by Kraft Moore

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It's fairly shocking to see how dedicated major labels are to screwing their own artists. One former major label executive pointed Digital Music News to 'institutionalized policies' towards shady accounting and hidden charges under the banner of 'cost reduction,' and we keep seeing evidence of that.  Which might explain why so many artists are now suing their major label parents for millions, and even threatening to put them out of business.  

Which brings us to Kenny Rogers, who recently sued EMI-owned Capitol Records on a litany of accounting offenses.  The centerpiece of the lawsuit - whether Capitol should pay a much higher percentage on digital sales - is controversial.  But the rest just seems like a laundry list of shady accounting and obfuscation.  And with that, here's a list of the various offenses, as listed in a complaint filed by attorneys for Kenny Rogers in the US District Court of Middle Tennessee (Nashville).

(1) In April of 2007, Kenny Rogers attempted to audit Capitol Records.  However, because of a "purposefully complex and opaque royalty payment system," coupled with an inability to receive any documentation on digital sales, it took Rogers' auditing firm nearly two years to complete the process.  "The accounting firm was unable to complete an initial audit report until March 9, 2009," the complaint read.

(2) That audit uncovered a number of payment issues, which Capitol Records promised to resolve in 2010.  By 2011, Capitol told Rogers that they were "still ironing out a few things," then the two employees assigned to the issue left the company (most likely laid off).

(3) The case was then passed to an attorney, who told Rogers in January of this year that he would "promptly try to resolve the Rogers audit."  It was not resolved, leading to the lawsuit.

(4) Capitol Records systematically put a portion of Rogers' royalties into a "suspense file," for reasons that were not articulated.  Rogers only found out about this file through the multi-year audit.

(5) Capitol refused to share any settlement amounts from lawsuits involving Napster, Kazaa, Audiogalaxy, Grokster, or BearShare.  The label also refused to share what those amounts were.

(6) Capitol sold Kenny Rogers classics through record clubs, but did not pass those royalties on to the artist.

(7) Capitol Records provided inconsistent royalty statements to Kenny Rogers, based on the use of different royalty calculation and processing systems.  One report would show royalties for certain albums in certain periods, while another report would not reflect those royalties.

(8) Capitol provided 'free goods' in foreign markets, but did not pay royalties on those freebies (as designated by the artist contract).

(9) Capitol charged Kenny Rogers for international taxes, even through they were receiving foreign tax credits.

(10) Capitol charged Rogers for 100 percent of video costs, even though the contract called for a 50 percent charge.

(11) Capitol charged more than $50,000 of inappropriate or mysterious expenses to the Kenny Rogers account, and never explained what these charges were. 

(12) Capitol Records did not offer any accounting (or royalties) on foreign broadcasts.

(13) Capitol offered improper accounting on sales on a number of sales in foreign countries.

(14) After the findings of the audit, Capitol did not implement any changes to fix the issues discovered.

 Full Lawsuit Filing

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Article source: http://feedproxy.google.com/~r/digitalmusicnews/~3/A4zU3PImogw/120219rogers

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Love For Sale by James Torme'

Learn more about James Torme' at http://jamestorme.com

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These are the stories we're watching this holiday weekend. Check back for ongoing updates and new developments.  Also, if you think we're missing something, just add it below!

First, the funding front.  It happened quietly, though the little extension-that-could exfm has just raised another $1.5 million from Spark Capital. 

Which complemented a $4.5 million round for Backplane, cofounded by Lady Gaga manager Troy Carter.  SV Angel and Google Ventures are were among the leaders of that series A, with the first iteration expected to be LittleMonsters.com.  The broader vision is a community platform focused around interests - and one that pushes beyond music. 

Heard playing at the Whitney funeral this weekend: "Drama" feat. Bobby Brown, who was escorted out of the ceremony in Newark after clashing with Houston family members.  The Reverends Al Sharpton and Jesse Jackson were apparently attempting to smooth ruffled feathers - and for more on that, we go to TMZ.

So what's the post-SOPA sentiment? Lots of 'what's next' discussion, including a well-circulated opinion by power-VC Fred Wilson, who this week suggested a privately-created and enforced blacklist. That is, free of government oversight, FBI raids, and egregious international oversight, while lacking that ferocious enforcement bite that everyone hates.  

And, we're still sifting through a mountain of notes and footage from SF MusicTech Summit from this week.  That includes OK Go digital strategist Mike Rosenthal, who noted that YouTube only produces a 'trickle' of revenues, and a flurry of music elevator pitches.  Coordinator Brian Zisk is uploading sessions onto Soundcloud now; meanwhile we've heard some American executives contrasting the fairly cheap-n-easy SF MusicTech to the far more pricey-and-complicated Midem...

I think I read this before (in 1998), but it looks like Microsoft is starting the wheels on a new music service.  According to details tipped by C|Net's Greg Sandoval, the service will be geared towards Xbox and Windows Phone customers.

Looks like the Ultra Music Festival is becoming a global roadshow. The event just announced expansion dates beyond its Miami roost into Buenos Aires, Ibiza, Seoul, Sao Paolo, and Warsaw, with Bayonne, NJ also on the shortlist.

Also on the live circuit, event-focused Thrillcall has just launched an iOS app that pushes ticketing deals to fans, including enticements like drinks, special access, etc.  The initial launch is happening in San Francisco, with Los Angeles the next hop.

More ahead...

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Article source: http://feedproxy.google.com/~r/digitalmusicnews/~3/RBRYoMqmmy4/120218latest

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The FBI and Department of Justice are continuing to make their case against MegaUpload, especially as attention shifts towards trial phase.  According to expanded indictment documents sent to Digital Music News this morning by DOJ prosecutors, 90 percent of all MegaUpload users were exclusively downloading content - without ever uploading a single file.  "Although the defendants have claimed more than 180 million registered users, the records on their internal computer systems suggest that they have only 66.6 million registered users as of Jan. 19, 2012," DOJ prosecutors relayed.  

 Full Indictment Document

On the flip side, a portion of the remaining 10 percent were exclusively uploading content, which means that the percentage of users actively uploading and downloading files was staggeringly low.  Which, if the FBI stats are accurate, makes MegaUpload look more like a candy store than a healthy locker service.

 Also check out: "What Really Killed MegaUpload? MegaBox, That's What..."

The prosecutors further isolated one heavy uploader to make its case, identifying the suspect only as 'VV':

One repeat alleged infringer referred to as “VV” was identified as a registered user for nearly six years;

VV had been the subject of numerous takedown emails, including 85 notices from one representative, to Megavideo since 2008;

VV received five 'rewards' payments from the Mega Conspiracy totaling $3,400 in 2008 and 2009;

VV uploaded approximately 16,950 files to Megavideo.com and Megaupload.com, which generated more than 34 million views;

VV's uploads included infringing copies of popular copyrighted motion pictures, including Ocean’s Thirteen, Ratatouille, and Evan Almighty;

Internal records reflect no deletions of any of VV’s uploaded files;

Which brings us to the most damning allegation, which is that MegaUpload took repeated steps to keep infringing content on its service, despite repeated takedown demands and falso reassurances issued to rights holders. 

More as it develops.

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  Visitor
  Friday, February 17, 2012

  So, not MegaBox, then?

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  Come on now
  Friday, February 17, 2012

  "The Mega Conspiracy created a computer system architecture which kept its most frequently downloaded files in memory (rather than in storage) on a number of dedicated high-end servers. Most of the files on these servers were infringing copies of copyrighted works."

  Well, to be fair, noone deletes files from their servers. They just hide them. Stuff is just pulled out of view, usually as not to aggrevate the copyright owners. Last.fm keeps every single mp3 uploaded. Grooveshark keeps everything, too. Just two examples of well known platforms. It is not honest to single out MegaUpload for this tactic, when everyone does exactly the same thing...

   

  Reply

  that's what they all say
  Friday, February 17, 2012

  Everyone else was speeding officer

  Reply

  PDF
  Friday, February 17, 2012

  Hey Paul, it looks like you forgot to publish the expanded indictment documents PDF. It would be nice to read. Give us a download link.

  Reply

  paul
  Friday, February 17, 2012

  We'll be uploading it soon - sorry for the delay.  It's actually a good read.

  /paul

  Reply

  AVAX?
  Friday, February 17, 2012

  Speaking of piracy and mafia gangs, how is it that avaxhome.ws is still active after all those years?

   

  Reply

  @zdar
  Friday, February 17, 2012

  Quel scoop...

  Reply

  George
  Saturday, February 18, 2012

  The FBI just wanted to open its on site! MegaFBI.com

  Reply

  
  

Article source: http://feedproxy.google.com/~r/digitalmusicnews/~3/22PUJ7kyEyM/120217megaupload

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Here's a little industry secret: if you want to sell a lot of albums, death helps.  And the more premature, shocking, and tragic the departure, the bigger the post-mortem windfall.    

Here's what US-based sales of Whitney Houston's 'Greatest Hits' album looked like last week, according to Nielsen Soundscan stats shared with Digital Music News.  Houston was pronounced dead on Saturday, February 11th, so this reflects sales for the week ending Sunday February 12th.  Which means this counts just one full day of sales and a small taste of things to come.

That's more than a 10,000% gain.  But wait! This macabre sales surge gets better. According to stats shared by Billboard, more Whitney Houston albums were purchased in that 24-36 hour window than all of 2011 and 2012 combined, leading up to the death.

And here's just a small sampling of the surge, which mostly happened across more immediate, ready-stocked digital channels.

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Article source: http://feedproxy.google.com/~r/digitalmusicnews/~3/nDALmcZrhTo/120217death

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