Jay Z Involved In Extortion Plot Over Master Recordings: Report NEWS By Billboard Staff | April 21, 2014 6:09 PM EDT
Police have reportedly confiscated a collection of Jay Z’s old master recordings that had been stolen.
Producer Chancey Mahan, who worked with Jay Z from 2008-09, was allegedly found in possession of Roc-A-Fella Records master recordings from 1998-2002 that Jay and his team thought had been lost, according to TMZ.
Mahan told law enforcement that he reached out to Live Nation to tell them that he planned to auction the recordings or hand them over to them for a $100,000 “storage fee.” He continued to say that they had settled on a fee of $75,000.
When Mahan went to the storage facility on Friday (April 18) where the recordings — which are valued between $15-$20 million — were being kept, he was reportedly detained by LAPD for questioning, but not arrested. According to Mahan, LAPD were contacted by Jay Z ahead of time.
The LAPD will remain in possession of the recordings until a judge decides who has rightful ownership.
Sources tell TMZ that the Bevery Hills PD are further investigating extortion allegations against Mahan, while Jay Z’s team has filed a grand larceny complaint with the NYPD. Jay Z’s representatives could not be reached at press time.
The Blanket ‘Problem’: Balancing the Needs of Songwriters with New Forms of Radio (Guest Post) NEWS By Casey Rae | April 21, 2014 12:59 PM EDT
Casey Rae is the director of Future of Music Coalition, a national nonprofit organization for musicians. He is also an adjunct professor at Georgetown University as well as a songwriter and musician.
In 1941, “Chattanooga Choo-Choo” was the biggest hit in the land, thanks to — what else? — the radio. Radio’s popularity owes much to songs like this — and the songwriters and publishers who enabled us to hear them. Back then, the balance of power in the music industry was tilted towards the performing rights groups ASCAP and BMI, organizations that acted as gatekeepers to the world’s most valuable musical repertoires — so much so that the US Department of Justice took action that same year to balance the scales. The result of this intervention are consent decrees that, to this day, govern how radio — whether AM/FM or digital — licenses compositions and whether we, as listeners, get to hear them on the dial or on our electronic devices.
Here in 2014, where “G I R L” tops the charts, the listening environment extends far beyond the “living room radio.” New forms of broadcasting have emerged that allow listeners to customize “stations” to their individual tastes, facilitating discovery and opening up new revenue streams. The amount of compensation and the way rates are determined, however, have recently sparked intense debate. Congress is currently grappling with these issues, and there’s understandable concern in the artist community over where the evolving situation is heading.
Even with all these developments, it’s important not to lose sight of the benefits of systems that have been in place for decades and the reasons for them. Take, for example, the aforementioned consent decrees, which set the parameters for radio services and music publishers. Under these rules, songwriters are paid their share directly, meaning the songwriters’ money doesn’t go through the publishers — it’s cash in pocket to the people who composed the song. This system also means that smaller, independent publishers can just as easily make catalog available as their multinational peers. That kind of leverage is crucial.
The “blanket licenses” within the consent decrees are what made radio possible to begin with, and this arrangement remains useful to new services that may not have the capital or clout to cut direct deals. The incredible growth of Internet radio, for example, would have been inconceivable had fledgling webcasters been compelled to negotiate with the all of the music publishers individually. Without an easier way to obtain permission to play songs, Internet radio might never have happened.
Leverage for songwriters and smaller publishers, one-stop shopping for emerging platforms — seems like a pretty good system. But not everybody thinks so. In fact, in an attempt to obtain higher rates through direct deals, the bigger music companies have attempted to pull catalog from performance rights organizations for certain digital uses. Such maneuvers have been rebuffed by the courts, which have ruled that publishers are “all in or all out” with regard to the rights groups. It’s easy to see why publishers want to go direct, especially when you look at what the major labels are able to negotiate for other digital uses. Still, any short-term gain may end up creating fissures that will be difficult to repair. Balkanization means that the marketplace would once again favor the biggest players over the little guys — the very dynamic the consent decrees were put into place to correct. Then there’s the not-so-small matter of songwriter compensation. What guarantees do the creators of the music have that that their share will be fairly apportioned? We also badly need transparency in today’s music business. Direct deals aren’t exactly known for this.
Songwriters and publishers have every right to push for rates that reflect the value of their contributions, especially as Internet radio grows. Yet those of us in the business would be wise to consider the benefits of the consent decrees. Being paid directly with fair splits is a huge deal, but we should also keep the doors open for new marketplace entrants. Legal, licensed music services mean more ways for our music to be heard and more revenue streams available to us. Fewer licensed services means more excuses for pirates, as well as the same kind of gatekeepers that have prevented so much great music from being played on commercial AM/FM radio.
The promise of Internet radio and other emerging services is that they provide an alternative to the same-old-same-old programming of AM/FM. By balancing discovery with artist compensation, these new radio platforms could reshape the medium into something more appealing to creators and fans. To some extent this promise has been fulfilled: Internet radio is now the fastest growing music industry sector. No doubt existing structures for compensation could be improved, starting with Congress compelling AM/FM broadcasters to compensate performing artists, which, unlike the rest of the developed world, they aren’t obligated to do and which new radio platforms enabled by compulsory licensing are already doing.
As we haggle over the rate standards and percentages, we should also keep in mind how creators are paid. The blanket licenses, fair splits and lower barriers to entry enabled by the consent decrees are just as important as they were in Glen Miller’s era. Perhaps even more so.
Billboard welcomes responsible commentary. Please send ideas/submissions to the editor: email@example.com.
Beats Music’s First 100 Days: A Bumpy Start NEWS By Yinka Adegoke and Alex Pham | April 21, 2014 10:59 AM EDT
As Spotify allies with Sprint, labels say Jimmy Iovine and Dr. Dre’s streaming service is off to a slow start.
This article was first published in the April 26th issue of Billboard Magazine.
Two of music’s most successful brand marketers, Jimmy Iovine and Dr. Dre, are in the hot seat as label sources grouse that the first 100 days of the duo’s subscription streaming service, Beats Music, has been a disappointment and soon will face competition on the mobile platform when Sprint begins bundling Spotify with its “Framily” plans.
Spotify founder Daniel Ek will debut the rival wireless partnership — a direct challenge to Beats Music’s alliance with AT&T — on April 29, at a time when a number of label sources are expressing concerns that Beats, which launched in January, has yet to catch fire in the streaming music market.
"Jimmy is finding out this is tougher than it looks," says one senior executive. "This business takes time."
Beats Music was started by Iovine and Dre with backing led by Warner Music Groupowner Len Blavatnik in a $60 million funding round a year ago. The music service is in the process of closing a new round valued between $60 and $100 million.
Although the labels remain supportive of Beats Music for the long term, these sources estimate early subscriber numbers as “disappointing” despite a marketing launch valued in the “tens of millions of dollars.” (Beats has not released subscriber numbers, but labels have gauged use by its revenue impact.) The push included a splashy Ellen DeGeneres Super Bowl TV ad and the lucrative mobile phone bundling partnership with AT&T, the No. 2 wireless carrier in the United States, which has 110 million mobile customers. Sprint, the No. 3 carrier, has 54 million, which should put Spotify at a competitive disadvantage.
The key metric for the labels is the so-called “conversion rate" — the rate at which free trials to road-test a streaming service lead to paying subscribers. Label sources estimate the Beats Music subscriber count to be in the "low six figures." Beats representatives declined to comment for this story, but company insiders argue that subscriptions and consumer reaction has met expectations and that the "millions of people" trying out the service exceeded internal projections.
Some label sources say Beats Music should scrap its original advertising-led approach and give away more free music. “We’ve learned from Spotify that you have to fund free for a length of time with users investing time, creating playlists and getting used to the service,” says one senior executive.
Spotify has just over 2 million subscribers in the United States, according to people familiar with the company’s data. They point out that it took two-and-a-half years of educating the U.S. market and giving away millions of dollars’ worth of music for subscribers to reach that number.
Despite their concerns, label executives predict the tipping point for the subscription streaming business is near now that two of the largest mobile phone carriers are bundling Beats Music and Spotify subscription fees, at a discount, into customers’ bills — which, they contend, is an easier hurdle than having users sign up for automatic billing through the streaming site. They also say they are excited the streaming services will benefit from their wireless phone partners’ huge marketing budgets. Kantar Media reported that last year, AT&T spent $1.8 billion on marketing, while Sprint spent $765 million.
The music streaming business grew 33% in the first quarter to, Billboard estimates, $171 million, while music download sales fell 13% to an estimated $473 million.
The labels not only want more entrants to boost the market size. They also want more competition so they’re not beholden to a dominant market leader like Apple’s iTunes, which has as much as a 70 percent share of U.S. digital music revenue.
Music industry insiders widely acknowledge that Beats Music is still young and has plenty of runway to match expectations. Some label executives also contend that Iovine and Dre’s success at building Beats Electronics into a world-class brand in just five years created unrealistic expectations for their streaming service.
"We are rooting for them," says one.
On April 16, Clear Channel Music + Entertainment began what they termed an ‘alignment’ of radio station sales staffs at the local market and cluster levels. According to reports, markets of all sizes have been impacted. 22 people were rumored to be affected.
The company, which has gone through several rounds of layoffs in other areas, remains tight-lipped about the number of positions shed. A Clear Channel spokesperson did say, however, that they “are aligning our sales organizations… to give more resources, authority and accountability to the most productive members of our team so we can operate as effectively and efficiently as possible.”
According to Clear Channel’s annual 10-K SEC filing from Dec. 31, 2013, the company had $20.5 billion of total debt.
The current round of restructuring followed what Clear Channel called a “flattening [of] our senior management organization to reduce overlap.” According to reports, since Bain Capital and Thomas H. Lee Partners’ buyout of the company in 2008, most of the layoffs have not focused on sales departments until now.
While details have not been released, there are reports that staff reductions vary from one market to the next, and that part of the strategy to make sales more efficient involves the creation of call centers in each market. There is also speculation that rep group Katz Media may add regional to their current national sales work for Clear Channel.
The company, which owns 850 radio stations in the U.S. with an estimated 110 million listeners, did not divulge the names of staffers let go, except to say: “In the process some people were negatively impacted.” The only layoffs confirmed to this point have taken place in the Orlando and West Palm Beach, Fla. offices. As of now, the only person known to have been let go was West Palm Beach Account Coordinator Donna Schaneen.