COURT UPHOLDS CRB DECISION
-- Last week, the U.S. Court of Appeals for the D.C. Circuit upheld a 2009 decision by the Copyright Royalty Board that set the mechanical royalty rate for ringtones at 24 cents. The judges found that the CRB’s decision “was reasonable and reasonably explained.” The RIAA had argued for a royalty of 18 cents, or 15% of the wholesale price. (TheLaw.com)
ELEVATION PARTNERS INVESTS IN FACEBOOK
-- Elevation Partners has invested $120 million in Facebook through a purchase of shares on the secondary market. That brings the private equity firm’s total investment to $210 million. Elevation, at which U2’s Bono is a managing director and co-founder, was said to have made a small profit on its investment in Palm when the distressed company was sold to Hewlett Packard for $1.2 billion in late April. TechCrunch says Elevation’s 7.5 million shares were purchased at $14 billion valuation, but Facebook is currently trading on the secondary market at a valuation of $24 billion. It adds Facebook controls who buys its shares on the secondary market.
If some experts’ opinions on a Facebook IPO hold true, Elevation would make a solid return on its investments in the company. In March, the Wall Street Journal said Facebook’s investors and potential investors expect a 2011 IPO with a market capitalization of $35 million to $40 million. Facebook has given no indication it is preparing for an IPO. In fact, David Kirkpatrick, author of the book “The Facebook Effect,” has argued Facebook may never raise funds through an IPO. He thinks Facebook can do large transactions with a small number of buyers, keep its number of shareholders low and retain a great deal of control. (TechCrunch)
HUMANS VS. ALGORITHMS
-- Do humans or algorithms create the better playlist? We’re one small step toward an answer. A while back, Paul Lamere, a developer at The Echo Nest, created a survey that asked people to indentify whether a particular playlist had been created by a human, an algorithm or at random. He found that people associated the better playlists with human experts and the worst playlists with random numbers. But Lamere found people actually rated the algorithm playlists the highest – a 2.7 rating. Playlists created randomly scored a 2.6 rating, and those created by human experts got the lowest of the three, a 2.5 rating.
The survey size is small, Lamere admits, and the survey didn’t present real-world listening conditions. Still, he says, “the results are intriguing.” They certainly are intriguing. The use of algorithms to fuel Internet radio and music recommendations has transformed the way people experience and discovery music. But for some people, there’s a nagging feeling that music services need a human element. Although as Lamere’s small study shows, the human element may not add as much to recommendations as people think. (Music Machinery)
THE INCREASING BURDEN ON COPYRIGHT HOLDERS
-- At the Copyright Alliance Blog, Patrick Ross objects to the increasing burden on copyright holders to police the Internet for copies of their works. “There really is no limit to the breadth of impact this has on creators and copyright owners, whether you are producing a live sporting event or attempting to earn a living as a photographer.” Ross uses Justin.tv as an example. The site broadcasts live streams, some of which are copyrighted. While Justin.tv’s CEO appears willing to take necessary steps to prevent misuse of the platform, Ross argues, others will look at Viacom’s loss to YouTube last week as “an empowerment of their business model of infringement.” That puts the onus on the copyright holder to locate and report infringing uses. Viacom may have had a staff tasked with doing just that, but photographers, small record labels and independent documentary makers may not have the resources for such investigations.
He concludes: “The authors of the DMCA aimed to strike a balance between enabling online activity and ensuring the rights of copyright owners and creators. Technology has thrown that balance out of whack, and let’s face it, technology is unpredictable. That is understood. What is not understandable is when a judge interprets a 12-year-old compromise to appear to be no compromise at all, but is instead a blank check to anyone who wishes to knowingly profit by infringing another.” (Copyright Alliance)
VEVO CHIEF ON PROFIT PLANS
-- In a Q&A with the Financial Times, Vevo’s Rio Caraeff gives a range of helpful information about the music video network. Current stats: one billion views a day, half of viewers are inside the U.S. and 50 million unique viewers per month. He says YouTube accounts for 80% of Vevo’s “business,” although he does not specify if that means revenue or views. Until now, the figure given for YouTube’s share of total Vevo views has been about 90%. Caraeff says Vevo is not yet profitable. “We hope to be profitable in a fairly short number of years,” he says. E-commerce will play an important role in Vevo’s revenue growth. To that end, Caraeff says “we're launching ticketing and merchandising” but doesn’t offer a timeline or details. (Financial Times)
BING + ZUNE + CREDIT CARDS
-- As a part of its integration of music into the Bing search engine, Microsoft’s Zune store now takes credit cards for purchases of unique songs. The previous payment method, Zune Points, can still be used. After a user searches for a song, the search results page will offer three places to purchase the song: Zune, iTunes and Amazon.com. If Zune is selected, a user can pay with credit card or Zune points.
Most noticeable, however, is the lack of streaming audio for songs listed in Bing search results. “Coming soon” says a pop up window that should ostensibly contain a Zune music stream. “Zune and Bing are working to bring you closer to the music you care about. Please come back later.” At Digital Noise, Directions on Microsoft analyst Matt Rosoff noticed the Bing-Zune integration was three days late as of Friday of last week (and it’s even later today). “This is the kind of stuff I expect from a rookie start-up,” he lamented. (paidContent, Digital Noise)
-- Flickr teaming with Getty: good for copyright holders? (The 1709 Blog)
-- Three arrested in connection with ‘Darkside’ file-sharing servers. (TorrentFreak)
-- Topspin now accepts Maestro, JCB, and Solo credit cards for its online purchases. (Topspin blog)
COURT UPHOLDS CRB DECISION