SONG CONTEST BLOG

Peter Kafka of All Things Digital, part of The Wall Street Journal Digital Network, confirms that one of my favourite music sites and Webware 100 Winner, Grooveshark, is being sued by EMI.  Here is Grooveshark’s statement sourced from Peter’s post:

“For the past year, Grooveshark has been in talks with EMI Records and other copyright holders to negotiate licensing agreements for the use of their content. We are pleased to announce that over the past few months Grooveshark successfully concluded mutually bene?cial agreements with many artists, labels, and publishers that we hope to be a template for other such agreements with additional copyright holders.

Recently, EMI Records chose to abandon the template we’ve built with the help of other major copyright holders and opted for their traditional intimidation tactic of ?ling a lawsuit as a negotiating tool. We ?nd the use of this negotiating strategy counterproductive, as Grooveshark has been willing to conclude an agreement with EMI Records that is economically sustainable for both EMI Records and a start-up company the size of Grooveshark.

Grooveshark is run by a group of young and passionate musicians. We love music, we make music, and we believe that the use of all music should be paid for. We adopted this core philosophy at our inception and to date have concluded agreements with hundreds of record labels, major US performance rights organizations, and thousands of independent artists who support Grooveshark’s business model. (See: Grooveshark Artists)

As musicians, we support the rights of copyright holders and strive to sign sustainable agreements with all content owners, ensuring that all artists get paid– or we agree to remove content from our system in accordance with our DMCA Takedown Policy. We hope that EMI Records eventually follows the lead of the many forward-thinking labels we are already working with, who would rather get their artists exposure and a fair share of our revenue than block content access and force customers to illegal networks.

We understand that the economy of the digital music business is in a state of ?ux, and we hope to help ease this transition by providing the required new tools and services that lead to the next generation of the music industry. We respect the ownership rights of the major labels and publishers, and our core mission has always been to compete with piracy by offering a service that is genuinely better than what illegal networks offer, while also ensuring fair payment to copyright holders. Our next important step on our road to success is to conclude a mutually bene?cial agreement with EMI Records that is sustainable for both EMI and Grooveshark.”

Related Posts
Music Piracy or Theft?
Radiohead against the RIAA
Copyright Laws and Issues on the Colbert Report

Presumably in response to EMI’s recent formal complaint and Warner’s lawsuit last year, SeeqPod filed for Chapter 11  with the U.S. Bankruptcy Court of the Northern District of California two days ago.  The music search engine which rolled out an attractive pay-for-play advertising programme for artists is liquidating its assets by selling its source code to developers for $5000, perhaps encouraging many services just like SeeqPod to emerge in the future.  Yet another sorry day for the music industry…

Related Posts: Grooveshark Artists, Jango Airplay

Typically, an artist manager receives 15% – 20% of the artist’s Gross income or 50% of the Net income.  I personally like the 50/50 model.  15% may not sound like a lot but keep in mind that the artist is responsible for expenses and if the artist is a four member band, you can guess who gets the biggest piece of the pie.  The artist manager is often the primary reason why the artist sees any money in the first place.  As such, a good artist manager deserves to be rewarded for his efforts, expertise, contacts and, above all, risk.  Besides, 15% – 20% of the gross is often the same as splitting everything down the middle.  In addition, the artist manager may negotiate a commission based on new deals he closed during the course of his relationship with the artist.  This is to protect his investment long after the contract has terminated and he and the artist have gone their separate ways.

A no-commission management deal, whereby the artist pays an artist manager or management firm a salary or ‘retainer’, is a relatively new contract model in the music industry.  The artist has the power to hire, fire and negotiate with his management.  The artist manager has a certain degree of ‘job security’ but can not reap the rewards of a huge commercial success.  No points.  No success fees.  Simple.  And the artist is in control.  This is similar to the way PR companies operate and charge for their services.

At the negotiation table, the terms of the deal, regardless of the type of payment model, should be in light of the degree of financial risk the artist manager is expected to undertake by the artist in the event that the artist can not pay upfront.  Considering that financial institutions define the terms of a loan by assessing the degree of financial risk, it is reasonable to expect an artist manager to be compensated based on similar projections.