WASHINGTON--Word on the Hill is that indecency fines are set to shoot through the roof soon. With public grousing and election-year politicking guiding Federal Communications Commission thinking, the






Breaking News

Immediatek To Buy DiscLive

By Susanne Ault

LOS ANGELES--CD-copying control firm Immediatek is acquiring DiscLive, a competitor to Clear Channel Entertainment's Instant Live, ELW has learned.

DiscLive CEO, former Loud Records president Rich Isaacson, will remain, and Disc Live will be run as a wholly-owned unit of Immediatek.

Zach Blair, Immediatek's CEO, which creates NetBurn Secure software, says DiscLive is "the next phase in our plan to secure scalable technology. Artists and labels will now have the ability to have the (concert) CDs copy controlled to help them preserve much needed revenue."

Blair expects DiscLive to bring in about $500,000 over the course of its spring 2004 tour business.

Winning over the Pixies by selling CDs for its entire 15-show series--one of the more anticipated tours of the season--Isaacson says, "the momentum has been amazing. The interest (for DiscLive) has been heightened."

EMI also partnered with DiscLive in rolling out show CDs for Christian act the Newsboys' March tour.

"Certainly it's an uphill battle. We are a small company (compared to Clear Channel) and they are not making it easy. It's always a challenge to go up against the monolith. But we think we are doing a very good job," says Isaacson.

CCE's patented Instant Live service is likely to have a busy year as well. The U.S. Patent No. 6,614729--the first one given to an operation devoted to producing on-site concert CDs--"speaks to the legitimacy of the innovation," says Simon. "We can deliver great recordings and make lots of money for artists."

Steve Simon, Instant Live's director and executive VP of CCE's music division, says he is offering "lucrative" incentives to major league acts in order to entice them to use Instant Live while on tour.

Two "significant amphitheater acts" are nearing deals to distribute Instant Live discs at their 2004 summer shows, he notes. At least three other top-tier acts are also currently in negotiations with CCE.

CCE is also in talks to bring Instant Live to Europe. Currently, CCE's U.K. office is testing the recording equipment.

Instant Live is also likely to soon offer downloads of its concert recordings within minutes of shows ending. Details are expected to be unveiled within the next few weeks.


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Clear Channel Trial Set For Aug.

By Samantha Chang

NEW YORK--Clear Channel Communications will face the music Aug. 2, now that a federal judge has set the trial date in the antitrust case against the media giant.

Judge Edward Nottingham of the U.S. District Court for the District of Colorado last Tuesday scheduled a four-week jury trial in Denver after deciding that an independent concert promoter presented enough evidence to move forward on its claims of predatory business practices by the media giant.

The plaintiff, Nobody In Particular Presents, alleged that CCC had attempted to create a monopoly by rejecting its advertising and denying its artists airplay on CCC's Denver radio stations.

Judge Nottingham had ruled on April 2 that CCC's cluster of radio stations in the Denver area was not a monopoly. However, he said CCC had intended to create a monopoly position when it rejected paid advertising by NIPP.

NIPP alleged that the Denver radio stations in question played songs by artists whose concerts were promoted by CCC's promotion division, but did not play songs by bands handled by NIPP.

CCC, the largest concert promoter in the United States, operates eight radio stations in Denver--the maximum allowed under Federal Communications Commission regulations.

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Video Price-Fixing Suit To Proceed

By Jill Kipnis


LOS ANGELES--A three-year-old federal lawsuit filed by video distributors Flash Electronics and East Texas Distributors against Universal Studios Home Video will proceed.

Judge Raymond J. Dearie of the Eastern District of New York will allow the plaintiffs to present evidence that USHV engaged in price-fixing, conspiracy, bribery, fraud and unfair competition. A court date is still pending.


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Aussie Govt Resists Sub-TV Lobbying

By Jacqueline Lee Lewes

SYDNEY (Hollywood Reporter)--The Australian government is resisting strong lobbying by the subscription TV industry to rewrite anti-siphoning sports regulation and has reaffirmed its commitment to giving priority to free-to-air broadcasters.

The group last Wednesday released an updated list of protected sporting events that only concedes access to minor football games for pay TV operators. The revised list allows subscription TV access to minor rugby league, Australian rules football and rugby union games, but that's all.

Other major premiership competitions, such as cricket matches not involving Australian teams, the U.S. Open golf tournament and U.S. PGA tournament, the Australian National Basketball League playoffs and FIA Formula 1 Grand Prix events not held in Australia are all still quarantined for first access by free-to-air broadcasters.

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Washington Report

Indecency Fines Set To Escalate

By Bill Holland

WASHINGTON--Word on the Hill is that indecency fines are set to shoot through the roof soon.

With public grousing and election-year politicking guiding Federal Communications Commission thinking, the agency has been issuing maximum amount fines, now $27,500 per incident per station.

But observers say that's chicken feed compared to what's in store. One not-so-subtle hint came on April 6, when the FCC slapped radio giant Clear Channel Communications with a $495,000 indecency fine for 18 incidents at six stations involving the Howard Stern show.

Waiting in the wings is sure-to-pass broadcast indecency legislation pending in Congress. The measure was crafted to ensure that broadcasters don't view indecency fines as just a minor cost of doing business.

The legislation raises the maximum fine per incident tenfold, to $275,000. It also authorizes the FCC to fine "individual non-licensees" such as Stern or even musical performers a maximum of $500,000 for incidents of indecency.

The bill has already been passed overwhelmingly by the House. The Senate will vote on its version when lawmakers return from Easter recess. There are several amendments that may be modified--but not the core of the bill, which is the 10-fold fine increase.

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Music Summit Seen Drawing 700 Attendees

By Bill Holland

WASHINGTON--Over 700 attendees will be on hand at the Future of Music Policy Summit May 2-3 at George Washington University.

The summit provides a forum to discuss music, technology and public policy.

Keynote speakers include Sen. Norm Coleman, R-Minn., FCC commissioner Michael Copps and Real Networks CEO Rob Glaser.

Among the 70 panelists are recording artist Suzanne Vega, ASCAP senior VP Chris Amenita, Consumer Electronics Assn. chairman/CEO Gary Shapiro, Congressman Jim Cooper, D-Tenn., and Koleman Strumpf, an economist from the University of Carolina at Chapel Hill, who co-authored new a hotly contested study indicating that P2P downloading has not hurt CD sales.

For more info, check out futureofmusic.org/events/summit04.

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Hearing Set To Mull Satellite Retransmission Bill

By Bill Holland

WASHINGTON--Rep. Fred Upton, R-Mich., has scheduled an April 10 hearing to discuss the Satellite Home Viewer Improvement Act.

Upton, who is chairman of the House energy and commerce subcommittee on telecommunications and the Internet, will oversee the talks at the Rayburn House Office Building.

There is concern in Congress that a recent court case could end the main thrust of the Œ94 law, which offered millions of subscribers who can't tune into broadcast channels access to network programming through satellite retransmission. Recently, however, a federal judge in Florida ruled that satellite providers must begin terminating the retransmission of network broadcasts to customers.

The House Judiciary Committee's subcommittee on courts, the Internet and intellectual property may also review the bill soon, says a source close to the committee.

In related news, a new bill introduced by Rep. Jeb Bradley, R-N.H., would amend the act to provide residents of states with single network affiliate stations with satellite reception of such stations. While no House bill is currently pending, there is legislation on the Senate side to extend satellite retransmission dates.

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International Section

Beatles Wins Early Round In 'Apple' Wars

By Roger Pearson

LONDON--The "Apple Wars" rage in England.

The Beatles' company, Apple Corps, has won an early round in High Court against Apple Computers in their brand-name battle. On April 6, Justice Mann dismissed Apple Computers' motion to have the case be adjudicated in California and not England.

Justice Mann says he was satisfied England was "the proper place for this litigation."

Apple Corps is accusing U.S.-based Apple Computers of breaching a 1991 trademark agreement.

The Beatles' company accuses the U.S. firm of using the Apple name and logo to promote music products through the iTunes computer music download system. Such use was banned under the 1991 agreement, the plaintiff alleges.

Key to deciding the case is whether the deal was made in England; whether the contract is governed by English law and whether there has been a breach. Stay tuned.

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Cdn. Film Honcho Backs CAA Pact

By Etan Vlessing

TORONTO (Hollywood Reporter)--Canadian film czar Richard Stursberg supports a deal between the Canadian government and Creative Artists Agency that aims to help Canadian film producers attract talent and obtain financing for their productions.

"We're trying to use Telefilm's size and importance to assist producers in getting access and getting their calls returned and getting people to take them seriously," says Stursberg, executive director of Telefilm Canada. The group invests about C$100 million ($75 million) annually in Canadian movies on behalf of the federal government.

"There are brilliant producers making wonderful things, and for their phone calls not to be returned is a shame. We're trying to use our size to help them." Telefilm Canada's confidential deal with CAA was revealed last Monday.

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Court Rules On Addinsell Works

By Roger Pearson

LONDON--The High Court has ruled that Keith Prowse Music Publishing Co., administered by EMI Music Publishing, owns the U.K. copyrights to 44 of the late British composer Richard Addinsell's works.

Justice Patten rejected a claim last Wednesday by London-based Novello & Co. that it owns the rights in question via an assignment from the trustees of Addinsell's will in 2000.

He supported Keith Prowse's claim that a 1973 assignment transferred to it the reversionary interest in Addinsell's works after his death.

Addinsell composed scores for well-known 1940s films, including "Goodbye Mr Chips", "Fire Over England", "Tom Brown's Schooldays", "Beau Brummel" and "Dangerous Moonlight." His works included his "Warsaw Concerto" from wartime movie "Dangerous Moonlight."

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Dream Makers & Deal Breakers

This Week's Dream Makers & Deal Breakers:

- J. Walter Thompson has launched a new branded-entertainment practice.

The group, Amplify, results from a merger of JWT's Brand Entertainment Group and Hill & Knowlton's Showcase.

Amplify specializes in brand integration in film, TV, gaming, magazines, books and music through product placement and the creation of original brand content. Amplify's principal client is Ford Motor Co.

Rob Donnell is executive director of Amplify, which is headquartered in Los Angeles and has offices in Detroit and New York.


- Davis Polk & Wardwell has named Douglas A. Cardwell counsel to its intellectual property group.

Cardwell recently advised Bertelsmann on the combination of its recorded music business with that of Sony; Comcast in connection with joint ventures with Gemstar-TV Guide and Microsoft with respect to software for digital television services; and H.J. Heinz on the sale of its Weight Watchers division.


- Aaron Walton Entertainment names Marcus Peterzell and Bobby Oppenheim co-presidents.

The duo, who previously were senior executives at MusicVision, will run the entertainment marketing firm from New York.

They take over the post held by Aaron Walton, who had been running the company from Los Angeles. Walton was named president of the entertainment division of the Radiate Group in January after Radiate acquired AWE.

At MusicVision, Peterzell handled integrated marketing for VH1, A&E, CBS, 20th Century Fox, Walt Disney Co./Buena Vista, Atlantic Records and Universal Music. Oppenheim expanded MusicVision to include the House of Blues Web site, Def Jam, Pollstar and Musicmatch.

Contributors: Gail Schiller (Hollywood Reporter) and Samantha Chang.

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Commentary

PIRATE Act: Reaping The Whirlwind

By Christian L. Castle

Senators Hatch and Leahy have introduced a bill called the "Protecting Intellectual Rights Against Theft and Expropriation Act," or PIRATE Act.

The stated purpose of the bill is to permit the Department of Justice to bring civil actions against filesharers, because, as the senators noted, "(It) is critical that we bring the moral force of the government to bear against those who knowingly violate the federal copyrights enshrined in our Constitution."

"Unscrupulous corporations could distribute to children and students a 'piracy machine' designed to tempt them to engage in copyright piracy or pornography distribution," the duo's joint statement continued.

Naturally, such a bald statement of moral truth has raised a cry among the denizens of the peer to peer community. Our civil liberties are under attack! Constitutional government itself is endangered! And the senators would have the DOJ investigate children doing the bidding of the copyright community, they say.

Poppycock.

First, infringement on P2P systems is so massive that it has risen to the level of moral
pollution of our society. It is unreasonable to expect that private industry should shoulder
the entire burden of fighting this multi-headed hydra.

Moreover--and I doubt that there's any hard data about this--but I would imagine that parents have taken a harder look at what little Johnny is up to in his room as the result of the RIAA's lawsuits. Once news of this bill percolates through the media, parents will definitely take a look. While the children of America may have good reason to start deleting files from their computers before their parents get to them, they have nothing to fear from DOJ.

Others do.

Senators Hatch and Leahy are expert politicians, and they must know that the bill is controversial. Senator Hatch in particular has shown himself to be a thoughtful student of intellectual property issues, and has spent long hours studying the P2P mess. The Senators have the respect of other members for their knowledge of the subject. There will be some hand wringing from some members for sure, but that's democracy in action. I really don't know how a serious person can vote against the core idea of the PIRATE Act.

The Senators make another important point in their statement: "...large user-bases and the threat of more piracy would become levers to force American artists to enter licensing agreements in which they pay the architects of piracy to distribute and protect their works on the Internet."

Setting aside the fact that the "architects of piracy" have demonstrated no interest in "protecting" anything, that's blackmail and cannot stand. One would have to have a childlike view of the world to think that the U.S. government would stand by and let blackmail control one of the nation's most visible industries.

There's a market-clearing level of piracy that is inevitable, like street prostitution. It's just going to happen. What's going on now, however, cannot and will not be tolerated. Period.

If millions of people were breaking into record stores and copying recordings (i.e., if the analog of what is happening on the Internet were happening in the physical world), there would be no doubt in anyone's mind that anarchy had arrived and the police should be called. The fact that the equivalent happens in the slithery, silent, digital darkness of the
Internet is the only reason that it has taken this long to get government into meaningful action.

This is not a game. Thousands are losing their jobs. This bill should come as no surprise to anyone. The P2Ps have sown the wind and they shall reap the whirlwind, and the bud shall yield no meal.

It took long enough.

Christian Castle is a senior counsel with Akin Gump Strauss Hauser & Feld in L.A.

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Case Analyses

Rockumentary Spurs Legal War

By Chris Morris

Kick out the writs.

A wrangle over "MC5: A True Testimonial," a documentary about the legendary '60s Detroit rock band, has led one of the group's members to block the film's theatrical and DVD release.

The filmmakers have responded by using the unusual venue of federal bankruptcy court to assert their claims.

In 1996, two neophyte Chicago filmmakers, producer Laurel Legler and director Dave Thomas, approached the surviving members of the MC5 with their ideas for a feature documentary about the band.

According to documents obtained by ELW, guitarist Wayne Kramer was to be music producer for the film by Legler and Thomas' production company, Future/Now Films. Kramer, bassist Michael Davis, drummer Dennis Thompson and Rebecca Derminer, widow of vocalist Rob Tyner, were to be Class C participants in a limited liability company established for the film.

During the course of production, Kramer cooperated with the filmmakers, participating in on-camera interviews shot in Detroit and Chicago.

According to correspondence between Kramer's wife and manager, Margaret Saadi Kramer, and Thomas, the musician also helped secure the participation of ex-MC5 manager John Sinclair and producer Jon Landau in the film. However, Kramer's role as music producer was never formalized contractually.

The film was completed, and began screening at film festivals in 2002.

Warner-Chappell Music, which controls the MC5's publishing, granted a license allowing the group's songs (published collectively) to be used in festival screenings of "A True Testimonial" only.

A rancorous dispute over Kramer's role continued to roil. In May 2002, Kramer signed his copy of the LLC agreement, but declined to sign a release granting use of his image in the film.

Last month, RCA Victor Group announced that it would release "MC5: A True Testimonial" on DVD May 4. New York distributor Avatar Films had picked up the film, and planned a limited theatrical release in March and April.

Kramer responded by asking Warner-Chappell not to grant a license for use of the MC5's songs in the theatrical and home video releases. Warner Music Group would not comment.

As a result of Warner-Chappell's action, RCA Victor Group pulled the DVD release, and the theatrical dates were put on hold.

Stymied, the filmmakers took their case to U.S. Bankruptcy Court in L.A. Kramer filed for personal Chapter 7 bankruptcy protection in 1999 (LA 99-48189-ES).

Legler, Thomas and Rebecca Derminer (a creditor in the original filing) moved to re-open the case, claiming "there are assets that should be administered that may return a dividend to creditors."

In response, Kramer said he did not oppose re-opening the case to amend certain schedules. However, he characterized the motion as "a flagrant attempt to coerce me and to abuse my rights."

"While it may be common practice in the music industry to extort consent from an artist, it is not acceptable for the Movants and their counsel to use the federal bankruptcy courts for that purpose," wrote Kramer's counsel, Jeffrey Shinbrot of Beverly Hills, Calif.

On April 6, Bankruptcy Court Judge Erithe A. Smith granted the motion to re-open. A trustee has 120 days to review potential assets. However, Smith added, "the case is not being re-opened to allow Movant or any other creditor to take any specific action."

Talks concerning the film's future have reached an apparent impasse. The filmmakers' attorney, Peter J. Strand of Holland & Knight in Chicago, says, "We have been negotiating on and off for a long time, hoping for a resolution, and that hasn't been reached." He declined to elaborate.

Kramer, Davis and Thompson have announced plans to tour as DKT/MC5, and plan their own DVD release later this year.

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Recent Cases And Filings:

Case: EMI Music Marketing v. Orpheus Music; Charles Huggins
Issue: Breach of royalty agreement due to non-payment.
Cite: New York Supreme Court, 600971
Filing attorney: Michael Elkin of Thelen Reid & Priest



Case: Gucci America v. Designer Bargain.; A Real New York Bargain; Ryon Sasson; John Does 1-10
Issue: Trademark infringement due to alleged unlawful use of "Gucci" name.
Cite: U.S. District Court, SDNY, CV-2556
Filing attorney: William Rand




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