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Court Gives a Victory to Pandora Over Licensing Streaming Music

September 18, 2013 by

The ruling, by Judge Denise L. Cote of United States District Court in Manhattan, is a blow to music publishers, who have tried to get the best royalty rates for digital music by limiting the extent that performing rights societies like Ascap and Broadcast Music Incorporated represent their songs. The ruling could also hurt the societies themselves if they are perceived as preventing the publishers from getting higher rates.

Two years ago, the industry’s biggest publishers began withdrawing digital rights to their music from Ascap and BMI, forcing companies like Pandora to negotiate directly for a license to stream the music.

Sony/ATV, the world’s largest publisher, has said it received a 25 percent higher rate by licensing its songs to Pandora directly.

Pandora argued in a motion for summary judgment that allowing publishers to withdraw their digital rights violated Ascap’s longtime consent decree, which says that the organization must license its songs to any service that asks. The judge agreed, saying that Ascap must make all the songs in its catalog available to Pandora through 2015, when its current licensing terms with Internet radio provider expire. If Ascap licenses a song for some purposes, the judge ruled, it must for others – like streaming — as well.

“ ’All’ means all,” Judge Cote wrote in her decision. The ruling precedes a larger rate-setting trial between Pandora and Ascap, which will begin on Dec. 4.

In a statement, Christopher Harrison, Pandora’s assistant general counsel, said, “We hope this will put an end to the attempt by certain Ascap-member publishers to unfairly and selectively withhold their catalogs from Pandora.”

John LoFrumento, Ascap’s chief executive, said he looked forward to the trial. “The court’s decision to grant summary judgment on this matter has no impact on our fundamental position in this case that songwriters deserve fair pay for their work, an issue that the court has not yet decided.”

The larger effect of the ruling is unclear. On Wednesday, a spokesman for Sony/ATV said he expected that the terms of the deal would not change because of Judge Cote’s ruling.

BMI, which like Ascap represents a huge portion of the music available in the United States, operates under its own consent decree, and is governed by a different federal rate court. BMI sued Pandora in June over rates, a few days after Pandora said it would buy a small radio station in South Dakota to qualify for rates enjoyed by terrestrial broadcasters. Ascap has also asked the Federal Communications Commission to block that sale.

Pandora, which has more than 70 million regular users, was once the darling of the music world. But over the last year it has become one of industry’s biggest opponents as it pushes for lower royalty rates. Last year, it heavily promoted the Internet Radio Fairness Act, a failed bill in Congress that could have reduced what services like Pandora pay record companies and performing artists.

Pandora’s efforts to reduce costs and increase its advertising revenue have helped push the company’s stock higher; by Wednesday afternoon, shares were up about 2 percent.

Article source: http://www.nytimes.com/2013/09/19/business/media/court-gives-a-victory-to-pandora-over-licensing-streaming-music.html?partner=rss&emc=rss

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Songwriters Sue to Defend a Summer Hit

August 16, 2013 by

That is the question at the heart of a lawsuit that Mr. Thicke and his co-writers, Pharrell Williams and Clifford Harris Jr. (better known as the rapper T.I.), filed in federal court on Thursday against Gaye’s three children. According to the suit, Mr. Thicke and his colleagues “reluctantly” went to court in order to protect their song from claims by the Gaye family — apparently made privately — that “Blurred Lines” copies “Got to Give It Up.”

“Representatives of the Gayes have recently notified plaintiffs that, if plaintiffs do not pay a monetary settlement of the Gayes’ claim, the Gayes intend to initiate litigation for copyright infringement,” says the suit, which was filed in United States District Court in Los Angeles and was first reported by The Hollywood Reporter.

Mr. Thicke and Mr. Williams have spoken about “Got to Give It Up” only as an inspiration for “Blurred Lines.”

“Pharrell and I were in the studio and I told him that one of my favorite songs of all time was Marvin Gaye’s ‘Got to Give It Up,’ ” Mr. Thicke said in an interview with GQ. He recalled that he told his partner, “We should make something like that, something with that groove.”

But suit contends that there is no foul. “Being reminiscent of a ‘sound’ is not copyright infringement,” it says.

“Blurred Lines” has sold more than four million copies in the United States, and its video has been viewed 138 million times on YouTube.

In addition to the Gaye family, the suit also names as a defendant Bridgeport Music, a publisher representing songs by George Clinton’s band Funkadelic. According to the suit, Bridgeport has also contended that “Blurred Lines” infringes on a Funkadelic song, “Sexy Ways.”

Mr. Clinton, who has a long history of his own disputes with Bridgeport, posted to Twitter in support of Mr. Thicke and Mr. Williams, saying there was “no sample” of Funkadelic in “Blurred Lines.”

A lawyer said to represent the Gayes as well as Bridgeport did not immediately respond to a request for comment.

Article source: http://www.nytimes.com/2013/08/17/business/media/songwriters-sue-to-defend-a-summer-hit.html?partner=rss&emc=rss

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Judge Considers Limits on Apple’s Future E-Book Deals

August 9, 2013 by

In a sometimes testy hearing in United States District Court in Lower Manhattan, Judge Denise L. Cote said that she was considering a plan in which Apple would negotiate contracts with publishers in a staggered fashion — possibly six to eight months apart — to prevent them from engaging in another price-fixing conspiracy.

Judge Cote ruled in July that Apple colluded with publishers to raise the price of e-books before the introduction of its iPad in 2010. Those charges were brought against Apple and five major publishers by the Justice Department in 2012. The publishers all settled, but Apple held out and went to trial.

The judge’s proposal was a scaled-back version of the guidelines put forth by the government last week, when it suggested that Apple be forced to end its agreements with the five settling publishers and avoid entering similar agreements with producers of movies, TV and music. Apple responded by calling the proposal a “draconian and punitive intrusion” into its business.

The publishers who settled also objected to the Justice Department’s proposed remedy, saying that it would fundamentally change their existing settlements.

In court on Friday, Judge Cote said that she wanted an injunction to be tailored so that it would encourage innovation in a rapidly changing e-book business and yet prevent collusion on price in the future.

“I have no desire to regulate the App Store,” she said.

But Judge Cote also slammed the publishers for lacking “contrition” and said that she feared future collusion in the e-book market. Although the publishers eventually agreed to settlements, none of them admitted wrongdoing.

Judge Cote said that the publishers had played “a rough and tumble game” and engaged in “blatant price fixing.”

“None of the publisher defendants have expressed any remorse,” she said. “They are, in a word, unrepentant.”

Lawyers for Apple and the government said in court that they would meet in the next week and discuss the judge’s proposal. Another hearing is expected later this month.

Apple and the Justice Department declined to comment.

Hachette Book Group, HarperCollins and Simon Schuster settled in April 2012; Penguin Group USA and Macmillan settled later. Penguin has since merged with Random House, which was not named in the lawsuit.

Article source: http://www.nytimes.com/2013/08/10/technology/judge-considers-limits-on-apples-future-e-book-deals.html?partner=rss&emc=rss

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The Media Equation: Why Barnes & Noble Is Good for Amazon

July 14, 2013 by Leave a Comment

In one aisle, a father and daughter were having a spirited generational discussion over the side-by-side covers of “The Great Gatsby,” one of which bore an image of Leonardo DiCaprio. For reasons I wasn’t quite clear about but nonetheless found charming, an older couple used a book on vegetarian cooking to cover up a copy of “The Art of Seduction” on the shelf. Nearby, two apparent siblings, one sporting pink hair and the other purple, traded loud opinions over the True Crime display.

Watching the readers lounge in chairs with a view of Route 3, it was hard to reconcile the pageantry of retailing with the brutal recent headlines about the book business.

At the beginning of the July, the Big Six publishers became the Big Five with the blending of Penguin and Random House. At the beginning of last week, the chief executive of Barnes Noble left the company after a grim earnings report that highlighted a failed strategy to have the company’s Nook device compete in the crowded tablet space.

Then on Thursday, Judge Denise L. Cote of United States District Court in Manhattan issued a withering decision against Apple, writing that the company had conspired with the major publishers to fix the price of e-books in an effort to thwart Amazon’s momentum.

So far, what has been bad for the industry has not yet hit consumers directly. If they are among the many millions of people enthralled by CBS’s “Under the Dome,” and decide to read the giant Stephen King novel that inspired it, they can hop on Amazon and buy it with a click for $13.99. Or they could avoid its door-stopping heft and spend just $7.99 for the Kindle version.

No wonder that last year e-book sales boomed, including a 42 percent rise in sales of fiction. Net revenue for publishers also climbed more than $1 billion in 2012, to $15 billion, according to BookStats, an annual survey of the book business.

But while publishers revel in the robust margins provided by e-books — no manufacturing, no shipping and no remaindering — the growth of Amazon leaves them as secondary characters in a business they used to control.

Apple may be the one that was found guilty of setting prices, but Amazon has the kind of market power that allows it to set prices unilaterally. The company is already pulling back on discounts on scholarly and small-press books.

Barnes Noble tried to keep up with the technological shift, but the company’s earnings were perforated by a $177 million loss from its Nook division, and that news took out William Lynch Jr., the chief executive, and threw a deep scare into publishers.

In my view, Barnes Noble is a company that did the right thing, and got clobbered anyway. When most media companies get into the device business, what pops out is clunky and useless, but the Nook is an excellent reading device that drew critical praise and, initially, buyers. At a time when legacy media companies are derided for letting the future overtake them, Barnes Noble aggressively innovated.

Amazon, however, not only had the Kindle, but consumer relationships, inventory and technical know-how that could not be overcome. And as consumers moved from e-readers to tablets to take advantage of multiple functions like video, the Nook ended up in a corner. During last Christmas season, Nook sales were down 12.6 percent compared with the period a year earlier.

But the current spate of bad news may mask underlying strengths. As Bloomberg News pointed out on Thursday, Leonard Riggio, the 72-year-old architect of Barnes Noble’s national buildup, is still considering buying the physical stores and taking them private, in part because the fundamentals of that business are still solid, if not spectacular. In the fiscal year that ended in April, the retail stores and Web site generated earnings of $374.2 million before interest, taxes, depreciation and amortization, a 16 percent increase, even as sales declined almost 6 percent.

One of the parties that might want to root for Barnes Noble is Amazon. Sales of e-books fell immediately after Borders went under, leading some to suggest that reduced opportunity to browse the physical artifact resulted in less online buying.

Having a bookstore in your neighborhood, as opposed to one that is bookmarked on your browser, is an invitation. Not long ago, I was walking by an airport bookstore and thought, “What if this was the only place to buy books?” Similar to Hollywood, only the blockbusters would get shelf space.

After Borders called it quits two years ago this week, Barnes Noble became the last big chain where publishers could get the exposure for their books that allows readers to discover them, and to sell all manner of books big and small that are still part of the foundation of the industry.

Morgan Entrekin, publisher at Grove/Atlantic, says everyone has skin in the retail game.

“We need to have a diversity of distribution channels to be healthy, and Amazon may want it all, but they are smart enough to know that,” he said. “People can’t live online all the time.”

Bookstores offer discoverability, not just the latest Dan Brown or Carl Hiaasen book on the front table, but sometimes treasures deep in the stacks, a long tail of midlist authors and specialty books. Even as the book business consolidates, the physical object displayed in an actual place will continue to be an important part of the ecosystem.

Let’s hope it survives. From the balcony of the Barnes Noble, what looked like the buzz of literary commerce was less impressive on closer inspection. The checkout line was busy because there were only two people working the registers. And the coffee shop was not so much an amenity for consumers-on-the-go than a spot where people camped out and pawed over magazines they had not bought and probably never would.

On the way out of the store, I saw the father and daughter who were arguing over the “Gatsby” cover. They had bought neither, but they probably settled on which one they were going to buy on Amazon.

Article source: http://www.nytimes.com/2013/07/15/business/media/why-barnes-noble-is-good-for-amazon.html?partner=rss&emc=rss

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DealBook: S.&P. Urges Judge to Dismiss Civil Case

April 22, 2013 by Leave a Comment

Floyd Abrams, a partner in Cahill Gordon Reindel, is representing S. P.Todd Heisler/The New York TimesFloyd Abrams, a partner in Cahill Gordon Reindel, is representing S. P.

Standard Poor’s, accused of inflating its ratings to win business during the boom in mortgage investments, urged a judge on Monday to dismiss the federal government’s civil case against it, saying the Justice Department had built a faulty complaint on “isolated snippets” of conversation rather than evidence of real wrongdoing.

The ratings agency, the United States’ largest, was responding to fraud accusations filed in February in the first significant federal action against the ratings industry since the mortgage bubble burst. The Justice Department’s lawsuit accused S.P. of knowingly giving complex packages of mortgages higher ratings than they deserved, stoking investor demand for the securities and driving up prices to where they crashed, setting off the global financial crisis.

“From start to finish, the complaint overreaches in targeting S.P.,” the firm’s lawyers said in a brief filed in United States District Court for the Central District of California, in Los Angeles.

“S.P.’s inability, together with the Federal Reserve, Treasury, and other market participants, to predict the extent of the most catastrophic meltdown since the Great Depression, reveals a lack of prescience, but not fraud,” the brief said. To have a valid case, the Justice Department would have had to demonstrate that Standard Poor’s knew what the correct ratings should have been, it said, and it had not done so.

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S.P. is seeking to persuade Judge David O. Carter that the Justice Department does not have a case at all, and is not asking him consider the merits and rule on them. If Judge Carter rules against S.P., the case will keep moving forward. A hearing is scheduled for May 20.

Separately, S.P. has been seeking to have more than a dozen similar fraud complaints, filed in state courts by state attorneys general, moved into federal court and combined for pretrial purposes. The states are generally suing under their own state consumer protection statutes. The federal case, accusing fraud, would have a higher standard of proof.

The Justice Department had not yet issued a response.

Much of the Justice Department’s 128-page complaint deals with the fact that S.P. promoted its ratings as “objective, independent,” and “uninfluenced by any conflicts of interest,” among other desirable qualities. The federal government then describes numerous messages and conversations among ratings analysts that suggest a lack of objectivity or independent thinking. The conversations took place between 2004 and 2006, and the Justice Department uses them to make its argument that Standard Poor’s knew its ratings were false at the time that it issued them.

In its brief, S.P. states that these “snippets” of conversation are devoid of meaning under the laws that govern fraud. It says that its many claims of objectivity, independence and “analytic excellence at all times” add up to “classic puffery,” the vague and overblown language that businesses often use to describe themselves as “the best,” even when no one has agreed on which product or service is best. S.P. cited other cases in which such claims were found to be “non-actionable,” and said puffery was “too general to serve as the basis for a fraud claim.”

If Judge Carter rules in S.P.’s favor on these boasts, the firm’s lawyers hope that all the damaging conversational snippets will also be thrown out. That would leave the final section of the Justice Department’s complaint, which lists 33 individual securities, called C.D.O.’s, or collateralized debt obligations, which were rated by S.P. from March to October 2007.

The C.D.O.’s had been created by investment bankers by combining and rearranging other securities, which were composed, in turn, of many residential mortgages, including some that were classified as subprime.

The Justice Department noted that in the spring and summer of 2007, many subprime mortgages from certain years — known as vintages — had begun to have delinquencies; it also said the 33 C.D.O.’s in question contained mortgages from those vintages. It said S.P. “deceived financial institutions that invested in these C.D.O.’s into believing that S.P.’s ratings reflected its true current opinion regarding the credit risks of these C.D.O.’s, when in fact they did not,” Justice said in its complaint. It said the financial institutions lost more than $5 billion on the 33 C.D.O.’s.

But S.P. argued in its brief that to have a valid claim of fraud, the Justice Department had to show how the particular residential-mortgage securities within the C.D.O.’s should have affected the ratings, and it did not do so.

“This failure is fatal to the government’s fraud claims,” the agency said in its brief.

Article source: http://dealbook.nytimes.com/2013/04/22/s-p-responds-to-mortgage-ratings-case/?partner=rss&emc=rss

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Media Decoder: Huffington Post Is Target of Suit

April 12, 2011 by Leave a Comment

The Huffington Post is the target of a multimillion dollar lawsuit filed in United States District Court in New York on Tuesday on behalf of thousands of uncompensated bloggers.

Jonathan Tasini is leading a $105 million lawsuit against the Huffington Post on behalf of unpaid bloggers.Gianni Cipriano for The New York Times Jonathan Tasini is leading a $105 million lawsuit against the Huffington Post on behalf of unpaid bloggers.

The suit seeks at least $105 million in damages for more than 9,000 writers.

The case raises significant unsettled questions about the rights of writers in the digital age and, at the very least, promises to offer a palette of colorful characters on each side.

The legal battle is being led by Jonathan Tasini, a labor advocate who was the lead plaintiff in a pivotal freelancers’ rights ruling in 2001. On Tuesday, Mr. Tasini unleashed his outrage over The Huffington Post’s practices, likening the Web site’s founder, Arianna Huffington, to a slave owner.

“The Huffington bloggers have essentially been turned into modern-day slaves on Arianna Huffington’s plantation,” Mr. Tasini said in a conference call with reporters. He vowed to picket Ms. Huffington’s house and turn her into an outcast in the liberal circles where she made her blog so prominent.

“It’s very important to understand the hypocrisy here,” he continued. “We are going to make Arianna Huffington a pariah in the progressive community.”

He concluded the call by addressing Ms. Huffington directly. “Until you do justice here, your life is going to be a living hell.”

Ms. Huffington’s spokesman, Mario Ruiz, said the suit was without merit and disputed the claim that the bloggers deserve compensation. “As we’ve said before, our bloggers use our platform — as well as other unpaid group blogs across the Web — to connect and help their work be seen by as many people as possible,” Mr. Ruiz said. “It’s the same reason people go on TV shows: to promote their views and ideas.”

The Huffington Post became a popular and potentially valuable target for people seeking compensation for unpaid blogging after AOL purchased the site for $315 million this year. That deal enriched Ms. Huffington and many of her business partners, much to the dismay of people who had worked for the site when it was just a start-up.

Mr. Tasini said Tuesday that the sale was what motivated a lot of bloggers to speak up and demand payment.

Mr. Tasini has long been active in politics and labor rights issues. He ran against Hillary Rodham Clinton for the Democratic nomination for the United States Senate in 2006 on an antiwar platform. He was the lead plaintiff in a case against The New York Times that led the Supreme Court to rule in 2001 that newspaper and magazine publishers had infringed the copyrights of freelance contributors by making their articles accessible without permission in electronic databases after publication.

Mr. Tasini is himself a Huffington Post blogger, though he has not written for the site since Feb. 10. Mr. Tasini said Tuesday that he would consider anyone now blogging for Ms. Huffington a “scab.”

Article source: http://feeds.nytimes.com/click.phdo?i=8abb235d7c05198d8d933682e27c9118

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DealBook: Middleman in Insider Trading Triangle Says There Was Once a Fourth

April 12, 2011 by Leave a Comment

Kenneth T. Robinson leaving federal court in Newark on Monday. He is helping the government with its case against two others.Craig Ruttle/Bloomberg NewsKenneth T. Robinson leaving federal court in Newark on Monday.

8:34 p.m. | Updated

A man accused of being the middleman in an insider trading operation that spanned nearly two decades said on Monday that at least one other person — someone not previously disclosed — was involved in the suspected scheme.

The disclosure came as the middleman, Kenneth T. Robinson, pleaded guilty to securities fraud in the United States District Court in Newark. Mr. Robinson has agreed to cooperate with the government’s case against co-defendants Matthew Kluger, once a lawyer at some of the nation’s top merger and acquisition law firms, and Garrett Bauer, a trader.

Federal prosecutors in New Jersey filed charges on Wednesday accusing Mr. Kluger of stealing secret information from his law firms about pending mergers and leaking it to Mr. Bauer, who used the inside information to buy the stocks of companies involved in the deals. The operation netted the men more than $34 million, prosecutors said on Monday, raising their earlier estimates by $2 million.

On Monday, Mr. Robinson said he shuttled the information — and cash — between Mr. Kluger, 50, and Mr. Bauer, 43. The men went to great lengths to avoid detection, plotting their actions on pay phones and prepaid cellular phones, Mr. Robinson said.

Mr. Kluger, prosecutors said, began the scheme in 1994, when he was a summer associate at the Wall Street law firm Cravath Swaine Moore. He continued leaking the information, with some interruptions, when he joined Skadden, Arps, Slate, Meagher Flom and Wilson Sonsini Goodrich Rosati. Mr. Robinson said in court on Monday that Mr. Kluger also leaked inside information while he was a lawyer at Fried Frank.

Mr. Robinson, 45, further disclosed for the first time that at least one other person was involved in the scheme. Mr. Robinson said in court that about 10 years ago, he passed insider tips from Mr. Kluger to another unnamed person.

The scheme halted in 1999, when the men apparently feared that authorities were on their trail. The scheme restarted in 2001, when Mr. Kluger worked at Fried Frank, Mr. Robinson said.

Over the course of 17 years, Mr. Bauer traded on insider tips surrounding some 15 mergers and acquisitions, Mr. Robinson said, though he could not recall an exact number.

“It was very hard to remember every one,” he told the judge.

Mr. Robinson, appearing in a dark suit and yellow tie, pleaded guilty to one count of conspiracy to commit securities fraud and two counts of securities fraud.

Mr. Robinson signed a plea agreement that could send him to prison for up to seven years. But the judge, Katharine S. Hayden of the United States District Court of New Jersey, said on Monday that she could decide to overrule the agreement, as well as impose thousands of dollars in fines.

Mr. Robinson is the linchpin of the government’s case.

Authorities searched his home around March 8, and shortly thereafter, he started secretly recording conversations with Mr. Kluger and Mr. Bauer, his close friends.

“In many criminal cases, the testimony of one person can be instrumental in our investigation and prosecutorial strategy,” Paul Fishman, the United States attorney for New Jersey, said on Monday.

Judge Hayden agreed to let Mr. Robinson remain free on a $2 million bond until his sentencing hearing, which is scheduled for July.

In a separate hearing on Monday afternoon, Mr. Bauer was released on a $4 million bond into the custody of his mother. Mr. Bauer, who appeared in court in designer jeans and a sweater, will remain on electronic monitoring in his $6.7 million home on the Upper East Side of Manhattan. He has been banned from trading securities.

Authorities have seized many of Mr. Bauer’s assets, including $290,000 from Citibank accounts, $11.6 million from a trading account and about $9 million from a Goldman Sachs account.

Article source: http://feeds.nytimes.com/click.phdo?i=f077c12565548de838ae0df4c6bb4c26

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