Opinion and analysis of the day's music business news.

Universal Music Group spent $840,000 in Q2 to lobby the federal government, up from the $700,000 spent in the same period a year ago, according to BusinessWeek. UMG lobbied "on issues including a proposal to pay recording artists and labels royalties for song play on traditional radio stations, according to a disclosure report," as well as on the budget allocated to fighting music piracy. (BusinessWeek)

UMG Vs. Ellen
-- Labels owned by Universal Music Group are seeking binding arbitration in its case over unlicensed use of its songs by “The Ellen DeGeneres Show.” Lawyers for Time Warner, owner of the “Ellen” show, have argued the labels gave implied consent to use their recordings without licenses because use of the songs since 2003 had not resulted in a cease-and-desist letter until February 2009. (Bloomberg)

-- A developer in Philadelphia is trying to bring a “state-of-the-art” venue to the city’s Fishtown neighborhood. The venue would have a capacity of 2,800 people and would be booked by “one of the largest promoters in the world,” according to the developer. (Daily News)

-- The Financial Times reported that Google plans to bring major studios’ films to YouTube by the end of the year. The service would probably launch first in the U.S., according to the report, and will have movies as soon as they are available on DVD. The fact that Google has been operating this service with less popular movies has been only a footnote to these articles. Available at Youtube.com/store, the service offers movie rentals for $1.99 to $3.99 and uses Google Checkout for payments. The length of rental times vary from one to 90 days and are set by the owner. All in all, YouTube’s video rentals are a solid, a la carte alternative to the monthly fees of Netflix and the big file downloads of iTunes’ movie rentals. (Ars Technica)

-- Don Henley believes the Copyright Office has not been a strong enough advocate for copyright owners and should be moved from the Library of Congress to the Commerce Department. Additionally he says Congress should amend the DMCA to change or limit the “safe harbor” provisions that protect sites like YouTube if certain steps are taken to remove infringing content uploaded by their users. But Henley also takes an odd turn when he pines for the days of DRM protections that neither protected music nor encouraged competition.

“The recording industry was bullied by online retailers into removing protective measures, such as DRM, from their sound recordings or else facing the prospect of these retailers refusing to distribute their catalogs. Yet, so far, digital royalties on music have failed to live up to the hype; in fact, removing such protective measures has increased the theft of music and other intellectual property.”

It is true digital royalties have failed to live up the hype. But Henley’s claim that the demise of DRM (on downloaded music tracks, one can assume) has led to an increase in piracy is dubious at best. I’ve never seen any studies or figures that described such an outcome due only to the elimination of DRM (as opposed to greater broadband penetration and an increase in illegal download options). But the open MP3 format has been an improvement over the formats that came before it. We should not forget about Amazon.com’s MP3 store, which did not launch until DRM had been abandoned by the major labels. Nor should we forget the growing market in direct-to-consumer sales that would be dead in the water if companies such as Nimbit, Topspin and Bandcamp were distributing tracks wrapped in DRM.Digital sales are slowing down, not because the MP3 format is problematic but because digital has become a more mature market.

If Henley wants DRM, he should rejoice over new music services and lobby hard for Spotify to launch in the U.S. These services both streams songs and “cache” them in the memories of computers and mobile devices. To “cache” is to store a file with digital protections against copying and usage beyond the term of the subscription. In other words, cached files are protected by DRM.
(Rolling Stone)

Assorted Links
-- StubHub has inked a partnership with Paciolan to offer its secondary tickets in Paciolan’s primary ticketing system for college football and basketball. (Sports Business Journal)

-- Connecticut talent agent has been ordered to pay $1.2 million for a Philippines appearance by Justin Timberlake that never happened. (AP)