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US AUTHORITIES TAKE MEGAUPLOAD OFFLINE, AND ARREST KEY EXECS
Yesterday evening UK time, the US Justice Department announced it had forced Megaupload.com, and associated websites, offline, and that four executives associated with the companies that run the offending sites, including larger than life founder Kim 'Dotcom' Schmitz, had been arrested in New Zealand, and awaited extradition to the USA where they face charges of mass copyright infringement, racketeering and money laundering.
Megaupload.com is a file-transfer service that lets people move large files across the internet, while sister site MegaVideo is a YouTube competitor, but one that operates without licences from the music, movie and TV industries. The sites, ultimately based in Hong Kong, had become key targets for the US content industries in the last year - and especially the Hollywood studios - who accused the Mega companies of enabling large-scale copyright infringement, of doing little to stop their services from being used to infringe, and from profiting big time by selling advertising and subscriptions around unlicensed content streams and files.
The legal case against MegaUpload and founder Schmitz had been quietly - and sometimes not so quietly - going through the motions in the US last year, though the content industries' frustrations with the Mega business came to wider attention when Schmitz posted an all-star promotional video onto YouTube promoting his file-transfer company. In the vid a bunch of A-list pop stars, most signed to the big record companies who had been quietly taking action against the Mega company, bigged up the MegaUpload service. "When I gotta send files across the globe", the c'lebs sang, rapped and voxpopped, "I used MegaUpload".
That so many famous faces from the entertainment industry would publicly support a website that their financial backers were trying to shut down was at the very least rather amusing. Though the 'Mega Song' became bigger news when Universal Music tried to have the promo taken off YouTube, utilising its content takedown arrangement with the Google-owned video site.
Universal claimed that one of its artists was in the video without permission, but it turned out she wasn't, and as Schmitz had signed clearance agreements from all the c'lebs who appeared in the promo song, which his company had written and produced, there was no legitimate claim to have the video removed under either copyright or contract law. MegaUpload announced it would sue Universal over the major's takedown request.
That dispute is ongoing, but meanwhile the US authorities were busy wrapping up their investigations into the Mega business, the content industries having complained to the powers that be that Schmitz et al were deliberately enabling copyright infringement, making millions out of the enterprise, and costing the copyright industries $500 million in the process.
In court papers released yesterday, the authorities said that their investigations had found many emails between key execs involved in the Mega company in which they discussed uploading vast quantities of unlicensed content to their servers to drive traffic to their sites, including pulling thousands of videos off YouTube and making copies available on their own platform. All of which means the company itself was infringing copyright on a mass scale, and that the presence of large amounts of unlicensed content on MegaVideo and MegaUpload cannot be blamed entirely on the firm's users (and therefore the Mega execs are not protected by America's Digital Millennium Copyright Act).
Other emails discussed offering cash incentives to users who uploaded large quantities of unlicensed movies, and when not to take notice of takedown requests submitted by content owners under the aforementioned DMCA. One email also mused "we have a funny business ... modern days pirates :)". Court papers also say that the Mega companies took $110 million through PayPal, which had enabled Schmitz to pay himself $42 million in 2010 alone. The Mega group had 60 bank accounts around the world, and owned a fleet of cars and motorbikes, some with personalised number plates using words like "STONED", "GUILTY" and "MAFIA".
Of course, efforts this week by the American content industries to secure new powers to take infringing websites offline hit a wall as their political supporters got cold feet amidst widespread opposition by legitimate web and tech companies. However, SOPA and PIPA, which would force internet service providers and search engines to block infringing sites, are only needed to combat piracy operations outside the jurisdiction of the US courts and authorities. The good news for the American music and movie firms is that the Mega operation's key server base was in Virginia, giving the courts justification to act, and the authorities a physical entity to target.
Seven individuals and two companies associated with them, MegaUpload Ltd and Vestor Ltd, are named as defendants in the criminal case against the Mega operation. The four men arrested in New Zealand were Schmitz, his co-founder Mathias Ortmann, Mega's CTO Finn Batato and another associate called Bram van der Kolk.
All four appeared in a New Zealand court earlier today, at one point posing for photographers after a judge agreed to let the world's media take pictures of the accused. Schmitz's lawyers initially requested no such photos be allowed, but once in front of the snappers Schmitz himself said he was fine with having his photo taken because "we have nothing to hide". The Mega founder maintains that his operation was legit, and that he's been framed by jealous music and movie industry chiefs.
Nevertheless, all four men were denied bail as the US authorities go through the motions of extraditing the accused. If found guilty of the various charges they now face, the Mega execs could face over 20 years in an American jail. Authorities named the three men also accused but not yet arrested as Julius Bencko from Slovakia, Sven Echternach from Germany and Andrus Nomm from Estonia.
Which means Swizz Beatz is off the hook. Earlier this week it was claimed that the famous producer was both a partner in and CEO of the Mega group, he apparently being listed as such on one of the now defunct Mega websites under his real name Kasseem Dean. However, it seems that while Dean did have links to the rogue web firm, he was neither a shareholder nor an executive there, so will not be a target of the criminal action.
It does seem likely, though, that Dean was behind the aforementioned 'Mega Song', which would explain how the web company managed to persuade so many famous artists - including Dean's wife Alicia Keys - to take part in the promo. If the claims against Schmitz et al now prove to be true, that's going to be a bit embarrassing for Dean, assuming he did indeed twist some arms to assure MegaUpload a bunch of celebrity endorsements.
While the sudden strike against MegaUpload was a bit of a coup for the music and movie industries after a week in which their anti-piracy efforts took a hit, the hacktivist community ensured the pro-file-sharing community got a little speedy revenge, with the Anonymous group of hackers staging an immediate Distributed Denial Of Service attack on the websites of the US Justice Department, the music and movie industry trade bodies, and Universal Music, most being forced offline within fifteen minutes of the US regulators announcing their action against Team Mega.
Still, assuming the case against Mega stacks up in court, and the authorities are able to keep the Mega sites offline long term, presumably the big record labels and movie studios would happily tolerate some attacks on their own web presence if it results in what is, allegedly, one of the biggest piracy operations in history being taken out of business.
AIM RALLIES MEMBERS TO OPPOSE EMI SALE
As much previously reported, the traditionally British-owned major is to be split by its current owners, US bank Citigroup, into its two constituent parts, recordings and publishing, and sold to Universal Music and Sony/ATV respectively. Universal is the biggest music company in the world already, while Sony/ATV's co-owner Sony Corp, when all of its music interests are combined, is already the second biggest operator in the sector. Meanwhile the two deals will mean that Warner Music, the third remaining major label, is dwarfed by its two rivals.
Pan-European trade body IMPALA, to which AIM is affiliated, announced even before the deals were done that it would oppose any EMI transactions involving Universal and Sony, both of which must be approved by regulators in the US and Europe. IMPALA argues that further consolidation in the music industry is bad news for the wider creative sector, and especially small and middle sized enterprises which will find it even harder to compete with ever bigger major players. IMPALA has a track record here, of course, have attempted - ultimately unsuccessfully, though with some successes along the way - to block previous major music company mergers between Sony and BMG, and Universal and BMG.
Although competition regulators in the European Commission, rather than in individual EU countries, will consider the proposed EMI sale, AIM wants bosses at the labels it represents to contact their representatives in the Westminster parliament, and to ask their MPs to call on the UK government to also review the implications of Universal and Sony becoming ever more dominant. It's not clear what impact British MPs or ministers could have on the regulatory process, though the letter writing campaign might boost political and public concern about the takeovers, which could theoretically influence the powers that be.
AIM has provided its members with a suggested letter to send to their MPs, which notes the importance of the independent sector in discovering and developing new musical talent, and says that indie firms are already operating in a tricky market because of the dominance of the small number of major players. It says: "Independents can and do launch and support talent, and win market share in an already distorted market, but market distortion must not be allowed to become even greater".
The letter also notes that third major Warner will become much smaller than its two main rivals as a result of the EMI deals (almost implying that, despite past opposition to the move, the indie sector would have preferred an EMI/Warner merger to the deals now on the table), and cites IMPALA's argument that if European regulators back these deals they would be going against the guidelines they themselves set when reviewing the aforementioned merger of the Universal and BMG publishing companies back in 2006.
The AIM letter concludes by re-quoting comments made by the boss of the Beggars Group, Martin Mills, when the original EMI deals were announced, that "this looks like breath-taking arrogance. It's hard to imagine this acquisition being approved, given Universal's existing dominance in an over-concentrated market. Even greater dominance would be bad news for almost everyone involved in the art and business of music".
AIM's campaign comes in the week that Warner Music hired the services of a US legal firm that specialises in anti-trust lobbying. As previously reported, that has led to speculation that it too may oppose the EMI deals as the regulatory investigations get underway.
GRAMMY GALA TO CELEBRATE BRANSON'S MUSIC ACHIEVEMENTS
Organisers of the Gala say Branson has been chosen for the honour, which has previously gone to the likes of Herb Alpert, Ahmet Ertegum and Berry Gordy, "in recognition of his significant contributions to the music industry and the impact his efforts have had on music and the business of music".
Of course Branson has been out of the music business for sometime now, having sold Virgin Records to EMI in 1992, second label venture V2 to Universal in 2007, and the Virgin Megastore to its management the same year (a clever move assuring it was Zavvi and not a Virgin brand that went under two years later).
Nevertheless, the Virgin name is still often associated with music, partly because EMI continues to use the Virgin name for one of its labels, and the Branson-controlled Virgin Group does still have interests in music radio in some parts of the world.
And some wonder if, in order to win regulator approval for its acquisition of the EMI record company, Universal might not propose selling off the old Virgin Records labels, and who knows, perhaps Branson would fancy another adventure in the record business.
DRUMMER J TILLMAN LEAVES FLEET FOXES FOR "GAPING OBSCURITY"
In a post to his Tumblr blog announcing the news, Tillman said: "Farewell Fleet fans and friends. Back into the gaping maw of obscurity I go. Tokyo is my last show with the Foxes. Sorry if I was distant and obtuse if we ever met. Have fun".
Having joined Fleet Foxes in 2008, Tillman has subsequently released three solo albums - 'Vacilando Territory Blues' and 'Year In The Kingdom' in 2009 and 'Singing Ax' in 2010. No reason has been given for the split, so instead let's all go and read his fantastically downbeat (and presumably self-penned) biog on the website of his US label Western Vinyl: westernvinyl.com/artists/j-till.html
UNIVERSAL NABS AZEALIA BANKS
The Universal deal may mark Banks' first brush with a major, but it isn't her first ever label experience. The 20 year old MC signed a development deal with XL Recordings in 2009, but then abruptly broke off from the London-based independent, seemingly over creative differences with its owner, producer Richard Russell.
Speaking in this interview with Self-Titled magazine, she claims: "Richard was cool, but as soon as I didn't want to use his beats, it got real sour. He wound up calling me 'amateur' and shit, and the XL interns started talking shit about me. I was like: 'I didn't come here for a date. I came here to cut some fucking records'. I got turned off on the music industry and disappeared for a bit. I went into a bit of a depression".
She recently told the BBC: "I was like, this is not what I worked so hard my entire life to do - to be rejected by some English guy in West Bumblefrickin nowhere London, telling me I'm amateur or something like that. So I just said: 'Screw you!'"
So there you go. You may as well, now that you're here, have a listen to Banks' latest track 'Bambi', which was debuted at Paris Fashion Week: videos.nymag.com/video/Cut-Exclusive-Mugler-Menswear-F
PAUL SIMON LP TO HAVE ANNIVERSARY REISSUE
Premiering at this year's Sundance Film Festival, the film is 'Metallica: Some Kind Of Monster' director Joe Berlinger's study of the album's creation and musical legacy. It sees Simon revisit South Africa, where 'Graceland' was originally recorded, to reminisce on the apartheid-era social and political conditions in which his most enduring solo LP was made. Also featured are interviews with Quincy Jones, Paul McCartney, David Byrne and Peter Gabriel.
Full details of the re-release and documentary reside here: www.graceland25.com
NEW SPRINGSTEEN LP NAMED
Landau tells Rolling Stone: "It's a rock record that combines elements of both Bruce's classic sound and his 'Seeger Sessions' experience, with new textures and styles".
Co-produced by Springsteen and studio veteran Ron Aniello, the album also features a guest appearances by Rage Against The Machine's Tom Morello and session drummer Matt Chamberlain.
Adds Landau: "It was an experimental effort with a new producer. Bruce and Ron used a wide variety of players to create something that both rocks and is very fresh".
Here's a fresh and rocking tracklist then, the first feature of which, 'We Take Care Of Our Own', is available now as a digital single. Preview it here: itunes.apple.com/gb/album/we-take-care-of-our-own-single/id495506578
We Take Care of Our Own
OBERHOFER TO RELEASE DEBUT
First track 'Heart', which gives a hint of New York singer-songwriter Brad Oberhofer's deft and delicately flawed stylistic fare, is free to listen to and download here: soundcloud.com/glassnote-1-1/heart-oberhofer
BURT BACHARACH WRITING MEMOIR
With biographer Robert Greenfield confirmed to assist with a story "told in Bacharach's own words", the book will chronicle the songwriter's many achievements and accolades, as well as the demise of his and David's professional partnership.
ONE NIGHT ONLY TOUR BELIES BAND NAME
16 Apr: Liverpool, Academy2
BIG CHILL IS CANCELLED
Benn's company acquired The Big Chill in 2009 after the previously independent festival, which had had various financial issues over the years, when into liquidation. Co-founder Katrina Larkin initially joined Festival Republic as a Creative Director for the event, but moved on a year later.
Plans were already well underway for the 2012 edition of the festival, and a number of bands had been booked. And as recently as last Friday organisers were running a competition for tickets on Twitter. However, it seems that by last weekend it had been decided this year's event would not go ahead.
Officially the Olympics are to blame. The Big Chill is, of course, an August event, and will clash with London's big sports bash, though some in the live community say that they are not convinced by that explanation, and that while the Big Chill brand is still popular, its flagship summer event has been in decline for some years. It's thought some pressure was put on Benn regards The Big Chill by Festival Republic's backer Live Nation, though it's not known what the company's actual concerns were.
Either way, Benn said in a statement yesterday: "It is with a considerable amount of regret that I have decided not to go ahead with The Big Chill in 2012. I looked long and hard late last year at moving the date so it didn't clash with the Olympics, but with the mix of the festival fans desire to keep the date and an inability to find an alternative date that works, I plumped for maintaining the existing weekend. Sadly, the artist availability and confirmations we were achieving led me to conclude that I couldn't risk going ahead with the event [in its usual form] this year. Efforts are being made to look to stage a smaller event indoors this year, with the anticipation of The Big Chill being back outdoors in 2013".
LIVE NATION BRANDS MAN MOVES TO EMI
Ron Pence, who has led brand partnerships and sponsorship alliances for Live Nation, is moving over to EMI to head up their brand partnerships division. EMI, like most majors, is keen to become the link between big brands and the artists it works with, generating an alternative revenue stream to traditional record sales. Though, of course, some big name artists already enjoy brand partnerships often negotiated by their managers, so labels like EMI need to demonstrate they have sponsorship experts on board to justify why they should be cut into the brand money pie.
Pence will report to EMI's Vice President of Commercial & Revenue Development Dominic Pandiscia in New York, who told CMU: "Ron's experience in the consumer products and music industries gives him a strong understanding of the delicate balance between the activation requirements of brands and the varying needs of the artist. His work in social and digital media proves that he can deliver the best possible outcome for brands and creative talent alike. He is an invaluable addition to the EMI Music team".
Brand partnerships is an interesting place to be in the major music framework, and EMI has done some interesting projects in this area already. Though, of course, some might wonder how secure Pence's new role will be long term if and when Universal acquires the EMI record companies, it already having their own brand partnership ventures. Not least via that new joint venture with Pence's former employer Live Nation.
LIVE MUSIC BILL RETURNS TO COMMONS TODAY
As previously reported, the Bill was introduced by Tim Clement Jones in the Lords, though is being sponsored by Don Foster MP in the Commons. It proposes a relaxation of the licensing rules around small scale live music events, making it easier for grass roots gigs to happen.
Many argue that new bureaucracy put in place by the 2003 Licensing Act has made staging such events so tricky, many pubs and small venues that previously staged live music have stopped doing so, to the detriment of the grass roots music community.
UK Music and the Musicians Union have been rallying MPs to show up and support the bill today, which does have cross-party support. As previously reported, although in theory backing Clement Jones's bill, the coalition government is also working on its own revamp of live licensing rules, which may go further than this bit of legislation.
GROOVESHARK WITHDRAWS FROM GERMANY OVER ALLEGED GEMA DISPUTE
That GEMA would not licence Grooveshark is not surprising, given the German equivalent of PRS For Music has been reluctant to back many advertising or subscription based streaming services in recent years, including Spotify. Indeed, some in the artist and label communities have been critical of GEMA's attitude towards streaming-based digital music platforms, though with all four majors currently involved in litigation with Grooveshark, they are less likely to find supporters elsewhere in the music community than Spotify et al.
Nevertheless, Grooveshark was critical of GEMA, saying it was forced to leave the German market because the collecting society's royalty demands were "unreasonably high". Though GEMA, for its part, denied having any negotiations with the Groovesharkers, and said the US-based digital company had refused to pay licensing fees of any kind.
As previously reported, Grooveshark does have licensing deals with some independent labels, and in theory EMI, though the label is currently suing for allegedly unpaid royalties. Universal, Sony and Warner have never licensed the streaming service, which includes a user-upload facility, and are currently suing the Grooveshark company in the US, alleging that bosses there routinely upload unlicensed content, and then pretend users have uploaded it in order to get protection under the Digital Millennium Copyright Act (which protects web operators from liability for their users' infringement providing they operate some kind of content takedown system).
While Grooveshark's legal disputes with the labels have been widely documented, its negotiations with the publishing sector - usually via the collecting societies - have been less high profile. The service is not currently licensed by PRS For Music in the UK, but operates here nevertheless.
CHANNEL 5 TO START MAKING PROGRAMMES
The network says it has a number of new programmes in development, including a cookery show fronted by Marco Pierre White, a documentary presented by John Barrowman on the TV show 'Dallas', and a TV format built around Jedward.
Another branch of Desmond's business already makes telly programming, for his adult channels Television X and Red Hot TV, and it's thought that division's facilities (but presumably not its on screen talent) will be used by he new Five production department.
CMU BEEF OF THE WEEK #94: ALEX JAMES V SMALL BAKERIES
This week, he wrote a lengthy piece looking at the food manufacturing processes of Greggs, McDonald's, and KFC, spending a day with each company to really understand how they go about producing such vast quantities of cheap food. It's the sort of investigative journalism we're all crying out for. And what did he discover? Well, on behalf of the British people, he discovered that all three of them are absolutely brilliant.
Helpfully, he pointed out: "Yes, big business can be a bad thing, but only if it's bad".
That's that cleared up then. In the case of McDonald's, he pulled out many of the statistics people who are anti-McDonald's use to knock the company, though viewed them in a wholly positive light. Though, in the case of Greggs, he was impressed by simpler things.
"[Greggs is] British and based in Newcastle, so it doesn't feel threatening or as if Americans are telling us what to eat", he said, forgetting that he was also about to write about McDonald's and KFC. "The little bakery in my local village offers goods too sweet and sugary and is massively over-priced. I can think of much worse things than a Greggs opening up there".
I hope he never needs a loaf of bread in a hurry again. Over at the McDonald's factory which makes "THREE MILLION burgers a day ... and processes 380,000 cattle a year", he set the scene, saying: "The overwhelming thing is the stench. When you go to the docks it smells of fish. This was the same but with an overpowering smell of beef - a beefy docks".
However, "backstage" at a McDonald's restaurant was a different matter. "There's some fantastic gear there and in some ways it's very similar to a Michelin-starred restaurant", he enthused. "When it's busy in a Michelin kitchen, all the chefs are doing is putting pre-prepared parts of a meal together, which is essentially the same as McDonald's".
Yep, almost identical. But surely there's the matter of health? Don't worry, Alex is on it. He spoke to the British Nutrition Foundation, who pointed out that McDonald's food "doesn't satisfy your appetite, so you eat more ... [and] is also lacking in fibre". As well as that "the BNF said it should only be eaten 'occasionally'".
How often is "occasionally", Alex? "They couldn't tell me what 'occasionally' meant, but we all know it means less than once a week". Cool, thanks.
He had less to say about KFC, but did describe being "up to my elbows in a big tub of the Colonel's 'secret recipe'", adding that the concoction isn't actually that difficult to make. "Now I've seen how it works I'm going to try Kentucky Fried grouse at home this weekend", he squealed.
You can read the full piece here, and check out The Quietus' amazing deconstruction of it here. Also, The Daily Mash points out that much of James' article is written in the style of an excited nine year old.