in the music business.

What exactly is a “nonprofit”?

From the IRS’ point of view, “nonprofit status” means one main thing: after you pay all of your expenses, any remaining money must be paid out to your members or your cause, thus leaving no “profit” left to distribute to stock holders — or anyone, really. This is true, even if you have 99 cents worth of expenses on every dollar that you make and give only a penny to your cause. The caveat being that it must be 99 cents worth of “legitimate and necessary expenses.”

ASCAP claims to have the highest cost/payout ratio (called a “cost/benefit ratio”) of any PRO in the world — 13.5 percent — meaning that 86.5 cents of every dollar that it collects goes to its members. BMI claims on its website that its overhead is only 15 percent, meaning that 85 percent goes towards its members.These are acceptable percentages, comparable to any legitimate, tax-exempt nonprofit charity. Save the Children, which pipelines donations to underdeveloped nations, has a similar cost/payout ratio, so it’s no surprise that the PROs would emulate that type of organization.

ASCAP and BMI both claim that after covering their necessary expenses, they pay out all remaining money to their members, leaving no “profit” at the end of each year. But what do the PROs consider “necessary” to spend your money on? A few facts:

– The CEOs of both ASCAP and BMI receive annual compensation well into the low seven-figures. Executives are paid quite well too.

– Both have offices in prime real estate in Manhattan and Los Angeles, where cumulative rent approaches millions of dollars per year.

– Both throw lavish and expensive parties designed to rally new members and give away huge cash awards.

– Everything listed above costs each PRO about $100,000,000 per year in “expenses.”

Big parties? Huge salaries? Fancy offices? A hundred million bucks a year in overhead? Does this sound like a charity or any nonprofit that you are familiar with? Are any of these expenses truly “necessary” to collect performance fees that are due them by law?

Moses Supposes: Will HD Radio lead to “hear ‘n’ buy” technology?

You want the 2011 Consumer Electronics Show in one sentence? 3-D TVs, every iPad accessory you can think of, and competing tablet computers. There, I just saved you a trip to Vegas.

Think you’ll never want a 3-D TV or an iPad? You’re wrong; trust me on this. Sony, LG, and a few other minor players are going to make you want 3-D so bad you’ll buy personalized eyewear just for the experience. And as far as juice for the iPadophiles — I cover that after this next thing.

What’s above is for the general public. But for us in the music space, I saw just one significant piece of new technology. Granted, I only got to cover 200,000 of the 1,000,000-square-foot show, so I’m sure I missed a few cool production gizmos. But I’m not impressed anymore by all the studio toys. Show me a new way to sell millions of records, and then I’ll get a woody.

And one exhibit did: HD Radio.

Moses Supposes: PCMag flips RIAA the bird

If you ever had any doubt that the ISP industry is at war with music and other content providers, this should put the controversy to rest. When a popular consumer computer magazine acutely and brazenly facilitates its readers to steal music via P2P, even after all the court battles, how can there be any room for doubt that this is anything short of a deliberate attack?

Even with ruling after ruling that clearly states that file sharing is a crime, even after every single legal argument has been made and defeated as to how file sharing commercial music might, in some extreme interpretation, be legal, some people just don’t get it, or just don’t care.

Moses Supposes: Epic gives up the Ghost

Ah, what happened to the days when being a music executive meant that you could party with the acts in your office, sleep late, yell at underlings, and get rewarded even if your numbers were bad? Well, they’re still here, unless you happen to have one important character flaw: a vagina.

You gotta read this Hollywood Reporter article on the firing of Epic president Amanda Ghost first, if you haven’t already.

You know, I’ve always said that as far as sexism is concerned, the music space defied the odds. We have far more female executives in positions of true power than probably just about any other industry, except maybe TV.

In my first book, Confessions of a Record Producer, in the “Miscellaneous Myths” section, I actually have a chapter called “Are Women Discriminated Against in the Music business?” Using statistics and raw data, it proves that the answer is “no.” We have a great deal more gals in the driver’s seat than any other biz. But after what Epic and, independently, the law firm of Boies Schiller have done, I think that I need to take another look.

Moses Supposes: EMI will not die, says CEO

It must be tough to be Roger Faxon right now. In early November, he wakes up to find that not only has his sugar daddy, Terra Firma, lost in court to its lender Citigroup, but many bloggers and journalists (me included) had written an epitaph to EMI, the company he runs, essentially throwing dirt on the grave of the major label before the coroner’s report is signed. Tired of pulling employees off the ledge of the building, Faxon fired back.

In an odd move, rather than call a press conference to publicly diffuse all the negative speculations, which would have opened his comments to journalists’ scrutiny, Faxon opted for a private memo to EMI staff. In essence, he called the press irresponsible and implied that the blogosphere should bugger off.

Moses Supposes: The new team

Moses Avalon is one of the nation’s leading music-business consultants and artists’-rights advocates and is the author of a top-selling music business reference, Confessions of a Record Producer. More of his articles can be found at www.mosesavalon.com.

Many “how-to” music biz books like to discuss the concept of the “artist’s team.” This refers to the business machinery behind the creative product. Typically the team members are: the lawyer, manager, publicist, and business manager. Each still play very significant roles in the process after the artist grows out of his garage and is headed for stardom. But how about before all that, while the artist is still developing? No one seems to want to talk about what personnel the artist needs to get to that higher plateau.