Historically, music publishing catalogues are valued at a multiple of the NPS (Net Publisher Share) with the multiple increasing or decreasing according to the perception of the future earnings potential.

The NPS is the gross margin the publisher keeps after the songwriter has been paid and is made up of a basket of Performing Rights income, Mechanicals, Synch and Print.

Back when I was involved in music publishing in the 80’s and early 90’s from within the music business rather than in a business advisory role, I would regularly be asked to do analyses of likely gross revenues going forward. This was generally because an emotional decision had been made to make the deal, but a rationale needed to be built to meet the internal management metrics set out by the corporation to minimise risk.

That meant looking at sales history, territories where sales had taken place and potential for growth in the future.

I would do the research, submit the numbers and generally would be told that the numbers weren’t quite what they were looking for and consequently I had to look for additional revenue sources that could help bump up the perceived value to get a deal over the line.

In every case that I can remember, even with incredibly bullish future revenue predictions and with quite substantial multiples driving very optimistic valuations, the acquisitions recouped their investments in shorter periods than anyone anticipated and went on to be hugely valuable.

That wasn’t because I was a genius. It was because the songwriters were artists who had enormous talent. As they built their fan bases, the back catalogue that had been purchased kept on increasing in sales even though some of the albums were years old – a lifetime in pop music.

I suppose it was thought that I had some talent in figuring out business models and how to extract revenues because while at MCA I recommended a strategy that was implemented and which drove a massive increase in the gross revenues of the publishing company. This was achieved by simply acknowledging reality. Artists that wrote their own songs, but not necessarily the lead airplay single, were more valuable to acquire in short term cash flow terms than song writers who wrote the hits.

This was because sales ensuing from the exercise of distribution clout by a major record company would sell through in enormous numbers, which would in turn deliver very high mechanical income. Those were the days when album sales were booming.

The hit song would generate considerable income from performances and would typically receive one tenth of the mechanical income from being a track on the album. Not too shabby, but controlling nine tenths of the mechanical income on an album that sold 5 million copies was pretty serious income.

In such a scenario, the valuation of the underlying catalogue was then about having an understanding of the granular detail of the make up of the revenue. Now it is even more critical to understand the drivers for the revenue and what the active momentum is that supports the revenue of a catalogue. Songs that were airplay hits then had a life beyond the charts and have a continuing value for a rights owner. Songs that derived their value predominantly from mechanical sales need to be valued much more carefully and with greater consideration.

Now there are a vastly increased number of variables inherent in the way that music is consumed that make it much more difficult to build out a robust valuation of a music catalogue. (I don’t regard piracy of copyrights as having any bearing on establishing true value as it represents revenue that is foregone in any event).

One quite critical change to the market that is both good and bad is that as a result of iTunes consumers don’t have to buy albums to get a song. They can easily browse all the songs that an artist has released and purchase only that which they particularly like. That means that there are hidden gems that may have a new life even though they are obscure and were not truly valued by the record company. But it means that those songs that were album fillers in times gone by have a substantially lower potential to yield income than they did before, because of the nature of uncoupling.

We appear now to be moving to a period similar to the early days of music publishing where the true value of a song writer was established purely by the hits.

In trying to develop a robust valuation model now what seems to be apparent is that quite forgettable pop songs of the past have potential in the future in movies and TV shows, as themes for advertising jingles and as novelty downloads or ringtones.

Being able to look for the gems in a catalogue and to then extract value from the song, and bearing in mind that the song will continue to generate money for its creators and their heirs and its publisher for possibly 70 years or more from now means that the art of publishing is returning. Instead of it being a pure numbers game, which some people in the industry like quite a lot, it is going to be about what it was in the past – identification of songs that resonate emotionally with the masses on a timeless basis. One of my friends and mentors in the music industry for years, Wally Brady, put it aptly, “A hit song is being able to say “I love you” in a new and unique way”. There is science in good valuation, and there is art in identifying what will touch the human soul. Putting them together enables acquisitions of catalogues to work for both the songwriters and the new owners of the catalogue.

Here is a pic I got sent in the mail this morning - ironically by someone who is in the DVD manufacturing business.

Funny but ironic isn't it, that even the people who are in the business get the sense that the industry may be on the wrong track...

 

Introduction

Over the last several months a number of reports have been published on the impact of file sharing of popular music on Europe's macro economy.

The purpose of this paper is to identify a number of arguments that have been made that are provably false or present data that is contrary to other so-called factual data that is diametrically opposed the data in these reports.

The question is what the rationale might be for publishing reports that can be so easily disproven. While we can only surmise what is behind this, we have a very deep concern with the concept of publishing and promoting information that could possibly be treated as fact and which could then be used to argue changes in legislation governing various rights that ordinary citizens may have, particularly with respect to their ability to have an ongoing internet connection.

The fundamental problem with reports of this kind is that they create an environment where logical arguments are made based on false hypotheses. And as any good student of logic understands, if you start with a false hypothesis it is impossible to reach a provably true conclusion.

The pursuit of changes to legislation based on false hypotheses, if successful, would almost certainly lead to random unforseeable events and trends taking place that are totally contrary to the philosophical development of the human race and would overturn hundreds of years of enlightenment thinking.

For this reason we believe that the analysis of these recent reports should be carefully considered by readers interested in the legal structures that govern both content and communications as they pertain to citizens.

 

Unfortunately, the details of our response to these various reports now contain many pages [188] of dry, boring statistical data and there is unfortunately no real way to proffer a rebuttal suitable to present in a Blog format that would;

 

a)       Be of interest to the great majority of Perceptric readers.

b)       Be presented in a continuous format suitable for cross-referencing and comprehension.

c)       Be taken seriously by anyone in either Government or Ministerial advisory roles.

 

Therefore  over the next few days, highlights (the more interesting bits) of our research will be published as a series of articles here on Perceptric, and when complete, the entire report  will be tendered (in a more formal fashion) for consideration and comment by academics amongst the global community.

 

Report Number 1.

 

Building a Digital Economy : The Importance of Saving Jobs in the EU’s Creative Industries

 

The study focuses on three questions :

1) What is the contribution of the creative industries to the European economy in terms of GDP and jobs ?

2) What are the consequences of piracy on retail revenue and jobs ?

3) If current policies do not change in the EU, what will these losses be by 2015 ?

We urge readers to read this report in its entirety, so that the highlights of our research in answer to many of these reports findings will have relevance.

According to IBM the more data you have, the better you can see...

I don't disagree with this at all. The problems I see are when selective data is analysed in order to present a specific point of view, when those people who look at the analysis either don't have the time to check on whether the data inputs are correct or not.

I think that a very large part of the problems that corporations are starting to face right now, and will continue to do, regardless of the sector, are caused by not understanding that the ecosystem that they exist in has changed...

Nevertheless... enjoy this video for IBM - But then think to yourself, who is checking that the inputs are correct.

We are living in a constantly changing world. More of those changes are taking place than we have ever experience before, and for some reason people are shocked by much of the change.

But we shouldn't be.

Much of what is taking place should not really be surprising, because it is largely predictable.

All this you probably realize. The big issue is how do you get some benefit from the insight? How do you get to predict not just the what but the when?

I was listening to an interview with Jeremy Rifkin on the BBC the other day who was talking about the need to re-examine the philosophy that we have currently - built on enlightenment principles - and establish something new designed to reflect a global economy, a totally interconnected and interdependent human and planetary ecosystem. Very visionary stuff. (This is a link to the interview)

That got me thinking about the dilemma that many companies find themselves in as a result of the tide of digital technology that has first generated huge productivity gains and now threatens to utterly disrupt their models.

Enlightenment thinking is substantially reflected in the US Declaration of Independance - the notion that "all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty and the pursuit of Happiness".

That concept drives not only the individual but the whole of modern capitalistic thinking - in essence the idea that through individual effort profit should ensue. That travels from the individual through to his or her family and the ability to generate wealth and assets. It may or may not have been the original purpose of Jefferson, but it certainly is the interpretation nowadays.

This kind of philosophy travels through to the nation as a whole with countries whose politicians are tasked with developing and executing policies that will be of ultimate benefit to the nation, even though in some cases (as with Obama's recent health policy win) there are a lot of people who don't get it and don't agree with it.

In between lie the companies and their goals of profit to deliver on the pursuit of happiness for the shareholders through increased and continuing dividends.

But a lot of those companies are looking down the barrel of utterly unsustainable business models.

Their solution is one that is quite logical - they put aside their natural enmity with their competitors and go to their industry association and ask the industry association to act on their behalf, "for the common good". This concept allows the cost of action and the benefit to be socialized, which generally makes sense.

But the problem nowadays is that in developing a "common good" strategy, which is what it is, even if they don't express it in those terms, they start to butt heads with players that have an even bigger "common good" position. These are giant corporate players with massive balance sheets and huge revenue bases such as Google, Microsoft, Apple and other whose brands have become synonymous in the public perception with delivering - not necessarily benefit to humanity per se - but certainly empathy.

The empathy that these companies promise - and deliver on in spades - is the thing that most of the companies that they disrupt do not provide. Jeremy Rifkin doesn't talk about tranformation management in the interview that I listened to, but does talk about the need for empathy on a global basis. I think this is a very powerful concept and is one that, if translated into corporate strategy, can help solve problems and re-invigorate profits. It is actually about delivering a bigger "common good" promise.

Think about content companies as a start. They are fighting a losing battle against piracy in their view. Why? Because they insist that ordinary people sharing content is leeching away their profits. In acting to stamp this out they move to alienate a good deal of their customer base and demonstrate their total lack of empathy with their customer. Now the customer may be wrong to share the content, and may be breaking the law. But having a customer that is wrong is nothing new. All successful business is based on selling people what they want, and not necessarily what they need. But when you start to alienate your customer you are unlikely to sell them anything.

Clearly the content companies need to understand that it is imperative to build empathy first and not destroy it. How do you get to do that when your profits are apparently going up in smoke because the latest iPod enables me to keep on it literally tens of thousands of songs? If I bought them on iTunes it would cost me tens of thousands of dollars. Clearly that isn't going to happen. Google enables me to find songs that I might want to download through a simple search mechanism. My Microsoft operating system allows me to develop data bases of information and to write down my ideas and more... Each of these companies actually has a very real contribution to an empathetic common good solution for me as a consumer.

The big challenge for the content companies is to realize that in order to survive and thrive they are going to have to learn how to deliver the same promise as these companies. It can be done, but it isn't easy. If it was they wouldn't be struggling in the way that they are.

But it isn't just content companies that face this challenge. Every business that can't figure out how to position itself and its model to deliver a common good outcome that is about the customer and not about the shareholder will find that it is going to be disrupted. As it tries to find solutions that are all about delivering shareholder value and not empathetic human value it will find that it keeps on going down a pathway that is ever more circuitous and doomed to failure.

 

OR

 

Why the Music Industry is Losing Money…..

 

Whilst researching statistics for an article I am doing, I came across a little historical gem.

 

The first CD ever issued back in 1982 was “52^nd Street” by Billy Joel.

 

I looked it up on Wikipedia

United States The Billboard Pop Albums 1^[3] 76 7x Platinum^[4] 7,000,000+

 

Which is not bad if you consider the USA population. In other words

 

Percent             Sales              Population

2%

7,000,000

330000000

 

Or one in forty-seven people have a copy of the album in the USA.

 

There was a link on Wikipedia ^ The RS 500 Greatest Albums of All Time : Rolling Stone which took me to the Rolling Stones page.

 

352 on the Rolling Stones Magazine list of Greatest Albums of all time.

. 52nd Street, Billy Joel

 

and, I could listen now.

 

 

But only if I was in the USA.

 

But wait, there were other options available on the Rolling Stone page.

 

Buy RS cover reprints!
Download the cd!
Buy the album at Rhino.com

 

I clicked on Download the CD.

 

 

 

I clicked on the “Listen to Radio” button and was taken to the European site of http://europe.real.com/music/

 

Where my original search request had been dropped. I typed in 52^nd Street again….

 

52ndsearch.gif

 

 

 

52ndresult.gif

 

 

Which of course was not what I was looking for.

 

I had lost the Rolling Stone page by this time. So I thought I would try Last.fm

 

Curiously, Last.fm would let me listen to Billy. Facilitated by becoming a member. In other words, there was no option to remain anonymous.

 

It’s a shame that the efforts of the industry at legitimizing music downloads don’t appear to extend beyond the borders of one or two countries.

 

i.e.: In a perfect world, where a supplier is interested in engaging with me, the consumer, rather than being fobbed off with the:

 

“For music and entertainment services available in your country, please click here……”

 

Which, by the way took me to the same place that thought “52^nd street” equaled everyone BUT Billy Joel.

 

If American programmers can’t yet work GEO IP location databases to find out where an AU APNIC registered IP address originated from, then the music biz is in real trouble.

 

Hint Rhapsody and Real…. Please see the Resources section below for free GEO-IP software and if you would like Aussies as customers maybe you could link them to a service that knows that the worlds first CD was 52^nd Street by Billy Joel.

 

Alternatively and until you do, users are probably still going to use the convenient, no hassles, works every time option…..

 

Emule doesn’t require me to be any particular country, nor does it require that I offer up my user details for statistical analysis.

 

 

On Emule there were 45 instances (file versions) with 54 people offering to share their copy with me.

 

Had I elected to download the track, I could have been listening to it within seconds, hassle free and still anonymous.

 

There-in lies the principal challenge for the industry.

 

How to replace the convenience and accumulated habits of consumers with revenue earning alternatives.

 

We are impressed with many of the digital available alternatives.

 

So I have but one question…. Why couldn’t I listen to Billy Joel via the Internet anonymously?

 

 

 

SneakPeak. (OK it’s the Perceptric version of a Trailer……..)

 

For all those wondering what I have been up to for the last ten days with nary a blog post or a how’s your doody…..

 

It’s been an interesting start to the year.

 

Two reports came out in the last couple of weeks.

 

The IFPI Digital Music Report 2010

 

Music How, When, Where

You Want It – But Not

Without Addressing Piracy

 

and the independent report that emanated from Tera Consultants.

 

Building a Digital Economy : The Importance of Saving Jobs in the EU’s Creative Industries

 

For some time we have been saying that the downturn in sales [if any] has more to do with format change (Compact Disc to Digital) and the industry’s slow response to consumer demand than P2P.

 

 

Although we have found that there are positive indications of file sharing damaging catalogue sales, we are unable to come to the same conclusion on new releases.

 

Whilst perusing the Terra report, found some criticism of the Oberholzer-Gee & Strumpf  2007 paper

 

– Most studies conclude that the impact is negative

and significant (even if, in some cases as

Oberholzer-Gee and Strumpf (2007)133, the effect is

supposed to be negligible)

 

133The results of Oberholzer-Gee and Strumpf (2007) were contradicted by Blackburn (2007) and

Leibowitz (2007).

 

A similar comment in the IFPI 2010 Digital Music Report;

 

“There is one study (Oberholzer and Strumpf, 2004) that claims to find a zero impact but it

has been frequently discredited. All the other studies find some degree of negative

relationship between file-sharing and sales of sound recordings.”

 

again in the Recording Industry In Numbers 2009 report;

 

A well-publicised study by Oberholzer and Strumpf (2004) found

no link between the fall in music sales and illegal downloading.

This study was reviewed by Liebowitz who concluded that “it

is probably something of an understatement to say that [their]

results did not hold up well under this re-examination” (How

Reliable is the Oberholzer and Strumpf Paper On File-Sharing?).

 

 

Being a curious chap, I read the Leibowitz commentary and let Google do the walking…..

 

Here are the concerns I have put to Professors Oberholzer and Strumpf.

 

Secondary Issues: Your Instruments

 

In Table 11 your instruments are different for each album. In Table 12, your instruments only have 17 observations, one for each week. That doesn’t seem like much information on which to explain the downloading behavior toward 670 albums. I am particularly concerned about the German school holiday variable. To start, I am surprised that the coefficient was even positive. I looked at German school holidays and I see that there are usually 12 days in October plus the typical Christmas holiday. Yet according to Table 3, October is when downloads were lowest. Is there something else going on here? Would you mind providing data on the number of German kids on vacation for each of your 17 weeks? (What a ridiculous question from a learned academic – I did not know that sarcasm was an approved method of querying statistical results or analysis.)

 

There appears to be more going on here than meets the eye….. I always thought that academics earned their spurs by being dispassionate and independent.

 

How important are the files of German school children to American downloaders? We really do not know. You only provide data on the total files of Germans used by Americans. 

 

That’s interesting, because although I am familiar with the work of Oberholzer-Gee and Strumpf and don’t exactly agree with all their findings, this was one area of research that I had conducted extensive samplings over – i.e.: increases and decreases in file sharing based on school holidays, work start times and work end times and our data correlated the small sample numbers of the Oberholzer-Gee and Strumpf analysis.

 

This was obviously a velvet gloves off (game-on) situation, where analytical economic theory fails against actual raw data collection.

 

Many of our readers are aware that we set-up and ran for six months (April-September 2009) an ed2k server (non-indexing) to collect search request data from Australian IP numbers.

We restricted the access numbers to 1000 users but still amassed 6 GB per day of search request data.

 

In part to assess the damage or lack of, that file sharing was causing to media creators and in part to confirm the Ipoque data that users were no longer as interested in downloading music files.

 

With the server located initially in Melbourne for the first few months and then Sydney, we discovered that it was still a target of attempted (futile, because it didn’t index users files) server use by international IP numbers (even though it had an overseas latency figure of over 1400 ms).

 

The Kademlia XOR next available bucket does not respect RIPE allocation of IP numbers.

We briefly discussed the Kademlia Protocol in P2P with a Condom. (A blog article and not a formal research paper).

 

However the relevance of the German school kids files to Americans would be in the time differences between the two continents and the habits of user in keeping their computers on all night.

 

If on holidays, obviously, German kids computers are not being left on at night and not making available (average 800 files each) for the download of American kids.

 

This unfortunately is a serious flaw in the understanding of Leibowitz.

 

I wondered if a learned academic can make such an obvious mistake in the analysis of other academics data studies, was it time to speak up about the results of our own empirical data set?

 

Australia is an island without the luxury of gigabyte speed unmetered intercontinental connections. Each megabyte costs someone somewhere (our data says that it is usually the employer that pays) about $0.10 cents. Therefore, as a semi-isolated ed2k enclave, Australia is particularly useful as a reference analysis of XOR propagation.

 

Not-withstanding my above comments, we have noticed a very similar effect related to a children’s television program called Hi-5.

We covered this (briefly) in an article last year, Australians Digital Economy Request For Comments Q.23

 

Google discovered a new Oberholzer-Gee & Strumpf paper, from 2009, and I quote there-from;

 

While the majority of papers reports some sales displacement, the four studies using actual measures of file sharing (Tanaka, 2004; Bhattacharjee et al., 2007; Oberholzer-Gee and Strumpf, 2007; Smith and Telang, 2008) find that file sharing is unrelated to changes in sales.

 

 

What I found most interesting is that everyone ignored the official Netherlands paper,

 

Economic and cultural effects of file sharing onmusic, film and games (TNO)

 

Which is the only paper apart from a Canadian paper, (referenced) to have brought up the positive cultural aspects of file sharing.

 

The research shows that the economic implications of file sharing for welfare in the

Netherlands are strongly positive in the short and long terms. File sharing provides

consumers with access to a broad range of cultural products, which typically raises

welfare. Conversely, the practice is believed to result in a decline in sales of CDs,

DVDs and games.

 

Therein lies the Dilemma for the European Union (and every country outside the USA).

 

Cultural enhancements for the community or blind allegiance to corporatism.

 

At Perceptric we believe there needs to be a balance, ensuring cultural diversity, the welfare of the citizenry and that new content can continue to be created.

 

So, for the last ten days readers, I have been refreshing the recent material on file sharing including the Leibowitz evidence in the Joel Tannenbaum case.

 

Based on what I have read, it is time to revisit seriously the partially completed analysis of Australian file sharing that I carried out last year and rebut some statements that I consider erroneous and misleading.

 

We thought we would look at actual sales data to ascertain the impacts of file sharing.

 

Sales figures by Numbers of Sales, Record Albums, 1991 – 2009, No 1 Albums by Week (USA).

annualalbumswk.gif

 

Source: BillBoard Charts, Neilsen Soundscan

 

Positive growth (however miniscule) over the whole period. Then again, what happens if we just look at the file sharing years?

 

Sales figures by Numbers of Sales , Record Albums, 1998 – 2009, No 1 Albums by year (USA).

Source: Neilsen Soundscan.

 

Yes, it looks grim for the file sharing community (or someone).

 

And that was before we allowed a factor for population growth numbers…..

 

We leave you with just one more little graph…. Call it thinking music……

 

 

More later in the week.

 

 

Resources:

 

http://software77.net/geo-ip/

 

Reference:

 

A Great Invention a 100 years on.

http://www.sony.net/Fun/SH/1-20/h5.html

 

 

 

(Our previous article was the first upset.)

 

This time, Canadians have made the top ten list of countries that are “out to get” the content industries.

 

They share this dubious honour with the following countries.

Priority Watch List

(Links retrieve country specific pdf reports.)

        Argentina

        Canada

        Chile

        Costa Rica

        India

        Indonesia

        Mexico

        People’s Republic of China

        Philippines (OCR)

        Russian Federation

 

In an Article last month, Nate Anderson at ARS Technica said

 

US copyright industries have declared war on Canada, and they want the US government's help in fighting the battles.

 

We, that is I, was/were under the impression that only a sovereign nation could commit to a declaration of an act of war.

 

Yet, I am forced to agree with Ars Technica. In an article last year we defined war as;

 

“War throughout the ages has been traditionally declared for the acquisition by one sovereign state (or Warlord) of another’s (sovereign state or Warlords') possessions.
The legitimacy of the process is provided for by the Charters and Constitutions of nearly all of the World Governments.
 
Definition (US site)DECLARATION OF WAR - An act of the national legislature, in which a state of war is declared to exist between a nation and some other nation. This power is vested in Congress by the Constitution, There is no form or ceremony necessary, except the passage of the act. The public proclamation of the government of a state, by which it declares itself to be at war with a foreign power, and which forbids all and every one to aid or assist the common enemy. A manifesto stating the causes of the war is usually published, but war exists as soon as the act takes effect. It was formerly usual to precede hostilities by a public declaration communicated to the enemy, and to send a herald to demand satisfaction, but that is not the practice of modern times.

 

If the content Industry with its own peculiar accounting systems, offshore bank accounts for the receipt of licensing and royalty fees, international lobbyists (Content Industry Ambassadors) to all Governments isn’t a recognized Independent State, it should be.”

 

Nate Anderson's article was in reference to the Intellectual Property Rights Alliance (IIPA) report (All Countries TOC) released earlier this year that recommended that Canada remain on the 302” watch-list for failing to bring to update it’s legislation in line with other countries (the USA).

 

The (Canadian) IIPA report stated that;

“IIPA regrets to report that its statement in the 2007 Special 301 report – submitted three years ago –

remains, disappointingly, true today: “Canada remains far behind virtually all its peers in the industrialized world with respect to its efforts to bring its copyright laws up to date with the realities of the global digital networked environment. Indeed, even most of the major developing countries have progressed further and faster than Canada in meeting this challenge.”

 

Last year I blogged about Canadians buying more music per capita than the Americans:

In an article “The Music Industry DB the Nice Way or the Facist Way”, we said;

 

Despite a 47% sales decrease to 172.000 copies, Madonna's best of compilation 'Celebration' holds the top spot of the global album chart for a second week. In 3 weeks on the tally the album moved nearly 700.000 units. Michael Bubl's new set 'Crazy Love' follows close behind at no.2 with 169.000 copies. After only 3 days at retail in North America the album sold 132.000 in the USA and 37.000 in Canada.

Sales	Country	Population	Percentage of Pop
132000	USA	330,000,000	0.040%
37000	Canada	31,000,000	0.119%

 

Difference  Canada wins by                298.39%

 

So 298.3% more sales per capita of population than the USA which we would guess isn’t on President Obama’s Black List. [sic: The 301 watch-list]

 

(This result is not exclusive to those statistics. Overall according to Michael Geist’s blog article,

Canadian Digital Music Sales Growth Beats The U.S. For the 4th Straight Year                     

 

 

Michael said;

“Nielsen Soundscan has just released the Canadian music sales figures for 2009.  Notwithstanding the regular claims that the Canadian digital music market cannot develop without copyright reform, the Canadian market grew faster than the U.S. market for the fourth consecutive year.  As the chart below demonstrates, digital music sales have grown faster in Canada than in the U.S. in every year since 2006:”

Year	Canada	United States
2009	38%	8%
2008	58%	27%
2007	73%	45%
2006	122%	65%

 

So if Canadians are buying more  music per capita than US natives, what exactly is the problem?

 

Is it possibly that the Canadians have decided to let the content companies duke it out amongst themselves?

 

In The P2P Liberation Tax, we said;

 

In Canada, the Government has elected to ignore the industry infighting. Their distribution of collected blank media royalties is simple…..

 

66%	to eligible authors and publishers
18.90%	to eligible performers
15.10%	to eligible record companies.

 

There-in lies the rub. The Canadian Government has set a value of only 15.10% on the non-performing and non-publishing Music Industry’s input.

 

From the FAQ of Re-sound Canada (the Canadian not-for-profit music licensing company dedicated to obtaining fair compensation for artists and record companies for their performance rights.)

 

Q3: What is equitable remuneration?
A: For many years Canadian composers and authors have received royalties from the broadcast or public performance of their songs. These royalties are collected by SOCAN. In 1997 the Copyright Act of Canada was amended to acknowledge the essential contribution of artists and record companies in the creation of recorded music and to add a right to equitable remuneration for artists and record companies, which is in line with similar rights in the rest of the world. This right to equitable remuneration is sometimes also called a “neighbouring right”.

The rights to equitable remuneration are the rights of artists (including feature performers, background musicians etc) and record companies to be paid fairly for the broadcast and public performance of their works.

 

And we already established above that the maximum was:

 

15.10%

to eligible record companies.

 

So now we know why the industry is so hot under the collar.

 

When you are used to having it all it’s hard to understand a Government that favours Artists and Publishers over distributing record companies.

 

Howard Knopf  (well known Canadian Copyright lawyer) on his blog, Excess Copyright, said in an article on Feb 16^th 2010 (in reference to Canada being listed on the 301 watch-list);

• Canada already has much stronger copyright laws in many ways than the USA;

• These stronger laws result in significant dollar outflows that greatly favour U.S. interests with little or insufficient benefit for Canadians;

• There is no verified and reliable evidence of piracy or counterfeiting problems in Canada that are any worse than in other comparable countries. In fact, the largest and most accessible market in North American for pirated and counterfeit consumer products remains the streets of mid-town and lower Manhattan;

• The alleged deficiencies in Canada's laws regarding file sharing have not been proven in any Canadian court and the music and film industries have taken no serious initiative to do so, despite having been given a green light to proceed by the Federal Court of Appeal in 2005. Instead, they lobby for US DMCA+ type laws. Indeed, much of the alleged copyright problem that the music industry complains about in Canada is a direct result of its own successful wish for a rich private copying levy, the result of which has included the effective legalization of music downloading in this country, according to comments by both the Copyright Board and the Federal Court. The music industry has proven only that it ought to be careful what it wishes for, not that there is any need to change Canadian law

He then gives 21 examples of how Canadian Copyright law is tougher and different than it’s US equivalent.

(Worth reading….. http://excesscopyright.blogspot.com/2010/02/annual-301-parade-ustr-calls-for.html halfway down the page).

 

Is there a problem in Canada that warrants the attention of the IIPA and inclusion of Canada on the Global watch-list?

 

Yep... the Canadian Government intervened and made sure that Canadian Artists and Producers were taken care of in advance of overseas interest, whilst protecting, in same cases more thoroughly the interests of artists and content creators.

 

It’s a shame that other Governments are not as patriotic towards their own local talent.

Dug out from the archives of the New York Times….. June 13, 1897 NYTimes

 

American Publishers say they are Suffering by Copyright Violations

There-Steps Taken for Redress.

 

“Canadian pirates” is what the music

dealers call publishing houses across the

line who are flooding this country, they say,

with spurious editions of the latest copyrighted

popular songs. They use the mails

to reach purchasers, so members of the

American Music Publishers' Association as-

sert, and as a result the legitimate music

publishing business of the United States

has fallen off 50 per cent, in the past twelve

months. Their investigation has revealed

that all of the most popular pieces have

been counterfeited, despite the fact that

they are copyrighted, and by unknown publishers

are sold at from 2 cents to 5 cents

per copy. though the original compositions

sell at from 20 to 40 cents per copy.

It is estimated by the publishers that fully

5,000,000 copies of songs were printed and

Bold in the month of May.

T. B. Harms, the music publisher, said

yesterday that the American publishers

had held a conference lasting three days

last week, and a committee had been appointed

to fight the pirates. This committee

consists of Isidore Witmark, T. B. Harms, and

H. W. Gray.

It was explained that the business is

worked in Canada in connection with newspapers

which publish lists of music to be

sold at, say, 10 cents a copy. The Post

Office box given belongs to the newspaper,

and it takes half of all the money sent as

pay for the advertising, and the other half

goes to the “pirate,” who sends the music

by mail.

If the Post Office authorities stop such

mail matter because it infringes the copyright

law, it is returned to the publisher,

after thirty days, under our law, and the

only one who is out is the person who

sends the 10 cents. The Canadian law is

less lenient, as it provides for the destruction

of contraband matter sent over the line

by American violators of copyright law.

So it would appear that in1897, the pirates were in league with the Newspaper publishers, the only people that had printing presses.

It would appear that the crime of Music Piracy in 1887 was facilitated by Technology.

"Have technology, will pirate...."

Not much has changed then.

Hattip: http://www.homepagedaily.com/Pages/article7146-music-piracy-in-1897---from-lucas-jensen.aspx

 

References:

 

"Music Pirates in Canada"

 

Prologue:

(purloined from http://www.fourthturning.com/html/boom_generation.html)

 

The Boom Generation (Prophet, born 1943-1960) basked as children in Dr. Spock permissiveness, suburban conformism, Sputnik-era schooling, Beaver Cleaver friendliness, and Father Knows Best family order.  From the Summer of Love to the Days of Rage, they came of age rebelling against the worldly blueprints of their parents.  As their “flower child,” Black Panther, Weathermen, and Jesus Freak fringes proclaimed themselves arbiters of public morals, youth pathologies worsened—and SAT scores began a 17-year slide.  In the early 1980s, many young adults became self-absorbed “yuppies” with mainstream careers but perfectionist lifestyles.  Entering midlife (and national power), they are trumpeting values, touting a “politics of meaning,” and waging scorched-earth Culture Wars.

 

 

---

Every year since 2003, Whirpool Internet does the Internet Survey.

The numbers of people who are prepared to donate 10 minutes of their time has been indicative of the great job that Whirpool has been doing in collecting the data.

 

This year, the data release was altered.

 

It was carried out in two tranches, with a selective release to the media ahead of the other selective release on the web site.

 

There is no entire release of the survey results for the public.

 

In an article by Renai LeMay, (Delimiter.com.au) on builder au he noted:

 

Note: On 23 February, the day after this article was first published, Whirlpool stated that the results released in this article did not constitute the final survey results. They were computed for a specific purpose before the Whirlpool survey closed.

 

The media release was limited to a subset of 21,755 responses and the public release was for 23,683 responses.

 

On that basis, the following figures have a reliability factor mean of 91.8%.

 

The younger generation are losing interest in being “part” of the Internet.

They still use it, but are apparently not as interested in giving feedback as the older generations.

 

 

 

I’m not sure what that means, but possibly the Internet is now so ho hum, that it no longer warrants their undivided attention.

 

What I will say is that he older generations are taking to the Internet like the proverbial fish.

 

The steepest uptake curve is in the baby boomers, who can of course, now that the kids have left home, take the time to respond to internet surveys

 

What else do they do? (Watch TV? - Not with all those adverts thank-you very much.....)

 

The Broadband Wedge.

(All respondents)

 

 

And how do they feel about their access (in a nutshell) ?

 

(All respondents)

This is typical of a new telecommunications adoption curve, with peak new users being added in 2006 with carriers and ISP’s playing catch-up on bandwidth since.

 

Also, the 2004 figures were probably artificially inflated as a result of the enhanced user experience in moving from dial-up to DSL and Cable.

 

 

P2P File sharing is down, although two segments were missing from this years results.

 

The 17 and under youngsters and the People that want to use P2P file sharing.

(All respondents)

On that basis, it’s difficult to qualify this result except that it would appear with a 91% mean certainty that file sharing is reducing, down about 6% from last years total.

 

Although in the 2008 figures, persons under 17 (who traditionally are considered the biggest downloaders) represented 4.6% of the total numbers – so that might account for the large drop in P2P numbers.

 

Then again according to Ipoque, there has been a resurgence in the utilisation of Newsgroups as being an anonymous file sharing resource (at  4% increase) and an increase in http-gets from file sharing web hosts (at around 6.8%).

 

In fact, quoting directly from IPOQUE 2008/2009 Internet report,;

 

Key Facts

• Web usage is second behind P2P across all regions

• File hosting (DDL) has increased to up to 45% of all Web traffic

 

However, the content industry is working it’s buns off making sure that more of the digital catalogue is available every day, so from a convenience point of view, that also will be having a big impact on illegal file-sharing.

 

Officially, the boomers are using p2p less…. .03% less than last year. (possibly they are too busy filling in Internet surveys).

 

 

Boomers

 

Historical perspective

(Pro-rata of P2P use by age group)

(All respondents)

Yep, that’s 7.28% of you boomers are downloading files using P2P…….

 

(Would love to hear from you anonymously –via comments  as to what software you are all using.)

 

In closing, I would like to thank Simon at Whirlpool for the years of dedication that he has given to making Whirlpool the pre-eminent Australian online meeting point for discussion about all things communications.

 

I am sure that the data snafu was as a result of incomplete respondee entries and not for any other censoring reasons.

 

Although I hope that next year, we will see the 17 and under(s) again as well as a complete list of data for all the questions.

Conclusion:

That the Baby Boomers, sons and daughters of the sixties and seventies have discovered the power of social networking and the Internet in being able to encourage Governments to be open and transparent. 

As they take to the tools of the net, blogging, Facebook and Myspace they have the time to get involved with a process that before the Internet could only be attempted by writing strongly worded letters "To the Editor" (which would most likely be censored or edited).

The Internet allows for an unedited and currently uncensored freedom of expression and ideas from everyone and anyone that can type (blog), hold a movie camera (Youtube) send an SMS type message (Twitter).

The baby boomers might never reach 2500 SMS messages per month, (avge messages per mnth by Teenagers) amongst their peer group via mobile phones, but their arrival on the net enmass, with the time available (as they retire) is likely to alter the balance of power in;

Abu Dhabi, Abuja, Accra, Addis Ababa, Algiers, Amman, Andorra la Vella, Ankara, Antananarivo, Apia, Ashgabat, Asmara, Astana, Asuncion, Athens, Baghdad, Baku, Bamako, Bandar Seri Begawan, Bangkok, Bangui, Banjul, Basseterre, Beijing, Beirut, Belgrade, Belmopan, Berlin, Bern, Bishkek, Bissau, Bogota, Brasilia, Bratislava, Brazzaville, Bridgetown, Brussels, Bucharest, Budapest, Buenos Aires, Bujumbura, Cairo, Canberra, Caracas, Castries, Chisinau, Colombo, Conakry, Copenhagen, Dakar, Damascus, Dar es Salaam, Dhaka, Dili, Djibouti, Doha, Dublin, Dushanbe, Freetown, Gaborone, Georgetown, Guatemala City, Hanoi, Harare, Havana, Helsinki, Honiara, Islamabad, Jakarta, Jerusalem, Kabul, Kampala, Kathmandu, Khartoum, Kigali, Kingston, Kingstown, Kinshasa, Kuala Lumpur, Kuwait City, Kyiv, La Paz , Libreville, Lilongwe, Lima, Lisbon, Ljubljana, Lome, London, Luanda, Lusaka, Luxembourg, Madrid, Majuro, Malabo, Male, Managua, Manama, Manila, Maputo, Maseru, Mbabane, Melekeok, Mexico City, Minsk, Mogadishu, Monaco, Monrovia, Montevideo, Moroni, Moscow, Muscat, Nairobi, Nassau, N'Djamena, New Delhi, Niamey, Nicosia, Nouakchott, Nuku'alofa, Oslo, Ottawa, Ouagadougou, Palikir, Panama City, Paramaribo, Paris, Phnom Penh, Podgorica, Port Louis, Port Moresby, Port-au-Prince, Port-of-Spain, Porto-Novo, Port-Vila, Prague, Praia, Pretoria, Pristina, Pyongyang, Quito, Rabat, Rangoon (Yangon), Reykjavik, Riga, Riyadh, Rome, Roseau, Saint George's, Saint John's, San Jose, San Marino, San Salvador, Sanaa, Santiago, Santo Domingo, Sao Tome, Sarajevo, Seoul, Singapore, Skopje, Sofia, Stockholm, Suva, Taipei, Tallinn, Tarawa Atoll, Tashkent, Tbilisi, Tegucigalpa, Tehran, The Hague, Thimphu, Tirane, Tokyo, Tripoli, Tunis, Ulaanbaatar, Vaduz, Vaiaku village, Valletta, Vatican City, Victoria, Vienna, Vientiane, Vilnius, Warsaw, Washington D.C., Wellington, Windhoek, Yamoussoukro , Yaounde, Yaren District, Yerevan, Zagreb,

 

(List of Capital cities excludes non independent states and Territories.)

 

References:

 

Australian Broadband Survey

Consumer Sentiment Report

http://whirlpool.net.au/survey/2009/

 

Ipoque 2008/2009 Internet Survey

(Login required – Free Registration).

http://portal.ipoque.com/downloads/index/get/id/265/

 

Generations in History

(For the non boomers reading this article – to see where you fit….)

http://www.fourthturning.com/my_html/body_generations_in_history.html

The Real Value Of Time-Shifted Content

http://www.perceptric.com/blog/_archives/2009/4/19/4157035.html

 

 

Eighteen Months ago, I bought a 1 Terrabyte Lacie Big Ethernet Drive from a reseller on eBay for $530.00 (advertised with a three year warranty).

 

I purchased the Lacie because a friend of mine who was in the video production game told me, “You can’t go past the Lacie drives, they’re indestructible.”

 

On Saturday, when I powered up my drive, it behaved differently to it’s normal start-up sequence and then it  started making a noise……  Grind…. Griiiind…. GRIIIIIIND!

 

And of course, it wouldn’t give me any data……

 

On the Lacie web site, a letter from the Chairman of Lacie extols the fine qualities of the company, the excellent design and workmanship of the drives with Lacie’s two manufacturing plants located in France and the USA.

 

He starts off…..

 

At LaCie, we combine design and technology to result in products that are both beautiful and performance-driven. We work hard to make your digital life better.

 

Promising.

 

We want you to feel confident when you use LaCie’s products. It’s easy to replace a keyboard, processor, or printer—but not your data. Your life is on your hard drive; you need to be able to back up to a second place easily, and feel like you’ve made the best choice for your data’s safety and security.

 

Oh goodie… because that Griiiiind had me worried.

 

To better understand and serve the needs of our customers, we do not outsource our professional product line support or our repairs center. We are proud of our two main manufacturing sites in Oregon and France. We have offices in 15 different countries, and about a third of our worldwide staff of approximately 460 employees belong to our technical teams. It is an excellent way to stay connected.

 

Great! A company that stands behind it’s product.

 

Well, yeah. They have to say all that stuff, to get you to buy.

But once you have the Griiiind…… try getting any warranty service…..

 

Open Lacie Service Ticket…..

 

Tom K.
        Posted: March 6, 2010 @ 9:44 PM
Lacie Power Light immediately on when power applied - but before button is pushed. Grinding noise from inside. No access to data. Power supply heats up .

 

From Lacie

Posted: March 8, 2010 @ 8:28 AM

Good day Tom,

My name is J____, and I’ll be working with you to find a solution. If I understand your problem correctly, you seem to be having an issue using the LaCie drive on your computer.

Many problems that occur with any electronics happen due to power problems. LaCie drives are powered by external power supplies. The external power supply is a small, black box that contains a transformer. This changes the AC power coming from a power outlet, into the small amount of DC energy required by a drive. They appear somewhat like this:

 psu

A power supply failure can have these symptoms:

Unusual sounds coming from the drive (clicking, humming or beeping in some cases.)

Unusual sounds coming from the external power supply. They should normally be silent.

Errors in Device Manager or System Profiler (error codes, driver problems, etc.)

General file errors or other strange behavior.

Some models of drives will flash or alternate colors when not receiving enough power.

Try a different power supply unit, from LaCie and of the same specifications, if the drive has similar symptoms.

Please let me know your results from following this procedure.

Thank you very much for your patience.

Regards,

J
 

Tom K.
        Posted: March 8, 2010 @ 4:03 PM
Dear J, Thanks for your recommendation. Are you suggesting that I purchase a new Lacie Power supply to eliminate a warranty problem?

If so, is there a special price I get and is it refunded if that doesn’t fix the error?

 

I noticed however that the service tech window gave me an option to log a service ticket with the Australian office.

 

Great…. As I had already logged a service ticket, I called the Australian office.

 

Lacie: Hello, this is _____, how may I help you?

 

Hi. I’m trying to get a warranty return for a Lacie Big Ethernet drive that I purchased in 2008 from eBay.

 

Lacie: Is it secondhand?

 

No, why would I buy a secondhand drive? It was new.

Lacie: Well lots of people sell secondhand hard drives on eBay.

 

No, it wasnt secondhand. It was shrinkwrapped new in it's box. I had to set-up the shares etc. It was new.

Lacie: Is it still under warranty?

Well I would expect that it was. It had a three year warranty. Shall I give you the serial number so you can check?

 

Lacie: No, I don’t have access.

 

Well I filed a service ticket on the weekend, however ____ says that it’s most probably the Power supply. Do I have to buy a power supply or will you supply one under warranty.

 

Lacie: Well you will have to email me your serial number and I will check to see if it is under warranty.

 

(I thought we had that conversation….. so I made some unkind comments about  levels of service support, but emailed her the serial number.)

 

To Lacie

Confirming our discussion, the serial number of my big Ethernet disk is 18118497D9.

I have opened a support ticket (details below).

Until today, I didn’t even realise that Lacie had opened an Australian office - or that it didn’t have one when I purchased the disk.

I am aware that the disk was offered with a three year warranty. I registered my product with the Lacie Registration page when I received it.

Therefore there will be an accurate record of Purchase Date.

I was not aware that the warranty was not applicable if I purchased the disk new, from an EBay vendor.

I have other Lacie Disk products, unfortunately none of them have compatible plugs on their power supplies.

The details for the power supply are:

Model No: ACU057A-0512

There does not appear to be a serial number on the power supply.

Incidentally, it is manufactured by Zghonghan Union East Electronics.

Whereas power supplies I have from two Neil Poulton 1 TB USB disks appear to come from other manufacturers.

APD & Sunfone

Anecdotally, you might be interested that the 1TB  powered by Sunfone power supply appears to run hot constantly whereas the APD powered Neil Poulton 1TB device runs very cool.

 

Back came the prompt reply a couple of hours later.

 

Dear Tom,

 

After checking with our Technical Manager, he confirmed that your drive is from the USA and is still under warranty.

 

From here you have 2 options:

 

The first one (and probably faster one) would be to purchase a new power supply, part number #710449A. The cost of the power supply is $49. You can purchase it from our website directly at http://www.lacie.com/au/products/product.htm?pid=10706 and the delivery cost will be $9.90. Otherwise, if you wish to purchase the power supply from a store, please click on the link below to have a list retailers:

http://www.lacie.com/au/wheretobuy/index.htm

Please note that the power supply will come with 1 year warranty, therefore if anything goes wrong within the warranty period, you'll be able to organize an exchange by creating a support ticket at www.lacie.com/au/register.

 

The second option would be to organize an exchange under warranty with LaCie US directly. I can not confirm whether or not they will send you the replacement part since you live in Australia. Second of all the power supply you might get will be designed for the US market and not the Australian one. Therefore the same issue might happen again. I'm afraid you won't be able to organize an exchange under warranty with LaCie Australia directly. Since your drive is from the US and LaCie warranties are continental warranties, we can not offer any support.

 

Let me know if I can be of any further help.

 

 

Hmmm, let me see, I purchased one of the worlds most expensive external drives.

The Chairman said the company stood behind it’s product,.

 

The US Office told me to get a Lacie Power supply, the Australian office won’t honour warranty on a US drive.

 

This is a company (the Australian office) that has its emails addressed to Sales.au [sales.au@lacie.com]

 

That would be a .com domain name and not a .eu domain name. (In other words, for sales, it’s an American branch office, but for service… it’s suddenly divorced from the US parent.

 

Conversely, the Australian office only honors warranties from the continental office i.e. from .eu and not from .com.

 

Plus, she confirmed that there was a defect in the manufacture of the power supply of the US version....

"Second of all the power supply you might get will be designed for the US market and not the Australian one. Therefore the same issue might happen again."

I'm not an electrical engineer, but I've been around computer power supplies since about 1979 (in one form or another).

This particular power supply says:

Input: 100-240V~

50-60Hz 1.5A

That sounds pretty international to me.

And she wants to know if she can be of any further help.

 

God save me from incompetent service personnel working for tin pot organisations who are too cheap to provide global warranty for products that are obviously put together in China.

 

I’ll buy their stupid $49.00 power supply, but from where I come from, if a product is dependant on  a power supply to operate correctly then that power supply actually has the same warranty unless specifically excluded at the point of sale.

 

Imagine buying a GMH car and being told, “Sorry, we buy the motors from Toyota, you’ll have to see them for warranty claims on the engine. We only make the car…….”

 

Next time I purchase a drive, I won’t worry about getting the NAME (LACIE) brand, as obviously the crap warranty is about the same as if I purchased a cheap Chinese alternative.

 

The letter from the Chairman finishes……

 

We believe in design and technology. We believe in people and relationships.

 

Not you don’t Mr. Chairman. Your relationships with your clients are only as good as the last transaction.

 

I have purchased 5 Lacie drives in the last two years each one has a different power supply (made in China).

I won’t be recommending Lacie products to anyone that I know in the future.

Update: 11:30 am EST Australian Time, 10th March 2010.

Posted: March 9, 2010 @ 7:47 AM

Hello Tom,

Thank you for providing the additional information. Since your LaCie is within warranty (Original Warranty Exp 03/23/2011), as a precautionary measure we can go ahead and send you a replacement power supply but upon checking the address on file it appears to be an Australian address is this correct (if you can post full address this would be helpful too)? Do let me know and we'll make arragements for you.

Kindest regards.

 

However, it would seem at this stage that apparently the American office need to be told that you are making a warranty claim when you file a service ticket.

 

It's not like they don’t have a database of serial numbers and dates sold.

In fact when you first register your purchase with Lacie (or the first time you create a trouble Ticket) they ask for your serial number.

 

 

So essentially, when a service/trouble Ticket is created, Right there on the screen should be  a little box…..   

 

Lacie is large successful sales organisation:

 

Key indicators

IFRS rules, in Euros (millions)	30/06/2009	30/06/2008
Sales (Millions I presume)	301.2	389.8
Gross margin Gross margin (% Sales)	46.3 15.4%	68.6 17.6%
Operating profit Margin from operations (% Sales)	4.1 1.4%	25.6 6.6%
Financial result Income tax	0.5 0.1	- 1.8 - 6.5
Net income for financial year Net margin (% Sales)	4.6 1.5%	17.3 4.4%
EPS (in euros)	0.13	0.49

Source: http://www.lacie.com/company/investors/index.htm

 

With offices in 15 countries.

Surely they can afford two lines of code and a little box on the screen.

I don’t mean to be cynical, but having been the CEO of a couple if multi-national companies, I know that the CRS user database has an option for listing what I had I had for breakfast.

So whilst it’s nice that they are honoring the warranty, I can’t help but wonder if it has anything to do with this blog article.

 

Article originally posted on March 9, 2010 10:22pm (EST) Australian time

With the Lacie Email arriving 2:48 am March 10, 2010 Australian time.

How am I sure that this is not a normal email in the normal course of business?

(Remember, they have two manufacturing offices, one in France and the other in Oregon.)

Because 10:22 pm EST AU time = 03:22 am in Oregon or 12:22 pm in France.

And the Lacie email arrived at 2:48 am EST AU time = 7:48 am in Oregon or 4:48 pm in France

I had an office in the CFI building at 400 SW sixth in downtown Portland for a while and one of my major frustrations was that no-one in the USA turns up at 7:47 am ready to work. At 7:47 they are still at the Petra coffee (downtown Portland) stand or Starbucks....

Where is the Chairman located?

M. Philippe SPRUCH 132 avenue Victor Hugo, 75016 Paris 75016 Paris

However, four hours and twenty-six minutes. An impressive tactical response time Mr. Chairman.

I'll keep you all posted as the outcome unfolds.