MP3.com opinions, Janet Fisher's Daily Updates, Articles for Goodnight Kiss

Goodnight Kiss Music (BMI) & Scene Stealer Music (ASCAP)

March 22 - April 25, 2001

Today's Topic: Some MP3.com Articles

Lately, I have been writing some articles for MusicDish.com, and the response has been overwhelming....much too much so to even print the half of it here. I just want everyone to have the same information I do when it concerns our company and your work.

ALL OF THE ARTICLES BELOW ARE JUST MY OPINION AND NOT IN ANY WAY
TO BE TAKEN AS LEGAL ADVICE.

ALSO: MP3.com and other online music sites do change their licensing agreements from time to time. That may be the case, in regards to WHEN these past articles were written.

The point of these articles is to realize that what one signs DOES matter, and to be aware of what rights they CHOOSE to surrender. The actual phrase "in perpituity" may be revoked from a contract, but the conditions defined by the phrase may still be intact, simply stated differently.

READ YOUR AGREEMENTS!

One more disclaimer: I am not against file sharing -- simply against UNAUTHORIZED file sharing.

I am not against online music sites -- the EXACT OPPOSITE is true, there is nothing I would like more than an online site, open to artists and writers, that would honor the (TINY) royalty payments requested by our traditional music industries. And, I believe that all writers and artists should be able to choose what system to follow, allowing others their (hopefully) informed choices. Music should be free to all -- but recorded works should be controlled by their creators.

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1. MP3.com Increases Their D.A.M. CD Prices
2. MP3.com Becomes Pay-To-Play
3. Why I Could Never Use The MP3.com Licensing Program As A Music Publisher
4. Three GREAT Things About MP3.com

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1. MP3.com Increases D.A.M. CD Prices

I think it's quite interesting to see MP3.com (and other similar online entities) go through an evolution in trying to marry the true music industry. Since being made to account for former copyright uses, we see them struggle to find a way to survive (just as Indy and Major Labels, Acts and Publishers do).

But an observer might realize, that it's only been by creating Artist-as-CONSUMER driven sales platforms, that have made continuing survival possible ... sales from money provided by those same Indy Artists that were going to be helped so much more by the digital "labels" than the traditional record industry.

Not that there's anything wrong with that, just as long as all involved realize WHERE entities are making their money; is it from the writer/artist's actual work (song uses) or is it from advertising, by charging subscriber fees, "premium" services for writers, etc.?

It's true (just as in the regular "old" record industry) a few artists are making a nice income from their work. Enough to retire on? I'd love to see the stats, but I would bet that most "independent" artists aren't earning much.

And now, the platform that was initially going to be the most affordable way to deliver a CD is rising in cost. The prices are starting to sound more familiar. In a recent email, MP3.com writes that they will be changing the current D.A.M. CD Pricing Guidelines. (For those who don't know, a D.A.M. CD is a deliverable online-ordered CD. The "customer" orders it, and MP3.com makes them up as they are ordered.)

Formerly the Artist could price the CD(s) within a range of $5.99 to $15 per CD. Friday, February 16, it changed to $6.99 - $30.

If one was currently selling for $5.99 or $6, the D.A.M.CD will automatically be priced at $6.99.

If one did not agree to the new Pricing Guidelines, one was to delete one's CD before Thursday, February 15.

The email actually emphasized that Artists now have the ability to price their CDs as high as $30.00.

By the way... I've noticed ALL MP3 member choices are "take it or get out." That sounds sort of familiar, too... I can't wait to see what the rules are in the next couple of years.

I bet that that old record industry contract will look pretty good by comparison before this is all over (at least the good ones will...and there IS such a thing as a good contract, although sometimes you have to fight for it.)

Just my opinion, based on observation and experience, not to be taken as legal advice.

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2. MP3.com Becomes Pay-To-Play

Recently, I wrote an article pointing out that MP3, which was to be the great "doorway" to success for the Indy musician, was charging prices for its online D.A.M. CDs that (high-end) out-priced traditional music label prices. Also pointed out was their very prevalent "take it or leave it" attitude with any and all musicians.

Yesterday, I received mail concerning my MP3.com Artist Account, which basically said that the only artists who will "qualify" for any royalty earnings will be the artists who enroll in MP3.com's Premium Service (artist pays to be included). In short, one must pay fees in order to be "allowed" to earn.

It seems heinous to me that the MP3.com agreement the Artist is required to sign can be changed at MP3.com's whim -- and ONLY theirs. Nothing is guaranteed to remain the same for the artist who uses MP3.com.

No artist has the right to see any MP3.com accountings (at least that I can find).

The new pay-to-play policy promises benefits like "song-approval" and "song-review priority" -- oh, yes, I need to pay someone to APPROVE my songs; and I need to pay an online service EXTRA and above their scheduled fees to do their work on a timely basis. (Yes, I am being facetious.)

The actual letter to me said, "We're working very hard to make PAS the smartest and most cost-effective way for all Artists to promote their music online and earn money!"

Ridiculous. The words "MP3.com" and "smartest...for all Artists" do not belong in the same sentence, in my opinion. Nothing personal, but did ANY of you read the fine print where YOU are obligated IN PERPETUITY to MP3.com?

"OK, Janet, then what the heck are YOU doing there, if it's so bad?!"

MP3.com (et.al) is a reality. For the "good parts," I'm in. I think it's a great "business card." I think it gives access to those who have none; or for those, like me, who simply want an expanded presence wherever I can get it. It is another popular place for contact information and a link.

Do I have a song there? Yes indeed! But it is a public domain version of a specific Holiday song -- something that cannot earn much in the traditional market, due to its topic, public domain status, pure acoustic production, etc. It is a calling card for me, a flavor from my acoustic country Christmas album (carried at Amazon, NOT MP3), and even though I did allow MP3.com the right to use my "likeness," etc., I tried to only agree to the parts that help me, or at least the parts that don't hurt me or my material. I, myself, would never put my original writings there (under the current conditions, anyway).

Just my opinion, based on observation and experience, not to be taken as legal advice.

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3. Why I Could Never Use the MP3.com Licensing Program as a Music Publisher

At one point, I had two immediate needs on a project I was working on, so I thought I'd go to MP3.com and surf the files, just to see if I could find something different. (This is a bit of a pain, as my neighborhood doesn't have DSL, so it takes awhile between songs.) To save time, I thought I'd go to the "pre-screened" licensing area where producers and publishers can listen to "selected material."

After reading the MP3.com Licensing agreement applying to those who WANT to license an MP3.com Artist's work in any traditional business sense, I think the artist is going to pretty much be out of luck (as usual).

I will tell you right now that if there is a big film or TV use offered for your song, the following conditions will probably NOT be met, nor be able to be negotiated under some of the terms, in the deals that our company makes. The following is only one small part of what is being required from the person TRYING to license MP3.com artists' songs:

"Subject to our prior written approval of such use, you agree to prominently display our logos, trademarks, artwork, designs, banners and the like that may be provided to you by us ("Our Material") in promotional venues such as, without limitation, movie credits, tv show, game, and/or website where song is used, and other promotional context where the song is being used."

Yeah, Paramount's gonna love to do that for you. I cannot believe that a legitimate publisher/producer would even think of diluting their own project, logo, branding to carry MP3.com's trademarks (in whatever size, shape or form MP3.com chooses), let alone expect such from a company who was BEING pitched. Can you imagine a hit network TV show agreeing to run a big MP3.com banner on the credits?? I want to see that blanket agreement. Maybe it would be allowed in a song contest or something.

"You agree that any benefits and goodwill arising from your use of Our Material shall inure solely to our benefit. We may revoke your license at any time by giving you notice in accordance with the provisions of Section 15 of this Agreement."

Oh, right...I place a song in a network situation and the artist license or lease license is revoked. Just the kind of liability my company needs to grow on (not).

And the following must be included in my licenses, so that all royalties earned go directly to MP3.com, not the artist, writer or publisher.

"We hereby irrevocably and unconditionally sell, assign and transfer to MP3.com, Inc. [or the designated Licensing Services Provider, if applicable] and hereby irrevocably and unconditionally authorize and direct you to pay to MP3.com, Inc. [or the designated Licensing Services Provider, if applicable ] the "Licensing Service Fees" [as defined below] payable by you to us under this Licensing Agreement. Such amounts payable to MP3.com, Inc. [or the designated Licensing Services Provider, if applicable] shall be paid no later than the date on which the "Licensing Fee" [as defined below] becomes payable to us, and shall be deducted from the entire Licensing Fee otherwise payable to us under this Licensing Agreement. Until such time as MP3.com shall notify you in writing of a new address, all payments to MP3.com pursuant to this Licensing Agreement shall be sent to the following address: MP3.com, Inc...(etc)."

Does this leave any traditional (and in place, standard industry rate) payment tree, such as Harry Fox for mechanicals or a recognized PRO for performance royalties? Who polices and/or audits the MP3.com rates and payments? Do they increase to the writer in the future? Where is there ANY room to negotiate in this contract? Do I have the right to audit their books? I would be reluctant to ever place such an agreement on my contract, simply to PROTECT the writer and myself.

In this case of take it or leave it, I leave it.

Also, if the person who wants to license this music DOES agree to these (and other) terms, they are LOCKED INTO a three-year agreement with MP3.com, at a cost of $100.00 per year, just to listen to songs. Not for me. I won't even take a three year phone plan.

If you are an MP3.com artist and expect licenses from there, they won't be from my company and probably not many traditional music sources. The agreement is just too demanding, has no protections for anyone but MP3.com, and there's no room to adapt on a deal-to-deal basis any of the blanket policies.

Of course, as in every deal out there, one must consider their own needs, obligations, future and morality. My sets of rules and criteria may not be the same as yours. But I know how hard so many of us, (writers, musicians, producers, publishers, labels, etc.), have fought for what rights we have, and I see NOTHING being offered (especially CONSISTENTLY) that's bettering the actual system we have in place.

Don't get me wrong, what DOESN'T need improving in this world? But I see no Internet-related earnings that overwhelm, or even rival, the traditional business in percentages of artist/writer opportunities and success, and I see many fewer ways to track the uses. Yes, more Indy artists have a "storefront," for viewing, I love that part. But in looking at numbers, percentages and the realities of EARNING A LIVING strictly from music, I don't see any sort of major gain. Examine percentages of artists on MP3 vs. percentages of artists in traditional situation.

Those who have earned royalties on MP3.com, how many hours did you spend promoting (and possibly spending dollars) to earn those tiny checks?

Remember, there is such a thing as a "good deal" and a "fair deal" out there among the "bad deals" that are so highly profiled these days. One first has to recognize what one's OWN needs are, what goals one is trying to accomplish; and then, by doing the math, see where the returns will realistically come from. That being established, it is a relatively simple matter to make sure that a competent attorney or representative reviews your contract, not only for its own soundness, but in case an area not addressed may be brought to your attention.

EVERY deal is different (or should be) based on all parties individual needs and goals, but you must be able to define specifically what those are.

Just my opinion, based on observation and experience, not to be taken as legal advice.

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4. Three GREAT Things About MP3.com

I should know by now that many people read an article and see pretty much what they want to see. My articles usually voice a concern or complaint over something I see as unfair, and sometimes that aspect overshadows other points in the article. In music, as in life, it's hard to find cases that are 100% good for one, or 100% bad for one, with no shades of gray between them. (I love the people in my family, but we each have our faults.)

I recently have questioned new (and some old) MP3.com policies, and many people took that to mean that I thought MP3.com was a bad thing. The truth is, there is no 100% here. I think (just like in the case of my family) MP3.com has wonderful traits and some glaring faults, too.

Since most are acquainted with the licenses already, (and if you are not, then please for the love of all things good, go read every page you agreed to when you signed up), I want to talk about three INCREDIBLY GOOD aspects of MP3.com.

1. MP3.com has given every artist and writer who has computer access a chance to be heard via the Internet around the world. That is a miracle. They have created an easy-to-use, customizable (sort of) format at no fee to the writer/artist. That is not to say that there is not a price tag in access of rights to works uploaded there (exploited or not), but if an artist wanted a worldwide, well-known presence in the Internet music world, MP3.com has supplied it. And given EVERYONE the same chance at the same entry level.

Because of their ability to offer that presence, I felt it was fair to sign a tradeoff of potentially given rights in the case of a (not my best) song, that is not a potential money-earner (although that one is somewhat hard to predict). True, if one doesn't opt for the monthly premium charges, the ads flash in your face. But the point is that MP3.com allowed us a place to gather, be heard, and be "searched for," which was pretty unique and much needed. (OK, the agreements need a LOT of work...but the tech is divine!) If you were my client, I might not encourage you to do the same thing, by the way, unless you understood what you were signing, and limited what work you would "risk."

If one has no way to access the industry on a face-to-face basis regularly, if one can produce and co-write tracks via the net and has a need to meet similar musicians, if one has a lot of spare time on one's hands, and if one loves one's computer almost as much as one's music, MP3.com can hardly be ignored.

I had a very sweet gentleman call to discuss an article yesterday. He explained that he lived in a small town in Ohio, had no contacts or access, and no way to promote the CD he and his band had created. So, in addition to an MP3.com artist site, he had created several radio stations (another cool feature of the site, by the way), and had developed some swaps for his band's CD play with other stations of like genre, and all were benefiting. For him, regardless of what ultimate rights he potentially allowed access to, he felt it was something that was working better than anything else he had found yet. He was spending a lot of his time, but he was happy. For him, it may be a perfect place, although he risks the rights to every song uploaded there. By the way, he invited me to take a listen...and I did. (But I will point out that if he could reach me by phone about an article, he could contact me about a song without risking or committing anything, and much of the industry is the same way.)

2. I really do believe that MP3.com has been trying to create something that does help artists and writers...it's just that they have bottom lines to meet in order to provide us that site mentioned above, so it seems to me, the quickest way right now to create budget is to charge those who are using the site in numbers (the people uploading). I think these, as well as some of the licensing agreements will mellow and change over time, or at least I hope they do, so MP3.com can continue to grow and become a serious contributor to the traditional industry through it's online expertise. I also believe that a lot of the people working at MP3.com are nice people, and are trying to find a way to make it all work. AND, I believe where there's a true will, there is a way.

3. MP3.com is really one of the neatest "surf sites" around. I don't like FM radio as much as Internet radio for a couple of reasons...FM radio rarely identifies the artist, and never the writer; and I can't add a song that I think is great to my personal "songlist" for listening while I work with the traditional radio -- and those are just two of the reasons.

MP3.com is a fun place to hear how other "music minds" work and relate, and it's easy to find and contact most of the artists there. I'd be happy to pay a royalty per song I added to my list, since I know that royalty would probably (if set by the traditional music industry), be fractions of a cent per song.

Please don't think my questioning of MP3.com's "fine print" means that I can't appreciate their good parts. I love some of MP3.com's ideas ...but there has to be more writer/artist protection in the licensing. How about adding some reversion clauses, and contracts that can only change when both parties agree in writing, things like that? Limited uses for a limited amount of time is something we could consider more realistically. It's all doable, it just takes some more work.

Just my opinion based on my own experiences, not to be taken as legal advice.

GOODNIGHT KISS