December 2010 - MBJ

Music Business Journal
Volume 6, Issue 3 www.thembj.org December 2010
Berklee College of Music
Inside This Issue
Mission Statement
The Music Business Journal, published
at Berklee College of Music, is a student
publication that serves as a forum for intel-
lectual discussion and research into the var-
ious aspects of the music business. The goal
is to inform and educate aspiring music pro-
fessionals, connect them with the industry,
and raise the academic level and interest in-
side and outside the Berklee Community.
(Continued on Page 3)
With the advent of online market-
ing, social media platforms, music streaming
services, and music piracy, it has become in-
creasingly difficult to track the consumption of
music. Falling record sales in conjunction with
the explosion of new media delivery has made
the task of monitoring an artist’s progress far
more complicated than it used to be. For the
past decade, BigChampagne has quietly oper-
ated behind the scenes, tracking how consumers
find, acquire, and listen to music on the Internet.
Throughout, the company has taken some big
steps towards redefining the way the music in-
dustry measures success.
The Back Story
Founded in 2000 by Zachary Allison,
Eric Garland, and Adam Toll, BigChampagne’s
first venture was tracking what songs people
were downloading at Napster and the various
other file-sharing programs that followed.1
Garland and Allison hired coders
to build software capable of tracking and ar-
chiving the contents of shared folders and up to
fifty million daily search queries with the intent
of selling the service to major record labels.2
Amidst the copyright infringement lawsuits that
labels filed in conjunction with the RIAA, the
companies resisted the idea at first---figuring
the courts were about to solve the problem. But
as other P2P networks began surfacing, it be-
came evident that file sharing was there to stay.
NPD Group research estimates that 31 million
Americans shared music from a P2P service in
September 2002.3
BigChampagne got its first big break
when the popular punk rock band the Off-
spring came forward in support of file sharing
networks. According to Garland, “[Offspring]
knew this was more an opportunity than a
threat.”4
He and his team immediately began
tracking and reporting the band’s progress on
P2P websites. Through the band’s manage-
ment, Garland contacted Offspring’s attorney,
Peter Peterno, whose roster included a number
of other well established acts like, Destiny’s
Child and Will Smith. Seeing the potential in
Garland’s new service, Peterno promptly signed
his other acts to be tracked as well, thus opening
the floodgates for BigChampagne.5
In the early 2000’s, there were no
experts in the arena of tracking digital con-
sumption. The only companies doing any
sort of music ranking were the Recording In-
dustry Association of America (RIAA ) and
Nielsen SoundScan, which compiles data on
all kinds of consumption ranging from album
sales to terrestrial radio play. SoundScan has
been significant since its 1991 inception be-
cause of its accurate representation of legiti-
mate sales figures taken directly from retail-
ers.6
These numbers are then aggregated and
used by numerous data tracking companies,
and, most notably, Billboard.
While known for its Top 200
Chart, Billboard offers clear and comprehen-
sive weekly rating reports for all individual
genres, albums, digital tracks, radio, video
sales, and the Internet. In addition, album
sales are separated by format and compared
with previous weekly, monthly, and annual
Much About Video Games
Pages 10 & 12
Music in the Living Room
Page 8
Death of a (P2P) Giant
Page 6
Copyright in Europe
Page 5
Girl Talk
Page 4
BigChampagne:
By Amy Mantis
The Meaning of Success

Table of Contents
Business Articles
The Ultimate Chart................................1
Producing in Berlin...............................7
Placing Bands in Video Games.............10
Fab Four Music.....................................13
A Lively Gathering...............................14
Law Section
Testing Fair Use.....................................4
Copyright Abroad..................................5
The Business of Video Games.............10
MBJ Editorial
Mission Statement...................................1
Editor’s Note...........................................2
Upcoming Topics...................................16
Sponsorship
Berklee Media....................................... 15
Editor’s Note
Volume 6, Issue 2 Music Business Journal
As the year 2010 winds to a close, the final Music Business Journal release of the semester is here
just in time to accompany your holiday travels. With some of the most significant content we’ve had
all year, the MBJ team is marching towards 2011 with its best foot forward. This new issue is sure to
capture your interest on numerous levels.
This month, Amy Mantis kicks things off with an informative analysis of Big Champagne and
its attempts to supersede the Billboard Charts with its new artist ranking service, The Ultimate Chart.
Aggregating data from online sources like Facebook, Twitter, and YouTube, The Ultimate Chart aims
to provide a more accurate picture of an artist’s progress based on more than just physical album sales.
Over the past month, the music industry has produced a considerable amount of important current
events which we’ve covered in full detail: The shutdown of the major P2P network, Limewire (Nick
Susi), the release of the new Girl Talk record which includes the illegal use of more than 350 samples
(Luiz Silva), and the long-awaited release of the Beatles catalogue on iTunes (Ben Scudder). Also
last month, the Billboard Touring Conference was held in New York on Nov. 3rd & 4th. In this issue,
I’ve provided a first-hand review of the event.
As artists continue to search for new ways to generate revenue from their music, the Video Gam-
ing Industry is becoming an increasingly attractive option. Exploring this new medium, Jamie Ander-
son was able to sit down with Machinima.com’s social media manager, Elissa Ayadi, for an exclusive
interview on the business of music and video games. In addition, Ben Hong provides an informative
article on copyright law as it pertains to interactive gaming.
As copyright law struggles to catch up with new advancements in technology, VEVO appears to
be the answer to Google’s prayers for legal music video streaming. Itay Rahat provides us with a full
analysis of the new company. In addition, globalization in the music marketplace is calling for an
increased understanding of foreign territories. Witt Godden offers an insightful piece comparing the
differences between European and U.S. copyright law while Fred Bouchard shares a personal inter-
view with Berlin Jazz Festival production manager, Ihno von Hasselt. There is a striking contrast in
the modus operandi, and we can learn a lot from the comparison.
It my pleasure to introduce the Music Business Journal’s concluding release of 2010. Be sure to
stay connected with us over the break on thembj.org and our Facebook page, and keep an eye out for
our new website scheduled to launch in early 2011!
Happy Holidays from the MBJ team.
Evan Kramer, Editor-in-Chief
Contributors
Editor’s Note.....................................................................................................................................................................Evan Kramer
Business Articles............................................................................................................Amy Mantis, Fred Bouchard, Jamie Anderson
Business Articles (cont).............................................................................................................Nick Susi, Ben Scudder, Evan Kramer
Law Section......................................................................................................................Luiz Augusto Buff, Witt Godden, Ben Hong
Staff.............................................................................................................Witt Godden, Ben Hong, Trish Hosein, Gabriella Howard
Staff (cont)........................................................................................Dean Miller, Silvina Moreno, Dahyun Ed Jeong, Mia Verdoorn
2 www.thembj.org December 2010

Management
Editor-in-Chief..................................................................................................................................................................Evan Kramer
Content Editor.........................................................................................................................................................................Nick Susi
Webmaster..................................................................................................................................................................Itay Shahar Rahat
Faculty Advisor and Finance.....................................................................................................................................Dr. Peter Alhadeff
Layout Editor..................................................................................................................................................................Lau Meng Wai
Marketing Manager.......................................................................................................................................................... Minden Jones

December 2010 www.thembj.org 3
Business Articles
on the Ultimate 100 chart with the top ten
singles on iTunes and the Billboard Hot 100,
some differences become apparent. For ex-
ample, in the week starting December 4th,
the number one song on the Billboard Hot
100 was Rihanna’s Only Girl. In contrast, at
the Ultimate Chart, it was Ke$ha’s We R Who
We R. iTunes ranked the two songs at no.
4 and no. 9 respectively, while Katy Perry’s
Firework (ranked no. 6 on Billboard) held
the top position. In terms of The Ultimate
Chart, We R Who We R most likely had more
combined YouTube views (there is no video
for it yet, but people have uploaded their own
versions), more plays on streaming websites,
and was probably talked about more on Face-
book than Only Girl or Firework.
The Ultimate Chart contains graphic
information beneath each song that shows
how the song’s ranking was determined.
Each song is rated on a score out of 100,
while the graph shows the song’s progress
throughout the last five weeks. Even if the
accuracy of the four-month-old service is
still questionable, the concept behind Big-
Champagne’s data aggregation is not. The
challenge posed to SoundScan, and the more
traditional reporting methods, is apparent.
YouTube & Lady Gaga
Last month, for instance, Lady
GaGa was the first artist to receive one bil-
lion views on YouTube. In addition, she has
also sold over 15 million albums and is cur-
rently on one of the highest grossing tours
of 2010. Moreover, Lady GaGa has more
followers on Twitter than any other artist.
Yet, she hasn’t been on any chart—includ-
ing the Ultimate Chart—for months. Does
that mean her music isn’t as popular as that
of the Katy Perry’s and Rihanna’s, currently
holding the top positions on iTunes and Bill-
board?
“When you look at Lady Gaga hit-
ting a billion views, I think that’s a very
positive wake-up call for the industry--we
need to think about the metrics of success
differently,” says Joe Fleischer, the CMO of
BigChampagne.10
Fleischer continues, “The
right way to understand success is to include
all of those points of contact that are mean-
ingful into the charting environment. Just
look at gold and platinum awards from the
RIAA. When an artist like Disturbed reaches
Number One, are they now bigger than Tay-
lor Swift? No. It means for just that one week
they’ve sold more albums. It’s one compo-
nent of success, but it does not give a consis-
tent, undistorted view of the market.”11
The point is that Lady GaGa is ar-
guably the biggest contemporary act in the
world right now--yet if one allowed the Bill-
board charting system to make the call, she
would be relatively inconsequential. While
she has completely fallen off the top half of
the Top 100 Charts, her music has global
impact and reflects poorly on the tradition-
al charting system. Lady GaGa is currently
ranked at #18 on the Ultimate Chart. While
she may not be number one –Rihanna has
that spot-- she tracks better (like Billboard
and iTunes, Lady Gaga’s current standings
reflect time elapsed while fans wait for a
follow-up to her debut release).
Billboard under Scrutiny
The progression of technology has
opened countless doors for musicians to bet-
ter build fan bases. Moreover, physical sales
are now far from being the only medium
with which to measure success, as artists are
constantly finding other ways to further their
careers and monetize their work. Therefore,
the obsolescence of Billboard’s current chart
reporting appears somewhat inevitable. Big-
Champagne’s Ultimate Chart may be the
most serious threat yet to the existing indus-
try standard.
Sources:
[1-3] Howe, Jeff. “BigChampagne is Watching You.” Wired. Wired
Magazing, Oct 2003. Web. 25 Nov 2010. <http://www.wired.com/
wired/archive/11.10/fileshare.html?pg=1&topic=&topic_set=>.
[4-7] Dansby, Andrew. “Rice grad keeps track of what we’re down-
loading.” Houston
Chronicle. Houstin Chronicle, 25 Apr 2008. Web. 26 Nov 2010.
<http://www.chron.com/disp/story.mpl/ent/5730393.html>.
[8] Sisaro, Ben. “A Pop Chart for Web Era Challenges Billboard.”
The New York Times. New York Times, 21 Jul 2010. Web. 27 Nov
2010.<http://www.nytimes.com/2010/07/22/arts/music/22singles.
html?_r=2>.
[9] Dansby, Andrew. “Rice grad keeps track of what we’re down-
loading.” Houston Chronicle. Houstin Chronicle, 25 Apr 2008. Web.
26 Nov 2010. <http://www.chron.com/disp/story.mpl/ent/5730393.
html>.
[10-11] Carr, Austin. “How Lady GaGa’s One Billion YouTube
Views Changes the Music Industry.” Fast Company. Fast Com-
pany, 27 Oct 2010. Web. 27 Nov 2010 <http://www.fastcompany.
com/1698374/how-lady-gagas-billion-youtube-views-changes-the-
music-industry>.
figures. While Billboard’s reporting is sec-
ond to none (along with SoundScan’s), the
drastic decline in physical sales has spurred
some skepticism amongst those who heavily
rely on the charts to conduct their business.
How relevant is it to consider only physical
album sales when tracking an artist’s success
anymore? In this evolving musical age where
new acts have traded radio play and record
label support for things like YouTube and
social media, how accurately can one expect
Billboard’s rankings to be?
A Chart of Charts

In recent years, accurately defin-
ing a universally accepted standard of artist-
success has frustrated industry professionals.
“All this time, there’s always been a single
indicator of success: album sales”, says Gar-
land. “It used to be you were selling CDs
or you weren’t. But we transitioned quickly
from one business indicator of health to many.
You’re no longer judged by one number.”7
This past July, at the New Music
Seminar, BigChampagne announced the re-
lease of its (so-called) Ultimate Chart, an
“an unprecedented aggregation of timely and
relevant metrics.” The chart measures mu-
sic’s popularity counting not only sales and
airplay, as Billboard does, but also online
streams and an array of social-networking
services such as Facebook, MySpace, Twitter,
Last.fm, and YouTube.8
It also gathers infor-
mation from Pandora, AOL, Yahoo, Amazon
and Clear Channel. Not excluding the sales
of physical albums, the new service appears
to be pioneering a new method of ranking that
goes above and beyond traditional measure-
ments.
BigChampagne has been follow-
ing unofficial music data for quite some time,
tracking Facebook and MySpace long before
they became social networking giants. Their
desire to “define what the next [leading mu-
sic] indicator will be”, seems to have kept
them focused on new consumption trends. As
Garland puts it, the Ultimate Chart illustrates
the “multidimensional picture of an artist”
and their career.9
The Ultimate Chart Compared
As of now, The Ultimate Chart
compiles its data into two reports, the Ulti-
mate 100 songs and the Ultimate 100 artists.
However, when comparing the top ten songs
BigChampagne(cont.)

Law Section
By Luiz Augusto Buff
licensed, copyrighted work as long as one
gives credit to the author or copyright
owner (the assumption that a use is fair
can be risky, and technically speaking, it
is considered fair only when a court de-
cides so).
The Copyright act listed certain
types of use that are likely to be consid-
ered as fair, such as criticism, comment,
news reporting, teaching, scholarship
and research. This list is just illustrative
and there are other types of uses that can
be considered fair as well. Also, Section
107 of the Copyright Act lists four main
factors to be considered by a court to de-
termine whether or not a particular use is
fair:
“(1) The purpose and character of the use,
including whether such use is of commer-
cial nature or is for nonprofit educational
purposes;
(2) The nature of the copyrighted work;
(3) The amount and substantiality of the
portion used in relation to the copyrighted
work as a whole;
(4) The effect of the use upon the potential
market for, or value of, the copyrighted
work.”
Girl Talk
The first factor focuses on the ob-
servation of how the work is being used.
If the use is related to information and/or
education, it is more likely to be consid-
ered as fair since there are public benefits
in these purposes. In general, the nonprofit
character will weigh towards fair use, but
the commercial use by itself does not dis-
card the fairness of the use, since most
uses are commercial to some extent. The
court’s main concern is finding out if the
user stands to profit from exploitation of
the copyrighted material without paying
the customary price for the licenses–and
Girl Talk’s does profit from the act.
The transformative quality of the
use is also analyzed here as a means to dis-
tinguish infringement and fair use. A use
that is transformative, rather than imita-
tive, has more of a chance to be qualified
as fair, for it inserts the piece in a different
context and purpose. Girl Talk’s sample
works are transformative, in that he trans-
forms different pieces of existing sounds
recordings into a new work of his own.
However, his purposes are strictly commer-
cial and do not involve educational value or
critical commentary. In addition, the good
faith of the defendant is extremely relevant
in court analysis of the first factor. As the al-
bum was distributed on a website called Ille-
galart.net, the presumption of good faith can
be quite a stretch.
When analyzing the nature of the
copyrighted work, the court must determine
if the work was published or unpublished, or
if it is a factual or creative work. As musi-
cal works are creative in essence, this factor
usually weighs against fair use- even more
so when it is an unpublished work, in which
case, the original author has the right of first
use before a derivative creator. Greg Gil-
lis’ samples come from published original
works- a fact that does not harm the first use
principle.
The third factor refers to the por-
tion of the copyrighted material used. There
is no absolute rule to determine how much of
a work can be used to be considered fair. Not
only is the size and proportion of the work
relevant, but also the qualitative dimension
of the portion used. The greater the amount
used, the less likely a use will be considered
fair. Yet in some cases, the use of even a
very small part- if considered signature to
a song- may characterize the use as an in-
fringement.
Probably the most important of
Introduction
With the development of digital
music in the mid-1990s, the act of sam-
pling became very popular and is now a
fundamental element for musical styles
like Rap and Hip-hop. The use of samples
to construct new songs is considered a
derivative work and usually a license is
required. Copyright owners have already
successfully sued Hip-hop artists that tried
to use samples without these licenses.
Another sample-based de-
rivative work is the Mash-Up; a type of
composition that blends two or more pre-
recorded sounds creating an entirely new
musical composition. While Mash-Ups
are also considered a derivative work, artists
like Greg Gillis – known as DJ Girl Talk – are
trying to push the boundaries of the strictures
of the law by trying to include these musical
collages under the fair use concept.
Girl Talk’s latest album, All Day,
was released as a free download on Novem-
ber 15th and has more than 350 samples of
different sound recordings in approximately
seventy minutes of runtime. Obtaining all of
the necessary licenses for each sound record-
ing used would have been very costly and
extremely time consuming. Gillis, having
planned to release the album for free, de-
cided to move forward without licensing a
single track – not even the three-minute use
of Black Sabbath’s War Pigs– claiming that
his creations fit the guidelines of fair use.
However, to determine congruency with the
fair use doctrine, it is necessary to understand
the origins and basis of the fair use concept.
Fair Use Revisited
Following a tendency that had been
developed through case law, the 1976 Copy-
right Act recognized the fair use doctrine as a
defense against copyright infringement. The
goal of that concept was to permit certain
uses of copyrighted works that encouraged
the advancement of learning and knowledge
and to provide wide access to creative works
for the public. It is important to understand
that fair use is not an affirmative right, but
merely a defense against a copyright in-
fringement. There is a false common belief
that it is considered “fair use” to use an un-
Mash-Ups & Fair Use: Girl Talk

Law Section
By Thomas ‘Witt’Godden
US & European Music Copyright & Collections: A Brief
With the world growing smaller and
technology making music more accessible,
understanding publishing on a global level is
becoming increasingly crucial for songwrit-
ers and musicians. Artists such as Lady Gaga,
Katy Perry, and Sarah Bareilles have multi-
million dollar markets outside of the United
States, and there are separate sets of rules and
regulations in all of the various other territo-
ries. Each country has its own interpretations
of intellectual property and the rights that they
consider fair and equal. The United States
and Europe in particular, have varied sources
of royalties and different collection societies
as well.
When someone records song in any
tangible form (sheet music included), they
are automatically a “copyright” holder for
the material that they created. Registration
with the copyright office is not necessary to
attain true ownership, but when dealing with
infringement cases or working with a record
company, legal proof of ownership over the
intellectual property is required. In the Unit-
ed States, owners of copyright have six basic
rights: reproducing the work, creating deriva-
tive works, distributing copies to the public,
performing the work in public places, display-
ing the work publically, performing the work
in non-exempt digital mediums
In Europe, a similar set of rights is
offered, with a few additions: For example,
in the 1961 signing of the Rome Convention,
neighboring rights were introduced. These
rights address performing artists and record
producers who make creative reinterpreta-
tions of other artist’s work. For instance, when
Alien Ant Farm reinvented Michael Jackson’s
“Smooth Criminal,” some argued that the
band should have received performing royal-
ties each time their rendition was played on
American radio. While the band only received
royalties from records sales in the U.S., roy-
alties collected by the Performing Rights So-
cieties in Europe were split between Michael
Jackson’s estate and Alien Ant Farm.
European artists are also entitled to
moral rights. The United States has a similar
structure, but the laws are much more con-
cerned with creating a commercial market
than protecting an artist’s creative rights. As
a result, the United States copyright law is not
as strict. Under moral rights, the author may
exercise a right of integrity to approve or op-
pose any alterations made to their work by a
third party. Once the work is created, a right of
paternity is held- granting the original author
writing credit in the third party work. These
rights are non-alienable, and like U.S. law, the
copyright is active 70 years beyond the death
of the author.
There are two main ways for an artist
to profit from their songs: performance royal-
ties are distributed when a song is publically
performed, and mechanical royalties paid
when physical copies of sheet music or record-
ed music are produced. In the United States,
publishing companies only deal with mechani-
cal royalties and the administrative aspects of
a writer’s career. Publishing companies not
only help a songwriter get his or her material
recorded, but also deal with the nitty-gritty
administrative tasks related to licensing and
mechanical collections. Artists typically sign
away the copyright to the publishing company
and collect 50% percent as a writer’s share, but
with enough clout, an artist can bargain for a
different structure. Once an artist has begun
receiving money from album pressings, their
songs can go on to be played on the radio, in
stores, in restaurants, and performed live by
cover bands and artists in venues across the
United States.
Performing Rights Organizations
(PRO’s) collect royalties that are paid in pro-
portion to the number of times an artist’s song
is played on the radio, in a bar or club, or in
any other public space. In the United States,
there are three organizations that an artist can
choose from – ASCAP, BMI, and SESAC. In
Europe, there are 25 collection societies for
the 27 countries in the European Union, and
each one acts as the sole society for that coun-
try. Essentially, they are government-affiliated
monopolies that collect all of the money in a
designated country for both performing royal-
ties and mechanical royalties. Differing from
the United States, the European performing
rights societies almost always expect exclu-
sive administrative rights. Since artists in the
European Union cannot choose their service,
regulations can be forced upon the artist that
might not be in their best interest. Overall, the
United States offers more choices to an artist,
while each country of the European Union of-
fers a more streamlined set of regulations for
the complicated royalty system.
Also differing from the United
States, the European collection societies
pay the publishers for mechanical royalties
directly, rather than sending them to a third
party organization first. In the U.S., me-
chanicals are usually collected by organiza-
tions like Harry Fox. Companies like these
are responsible for handling all of the licens-
ing, tracking, and payment collections, and
they do so completely independently of the
PRO’s.
In the United States, each of the
three major PRO’s use separate processes to
determine how much each artist has earned.
For instance, ASCAP and BMI use an un-
disclosed equation which tracks play counts
based off of arbitrary airtime samples to de-
termine how much each artist receives from
the total amount collected from the total
royalties collected. SESAC uses a scanning
device that tracks the technological finger-
print of a song, which provides a more accu-
rate representation of how many times that
song was played.
European PRO’s utilize a similar
system to SESAC called DJMonitor which
also tracks fingerprinted songs on an online
database. Since each society only handles
their respective country’s artists, the system
is more equal and accurate. Furthermore, the
European societies strive for more transpar-
ency. DJMonitor has developed a Playlist
Management System (PMS) in which rights
holders can review the music performed to
verify the results and to make corrections to
songs that were fingerprinted incorrectly.
All in all, there are many differ-
ences between the European and the Ameri-
can process for publishing and royalty col-
lections. The three societies of the United
States allow for more competition within a
single market, and are independently regu-
lated. In Europe on the other hand, the
government regulates each society with
DJMonitor- a system that seems to provide
more accurate tracking. European artists
may sign away more rights, but they have
more provisions written into copyright law
that protect their work from being altered in
an unfit or unacceptable manner.

On October 26th 2010, the rogue
P2P service LimeWire was shutdown. Thir-
teen separate record companies – all repre-
sented by the Recording Industry Association
of America (RIAA) – sued for mass copy-
right infringement. Limewire argued that
granting its users access to copyrighted files
was not technically the same thing as infring-
ing copyrights, and declared that it was not
responsible for the actions of others. In turn,
the RIAA made its case by selecting 1,800
files at random from the LimeWire database,
and finding that 93% of them were copyright
protected, i.e. not authorized for free distribu-
tion.
The Ruling
The court observed that LimeWire
had actively “induced” its users to infringe its
copyrighted material. After Napster, received
a court-ordered injunction for copyright in-
fringement in February 2001, LimeWire’s
marketing team developed a plan to quick-
ly acquire all of Napster’s previous users.
LimeWire representatives traveled to college
campuses where Napster was popular to pro-
mote their new file-sharing service for music
downloads. They utilized Google AdWords
to direct any searches related to Napster, Ka-
zaa, and Morpheus – all of which were found
guilty of copyright infringement – to the
LimeWire site. Finally, when users down-
loaded the software, they were asked if they
would use LimeWire for copyright infringe-
ment. If the user answered yes, they were
given the option to go back and select no for
the software to load properly. The company
attracted a dedicated user base rapidly, and
at the time of the LimeWire vs. RIAA court
hearing, the service had a steady 4 million us-
ers per day and made up to $20 million per
year through ad space and premium users.
The district judge on the case, Kim-
ba Wood of New York, considered these fac-
tors and determined –without need for trial-
that LimeWire was actively attracting users
and encouraging them to download copy-
righted material. On May 12th, 2010, Wood
officially ruled in favor of the RIAA and set a
court date for January 2011 to determine the
monetary sum of LimeWire’s damages.
In addition, the ruling also held the
company’s founder and president, Mark Gor-
ton, personally liable for the infringements.
Copyright law clearly states that individu-
als involved with an infringing corporation
can be held personally responsible for their
actions, but the RIAA’s approach to this is-
sue, and the redress it sought on this count,
were perceived as unusual and controver-
sial Although there are no official figures at
this time, the RIAA’s requested damages are
$150,000 per violation – the maximum that
copyright law will allow. Of course, the As-
sociation will have to settle for considerably
less based on what LimeWire’s ability to pay
is.
After the favorable RIAA ruling,
it went all downhill for LimeWire. Just one
month later, the National Music Publish-
ers Association (NMPA) sued LimeWire
again—and also for mass copyright infringe-
ment. By October 26th 2010, Wood ordered
LimeWire’s services to be shut down perma-
nently to prevent any further copyright in-
fringement.
Pirates Regroup
As a result of the injunction,
LimeWire laid off 30% of its employees.
Shutting down its services, however, proved
to be a complicated undertaking. The service
operated on a decentralized system called the
Gnutella Network, which LimeWire did not
have direct control over. Within a week of
the injunction, a pirate version of LimeWire
surfaced on the Internet. This version was
free of adware and spyware, so it operated
even faster, and it offered LimeWire’s typical
premium features without charge. LimeWire
denied any affiliation with the pirate version,
and posted the following statement to their
website:
LimeWire is under a court order
dated October 26, 2010 to stop distributing
the LimeWire software…LimeWire LLC, its
directors and officers, are taking all steps to
comply with the injunction. We have very
recently become aware of applications on
the Internet purporting to use the LimeWire
name, such as the LimeWire Pirate Edi-
tion. We demand that all persons using the
LimeWire software, name, or trademark in
order to upload or download copyrighted
works in any manner cease and desist from
doing so. We further remind you that the
unauthorized uploading and downloading of
copyrighted works is illegal.”
By Nick Susi
The pirate version was not the only
form of retaliation against LimeWire’s injunc-
tion. A pro-piracy group known as “Anony-
mous” launched an attack known as “Opera-
tion Payback.” They shut down the RIAA
website through DDoS, a denial-of-service
attack, just as they had done in the past with
the website of the Motion Picture Association
of America (mpaa.org). Although the RIAA
site is back to full service, it was a major in-
convenience to fix and it caused a large uproar
in the anti-piracy community.
One might expect LimeWire to suc-
cumb to the recent bedlam surrounding its
name. The company, however, has unusual
plans for the future. Despite the injunction
and its impending punitive damage charges,
LimeWire has set its sights on launching a
legal cloud-based streaming service. It is
questionable as to where LimeWire expects to
receive its licensing deals from– as it doesn’t
exactly have the best relationships with the
RIAA or the NMPA. But LimeWire execu-
tives are quite serious about the matter. Simi-
lar to Napster’s shift to a legal streaming ser-
vice, LimeWire hopes to keep its brand name
alive. This alleged cloud-based service would
sync to the user’s iTunes library, so that the
user could access their iTunes library from
any computer or smart phone.
Afterthoughts
Overall, what does this case against
LimeWire mean for the future of the music
industry? It is hardly a victory against peer-
to-peer file-sharing services. With so many
similar options available on the Internet, il-
legal downloaders are likely to move on to
RapidShare, BitTorrent, FrostWire, or any of
the other numerous sites currently available
online. LimeWire existed for ten long years
before being shut down, and it is likely that
these other services will defy litigation for
similar amount of time. For instance, Rapid-
Share was already taken to court this summer
by Capelight Pictures for distributing their
copyrighted films as free downloads. Cap-
elight argued that a copyright filtering system
needed to be placed upon their service, but
RapidShare successfully appealed the motion.
Ultimately, the LimeWire court
case seems to show that punitive legal action
bears some fruit. But it may never be enough
to frighten new market entrants that leverage
free music for their benefit.
Business Articles
LIMEWIRE to the Wire

Interview
Ihno von Hasselt on The Berlin Jazz Festival
Producing, promoting, booking, and
ticketing a music festival is, of course, chal-
lenging. In this issue, we look afar into the
heart of Europe, where journalist and distin-
guished teacher Fred Bouchard interviews the
producer of Germany’s premier jazz festival.
If music is a product of culture, then the busi-
ness of music cannot be the same everywhere.
Please read on to find out more.
Q: What’s your model for a jazz festival--
your organizational structure?
A: Our parent company is called Kultur
Fahrensteitungen fur Berlin. It is a cultural
events organization run by federal govern-
ment as a state-operated business. It’s hard to
explain in English, because, frankly, I cannot
explain it in German! As a non-profit, we’re
exempted from most taxes.
Q: The state organization that funds jazz
also funds Festspiel Hall’s classical events,
correct?
A: Yes, and we’re partially funded – about a
fifth of our income -- by selling radio record-
ing rights to the public radio organization, a
little bit like the USA’s NPR. All in all there
are about nine radio stations – for example,
SWR in Stuttgart -- in Berlin, Cologne, Ham-
burg, Leipzig; every county has a designated
radio station. Ticket sales account for a little
less than 50% of revenues.
Q: Are grant monies available to BJF?
A: Usually not, because we are a short-term
operation, and grants have to be applied for 1-2
years in advance.
Q: Isn’t this a major difference between
running a jazz and a classical festival?
A: Of course, my colleague who runs the clas-
sical side is already booking 2013.
Q: Do you have a hard time convincing the
Powers-That-Be of this discrepancy?
A: I try to keep a low profile and be satisfied
with the monies I get. If I stick my head out
too far, I make myself a nuisance. Then they’ll
start asking themselves why are we spending
so much on culture that isn’t German, or even
European. So, I hide myself a little bit. …And
since BJF developed a good reputation artis-
tically through the Berendt and Gruntz years,
By Fred Bouchard
the thinking is ‘well, if it’s been around for 47
years, it can’t be all bad.’
Q: Candidly, have ticket sales been satisfac-
tory this year?
A: No. For example, I think the decisive fac-
tor for the Saturday night sellout was Moss
[American vocal quartet out of New York
Voices] rather than Joachim Kühn [famous
modern German pianist, an icon in Berlin,
who followed Moss with an intriguing Moroc-
can Berber project.] But that’s a judgment call.
Q: If some acts from abroad are govern-
ment subsidized, does that help much?
A: A little bit. Scandinavians put money be-
hind exporting their musicians, and sometimes
take over the travel costs. French businesses
like record labels working through the Bureau
des Exports, which convinced some bands not
to ask for too much money.
Q: Any partnerships with airlines?
A: Non-existent. They’re not interested be-
cause I cannot guarantee them exclusivity. I
had a band coming from Skopje, Macedonia,
and we had to use Hungarian Airlines.
Q: How has the organization evolved dur-
ing your stay?
A: Well, the festival was founded in 1964. The
model was a little like the festival that George
Wein founded in the 1950s [Newport Jazz
Festival]. At that given moment in our classi-
cal festival -which presented classical music
and theater- there was a kind of emphasis on
exchange between Africa and Europe. Music-
wise, one of our pillar figures in jazz concep-
tion after the war, Joachim-Ernst Berendt, was
asked to create a festival that then became a
jazz festival in its own right.
Q: So Berendt’s idea was quite successful
and sprung other shoots and ideas.
A: Berendt was musical director until 1972,
then [Swiss bandleader] George Gruntz took
over, and guided and guarded the festival for
23 years. I came in during that time, and we
worked together a couple of years. In 1993,
the [Berlin] Wall had fallen down and money
became tighter, so Gruntz made his retreat.
Albert Mangelsdorff [experimental trombon-
ist who developed multiphonics] came in until
2000, and [frequent changes] until today we
have Nils Landgren [Swedish trombonist],
until at least 2011.
Q: You’ve been steady at the helm as pro-
duction manager through all these chang-
es?
A: I started out as a driver during my col-
lege days [1969]; I always had this job and
watched the festival develop. In 1978 I was
hired to run the Berlin office, because a pri-
vate enterprise was out in charge when there
was a fight between George Gruntz and the
guy I worked for. Since 1981 I’ve been pro-
duction manager of the festival.
Q: As the hand that guides the ship, does
production include financial operations?
A: Ja, I manage the money. And I handle ne-
gotiations. Of course, I must discuss things
with Nils Landgren, and I bring my experi-
ence to guide him a little bit when he’s over-
doing it from the musical side. Your President
Truman said, ‘The buck stops here?’ So, the
buck stops here. [hits his desk, laughs]
Q: So this year Nils decided to spread it
around, hire a bunch of European big
bands and skip the expensive super-stars,
like Herbie Hancock [2008 finale perform-
er].
A: As long as we work with public money, I
think we have a certain responsibility to not
only serve the market, but add something to
the market. Private enterprises, agencies and
concert promoters could easily make a buck
with the Herbie Hancocks, but if they don’t
fit in at that time or in that program, then it’s
not worthwhile. Of course, Herbie Hancock
deserves it, but if it’s public money, you have
to be more careful and make things happen
that otherwise would not happen. And Pat
Metheny and Herbie are happening always,
everywhere. On my side, it’s always easier to
sell music from the original source, and that
is the United States.
Q: But today Europe offers so many satel-
lite sources to choose from for jazz.
A: Exactly, and why not concentrate on them
for a year? Next year it could be West Coast
cool, New Orleans funk, or the growing
Brooklyn scene.

Business Articles
Video is the fastest growing seg-
ment on the Internet and a quick glance at
the top ranked videos on YouTube will re-
veal music videos occupying almost all of
the top slots. Lady Gaga, for example, re-
cently reached one billion views. But does
YouTube track and monetizes Lady Gaga?
Not really, for it is mired in a copyright
conundrum over its content. The answer
is that VEVO.com does. And, following a
recent agreement, Google, who owns You-
Tube, is now moving all full-length profes-
sional music videos to the VEVO website.
VEVO Beginnings
VEVO.com was created by Uni-
versal Music Group, Sony Music Entertain-
ment, and the Abu-Dahbi Media Company.
It was meant to satisfy the demand for ac-
cess to music video programming of popu-
lar artists. It features the most extensive
catalog of high quality music video on the
web. It is available thanks to exclusive
distribution and advertising deals with The
Orchard and many other independents, as
well as all the major labels except War-
ner The service uses YouTube’s technol-
ogy and is available through VEVO.com,
the VEVO-branded embedded player, and
VEVO on YouTube. Official high quality
music videos appear on YouTube through a
customized VEVO channel. Any other mu-
sic videos on YouTube – streaming outside
the VEVO channel – are likely unofficial
violations of copyright law and subject to
immediate removal. About four-fifths of
VEVO’s business comes from a syndica-
tion deal with YouTube, which is the largest
video website in the world.
The Business Model
Delivering high quality content to
a targetable audience, and creating a scarcity
of advertising real estate, is the basis of the
VEVO business model. So far, labels have
licensed music to multiple online services
for a share of the advertising revenue sold
with those videos. Before VEVO, the com-
petition between all services for the same
advertisers drove ad rates down even while
views were on the rise. VEVO is hoping to
push rates up and create a single point of
negotiation for advertisers who wish to buy
ad space on music videos. As the ads would
air equally on VEVO and YouTube, profits
would be split evenly between the two.
VEVO receives over 500 million
views a month in the United States and Can-
ada and 1.4 billion views per month world-
wide with almost 60 million unique users,
according to Comscore (as reported by Digi-
tal Music News, Oct. 13, 2010). During VE-
VO’s launch in December 2009, Rio Caraeff,
the company’s CEO, stated that VEVO’s ob-
jective was to become one of the top twenty
sites in the world, driving over 500 million
streams per month. The goal was quickly re-
alized, and the site is already the third largest
source of videos on the web.
VEVO Explained
VEVO’s platform allows the user
to create personal music video playlists with
a selection of over 50,000 videos and 8,000
artists, through the syndication deal with
YouTube. The goal is to extract value and
meaningful revenue for the rightful owner,
while reaching a large audience. VEVO is
offering advertisers access to the connec-
tion between the fan and the artist- -and es-
pecially fans in the younger demographics.
Caraeff claims that the total revenue gener-
ated to date is in the tens of millions, but with
more than half of the money going straight to
the labels and artists, VEVO may not yet be
profitable.
Originally, artists used to get one
cent per stream on YouTube views. Certain
artists and licensors, however, have been able
By Itay Rahat
to increase these numbers because the lifes-
pan of a “hit” is longer on the Internet than
on TV, allowing revenue to add up over time.
Since the content is consistently profession-
al, it draws advertisers and companies to pay
a $25-30 cost per thousand views (CPM) ver-
sus the $5 marketers used to pay for place-
ment next to regular YouTube content. The
videos are still on YouTube, but now they ap-
pear through the VEVO customized channel
in high quality. Overall, VEVO reaches more
people and runs fewer ads while splitting the
revenues with YouTube.
With such aspirations, it only
makes sense that VEVO would expand
the availability of its content and platform
to other mediums. A new mobile app was
launched this past August, and it has already
been downloaded over 3 million times to
iPods, iPhones, iPads and Android devices.
The app has a simple, elegant design, com-
plete with a list of channels and their de-
scriptions. It has an enhanced user interface
with a search engine to access all of VEVO’s
licensed content, as well as information re-
garding music channels and new artist proj-
ects.
Converging to a TV Near You
Furthermore, VEVO finalized a
partnership with Google TV to expand into
the realm of home entertainment systems.
This means that VEVO’s content is available
through any Google TV device that con-
nects to an existing television, via on-de-
Back to VEVO: Music Videos on TV

mand or auto-play. Google TV combines
a television’s screen and sound with the
intelligence and power of the Internet in a
single entertainment experience. Android
devices and iPhones can even be used as
remote controls. There used to be a time
when there were only a few networks, but
today, viewers have limitless options be-
tween TV channels and web content. This
partnership is not surprising, considering
VEVO’s close relationship with YouTube
and its owner, Google.
In addition to VEVO, Google TV
comes preprogrammed with many apps
such as Twitter, Chrome browser, Netflix,
Amazon Video on Demand, NBA real time
scores, YouTube, Pandora and Napster. It
displays CNBC, HBO, CNN, USA, and it
is in the process of acquiring Hulu, ABC,
CBS and NBC. All of the Internet chan-
nels and apps are customized specifically
for the television.
To expound upon VEVO’s pro-
gramming, the channels include: VEVO
Top 10, music charts, VEVO 24, and the
most popular – Music Videos on Demand.
VEVO acquired global rights from its la-
bel partners, and it is directly working with
artists to create original programming and
live events.
Shades of MTV
Sound familiar? The comparison
to MTV is inevitable. MTV has had a great
history of offering music videos and shows
about music, although recently, reality
shows have seemingly taken over. Google
TV aims to reclaim the music experience
with VEVO’s help. Consequently, MTV
and VEVO are competing to be the top on-
line destination for music. The most re-
cent statistics show that MTV.com is in the
lead.
What separates MTV from
VEVO? Warner Music Group’s vid-
eos and ads appear exclusively on MTV.
com. However, UMG’s licensing deal
with MTV.com has expired, so MTV has
to syndicate VEVO if they wish to access
UMG’s catalog. Likewise, VEVO has to
have a syndication deal with MTV if they
wish to access WMG’s catalog. Syndi-
cation would allow VEVO to sell ads on
MTV’s properties and to target MTV
viewers. MTV is reluctant to grant VEVO
such valuable access, and as a result, their
Business Articles
negotiations have failed up to this point. De-
spite MTV’s deal with Warner, Google does
not credit MTV for the views of Warner vid-
eos on YouTube. Google has clearly sided with
VEVO, and when Google TV launched the
VEVO app, VEVO gained an insurmountable
advantage over MTV. Yet VEVO and MTV
cannot live apart, for VEVO users cannot ac-
cess Warner’s videos without MTV. CEO Rio
Caraeff stated that in the long run, VEVO hopes
to offer a complete music catalog on the Inter-
net.
In contrast, while MTV provides a
comprehensive experience that includes music
news, interviews, live streams, music videos
and more, VEVO is a video search engine. And
VEVO is definitely seeking to expand their
content beyond music videos. Whereas music
videos used to be a means of increasing record
sales, lately, videos have become a promotion-
al means of spreading awareness, generating
revenue, and interesting sponsors (still, given
the current cutbacks in the industry, labels are
investing less on music videos—which might
threaten VEVO’s medium term viability).
Videos that Sell
Ultimately, VEVO has a strong influ-
ence over its future since it operates its own
platform. Record labels have long desired an
important platform with such authority in the
Internet world. VEVO does have the potential
for reinventing the music video and its com-
mercial exploitation since MTV’s peak. In-
deed, thirty years after MTV’s first broadcast,
VEVO is hoping to revive a languishing for-
mat. “Let’s hope VEVO can salvage something
that used to be amazing,” said singer Mariah
Carey at the launching event of VEVO on De-
cember 2009. VEVO may be on the right track,
for the Internet will soon make its way into our
living-room TV.
Sources:
1. Resnikoff, Paul. “MTV Beats Vevo Again: Here’s the Com-
plete Breakdown... - Digital Music News.” Home - Digital
Music News. 13 Oct. 2010. Web. Nov. 2010. <http://www.digi-
talmusicnews.com/stories/101310comscorenumbers>.
2. “VEVO CEO Says Site Is Making Tens Of Millions In Rev-
enue.” FMQB: Radio Industry News, Music Industry Updates,
Arbitron Ratings, Music News and More! 30 Sept. 2010. Web.
Nov. 2010. http://www.fmqb.com/article.asp?id=1970073
3. France, Jasmine. “Vevo plus Google TV: It’s What MTV
Used to Be | Webware - CNET.” Technology News - CNET
News. 7 Oct. 2010. Web. Oct. 2010. http://news.cnet.
com/8301-17939_109-20018944-2.html?part=rss&tag=feed&
subj=TheDownloadBlog
4. Resnikoff, Paul. “Vevo Finishes Google TV Deal... - Digi-
tal Music News.” Home - Digital Music News. 04 Oct. 2010.
Web. 03 Nov. 2010. <http://www.digitalmusicnews.com/
stories/100410vevogoogle>.
5. Kenghe, Ambarish. “Here Comes Google TV.” The Of-
ficial Google TV Blog. 4 Oct. 2010. Web. Nov. 2010. http://
googletv.blogspot.com/2010/10/here-comes-google-tv_04.
html
6. http://www.vevo.com/about
7.http://blog.vevo.com/the-music-evolution-revolution-
comes-to-google-tv/
8. Bruno, Antony. “Vevo To Launch TV Network?” Music
Business | Music Industry | Record Sales | Billboard Charts
| Billboard Hot 100. 24 Sept. 2010. Web. Oct. 2010. http://
www.billboard.biz/bbbiz/content_display/industry/e3i-
386774579db7c20313f693db4a21a3a
9. Warman, Matt. “Google TV Launched - Telegraph.” Tele-
graph.co.uk - Telegraph Online, Daily Telegraph and Sun-
day Telegraph - Telegraph. 20 May 2010. Web. Nov. 2010.
http://www.telegraph.co.uk/technology/google/7747217/
Google-TV-launched.html
10. Carr, Austin. “Vevo Partners With Google TV, Takes
Aim at MTV | Fast Company.” FastCompany.com - Where
Ideas and People Meet | Fast Company. 4 Oct. 2010. Web.
Oct. 2010. <http://www.fastcompany.com/1692984/i-want-
my-vevo-on-google-tv>.
11. Sandoval, Greg. “Why Google’s Glad to Dance to Ve-
vo’s Tune - CNN.com.” CNN.com - Breaking News, U.S.,
World, Weather, Entertainment & Video News. 10 Dec.
2009. Web. 03 Nov. 2010. <http://www.cnn.com/2009/
TECH/12/10/cnet.vevo.google.schmidt/index.html>.
12. Bruno, Antony. “UMG, Google In Deal For Video Ser-
vice.” Music Business | Music Industry | Record Sales |
Billboard Charts | Billboard Hot 100. 9 Apr. 2010. Web. 03
Nov. 2010. http://www.billboard.biz/bbbiz/content_display/
industry/e3ie9cf6d4fe9496d05114eee350e70e66c
13. Bruno, Antony. “UMG Pulls Music Videos From MTV
Over Vevo Dispute.” Music Business | Music Industry
| Record Sales | Billboard Charts | Billboard Hot 100. 6
Aug. 2010. Web. Nov. 2010. <http://www.billboard.biz/
bbbiz/content_display/industry/e3i831a0b575c6cd1c-
6931ba669cb544f9
14. Gecliffe-Johnson, Andrew. “View from the Top: Rio
Caraeff, President and CEO, Vevo.” Financial Times. 28
June 2010. Web. <http://www.ft.com/cms/s/0/9d1a61de-
e4f2-11de-817b-00144feab49a.html>
15. Gecliffe-Johnson, Andrew. “Vevo Could Be Saviour
of Music Video.” FMQB: Radio Industry News, Music In-
dustry Updates, Arbitron Ratings, Music News and More!
9 Dec. 2009. Web. http://www.ft.com/cms/s/0/9d1a61de-
e4f2-11de-817b-00144feab49a,s01=1.html
16. http://adage.com/digital/article?article_id=146577
17. Carr, Austin. “Vevo CEO on MTV, Jersey Shore,
Google TV, Music Videos | Fast Company.” FastCompany.
com - Where Ideas and People Meet | Fast Company. 27
Oct. 2010. Web. 03 Nov. 2010. <http://www.fastcompany.
com/1698277/vevo-ceo-on-mtv-jersey-shore-google-tv-
music-videos>.

Law Section
Introduction
The emergence of new types of
entertainment has always been associated
with rapid developments in technology.
Popularization of the Internet eventually led
to the birth of social networking platforms,
like Facebook and Twitter. Smartphone
technology has lead venture capitalists to
heavily invest in mobile application devel-
opments. Now, the video game industry is
beginning to take hold as a premier leader
in the progression of new entertainment--
opening many doors for other industries to
walk through, including the music trade.
It’s been 25 years since Nintendo’s
Super Mario Brothers was first released.
Back then, aspects such as gameplay, graph-
ics, music, and sound design were limited by
memory capacity. Today we can easily find
realistic graphics in games going hand-in-
hand with top musical releases. Currently,
people appear to be spending more money
on games than any other form of entertain-
ment.1
Moreover, according to market re-
search group NPD, U.S. retail sales of video
games, including all platforms and accesso-
ries, generated $20 billion in 2009.2
There is
much opportunity to license music.
The gaming industry is known for
its high level of brand royalty, where 30,000
to 40,000 units of video game soundtracks
are easily sold to fans that want to hear the
music featured in the game.3
As the gaming
business has become increasingly global-
ized, and the music industry struggles to find
new sources of revenue to compensate for
the decline in physical sales, gaming affords
economic solace through the exploitation
of intellectual property rights–an ever more
important consideration for musicians.
Scoring for Film & Video Game -
Not the Same
Due to the increasing crossover
with Hollywood, video game productions
are often compared to film productions.
Since films have a longer history of get-
ting audiences emotionally involved with
the drama of a story, video games have bor-
rowed techniques like musical motifs and
themes identifying characters or settings.
This adds to the emotional dimensions of
the storyline, thus enhancing gamers’ ex-
periences. However, the main difference
between films and video games lies in lin-
earity vs. interactivity. In music production
for films, the picture dictates how the score
is built because the music must follow the
dramatic structure of the linear storytelling.
In video games, players consciously decide
how they interact with the gaming environ-
ment. This represents an artistic challenge to
video game composers because they have to
score “in stems”- creating certain segments
of music “which will never be played the
same way twice.”4
Plus, while films always
have the same runtime, the length of game
play can vary by hours, depending on player.
As a result, the process of writing original
music for a game requires thoughtful consid-
eration and must imply different techniques
for musical interactivity.
New Opportunities for Licensing Music &
Artist Branding
To produce a spontaneous and non-
repetitive gaming experience, developers are
incorporating a massive number of licensed
music into their productions. For example,
in Grand Theft Auto (1997~2009), an ac-
tion game series developed and published
by Rockstar Games, over 200 pre-existing
songs were licensed for the “radio stations
[of almost] every genre”5
; these were avail-
able to the gamer in cars during game play.
In Sims 2 (2004), a life simulation game
developed by Maxis and published by Elec-
tronic Arts, pre-existing songs were licensed
and re-recorded in fictional language (called
“Simlish”) to represent the music appropriate
for the gaming environment.6
Consequently,
approximately 128 songs were specifically
composed and re-recorded for Sims 2.
Creative ways of pairing video
games with music have been in evidence,
and brought new forms of publicity to art-
ists. Bands like Good Charlotte, Fall Out
Boy, and Selasse enjoyed a massive amount
of exposure after their songs were introduced
in Madden NFL 2003 (2002), Tony Hawk’s
American Wasteland (2005), and FIFA 2006
(2005). The combination of various genres
of music with the right types of video games
produce a synergy that amplifies both the
artists’ career and the games’ success. It
serves as an advertising and promotional
tool for game developers and helps to in-
By Beom (Ben) Hong
crease soundtrack sales. Statistics show that
“40% of [hard-core gamers] said that a game
introduced them to a new band or song, then
27% of them went out and bought what they
heard.” Artists now have video games as a
valid medium for breaking into the market . In
other cases, games that have primarily musi-
cally driven premises -such as Guitar Hero or
Rock Band- have obvious reasons for licensed
music. In these creative music games, players
are actively involved in remixing, producing
and composing music. Spin-off titles such as
Rock Band the Beatles actually represent art-
ists as protagonists of the game, which allows
for another source of branding.
Moreover, increasing sales of
soundtrack in iTunes and other online music
stores also bring attention to emerging com-
posers and musicians. As technologies de-
velop, audio design is progressing from PSG’s
(Programmable Sound Generator: sound
chips included in consoles for audio produc-
tion) reading written codes, to synthesized
waveforms, which produce sounds for today’s
Hollywood-size symphonic orchestras. For
example, in Afrika (2009), a safari simulation
game developed by Rhino Studios and pub-
lished by Sony, a 104-piece ensemble of the
Hollywood Studio Symphony was used to re-
cord the soundtrack. These facts indicate that
the music industry is witnessing a revival of
symphonic performances and recordings. Di-
minishing attendance for symphony halls and
waning financial support for orchestras have
been a serious, ongoing issue. However, sym-
phonic music has seen new forms of success
in concert tours like Video Games Live, which
perform popular video game soundtracks in
full orchestral arrangements. Plus, numerous
game developers invest their budget in hiring
professional composers from film, TV and
other entertainment industries to score their
developing games. Recently, film scorers like,
John Debney (Liar), Harry Gregson-Williams
(Metal Gear Solid) and Michael Giacchino7
(Medal of Honor) have all contributed to new
video game soundtracks. Overall, these trends
feed the hopes of aspiring composers, as well
as those of union classical players who are
struggling to sustain their careers.
Licensing & Intellectual Property Consid-
erations
The growing symbiotic relationship
Catching Up with Video Games

Law Section
between the music and gaming industries
have resulted in new developments in licens-
ing agreements. As the video game industry
emerges as the entertainment trend of the de-
cade, lack of intellectual property protection
in many areas of the industry will cause seri-
ous legal issues. The music industry already
witnessed the current copyright legislation’s
incapability of protecting rights and adapting
to the changes brought on by the digital revo-
lution. Similarly, the video game industry is
the newest area of entertainment where these
rights have to be redefined and reapplied.
On the other hand, Matthew Burr, a patent
attorney at Monster & Wynne PC, insists
that people “who use computers for creative
work have a philosophical, almost political,
inclination to resist some forms of IP protec-
tion .”7
In other words, some game develop-
ers still feel that copyright and patent protec-
tion is unnecessary. Even if they understand
the necessity, the extensive process involved
in obtaining proper copyrights and patents
are arduous enough that most creators sim-
ply decide not to go through the hassle. This
calls into question the relevance of current
legal standards for intellectual property. If
the process of obtaining appropriate IP pro-
tections is too complicated, the progress of
entrepreneurship in the United States will be
greatly hindered relative to that of interna-
tional markets. Therefore, legislators should
consider ways of amending current legisla-
tion to guarantee developers and publishers
the proper rights and protection over their
products.
On the other hand, fierce enforce-
ments of protection for the creative side
will face resistance by users of intellectual
properties-- as we witnessed in the public’s
reaction to the RIAAs’ legal action against
individual copyright infringers. In the eyes
of copyright law, uploading someone’s
gameplay video onto YouTube, or creat-
ing user-created games using programming
codes and sources from a copyrighted prod-
uct are technically copyright infringements.
For example, Super Mario Bros. Crossover
was “a fan-made game” based on “the en-
tire original Super Mario Bros.” from Nin-
tendo, in which players can choose to play
“as Mario, or as five characters from other
video game franchises .”8
The original game
and all of the characters used are protected
under copyright law. Possible defenses, like
claiming the fan-made game as a derivative
work or fair use of copyright law in light as if
it were a parody would require complicated
legal settlements that would hurt both the
fan-creator and video game industry’s public
image. Instead, the gaming industry should
“recognize the fan-made labor of love” from
these products, thus “[instilling] good-will
amongst [the gaming communities and the
video game industry]”. Likewise, for the in-
dustry to sustain its reputation for high brand
loyalty from fans, publishers and developers
must not restrict themselves to legal bound-
aries to solve these issues.
Legal and intellectual property
protection considerations also apply from
the musicians’ point of view in licensing
their music to game developers and publish-
ers. First, bands must recognize that the vid-
eo game industry is not a royalty-producing
arena. As a regular practice, large game pub-
lishers prefer buyouts with flat fees instead
of royalty-per-unit sales.
The choice of the latter does not
make sense for two reasons. First, in a case
like Grand Theft Auto, publishers cannot
possibly include a royalty scheme in licens-
ing contracts for all 200+ songs. Second, un-
like licensing for television where dedicated
performing rights organizations collect roy-
alties, video games do not yet have a dedicat-
ed collection agency. Licensing costs range
from zero to $30,000, and usually last for 7
to 10 years. Publishers consider the length of
term sufficient since the progress of gaming
technology usually guarantees a timely re-
placement of most products. However, there
are dedicated fans that do play classic games
even after they have become outdated, leav-
ing the possibility for sales to occur even af-
ter licenses have expired. In addition, artists
must understand that negotiation involves cre-
ativity. As long as both sides agree, creative
ways to get the best deals possible do exist.
Artists could ask for sales-based bonuses;
1-5% of net sales in dealing with smaller com-
panies, box credits, screen credits, front cred-
its, etc. Bands must also understand that their
songs will not “[likely be] heard in the ways
in which the artist had originally intended.”As
previously mentioned, unlike films with their
linear storylines, video game music depends
on players deciding how they interact with
the gaming environment. From a composition
point of view, this indicates that songs can be
“altered” to fit the “nonlinear aspects of gam-
ing,” and artists must be aware of this when
granting licenses to game developers.
Technology is rapidly changing the
way that we discover and listen to music.
New business models are constantly emerg-
ing and the industry must be aware of those
changes and adapt them as fast as possible.
The video game industry is definitely a new-
born business and “new to academic study”
which means that “useful theories ” do not yet
exist. Nevertheless, golden opportunities ex-
ist where there are rules and regulations have
yet to be defined. Licensing could be great
source of exposure for many different kinds
of musicians. The current music industry re-
quires artists to be able to market themselves,
and branding is becoming the new way to
connect with fans. Deciding what songs to li-
cense to combine with the right video game
titles will create an authentic buzz amongst.
In fact, the video games industry will continu-
ally revolutionize itself, so the music indus-
try must evolve according to those changes.
Ultimately, the video gaming industry holds
great potential to be a major source of music
revenue.
Sources:
[1] Ventresca, N. Dan Carlin, “The New Business of Film
Scoring”, The MBJ, November 19th, 2009.
[2] The NDP Group, “2009 U.S. Video Game Industry and
PC Game Software Retail Sales”, http://www.npd.com/press/
releases/press_100114.html
[3] “Greg Curtis on Music For Video Games”; Artisthouse-
Music.com.
[4] “Steve Schnur on Composing Scores For Video Games”
ArtisthouseMusic.com.
[5] “Jeffrey Brabek on Video Game Licensing” Artisthouse-
Music.com
[6] Collins, K. Game Sound: An Introduction to the History,
Theory, and Practice of Video Game Music and Sound De-
sign. The MIT Press, Cambridge MA, 2008. Pg. 68.
[7] Gosdin, G.
[8] Athans & Hogan, LLC. “The Intellectual Property Impli-
cations of Super Mario Bros. Crossover”. http://www.athan-
shogan.com/2010/04/29/the-intellectual-property-implica-
tions-of-super-mario-bros-crossover
* **

Interview
New and established artists are
vying for the public’s attention, and find-
ing new ways to promote artists. Since the
release of Guitar Hero and Rock Band, es-
pecially, partnerships with video game pro-
moters have flourished. A prime example is
the recent collaboration between Avenged
Sevenfold and Machinima.com for the new
Call of Duty: Black Ops trailer. Machinima.
com created a montage of video game foot-
age, while playing Avenged Sevenfold’s sin-
gle, then unreleased, Welcome to the Fam-
ily. Both the new Call of Duty game and the
upcoming release of Avenged Sevenfold’s
new album gained much mass market ex-
posure. The MBJ interviewed Machinima.
com’s Elissa Ayadi to find out more;
Jamie Anderson: What roles does your
job entail?
ELissa Ayadi: I am the Social Media Man-
ager at Machinima.com. I oversee all our
social media properties, including all Face-
book and Twitter pages and apps.
JA: What different media outlets do you
use to promote bands?
EA: Generally, our interest is in promoting
the video that we have worked with a band to
create. This way, the cross-promotion works
most effectively for both entities. Depending
on the size of the campaign, we have differ-
ent tactics. Any video that goes up on our
network will generate a fair amount of views
without any more push than that.
However, we can do a lot of things on the
YouTube side to promote, including; (i) fea-
turing the video on our front page; (ii) mes-
saging all of our subscribers to check out
the video; (iii) annotating from videos with
a large fan base (or across all videos) with
a link to the video; (iv) creating a post roll
that plays at the end of targeted videos (or
all videos).
On the social side, we do several things,
including; (i) general tweets/status updates
with a link/embed to the video; (ii) crafting
“engagement questions” around the video
to get users talking about the content (e.g.
“Who from Band Name would you want
at your back during the Zombie Apoca-
lypse”?); and (iii)creating contests around
the video to drive exposure and excitement.
JA: How do you choose which bands to
promote and which video games to pair
them with?
EA: The bands are, essentially, advertising
partners. They buy in to our program at vary-
ing levels to have a video and marketing cam-
paign made. Therefore, we don’t get to really
choose which bands we do videos for-- aside
to saying no to some campaigns. In this way,
it’s a strictly a business rather than an artis-
tic deal. Sometimes, a label will come to us
with several bands that they are interested in
promoting, and we will come up with the con-
cepts. But, generally, there isn’t a lot of artist
choice at our end.
When we are putting together a campaign
pitch with a management company, label,
or other, we tend to come up with a list of
games and concepts to match the song that
they want to promote. Some things are a no-
brainer –-picking the season’s big releases,
for instance. But we also take into account
the character of the band. Slayer isn’t going to
go well with Scribblenauts and Taylor Swift
won’t work for Halo. Generally, we look for
the highest profile game with a similar “feel”
to the band. In this example, we’d probably
pair Taylor Swift with Fable 3 and Slayer
with Black Ops.
JA: Do many indie label bands approach
you or do you primarily deal with major
label bands?
EA: It’s been a mix. We’ve worked with art-
ists from WBR, Island, Fearless… i.e. gen-
erally majors and mini-majors. We haven’t
worked with any true indies, to the best of
my knowledge. The music program is fairly
new for us so we have been approaching
mid-to-high level clients (e.g. management
companies and labels) to maximize the cross-
promotional power for us. If we worked with
a truly indie artist with a small fan base, we
wouldn’t get a lot out and our fans would not
be receptive. Band endorsements are “cool”.
We don’t try to be “tastemakers” outside of
our gaming expertise.
JA: Over the past year, have you seen an
increase in the number of bands using vid-
eo games as marketing tools?
EA: We’ve seen this for longer than the past
year: Linkin Park making a music video for
Medal of Honor, Green Day for Rock Band
(and the explosion of DLC from mid-level
By Jamie Anderson
bands), and in-game songs in non-music
games (e.g. racing games). Over the past few
years, the music industry has been turning to
anyone and everyone to try to pull their prof-
its up. With the success of video games, the
entire entertainment industry has been trying
to find a way to capitalize and monetize the
business.
JA: What type of band do you think would
benefit most from pairing themselves with
a video game?
EA: Mid-to-high level bands. There needs to
be some name recognition…Gaming does lit-
tle for unknown bands, and it could possibly
damage their image. But getting that “bless-
ing” for an established band can help push
them over the edge. Genre and label depend
on the genre of the game and the type of mar-
keting. Again, you can put a song into a game
if it fits the band and the gameplay. It’s all
about pairing things that make sense.
JA: Do you predict a large shift in the mu-
sic industry that pushes bands to do more
promotion with video games?
EA: Cross promotion is not a new arena to
the music industry. They will keep trying to
leverage games more and more, so long as
they see a return. But will they do things cre-
atively beyond cramming a song into game?
That is the important question. While interde-
pendency in entertainment is good, not get-
ting stale as you move forward is key.
JA: At this point in time, what creative
ways of marketing and promotion do you
think are most effective in connecting art-
ists directly to their fans?
EA: Social media is the medium. It’s the most
direct way to speak to fans; it’s where the ma-
jority of music consumers spend the bulk of
their time. Being creative with social media
is harder and far more time consuming than
selling your song to a game –-and the market-
ing effects is not as clear. But it is the best
choice, both in terms of building a fan base
loyalty and taking advantage of ties to big-
ger acts. Besides, it’s cost-effective for small
bands and, if done well, it can go viral.
Elissa Ayedi on Band Promotion through Video Games

Business Articles
They Are The Champions, My Friend
The Beatles’ catalog is finally avail-
able for purchase on the iTunes music store.
The conflict that delayed distribution dates
back to 1978, when Apple Corps, The Beatles’
record company, filed a lawsuit against Apple
Inc. for the trademark infringement of their
name. Apple Inc. appeared to settle the dispute
in 1981 for just $80,000, much less than was
though possible at the time. The agreement
stipulated that Apple Computer would never
enter into the music business, while Apple
Corps would never enter into the computer
business. This dispute, however, would be
re-opened numerous times over the next few
decades as Apple Computer began inching its
way into the music space.
In 1986, Apple Inc. was brought to
court for violating the terms of the 1981 agree-
ment by adding audio recording software to
their computers. Apple Corps even disap-
proved of the computer company including
a basic software synthesizer in their product.
Eventually, by 1991, this second dispute was
put to rest with a hefty sum of $26.5 million.
When the iTunes program was launched in
2001, the contract was breached once again.
Essentially, the iTunes store became an incred-
ibly popular new distribution model, which in
turn, directly affected physical sales. Clearly,
Apple Inc. was now an important player in the
music industry.
Consumers now embraced Tunes,
which helped deflect piracy. Apple Inc. also
inspired the age of the mp3 player, at once
making the music listening experience por-
table and convenient. By 2006, the case went
to the High Court in London. The judge, how-
ever, would favor Apple Computer. In 2007,
Jeff Jones was brought on as the new Chief Ex-
ecutive of Apple Corps, replacing Neil Aspinall,
who had been a close friend of Paul McCartney
and George Harrison since childhood. Aspi-
nall’s mission had been to protect their legacy
in every way possible, and his emotional ties to
the band members were certainly part of the rea-
son why it took so long for Apple Corps to reach
an agreement. On February 5, 2007, just a few
weeks after Jones was hired, a settlement was
reached stating that all trademarks related to
Apple Computer would be retained, and that the
company could license some of these back to
Apple Corps for their continued use. Ultimate-
ly, Apple Inc. compensated Apple Corps $500
million for the ownership of these trademarks.
The Beatles’ entire catalog was thus
added to iTunes early this November. Within
the first week, two million songs and 450K al-
bums were sold, generating an estimated nine
million dollars in revenue. Such figures washed
out concerns that the Beatles were entering the
digital world too late. Many in the industry
had predicted that Beatles fans already owned
the music in physical format or had already ob-
tained the music in digital format through illegal
downloads—all of which would have curtailed
demand. In the event, sales figures showed five
classic Beatles albums on the U.S. Top 20 charts
less than twenty-four hours after release.
Everyone seems to have won. Apple
Inc. has acquired a catalog that has long been
in high demand at iTunes. The Beatles will re-
ceive exposure to an entirely new generation of
consumers that should perpetuate their legacy.
Finally, EMI, the struggling major which first
signed the Fab Four, will experience a much-
needed infusion of cash. Let it be.
By Ben Scudder
the four factors is the final, stating that it is
important to analyze the value and the po-
tential market of a copyrighted work. Any
use of a copyrighted work –fair or unfair-
it will automatically affect the copyright
owner to some extent, as since they are not
receiving any licensing incomes. This is
tolerated due to the public benefits afforded
from the fair use of the work. However, if
the new work competes with, or reduces
the potential commercial market for the
original copyrighted material, then the use
will most likely be deemed unfair. Again,
a commercial use has a presumed adverse
impact on the market for the original copy-
righted work and reduces the credibility of
fairness. Girl Talk’s main argument relies
on the last two factors: He alleges that his
work is based on various small portions of
original works, and the substantiality of it
will not substitute or harm the copyright
holder’s original or potential markets.
Conclusion
Girl Talk is aware of the risks that
he is taking by not licensing the samples
that he uses. There is no way to prevent a
lawsuit of copyright infringement by claim-
ing fair use and only a court has the power
to determine his particular uses as fair or in-
fringed. The expenses needed to prove fair
use in court can be very high, sometimes
surpassing the amount needed to obtain
the legitimate licenses in the first place. Al-
though Girl Talk has not yet faced a law-
suit for copyright infringement, the major
distributors of digital music decided to not
offer his albums on their websites. Major la-
bels and publishers are most likely holding
their moves against the artist because they
are afraid of the negative attention and the
potential setting of precedent in favor of the
fair use.
Fair Use(cont.)

Business Articles
By Evan Kramer
A Götterdämmerung
As the 7th Annual Billboard Tour-
ing Conference progressed through the two
full days of discussion, the distinguished ar-
ray of panelists maintained a refreshing level
of optimism towards the uncertain future of
the industry… that is, until the concluding
panel began. “A 20/20 View of the Concert
Business” was the culmination of all the
preceding presentations; featuring industry
giants like Paul McGuiness (Manager, U2),
Troy Carter (Manager, Lady GaGa), Gerry
Barad (COO, Live Nation Global Touring)
and Dennis Arfa (President, Artist Group
International) among others. The optimism
that was enjoyed over the past two days was
interrupted when the subject of big-box pro-
moters prospering at the expense of regional
independents was brought up. This struck a
nasty chord with Jerry Mickelson, partner at
Jam Productions, who made no reservation in
expressing his frustration towards his dwin-
dling market share while fellow panelists, like
Barad, continue to absorb his clientele. While
the conversation was professionally directed
by moderator, Ray Waddell, there was no
mistaking Mickelson’s hostility towards the
issue.
For the first time during the entire
event, the uncertainty of the touring indus-
try was made apparent. Prior to Mickelson’s
woes, one got the sense that despite shifting
revenue centers, things in the industry were
all hunky dory, because for most of the fea-
tured panelists, it was. Jordan Grazier (CEO,
Eventful), Panos Panay (Founder, SonicBids),
Liana Farnham (VP, MSG), Lynsie Camuso
(President, ShowClix), Andrew Dreskin
(Founder, Ticketfly)-- all of these people are
experiencing great progress by capitalizing
on the evolution of technology, and they are a
part of the new movement of industry leaders.
While their market niches are on the rise, this
transfer of market share is clear evidence that
the entire industry is struggling to find a new
balance. The touring business is reinventing
itself, and while many of the traditional in-
stitutions- like Mickelson’s Jam Productions-
could be on their way out, the industry is still
fishing to find a sustainable model for the fu-
ture. In times like these, success can be swift
and drastic. On the other hand, it can also be
quite fragile.
Nonetheless, it was both encourag-
ing and inspiring to see the innovative ways
in which some of the featured entrepreneurs
have carved out markets for themselves. For
instance, on “Ticketing: Managing the Keys
to the Kingdom,” it was very obvious that
secondhand ticketing websites like Stubhub,
ShowClix, and Eventful are beginning to pose
a serious threat to Ticketmaster’s new CEO,
Nathan Hubbard, who also shared a seat on the
panel. These tech-savvy startups have defined
their markets, pinpointed consumer needs, and
perfected a medium of delivery that vastly out
performs those of grandfathered industry es-
tablishments. Best of all, most of these new
services are drastically improving the state of
the industry by catering directly to the needs
of fans- a voice that has been autocratically
ignored by the business for quite some time.
The Billboard Touring Conference
provided an acute look at the current state of
the concert business as well as some insight
on its potential futures. The wide range of
panels seemed to cover every notable point
of interest. From Artist Development and
Ticketing, to Social Media and Multi-Rights
Deals, the presentations examined the pro-
ceedings of each area with the expertise that
only the professionals featured could have of-
fered. In addition, the more intimate “Round-
table Discussions,” catered Social Recep-
tions, the Musical Showcase, and the 2010
Award Ceremony/ Dinner, which allowed for
plenty of additional learning, networking, and
new musical discovery. All in all, the Touring
Conference was an invaluable opportunity for
musicians, students, and business people.
Find
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and
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Visit the MBJ online!
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Some of the topics we will tackle in
next month:
Music Business, 2011
The Taylor Swift Phenomenon
The San Francisco Music Tech
The Music Business Journal will be
released three times in the Fall, three
times in the Spring, and once in the
Summer.
Upcoming Topics
 
At the Music Business Journal’s 5th Anniversary Awards Ceremony, held November 9th in the Haviland Building, one could
distinctly feel a contagious sense of excitement in the air. Considering the Journal’s humble beginnings -surviving on the ambitions of just
a hand full of students using whatever materials and office space they could find- to say that the organization has grown a bit would be a
serious understatement. In just five short years, the publication has attained a level of credibility worthy of being resourced internation-
ally by other schools, the writing staff has expanded to include more than 25 members, and readership is at an all time high both on and
offline. On the one hand, while the event was a celebration of the MBJ’s progress and future aspirations, the Awards Ceremony was a time
of recognition and reflection on the Journal’s past. More than 25 awards were presented to faculty supporters, financial contributors, past
editors, and long-standing team members- all of whom played crucial roles in building the MBJ into what it has become. With live music,
a catered dinner, scrolling slide shows, and black & white formal attire, the event clearly displayed the spirit of the current organization.
Professional, committed, and eager to learn, the Music Business Journal team will continue to grow throughout its next five years in ser-
vice to the music business community.
Volume 6, Issue 3 December 2010www.thembj.org
Music Business Journal
Berklee College of Music
Music Business Journal 5th Anniversary Awards Ceremony

December 2010 - MBJ

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