Business Matters: Without SOPA, Are There Other Tools in Copyright Holders' Toolkits?
Business Matters: Without SOPA, Are There Other Tools in Copyright Holders' Toolkits?

Without SOPA, Are There Other Tools Are There in Copyright Holders' Toolkit
-- Even without an anti-piracy law like the Stop Online Piracy Act (SOPA), the U.S. government has gone after a foreign-based Internet company. Rather than block access to Canadian gambling site, the U.S. Department of Homeland Security went through VeriSign, the U.S.-based overseer of all .com domains, and seized the company's domain.

The indictment, filed in U.S. District Court in Maryland, alleges Bodog's gambling site violated state laws. "Sports betting is illegal in Maryland, and federal law prohibits bookmakers from flouting that law simply because they are located outside the country," a U.S. attorney said in a statement. It also charges Bodog with what it calls a "money laundering conspiracy" that transferred money to gamblers, media resellers and advertisers within the U.S.

But is the Department of Homeland Security's efforts against Bodog something that could be adopted by entertainment companies? I asked Daryl Friedman, Chief Advocacy & Industry Relations Officer at the Recording Academy, if entertainment companies could use this type of legal tactic to mimic what they could have done if SOPA had been passed into law. The short answer: It depends.

Friedman explained that existing US laws can work where the US has some jurisdiction but cannot reach sites operating entirely in foreign countries. SOPA was drafted to address file-hosting site and P2P sites that do not have operations in this country. Although Bodog was based in Canada, the U.S. alleges its money-laundering scheme involved U.S. entities and residents.

And working with VeriSign might have worked for Bodog, but it may not provide entertainment companies with a lasting solution. Even if a foreign-based site has a .com or other domain controlled by US companies, that site can easily switch to some other domain not hosted in the US, notes Friedman. "SOPA is still needed for offshore rogue sites-and more and more will keep their servers out of US jurisdiction and avoid a .com, or other US domain, to stay our of reach of US enforcement."

The U.S. government's case against file-hosting Megaupload was a case of poor timing for SOPA supporters. After the raids and arrests of the company's leadership, many people were wondering why the US needed a law like SOPA if authorities were able to shut down Megaupload and indict the company on charges of copyright infringement.

But Friedman points out SOPA and Megaupload are unrelated. U.S. authorities were able to use existing laws to go after Megaupload because the company used some servers based in Virginia that allegedly hosted pirate content. The location of those servers gave the U.S. jurisdiction even though Megaupload was registered in Hong Kong.
( The Register)

SoundCloud Unleashing Email Unlock Option

- SoundCloud is launching a new "Email Unlock" option for artists and campaigns. The feature will let fans unlock custom viral campaigns to promote their music (or other sounds, since SoundCloud is basically a repository for all things audio). The process is familiar: give an email address, get a download.

To see "Email Unlock" in action, check out the track giveaway by Sigur Rós to promote their new live album. One nice feature is the ability to immediately stream the band's song in the "Email Unlock" widget before giving an email address in return for a download link. The widget is also installed on the band's Facebook page and can be accessed under the "Email Unlock" tab.

Does Music Discovery Lead To More Music Sales?

-- Is music discovery going to lead to more sales of music and concert tickets? Here's some food for thought based on Oprah's Book of the Month club. A new academic study has found that Oprah's endorsement increases sales of the endorsed book without increasing aggregate demand. In other words, Oprah's endorsement encouraged people to buy endorsed books, not more books in general. "The endorsements decrease aggregate adult fiction sales," the researcher added, "likely as a result of the endorsed books being more difficult than those that otherwise would have been purchased."

Based on my experience in the music industry, I've always thought music promotion is a more or less a zero-sum game in which one party gets a sale and its competitor loses a sale. People who buy a lot of music are going to spend it on something. Endorsements inform those decisions but don't greatly alter overall spending.

This is not a definite rule, however. Some artists grab a listener's attention in such a way that incremental sales result - people spent money they wouldn't have otherwise spent. Adele's "21" is a good example of an album that probably represents a lot of incremental spending. The title has sold 7.6 million units in the U.S., according to Nielsen SoundScan, a number so high as to suggest aggregate demand for music might have been affected.

There may be benefits even if sales are not incremental. The paper's author notes that endorsed authors saw an "economically meaningful" increase in sales of previous works that were not endorsed. This finding that greater awareness leads to improved catalog sales is hardly a shock.

And what about live music? Is the concert business also a zero-sum game? There's a familiar line that 40% of all concert tickets go unsold because people didn't know about the show. Will perfect awareness reduce that number, or will people just make different choices?

I always ask people like Songkick, Thrillcall and ticketing companies if better overall awareness will lead to more ticket sales or just different ticket sales. And I always get the same answer: an enthusiastic, "Yes, overall ticket sales will increase." But one has to look long and hard for solid evidence that overall ticket sales are seeing a boost from improved marketing tools. Concert revenue has risen over the last 15 or 20 years mostly as a result of higher ticket prices, not a commensurate increase in ticket sales. Read the academic paper "Rockonomics: The Economics of Popular Music" for more on trend.

The moral to this story is that the oft-discussed term "music discovery" may imply changes in consumer purchases rather than changes in aggregate demand. From where I sit, most discovery tools merely shift demand from one place to another. Bottom line: it's not easy getting people to spend more on music (especially as CD sales decline) or get out of the house more often (which for many music fans requires finding a babysitter and an undesirable evening commute). Products that solve true pain points will increase aggregate demand. Everything else will shift demand.
( Marginal Revolution)