FRIDAY
21 DEC 2012

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CMU ARTISTS OF THE YEAR 2012: THE SMITHS
You might be thinking that making The Smiths one of our Artists Of The Year makes a mockery of the whole system. But it doesn't. The Smiths hold their position here precisely because they have done absolutely nothing. Well, except one thing: deny rumours that they are reuniting. The one thing I hope they will continue to do for many years to come more>>
 
THE CMU PODCAST
It's not the end of the world, but it is the end of the year (nearly), so this month's CMU Podcast is slightly different. Rather than reviewing the last month in music, Chris Cooke and Andy Malt look back through some key events and trends of the last year, including EMI, HMV, digital royalties, Psy, Amanda Palmer, festivals, MegaUpload, web-blocking, One Direction and Adele more>>
THE ARTISTS AND THE MUSIC
01 EDM
02 Reunions
03 RIP
04 Pap Attacks
05 Pussy Riots
06 Michael Jackson
07 Amanda Palmer
08 Psy
09 One Direction
10 Adele
THE MUSIC BUSINESS
01 EMI
02 HMV
03 LVCR
04 Digital sales
05 Digital royalties
06 Copyright reform
07 Web-blocking
08 Live Music Act
09 Secondary ticketing
10 Festivals
THE MEDIA AND THE INTERNET
01 MegaUpload
02 Grooveshark
03 Streaming services
04 Digital lockers
05 MySpace
06 The American radio royalties debate
07 Global domination
08 Savile-gate
09 The Word closes
10 Morrissey v NME
HELLO THERE CMU DAILY READERS!

And welcome one and all to our annual CMU Review Of The Year, looking back at the biggest artist and music business news stories of the last twelve months, and key trends in the media and on the internet.

Some of this year's biggest music news stories came from nowhere. Pussy Riot generated some of the biggest headlines, yet they were not long formed this time last year. We knew MegaUpload was annoying Hollywood bosses, but didn't forsee the scale of the attack against the controversail file-transfer service that would occur in January, and the increased celebrity status it would generate for founder Kim Dotcom. And who could have predicted Psy?

Other developments were new chapters in ongoing stories. The final days of the British major music company EMI, and what is increasingly looking like the final days of the big British music retailer HMV. Fan funding has been a talking point for a few years now, but Amanda Palmer really upped the ante. And the secondary ticketing debate was refuelled by a Channel 4 documentary. While an ITV documentary finally confirmed long-circulated rumours about a certain former BBC star.

Music wise, the continued rise of EDM, especially Stateside, couldn't be missed, nor could the phenomenal levels of global success scored by British acts One Direction and Adele, the former achieved by being everywhere, the latter by staying at home.

It was an interesting year for new music. The continued dominance of template pop in the charts means 2012 doesn't immediately leap out at you as a golden year, yet when we got round to compiling our annual list of the artists who had particularly impressed us in the last twelve months, it was incredibly difficult to get it down to just ten. And a quick scan back down the CMU Approved column confirms just how much great new music was created and released this year.

In the world of CMU, 2012 was another mighty fine annum. We programmed our second edition of The Great Escape convention in Brighton, which included conversations with Glastonbury founder Michael Eavis, Xfm's John Kennedy, Placebo frontman Brian Molko, Sunday Best and Bestival boss Rob da Bank and many many more. We're overseeing the conference side of the proceedings in May 2013 too, so get your tickets now!

CMU Insights, our training and consultancy division, continued to grow. Hundreds of people, newcomers and experienced practitioners, from music companies large and small, attended our training courses and DIY sessions, tapping into our team's knowledge of best practice and current trends in music rights, music PR, business models and social media, as well as how to get started in music, both on stage and behind the scenes. And in January we launch a brand new ten week evening course, details of which you can find here.

Back in the CMU Daily and on theCMUwebsite.com, more people than ever, from across the wider music community, and from all four corners of the world, checked in daily for a complete round up of everything that has been happening in music, the music industry and the music media. We continue to relish the fact that, by offering our news and features for free, CMU continues to unite everyone working in music, the complete music update for the complete music community.

This is the final CMU Daily of the year (though if any major news stories break, keep an eye on the CMU Twitter feed for updates). So I'll wish you a merry Christmas and a happy new year and let you get on with reading it. CMU Daily will be back on 7 Jan, so see you then in 2013!

Andy Malt
Editor, CMU


01 EDM
Electronic dance music (or EDM) - which is apparently how we're all supposed to refer to any form of dance music these days - continued to boom in 2012, particularly in the US, where such genres have historically gained less traction. Much of this success Stateside, though, was down to one EDM sub-genre in particular, dubstep, and specifically its more aggressive, less nuanced form often termed 'brostep' (aka dumb-step), and even more specifically the outpourings of its most famous producer, dumb-stepper in chief Skrillex.

That said, in the charts (on both sides of the Atlantic) it was the continued infiltration of EDM-pop by David Guetta that helped really drive commercial success for the dance genre. This year the French template-pusher has released tracks with artists including Chris Brown, Lil Wayne, Kelly Rowland, Ludacris, Flo Rida, Jessie J and Sia. This Guetta-led chart success and the rise of dumb-step has seen the more corporate end of the American music business take an interest in EDM for the first time (led by Live Nation's acquisition of Creamfields), which in turn has further helped boost the pay-packets of superstar producer/DJs like Guetta, Skrillex, Deadmau5 and Steve Aoki, especially when playing 'live'. Though there remains much debate about what they're actually doing up there on stage.

02 REUNIONS
The number of defunct bands who have resisted the temptation to have another go gets ever smaller by the day; soon bands will have to start reforming before they've even split if they want to keep up. The Stone Roses, of course, announced in October 2011 that they were getting back together, but it was this year that they actually stepped out again in public, playing three shows in Manchester's Heaton Park in June, before moving around what seemed like every festival in Europe.

The other big reunion of the year, I suppose, was Girls Aloud (even though they technically hadn't ever officially split), who reunited for their tenth anniversary. Returning with a new single, aptly titled 'Something New', they also released a greatest hits compilation this month and next February and March will head out on a tour of UK arenas.

As well as that little lot, the surviving original members of The Beach Boys recorded a new album to mark their 50th anniversary and headed out on tour (though not without controversy), Blur and Pulp continued their reunited status, plus the original Sugababes, Run-DMC, At The Drive-In, Refused, Atomic Kitten, 5ive, Liberty X, B*Witched, 911, The Honeyz and even Ugly Kid Joe all announced reunion plans of one form or another. Hopes for full original line-up reunions of Black Sabbath and Guns N Roses were less successful though.

03 RIP
2012 saw the music world lose more than its fair share of big names, perhaps most shockingly Whitney Houston, who drowned in a hotel bath over Grammy weekend in February following a blackout caused by the long-term effects of habitual cocaine use and heart disease.

One year younger than Houston, at 47, Beastie Boys' Adam 'MCA' Yauch also died somewhat unexpectedly this year. Although diagnosed with cancer in 2009, the prognosis had been positive. Though concerns about Yauch's health were raised after he pulled out of a planned performance to celebrate the group's induction into the Rock N Roll Hall Of Fame three weeks prior to his death.

Some of the other music people to pass away this year include Donna Summer, Andy Williams, The Bee Gees' Robin Gibb, Etta James, The Monkees' Davy Jones, Dave Brubeck, Ravi Shankar, Men At Work's Greg Ham, lyricist Hal David, Marshall Amplification founder Jim Marshall and American TV presenter Dick Clark.

04 PAP ATTACKS
Run-ins between the paparazzi and the celebs they stalk are nothing new, though some did stand out this year. While on his skateboarding hiatus, rapper Lil Wayne was accused of being involved in two very similar attacks in April and May after he and his skater buddies were photographed against their will. And fellow rapper A$AP Rocky was charged with attempted robbery, attempted grand larceny and assault following a fight with two photographers in June, later pleading guilty to the larceny charge after the other two were dropped.

Is there something that can be done about snappers enraging celebs, though? Well, possibly not if a case involving young Justin Bieber is anything to go by. And despite Californian legislators passing new laws that they thought might help the celebs who life in the state. After receiving a speeding ticket, Bieber argued that he'd only broken a speed limit because he was being chased by a photographer at the time. Said photographer, Paul Raef, was subsequently charged under a new piece of Californian law that states that paps who put people in dangerous situations in search of profit can be prosecuted. However, last month a judge dismissed the case saying that the law was too broad and contravenes the First Amendment right to free speech.

05 PUSSY RIOT
Although only formed in summer 2011, Pussy Riot created some of the most shocking headlines of the music year, and not via their designed-to-shock performances, but by reminding us of how much music and art can scare a paranoid establishment, and the risks protest musicians take in such circumstances. In February this year three members of the ten-strong band, who began performing protest songs in unusual places last year, were arrested after playing a 'punk prayer' at the Russian Orthodox cathedral in Moscow calling on the "Holy Mother, Blessed Virgin" to "throw Putin out".

With the arrested three charged with and later found guilty of "hooliganism motivated by religious hatred or hostility", the Russian government was accused of colluding with the national church to put pressure on the country's judicial system in a bid to 'make an example' of the Pussy Riot members for anyone else thinking of speaking out against the regime of President Vladimir Putin. It was hoped that negative attention internationally might result in a more lenient verdict in court, but despite global protests all three were sentenced to two years in jail. One, Yekaterina Samustsev, secured release on a suspended sentence in her appeal, but the two others, Maria Alyokhina and Nadezhda Tolokonnikova, end the year in Siberian prison camps.

While artists worldwide condemned what they saw as a brutal attack on the freedom of expression, Putin was quoted as observing that the women simply "got what they asked for".

06 MICHAEL JACKSON
More than three years after his death, Michael Jackson is still generating plenty of headlines - or rather the legal fallout surrounding his ill-fated O2 Arena residency is.

Promoter AEG Live this year settled its battle with insurer Lloyds Of London over the latter's refusal to pay out on the former's insurance claim on the cancelled 'This Is It' shows. However, AEG still faces trial next year in the Jackson family's claim that the company is liable for the late king of pop's death due to it hiring Conrad Murray, the doctor convicted last year of causing the singer's death in 2009. AEG denies liability, saying that Jackson himself hired and managed the doctor, though leaked emails from 2009 published earlier this year did show that execs at the company were concerned about the singer's health in the months before his untimely demise. As well as all that, Jackson's PA filed a rather optimistic class action lawsuit against AEG for his lost income relating to the O2 shows.

There was in-fighting amongst the Jacksons themselves too, when the singer's nephew TJ was given temporary guardianship of Michael's three children - Prince, Paris and Blanket - amidst reports that their grandmother, their existing guardian, had gone missing. The Jackson matriarch returned, however, and an agreement was struck that she should share responsibilities over the children with TJ. Though not everyone in the Jackson clan was happy about that arrangement.

On the up side, the Cirque du Soleil show featuring Jackson's music was the fourth highest grossing tour of the year, and the 25th and 30th anniversaries of the release of 'Bad' and 'Thriller' respectively were celebrated.

07 AMANDA PALMER
Proclaiming that "this is the future of music", Amanda Palmer launched a Kickstarter project to raise money for a new album, book and tour in April this year. Initially asking for $100,000, she reached her target two days in, going on to raise almost $1.2 million by the funding deadline of 31 May. Lucky really, as along the way she revealed that she'd already spent $250,000 getting the project up and running.

Despite much applauding of Palmer's success as a DIY artist, and interest in her proving that major-label level budgets could be secured through fan-funding and pre-ordering, the project was not without controversy.

Some fans simply disliked the fact that she opted to work with a label, albeit indie Cooking Vinyl, on the album release in Europe. Though the most negative feedback came after she asked fans to come and play for free at her live shows. Although said fans gladly participated gratis, many felt that after raising so much cash, Palmer could probably afford to hand a little of it over to her guest musicians. In the end, and after being branded an "idiot" by Steve Albini, she reworked her budget and found the cash to pay them.

08 PSY
In less than six months Psy has gone from being some guy in South Korea you've never heard of to genuine international phenomenon. In fact, while it's now almost six months since his 'Gangnam Style' video first hit YouTube, his progression to household name came even quicker than that.

Already a well-established performer in South Korea, since the release of said track and accompanying promo vid in July, Psy has scored the most viewed video ever on YouTube, been signed by Justin Bieber's manager, topped the charts, taught Britney to dance, addressed the Oxford Union, and had to apologise to a whole nation of new fans about some anti-American performances he gave a decade ago.

Few people will achieve any of that in their entire lifetimes. Though whether Psy can maintain the momentum in 2013 remains to be seen.

09 ONE DIRECTION
Well, haven't One Direction been just about everywhere this year? Though particularly America, where they released not one but two albums in 2012. Their debut long player, unleashed last year in the UK, arrived Stateside in March. And those American teeny boppers went crazy for the boys from 'X-Factor UK'. Not even a legal tussle over who, exactly, had the American rights to the name One Direction could spoil the fun. Legal papers were filed by the previously little known One Direction USA, but an out of court settlement duly followed.

Back in the UK there was controversy too, though not of the legal kind. When accepting the Best Single award at the 2012 BRITs, the group's Harry Styles remembered to thank Radio 1, but not the award's sponsor Capital FM. Unimpressed by this accidental snub, the commercial radio station banned the group from its airwaves for three whole months in retaliation. Though there too resolution followed - possibly because Capital couldn't afford to be boycotting the world's most popular boyband as a new album approached, and possibly because of the frequent mentions in the press that the station's owners also managed 1D rivals The Wanted, so the ban could be seen (albeit wrongly) as commercial bias.

Squabbles aside, there was no stopping that One Direction boyband machine. Not only did new album 'Take Me Home' top charts on both sides of the Atlantic (and in nineteen countries overall), they found time to sell dolls, announce plans for a perfume and film, develop a TV show, headline Madison Square Garden, and jam with Johnny Depp.

10 ADELE
What has Adele done this year? Nothing. And yet she's still been more successful that every one of you. Take that, try hards.

Throat surgery in November 2011 and then pregnancy meant that touring was off the menu for Ms Adkins this year, but her second album '21' (a year old in January) needed no extra promotion. Last month it passed ten million sales in the US alone, having shifted more than four million copies Stateside this year - making it by far the best selling album there in 2012. All of which helped to increase the profits of her label, UK-based Beggars/XL, ten-fold.

Of course, Adele didn't do absolutely nothing musical this year. Teaming up again with producer Paul Epworth, she co-wrote and sang the theme tune to the new James Bond film 'Skyfall'. Oh, and she flipped the bird at the BRITs.

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01 EMI
As 2012 began, it seemed certain that EMI, the British major music company, would be split into two this year, and sold on to its biggest rivals, Universal and Sony. US bank Citigroup, which had repossessed the music company from its former owner Terra Firma a year earlier, had done both those deals already, but both were subject to regulatory approval in various jurisdictions around the world.

However, it was the regulatory investigations in the US and the European Union that mattered. And while US Congress did invest some quality time into considering Universal's purchase of the EMI record company, really it was in Europe that the two acquisitions were given the most scrutiny. Though even there the Sony-led bid to buy EMI Music Publishing, actually the bigger of the two deals, and one that could have a major impact on the collective licensing system long term (such things being a bigger concern in publishing), went through with only a basic investigation, and with relatively small concessions on the new owners' part. That half of EMI basically became a subsidiary of Sony/ATV in June.

The Universal deal, making the world's biggest music company even bigger, proved more controversial. Despite the mega-major initially insisting it could get the deal through Brussels without making any concessions, in the end it had to commit to sell off more than half of EMI's European assets, including the worldwide rights to the Parlophone and Chrysalis catalogues (The Beatles and Robbie Williams excluded).

So much so, while there is now no major music company owned or headquartered in the UK, if a London-based independent Parlophone Music Group emerged in 2013, that could be quite exciting. That final chapter in the long running demise of EMI should conclude next spring. Then we can all refocus on the sale of live music giant AEG, which was put up for sale back in September.

02 HMV
While EMI ceased to exist as a standalone entity via multi-billion pound takeovers, one-time EMI subsidiary HMV could well cease to exist through a no pound bankruptcy. Certainly the flagging retailer did little in 2012 to convince the world it had a long-term future, beginning the year with gloomy Christmas sales figures, and a pledge to sell off its live music division MAMA, thus ending the sensible-if-expensive diversification strategy that had given the high street retail firm a glimmer of hope three years earlier.

MAMA's biggest asset, the Hammersmith Apollo, was sold for £32 million to a joint venture between AEG and Eventim in May, with much of the rest of the live music and artist services business being bought in a £7.3 million management buy out in early December. Having already offloaded its Waterstones and HMV Canada chains, there was little left for the HMV Group to sell as it posted a loss for 2011 and reported further declining sales in store; only its stake in 7Digital remains in the rainy-day box. CEO Simon Fox, before his departure in August, did secure an important new deal with the major labels and DVD distributors in January, which has been crucial in allowing the HMV stores to continue operating in the run up to Christmas this year.

Though with loan covenants due to be broken in January, and Wall Street firm Apollo now buying up HMV's debts with unknown intent, most are now braced for 2013 to be the year when Britain's last major entertainment retailer disappears from the high street.

03 LVCR
The decline of HMV, as with all high street record sellers in the UK, was arguably accelerated by the 15-20% advantage enjoyed by the big online mail-order companies, who didn't have to charge VAT if the CDs they sold were mailed from the Channel Islands. Independent retailers had campaigned for years for the tax loophole to be closed, more recently arguing its exploitation by The Hut, Play.com et al breached European tax rules.

And finally this year they got their wish, when in April Chancellor Of The Exchequer George Osborne finally ended so called Low Value Consignment Relief for Channel Islands-based businesses (the Channel Islands having failed to block the move, originally announced in 2011, through the courts). Mail-order firms that had always claimed they operated from the English Channel because they liked the sea air duly shut down their Jersey and Guernsey warehouses. Some have since been looking for alternative ways to enjoy the loophole, though campaigners hope those attempts will be ultimately futile.

04 DIGITAL SALES
HMV's woes are also linked, of course, to the ongoing shift of record sales to the digital domain, where His Master's Voice has never done especially well (indeed this year it basically shut down its own download store and started sending customers over to 7Digital instead, in which it has a sizable stake).

In the UK, digital revenues accounted for (just) over 50% of record sales for the first time in the first quarter of the year, as an increasing number of labels, especially in the indie sector, reported that digital revenues, mainly from iTunes, Amazon and YouTube, were now very much the driving force of their businesses. Similar stats have come out of the US in the last eighteen months too, while many other markets are ahead in the shift to digital, with some European record industries (most notably Sweden) noting the increased importance of streaming service revenue too (more on which below).

That said, predictions in late 2011 that the CD would die as a mainstream format in the UK this year were, predictably, unfounded, with physical product still accounting for nearly half of record sales income overall. The demise of HMV in 2013, should it occur, could alter things in that domain, but for the time being the album looks likely to remain an important part of any mainstream album release.

05 DIGITAL ROYALTIES
In the US, of more interest than the amount of money being generated by download sales was what should happen to that money. When it comes to royalties paid to artists, traditional record contracts distinguish between money made from record sales and money made from licensing or other deals. The royalty paid on the latter is generally considerably higher than on the former. So, needless to say, when it comes to artists whose contracts pre-date iTunes, the major labels have treated downloads as record sales, and paid the lower royalty.

But many artists earning from such deals argue that download sales should be treated as licensing revenue and the higher royalty should be paid. And last year FBT Productions, the production team who worked on and have a stake in the early Eminem recordings, successfully sued Universal for a higher pay-out on digital, with an out of court settlement this year confidentially setting just how much higher.

Universal insists the FBT case does not set a precedent, but many heritage artists disagree, and Sister Sledge, Toto, Kenny Rogers, The Temptations, James Taylor and Weird Al' Yankovic all sued on the issue this year, meaning all three majors are now facing digital royalty litigation. If and when any of these cases get to court they could set a precedent with major ramifications for the US record industry - so much so, Sony Music has been trying to negotiate a settlement to avoid that outcome.

06 COPYRIGHT REFORM
Back to the UK, and a consultation has been running for much of the year on reforming British copyright rules, stemming from recommendations made by Ian Hargreaves in his government-commissioned review of intellectual property law in 2011. In July, Richard Hooper published his report that expanded on Hargreaves' proposal that some sort of digital copyright exchange be set up to make the licensing of copyright works simpler. Said report led to the creation of the Licensing Steering Group, which will now consider how to make Hooper's 'copyright hub' a reality.

While the music industry, in the main, backs the copyright hub idea, there is less enthusiasm for the other set of proposals stemming from Hargreaves, which were published just this week. Basically expanding the so called 'fair dealing' exemptions where users can make use of copyright material without licence, the music rights companies are likely to lobby against most of the proposed changes when statutory revisions are presented to parliament next year, advocating instead the alternative proposals already set out in the 'Licensing UK' report published by various content industry trade bodies in early December.

07 WEB-BLOCKING
To the political community, the more efficient licensing of copyright material is, of course, the flip side to laws designed to combat piracy. Though record labels and music publishers in the UK might point out that the three-strikes system for combating illegal file-sharing, despite being made law in the 2010 Digital Economy Act, still didn't go live in 2012.

Instead, the music industry pursued an alternative strategy for fighting piracy, ironically the system that the DEA said was a lesser priority - web-blocking. With the British movie industry having successfully forced the internet service providers to block access to file-sharing community Newzbin in 2011 by securing web-block injunctions in court, the UK record industry did the same with The Pirate Bay. Such web-blocks remain controversial of course, and opponents point out how easily the blocks can be by-passed - though record industry trade body the BPI successfully pressured the Pirate Party into stopping helping with that process this month. And while The Pirate Bay boasts that the web-blocks, and resulting press coverage, has actually increased their traffic, it's worth noting that the people behind Newzbin decided this year that it just wasn't worth the hassle running a web-blocked website.

In the US, proposals to introduce a web-blocking system via new laws (either SOPA or PIPA) proved very controversial, with a Wikipedia-led protest resulting in the whole idea being shelved. It seems more likely, therefore, that 2013 will bring with it a three-strikes style system in America (although actually six-strikes), based on the deal US ISPs voluntarily signed up to last year and which is set to go live in the next few months (albeit with unclear final-strike sanctions).

08 LIVE MUSIC ACT
To live music now, and in a year when the recently buoyant live sector seemed to have a little wobble (in the UK at least), there was some joy to be had when the Live Music Act was passed by parliament, removing some of the unnecessary red tape that had been applied to small-scale music events by the 2003 Licensing Act.

A private members bill pursued by Lord Tim Clement-Jones, and backed by the coalition government, both the artist and live community welcomed the change in the law, hoping that it will revitalise the grass roots gigs circuit, which has suffered from pubs and such-like moving away from staging live music in recent years because of the paper work. Indeed, UK Music reckoned as many as 13,000 more venues may now stage live music.

Though some operating in the grass roots music community have questioned whether there is really consumer demand for a surge in pub music shows, worrying that if the bigger pub chains were to exploit the licensing law change to stage loss-leader music events, the already struggling smaller gig venues of Britain could actually lose out. It will be interesting to see what impact the Live Music Act has in 2013.

09 SECONDARY TICKETING
The other big issue in live this year remained the continued growth of secondary ticketing. Indeed the online touts debate, which had gone quiet in the UK in recent years (unlike in the US), was reignited when Channel 4's 'Dispatches' threw a spotlight on the whole thing, confirming that a number of high profile artists and tour promoters were actually touting their own tickets via resale sites (one of the reasons said artist and promoters had been less critical of the secondary markets in recent years).

Post-'Dispatches', the Association Of Independent Festivals published a Fair Ticketing Charter formally opposing online touting, while those against the secondary market hoped that proposals by Sharon Hodgson MP to regulate ticket reselling might be newly considered in parliament. Though, despite the 'Dispatches' show, the secondary ticketing market continued to prosper, and hopes that paperless ticketing might be the solution to the problem hit some snags. All of which means this debate will continue to rumble on in 2013.

10 FESTIVALS
It wasn't a good year for music festivals in the UK, that seems certain, even if a report presented at the UK Festivals Conference last month insisted that stories of gloom in festival-dom have been exaggerated. Of course smaller fests, with their incredibly tight profit margins, go under all the time (as the Bloc Festival company learned, one bad event and you're history), but with Festival Republic forced to cancel The Big Chill, and Kilimajaro the UK date of Sonisphere, and Vince Power's entire business going under, the big boys had a challenging time too in 2012.

The terrible weather, the ongoing recession, a lack of decent headliners in the rock domain, competition from Olympics events and market saturation were all in part blamed for the poor performance of the festivals sector, and all probably played a role. Of course if the main problem was too many festivals, then the inevitable closure of some fests (eg Guilfest and Hop Farm) and postponement of others (eg No Direction Home and Summer Sundae) should, to an extent, fix things. Though festival promoters will be approaching 2013 with a mixture of optimism and anxiety, whatever that Festivals Conference report might have said.

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01 MEGAUPLOAD
And to think, this time last year it was all about the 'Mega Song'. Remember that? Such innocent times. Yes, while the American movie industry did spend a lot of 2011 moaning about MegaUpload and its sister site MegaVideo, a file-transfer platform and YouTube competitor respectively, both of which were home to vast amounts of unlicensed movies, music videos and TV shows, few expected the dramas of 19 Jan to unfold the way they did.

With little warning (much to the annoyance of some Mega customers), the American authorities swooped on the US-based server facilities used by the file-sharing company and shut down the entire operation, while police in New Zealand raided the home of the controversial digital firm's founder Kim 'Dotcom' Schmitz and arrested three other Mega execs too. The Mega management were accused of money laundering, racketeering and copyright infringement, and the US authorities began proceedings to extradite Dotcom et al back to America to face criminal charges.

But once he finally got bail, Dotcom started to fight back. Denying all the charges against him, he hit out at Hollywood and its allies in the US government. His lawyers argued that the Mega company didn't have a corporate base in the US, so criminal proceedings against it weren't possible, and that the charges against Dotcom personally weren't enough to justify extradition. A US court wasn't especially convinced by all these arguments.

Though in New Zealand, Dotcom's extradition hearing was postponed, twice, amidst allegations that police there raided Dotcom's home using the wrong kind of permit, that they broke laws by letting US officials take evidence seized in that raid back to America, and that the country's intelligence bureau spied on Dotcom and his colleagues before the raid without the required clearances from the powers that be. Meanwhile the Mega men set about building an all new Mega file-transfer service, set to launch on servers outside the US in January, which - Dotcom reckons - is immune from claims of copyright infringement.

As 2013 begins, it remains to be seen if Dotcom will ever appear in an American courtroom to debate the legal arguments surrounding MegaUpload v1. Meanwhile the movie and music industries will be watching with interest the launch of v2.

02 GROOVESHARK
While it was really the movie industry that led the battle against Mega, the American record industry continued its assault against Grooveshark in 2012, albeit with little actual progress. Grooveshark, of course, is the US-based Spotify competitor that allows users to upload music to its libraries, meaning a portion of its content is unlicensed. Grooveshark argues it operates a takedown system meaning that, under US law, it is not liable for copyright infringement, even though its users upload lots of unlicensed files all the time.

With that get-out something of a grey area, last year Universal, Sony and Warner sued Grooveshark alleging that employees of the company also uploaded unlicensed content, something that would void the 'takedown system' defence. Then this year EMI, the one major that had done a licensing deal with Grooveshark, terminated its agreement and subsequently joined in with the litigation party. For its part Grooveshark called for Universal's lawsuit to be dismissed, while trying to force Digital Music News to reveal who had posted on the digital news site the original allegations of dubious staff-based uploading.

With all four majors now pursuing Grooveshark through the courts, and making it difficult for the streaming company to distribute its mobile apps through official channels, the digital firm is arguably on rocky ground. Though that didn't stop Forbes listing its founders amongst the 30 most influential people under 30 in music today.

03 STREAMING SERVICES
Talking of streaming music, what about those streaming platforms endorsed by the music industry? Overall, streaming set ups still account for a relatively small amount of revenue within the wider record and music publishing industries, but those revenues are growing rapidly and, in terms of public profile, this was definitely a good year for the digital services that stream.

And that's despite some high profile critics, mainly in the artist community, where some still reckon the royalties paid by streaming platforms are just too low, especially if being on a streaming service might negatively impact download sales. In Europe, Spotify, while enjoying the highest profile amongst consumers by some distance, also tends to be the whipping boy when it comes to criticism about streaming in general. The most vocal critic this year was probably Scott Borchetta, boss of US independent Big Machine, aka the Taylor Swift label. He said he had no plans to immediately put new releases onto Spotify et al at all. Though his viewpoint isn't the norm - both Universal Music and Beggars boss Martin Mills have come to Spotify's defence this year.

While Spotify is still the market-leading streaming service in Europe, there were plenty of competitors hoping to take its crown (but, presumably, not the flack) in 2012, with other players expanding big time. French-based Deezer continued its occasionally bizarre expansion plans, US service Rdio arrived in Europe, and Rara.com announced a big global push. Meanwhile UK-based We7 was bought by Tesco, with a revamp pending. Aware of all that competition, Spotify has just announced a major redesign with new features it hopes will retain its market leader status.

In the US, interactive radio service Pandora probably garnered the most column inches in the streaming music space, though, as with Spotify in Europe, a lot of that was negative - ie criticism from within the music community (more on which below) or its wobbly share price (especially whenever an Apple streaming service was rumoured). Though it did get to talk up its arrival in Australia and New Zealand earlier this month.

04 DIGITAL LOCKERS
Speculation that one of the big guys - Apple, Google or Amazon - would enter the streaming music space this year was unfounded, though arguably Google already owns the biggest streaming platform in the world in the form of YouTube.

But for those three it was all about refining existing digital locker services in 2012. While Google and Amazon had both beaten Apple to market in 2011 with music-focused digital music storage services - whereby users could upload MP3 collections to the 'cloud' and access tracks from any net-connected device - Apple's iCloud service was much more attractive because it offered scan-and-match, which scanned a user's PC and automatically placed copies of any music it found into the customer's cloud locker without them having to upload anything.

Google and Amazon couldn't do that because they hadn't involved the labels in their original locker offers, and while a basic cloud storage service can be run without a licence from rights owners (in most countries), scan-and-match cannot. But this year both caught up with Apple, doing the label deals and launching a fuller locker service, Amazon in July and Google in November (in Europe, in the US just this week). Now all offering pretty much the same service, and with the cloud storage market likely to expand further in 2013, all three will compete head on - Google by offering their service for free, Apple and Amazon by selling cloud storage alongside their market leading download stores.

05 MYSPACE
Another streaming music service now, but one pretending to be a social network. Yes, MySpace is back, everyone. Who'd have thought it? Well, Justin Timberlake, for one. He was, of course, involved in Specific Media's purchase of the near dead social network from News Corp last year, and was heavily featured in a promo video showing off the site's big redesign in September. The new MySpace is going to be all about the music, see, and Justin's presumably had an input on it all.

Now in beta, the all-new MySpace aims to provide a central hub for musicians to manage their online activity, and to monitor online interest in their work. Initial response from those who've played with the beta site has been positive, though more recently certain experts have had a deeper dig, and their reports haven't been so glowing. Meanwhile some have questioned the business model behind the new look site, which will still come with an in-built (and expensive to run) streaming music platform. Looking for new investment, Specific Media outlined various reasons why it thought the new look MySpace was a goer as an online music service, though not everyone was convinced.

06 THE AMERICAN RADIO ROYALTIES DEBATE
One of the plus points given to potential MySpace investors as to why the new look music-social-network could succeed in the increasingly competitive streaming music space is that it will push to the fore 'interactive radio' services over fully on-demand listening.

In the US such a service can be operated under a licence from collecting organisation Sound Exchange, and rates are generally much cheaper than under on-demand streaming licences secured directly from the record companies. Which is fine, except those are the rates paid by Pandora, and Pandora has been busy telling everyone this year that those rates are way too high and need to be cut.

Pandora points out that, in the US, online radio stations (including interactive radio services like the one its operates) need a Sound Exchange licence, but FM and AM radio stations can operate without paying any royalties to record labels at all. Satellite radio station Sirius XM is also required to pay royalties via Sound Exchange, but its rates are calculated in a different and more favourable way. Arguing that this gives its FM, AM and even satellite competitors an unfair advantage, Pandora this year asked US Congress to revise the American copyright system, so that the royalties it pays into the record industry are reduced. Needless to say, the record industry was not impressed with the proposal.

Indeed, the record industry would rather like it if terrestrial radio stations in America were made to pay it royalties (which would also make things fairer for Pandora), and has been lobbying to that effect, albeit unsuccessfully. Though the aforementioned Big Machine did persuade two major American radio firms - Clear Channel and Entercom - to voluntarily start paying undisclosed royalties when the indie label's music is played on its FM and AM stations. How? By offering much more favourable rates for the broadcasters' own Pandora-style online services. They are relatively small deals so far (also involving indie label Glassnote), but could pave the way for a whole new kind of licensing in the US radio and internet space in the coming years.

07 GLOBAL DOMINATION
Staying with radio, and back in the UK the big radio industry story of the year was probably the further expansion of Global Radio, already the biggest commercial radio firm in the country as owner of Classic FM, Capital, Heart, LBC, Gold, Choice and Xfm.

In June, Global won the bidding to buy the two radio networks owned by the Guardian Media Group: Real and Smooth Radio. The deal was immediately criticised by competitors, who said that the merger would give Global far too much market share. But OfCom ruled that there were no plurality issues relating to the deal, though competition issues are still being investigated. In the interim, Real and Smooth have been spun-off into a standalone company, with downsizing already underway to prepare for integration with the rest of Global, assuming regulators green light the acquisition.

Elsewhere, chatter about a possible sale of Absolute Radio began once again this month, though unlike in 2011 the deal on the table will not likely result in the rock station being rebranded back to Virgin Radio.

08 SAVILE-GATE
Perhaps the biggest media story overall this year (giving even the Leveson Inquiry a run for its money) was Savile-Gate. In October, an ITV documentary made allegations that the late Jimmy Savile had frequently abused teenage girls throughout much of his TV and radio career, and sometimes at the studios of the BBC shows on which he worked. It then emerged that a similar investigation had been dropped almost a year earlier by the BBC's own 'Newsnight', just as the Corporation was planning to air Christmas-time tributes to its former star presenter.

While a subsequent inquiry ruled that the 'Newsnight' report had not been canned because of pressure from BBC management, the editorial decision to drop the Savile revelations was heavily criticised, as was the failure of Beeb bosses to spot the implications of the 'Newsnight' investigation on their plans to celebrate their former employee. As the scandal grew (and allegations mounted up, against both Savile and other radio and music stars, forcing the axing of 'Top Of The Pops' repeats featuring the offending men), the BBC imploded.

BBC Director General George Entwhistle, still new to the job, proved himself particularly useless at managing the fallout of such a scandal, forcing him to resign after just 53 days in the role, though not before he'd negotiated himself a half million pay off, thus ensuring further PR hell for his former employer. All of which means the BBC has a lot of reputation repairing to do in 2013, while a police investigation into the permanently shamed Savile's criminal conduct continues to work out who else was involved.

09 THE WORD CLOSES
Away from the scandals, media companies continued to face commercial challenges in 2012, not least in the newspaper and magazine domain, where print circulations continued to decline while booming websites failed to generate big money. Though, for the first time in a number of years, there was a glimmer of hope, with research to suggest consumers who won't pay to access websites might pay to download magazine apps. With tablet device use due to explode this Christmas, publishers everywhere are hoping the tablet magazine could be the saviour of print media.

Though it's all too late for one of the UK music industry's favourite magazines, The Word. In June its publisher David Hepworth announced that the title was to cease publishing, just a few months before its tenth anniversary. "In the nine years since the magazine launched there have been dramatic changes in the media and the music business" he noted. "These changes have made it more difficult for a small independent magazine to survive and provide its staff with a living. This hasn't been made any easier by the economic climate of the wider world".

Hepworth's company Development Hell continues to publish its other title though, dance music magazine Mixmag, while also operating clubbing social network dontstayin.com.

10 MORRISSEY V NME
And finally, after all that doom and gloom, a happy ending. Well, except for fans of nasty legal battles. When not calling The Queen a dictator, accusing the royal family of hijacking The Olympics or suggesting that Kate Middleton brought about someone's death, Morrissey found time earlier this year to proceed with his long-awaited legal action against the NME. This was the libel case relating to a 2007 article which the singer felt had unfairly accused him of being a racist. NME publisher IPC had failed to have the case dismissed in 2011, and the whole thing was set to come to court in 2012. Good times.

Of course cases like this often fail to reach court, but Morrissey seemed incredibly keen to have his say and make everyone involved stand up in front of a judge to explain themselves. And as that day drew ever closer, our anticipation for what might have been the most entertaining music industry trial in a very long time only grew. But then in June all that anticipation was smashed when it was announced that the singer and the magazine had settled. Boo. And all Morrissey got out of it was an apology. An apology that stressed that his accusations were wrong.

Oh well, we might have been a bit disappointed by it all, but hey, reconciliation. That's to be celebrated right? And with that, consider CMU and 2012 fully back on speaking terms.

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CMU Editor Andy Malt and CMU Business Editor Chris Cooke are both available to comment on music and music business stories. Together they have provided comment and contributions to BBC News, BBC World, BBC Radios 4, 5, 6music and Scotland, Sky News, CNN, Wired and the Associated Press. Email andy@unlimitedmedia.co.uk or chris@unlimitedmedia.co.uk.

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