And, yes, Google still plans to launch a separate subscription music service later this year, via its YouTube site.

Make sense? Of course not.

It makes lots of sense for both YouTube and Play, which was built for Google’s Android devices, to sell music subscriptions.

YouTube is the world’s biggest free music service, which could make it a fantastic funnel for a Spotify-like paid offering, which can also help solve some problems with the music labels.

And if you’re going to have the world’s dominant mobile platform, then you ought to be the one selling music subscriptions that work on it, because that could help your customers stick to that platform. No sense in handing that feature over to Spotify, which works fine on iPhones and Kindles, too.

And something that knitted Android and YouTube together — combining a mix of free, paid, mobile, audio and video — could be great.

But that’s not what we’re going to see this week.

Music folks I talked to today expect the Google Play version to be paid-only — no free teaser tier, like Spotify has — and without any features that will set it apart from rivals.

And when YouTube launches its service — as best as I can tell, talks with the Big Three labels are all but completed — that service will likely run parallel to, but not connected with, the Play version. Which means none of the free music that people can get on YouTube will help sell Play subscriptions.

This set-up supposedly stems from former Android boss Andy Rubin’s insistence on controlling his own fiefdom (“Andy and [YouTube head] Salar Kamangar couldn’t be in the same room together,” said a music executive who has worked with both of them). But now we’re in the Sundar Pichai era, and he said he’s all about peace and love.

I’ve heard people in and outside of Google suggest that at some point down the line the two services could be knitted together. After all, just because something gets announced at Google I/O doesn’t mean it will show up. And getting something out there before it’s fully baked is standard operating procedure for Google.

But music subscriptions are an old idea that still really haven’t caught on in a big way. Spotify has six million paying customers worldwide, but its backers concede that it’s still a long way from mainstream. And none of its competitors are even close to those numbers.

If Google really wanted to make subscriptions work, instead of simply offering them as a feature most people won’t use — like the music store it opened up in 2011 — it ought to take the time to get this one right the first time.

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• With Sights Set on Spotify (And Pandora), Google Launches a Music Subscription Service
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• Google Doubles Down on Music Subscriptions, Which Means Google Isn’t Serious About Music Subscriptions
• Where Are They Now? Google I/O 2012 Edition.
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But when it comes to digital media, that doesn’t work. That’s the gist of a new Federal court ruling, which says that startup ReDigi can’t do what it says it can do — let users resell songs they bought on iTunes.

In a judgment filed Saturday, U.S. District Judge Richard Sullivan sided with Universal Music Group’s Capitol Records, which had sued ReDigi for copyright violation.

Sullivan’s argument, in a nutshell: Unless the copyright owner gives you explicit permission to do so, you can’t resell a digital media file. ReDigi used multiple arguments to support its case, including the “first sale doctrine” that supports companies like Netflix when it comes to physical goods; you can see Sullivan shoot them all down in his decision (also embedded below, courtesy Jordan Golson).

Sullivan granted a partial summary judgment in Universal’s favor, and told both sides to report back to him by April 12 for next steps.

Capitol Records v. ReDigi Judgment by MacRumors

Spoiler alert! No one outside of a handful of Googlers really knows.

But we can make some educated guesses:

As previously reported, Google’s Android unit wants to launch a subscription service.

This one’s a no-brainer. Music is a key part of mobile, and Andy Rubin doesn’t want to cede that to outsiders like Spotify and Pandora. (Android’s effort to break into music via a download store and a scan-and-match locker have had little take-up.) And this one is relatively easy for music owners to sign off on, since they’ve already bought into the Spotify model — free ad-supported music that pushes users into a $10-a-month mobile offer.

As previously reported, Google’s YouTube unit wants to do … something with a subscription service.

At a minimum, YouTube is trying to collect the rights to sell music, in both audio and video form, via subscriptions. But it hasn’t told music owners what it actually wants to do with those rights, and it hasn’t shown outsiders a prototype of what it’s working on.

This one also has some logic to it, but it’s not quite as clear-cut. More on that shortly.

Before we get there, though: Regardless of what you’ve read about timelines (“imminent,” or “Q3,” or “2013,” or “sometime” are all options), none of this can happen if Google doesn’t get deals with the music owners.

Right now, as Billboard reports, Warner Music Group has signed on to both ideas. I hear that Universal Music Group, the world’s biggest music label, is interested, but is at least a month or so removed from inking a deal. But industry sources say that Sony Music is resistant to all of this. For now.

Even if Google gets all three of the big labels on board, it’s not home free. It needs buy-in not just from the people who own music, but from the ones who own the publishing rights — the underlying compositions for each song.

Sometimes those rights are owned by the big-three labels, but sometimes they’re not. And particularly outside the U.S., Google will need to make peace with the agencies that represent music owners. That could be tough, given that its relationship with some of them is frequently fractious.

So there are lots of ways this could get slowed down/crippled/derailed.

One encouraging sign that all of this could get done is the fact that Google is no longer insisting that music owners negotiate their deals with both an Android team and a YouTube team. Instead, YouTube content head Robert Kyncl is representing the search giant in all of its talks — though the deals are still going to get done separately.

Small beans? Sure. But at least it shows the Googlebots are beginning to grok the way the humanoids in the content business would like to work.

For argument’s sake, let’s say Google does get all of its deals done. What next?

The Android scenario is relatively easy to map out. Google has yet to show a competence for selling content, but its huge installed base will still make it a serious contender. And that will be an issue not just for Spotify, but Pandora and Apple and anyone else with a vested interest in digital music. At a minimum, it could make Android phones more attractive and/or harder to switch away from. And that may be enough to make Rubin happy.

The YouTube version is harder to nail down. As many people have pointed out, YouTube already functions as the world’s biggest digital music service. That’s in part because of the official music videos it serves up in conjunction with Vevo, the video company it is set to invest in.* But mostly because of all the music that its users upload to the service, with homemade visuals and without permission, which ends up staying there with the blessing of the music owners.

So why does it need to sell music? As Eliot Van Buskirk notes, all of that free music may be the reason YouTube is talking about subscriptions. Offering a paid version may make the music owners more likely to keep their free stuff up there, too.

Background: In olden days, music owners got paid a small fee every time someone played their stuff on YouTube. All those small fees added up, which was nice for the labels, but a real problem for YouTube, particularly when it didn’t have much of an ad business to absorb those costs.

Fast-forward to today: Now the music owners get a cut of the ads YouTube shows when it plays their songs. Much better for YouTube, but music owners grumble that they’re not making enough. And their deals are all up for renewal right now.

Subscriptions can solve problems for both sides. YouTube can tell music owners that it’s providing a funnel to encourage people to actually pay for music. And the music owners can let YouTube hang on to what may be its most valuable asset, which it can keep offering for free.

I don’t believe music subscriptions indicate a real change in Google’s plans for YouTube, though. As far as I can tell, Google fundamentally sees the site as a giant advertising platform, and I don’t think a new music product changes that. Just like the talks YouTube is holding with other content owners about other subscriptions.

I also don’t see how YouTube’s audience, which skews very young and probably hasn’t bought a thing from Google in their lives, is likely to pay for any of this stuff.

But if subscriptions — or even the idea of subscriptions — help convince YouTube’s partners to keep supplying their stuff to the site, then that’s probably good enough to keep everyone happy.

*As far as I can tell, none of the subscription talk affects Google’s plan to renew its Vevo deal and put money in the site. The reason the Vevo deal hasn’t been finalized, I’m told, is because its closing has always been contingent on Google wrapping up other deals with the labels, including subscription rights, as I reported earlier.

YouTube and its owner Google have agreed to buy a minority stake in Vevo, according to people familiar with the deal, which hasn’t been finalized.

If it happens, it will be the second time in the last year that Google has invested directly in a video company that relies on YouTube for distribution. In May, Google put money into Machinima, the Web video network aimed at gamers.

If the deal does get done, it will allow the two sides to continue with a symbiotic — and at times contentious — relationship that has gone on for three years: Vevo gets to distribute its clips on the world’s largest video site, and YouTube gets to keep showing music videos from the big labels, which account for many of its most popular clips.

I don’t know the size of the planned transaction, but I’m told it will be bigger than the $35 million funding round Google and YouTube led in Machinima last year. Like Hulu, the TV site, Vevo is a complicated joint venture between content owners — in this case Universal Music and Sony Music — and an outside investor — in this case Abu Dhabi Media.

But while both YouTube and Vevo have signed off on the investment and a renewed distribution deal that includes long-term licenses for the videos, the deal hasn’t closed and could still be derailed.

For starters, the deal is supposed to get done at the same time that YouTube signs separate agreements with Sony and Universal, which cover subjects like user-uploaded videos that incorporate music the labels own. And relationships between the two labels — and between the labels and YouTube — have been rocky at times.

That’s one of the reasons Vevo had previously explored alternate distribution deals with Facebook and Viacom’s MTV over the past year.

But it makes the most sense for YouTube and the labels to work together. The labels would like to see more money than they currently get from YouTube, but it would be hard for them to walk away from the revenue they’re already getting.

And while YouTube has worked hard to attract more “professional” content on the site — which is why it has been writing advances to video makers to create “channels” on the site — the labels’ videos remain enormously popular with its young audience.

Meanwhile, both the distribution and the investment will be crucial for Vevo, which operates a very thin-margin business.

Under both the old deal and the new one the company is set to strike, Vevo hands over about a third of its revenue to YouTube, and more than 50 percent of its revenue to the labels, which doesn’t leave it much in the way of an operating budget. Last year, Vevo CEO Rio Caraeff said his company was doing more than $150 million a year.

Iovine’s pitch: It took guys who know music and culture to sell high-end headphones to the mainstream. And it’s going to take the same skill set for music subscriptions, which have been around for about a decade but are only now getting some traction.

In addition to Beats, Iovine has a very long resume and a very powerful perch at Universal Music Group, the world’s biggest label, which doesn’t mean he’ll succeed. But he’s certainly worth watching.

Iovine and his team aren’t talking about details yet, but he is more than happy to talk about the history behind his next venture — he says he wanted to get into music subscriptions before he got into headphones — and why he thinks he can do better than Rhapsody, MOG, Rdio, Spotify, Deezer and the other competitors on their way.

Best to let him tell it in his own words, so here are excerpts from an interview we conducted yesterday at CES, where he was getting ready to announce his new hire, Ian Rogers.

On early efforts to get into the subscription business, and pitching former Apple CEO Steve Jobs on the concept:

I always felt that our content was really valuable, and that it could help the tech guys with differentiation. The tech companies really didn’t see that. The guy that smelled it the most was Steve, obviously.

Once I went to see [Intel executive] Les Vadasz. I was running Interscope at time. He was a very nice man and he listened to me. I said, “You know, we could really help you guys.” He said, “You know, Jimmy, it’s a really wonderful story. But not every industry was made to last forever.”

So I was like “wow,” and I called [former Universal head] Doug Morris, and I said, “We’re fucked. These guys don’t want to take over our land — they want to come over and take our water and go back. They like where they are.” So from that point on, I was like, “You know what, this is going to cave. We need subscription. We really do.” I’ve just been single-minded about it since then.

In 2002, 2003, Doug asked me to go up to Apple and see Steve. So I met him and we hit it off right away. We were really close. We did some great marketing stuff together: 50 Cent, Bono, Jagger, stuff for the iPod — we did a lot of stuff together.

But I was always trying to push Steve into subscription. And he wasn’t keen on it right away. [Beats co-founder] Luke Wood and I spent about three years trying to talk him into it. He was there, not there … he didn’t want to pay the record companies enough. He felt that they would come down, eventually.

I don’t know what [Apple media head] Eddy Cue would say — I’m seeing him soon — but I think in the end Steve was feeling it, but the economics …he wanted to pay the labels [for subscriptions], but [the fees were] not going to be acceptable to them.

Why tech companies can’t succeed at music subscriptions:

I was shocked at how culturally inept most consumer electronics companies are. And what I also learned is that you can build Facebook, you can build YouTube, you can build Twitter — you can be a tech company and do that. But those [sites] program themselves. Subscription needs a programmer. It needs culture. And tech guys can’t do that. They don’t even know who to hire. They’re utilities.

Why Beats/Daisy will be different:

[Other music subscription] companies, these services, all lack curation. They call it curation; there’s no curation. That’s what we did as a record label, we curated. There’s 150 white rappers in America; we served you one.

We are heavy on curation, and we believe it’s a combination of human and math. But it’s a give and take.

Right now, somebody’s giving you 12 million songs, and you give them your credit card, and they tell you “good luck.” You need to have some kind of help. I’m going to offer you a guide. You don’t have to use it, but it’s going to be there, and it’s going to be a trusted voice, and it’s going to be really good.

Why making headphones is good practice for getting into music subscriptions:

Steve called me in once. He said, “You know something, you should feel really good. You’re the only guys from software that ever built a piece of hardware successfully.” That means that we can be the guys who cracked this code as well. Because we live in both worlds. We’re actually arguably better at this than at hardware. You know why they call it hardware? It’s really hard.

And the two sides won’t have a new deal in place by then, according to people familiar with negotiations.

But that doesn’t mean Vevo’s videos will disappear from YouTube, or that Vevo.com will go dark. The existing contract has what amounts to a 120-day extension, which essentially means that the real deadline for Vevo and Google won’t roll around for another four months.

That said, people familiar with the negotiations say the two sides are in “intense” discussions, with the hopes of wrapping something up much sooner than that.

That seems likely, given that the two sides don’t really have a choice: Vevo needs distribution, and Google needs Vevo’s content.

Earlier this year, that outcome wasn’t as clear. Press reports floated the notion that Vevo might try to work a deal with Facebook, the only Web player big enough to give Google a run for its money. But those discussions didn’t lead anywhere, sources said.

No comment from Vevo. Here’s one from a YouTube rep: “While we don’t comment on individual negotiations, we always hope to renew our relationships with valuable partners.”

Vevo is owned in part by Universal Music Group and Sony Music, the industry’s two biggest labels. It’s supposed to be a “Hulu for Music Videos” — a joint venture that gives content owners a digital hub of their own.

When Vevo launched three years ago, it solved a problem for Google. It allowed YouTube to keep generating views from the videos — a crucial chunk of content for the site — without having to fork out licensing fees every time someone watched a clip. Instead, the two sides share advertising revenue.

Since then, Vevo has claimed that the new structure has worked well. Earlier this year, Vevo CEO Rio Caraeff said the company had generated $150 million in annual sales.

But while Caraeff has worked hard to get eyeballs to his videos without YouTube’s help, via outlets like iPhone and Xbox apps, the company is still dependent on Google — in the U.S., YouTube accounts for two-thirds of Vevo’s views.

Google, meanwhile, is less dependent on music videos than it was three years ago, because it has worked hard to bring in other “professional” content of its own.

But losing the clips would still be a huge problem for the site. Check out the list of YouTube’s six most popular videos of all time, and count the number of them supplied by Vevo. Or I can save you some time: Vevo accounts for five of them.

Here, for better or worse, is one:

If Mr. Branson were to bid on Virgin, he would likely do so in partnership with Patrick Zelnik, a French music executive who owns the independent Naive Records label in Paris, this person added.

Read the rest of this post on the original site »

Do whatever you want on Saturday night, and on Sunday morning, you can see all of the show online, legally, for free. Your cyber-pals will have already told you which clips you should seek out, and NBC has gotten so good at this that it now hires a “social media marketing” firm to seed the Internet with embeddable highlights.

Easy. Except when it’s not. Periodically, NBC ends up in a position where it can’t use the Internet to distribute its TV show, because someone complained about a copyright issue after the show aired.

And that’s apparently what happened this weekend to this excellent “Game of Thrones” parody, which you can see on Gawker but not NBC or Hulu.  (The clip stays up on Gawker, apparently, because either no one complained or because Gawker hasn’t listened to their complaints; I’ve asked Nick Denton and company for clarification.)

So who griped? Not us, say HBO’s reps, and that makes sense, since the clip is first and foremost a great ad for the pay channel.

“Rights issue,” says NBC, without elaborating. So the best guess here is that someone who owns the rights to the “Game of Thrones” soundtrack complained.

That soundtrack comes from LA-based Varèse Sarabande, which specializes in film scores and soundtracks, and is distributed by Universal Music Group. I’ve asked Universal to confirm that the label complained, so we’ll see. But it’s a pretty good bet, because music rights are almost always the cause of this kind of thing.

That’s because music is particularly difficult to clear, even by byzantine digital media rights standards. Each song is composed of two elements, the recording and the underlying composition, and each one of those elements can have multiple owners and … ugh.

Amazing anything gets cleared, ever. And for a show that gets built on the fly, like SNL does, every week, even more amazing.

So nothing to do here, I guess, but shrug. Things are a lot better than they were way back in 2005, when NBC was befuddled by “Lazy Sunday” and YouTube. And at least Saturday Night Live’s writing staff can still point us to the Gawker clip, which has racked up some 300,000 views in the last couple days.

The backstory is here, but here’s the short-as-possible version: Grooveshark, a music service fighting lawsuits filed by the big music labels, is going after Digital Music News. The trade site had published anonymous comments accusing Grooveshark of deliberately violating copyright law.

Grooveshark says it needs information about the commenter — like the person’s IP address, etc. — so it can defend itself in its own lawsuit against the music labels.

But as Digital Music News publisher Paul Resnikoff points out in a post, this contradicts what Grooveshark has been telling the court in its battle against Universal Music Group, which is that the comments in question shouldn’t constitute evidence.

Confusing, yes? Even shorter version: Resnikoff says he can’t and won’t comply with Grooveshark’s subpoenas. But he is worried about how he’ll mount a legal defense. “We are a very small company and need the help,” he writes. “We are actively soliciting amici curiae and even pro bono litigation assistance in this matter.”

Meanwhile, an honest question: Does Google know that its ads are running on Grooveshark? If it does, does that mean it thinks the site is legal?

Beats’ majority owner is HTC, the Taiwanese cellphone maker, which put $300 million into the company last year.

MOG is one of several subscription music services that have cropped up in the last year, most of which offer some combination of free music and a paid version that works on mobile phones like iPhones and Android handsets. With the notable exception of Spotify, most of them have struggled to gain much traction.

MOG CEO David Hyman has told reporters that MOG has 500,000 active users, but he also told reporters last month that MOG was not trying to sell itself.

MOG’s most recent push to acquire users has been through Facebook and its “frictionless sharing” program, which is supposed to help digital services acquire users. Facebook-data tracker AppData says that MOG has 130,000 people using the service via Facebook at least once a month, though it’s possible that Hyman has several thousand other users that he’s acquired outside of the social network.

Business Insider reported MOG’s sales talks yesterday.

I don’t have a price on the transaction, and I’ll be very curious to see where it ended up. MOG raised a reported $25 million over the course of its corporate history, and $15 million in the last few years, as it bolted a music service onto an ad network, its original business. Last spring, it went looking for another $25 million to $30 million, and apparently ended up with this deal instead.

I’m assuming that Beats and HTC aren’t very interested in running a Web-based advertising network, so the real business they’re buying here is the music service. The subscriber base won’t be material, say people who have looked at the MOG deal recently — instead, Beats’ main interest will be in MOG’s deals with the major music labels, and the front end of the music service it has built.

If Beats wanted to hammer out those deals and build that service on its own, it could certainly do that (particularly since Jimmy Iovine, the powerful Universal Music Group executive/producer, is a Beats investor, along with Dr. Dre, whose name graces the product itself). But buying MOG will save it time. How much is that time worth?

The company was slated to announce the pacts — with Universal Music Group, Warner Music Group, EMI Music Group and Sony — at the South by Southwest conference today. CNET reported on Turntable’s Warner deal last week, and I think that report helped accelerate today’s announcement.

The fact that Turntable was able to get deals done in less than a year — the company is the result of a well-documented pivot from something called Stickybits — says a lot about the newfound flexibility on the part of the music business. Especially since Turntable has carved out a new business model — basically a hybrid between “on-demand” services like Spotify and “radio” services like Pandora.

The flip side is that the buzz and momentum Turntable was generating last summer has gone away. That may be due mostly to Spotify’s U.S. launch, which by all accounts has been a huge success. But it may also be because not that many people want to listen to other people play music.

I do, though, so I hope the deals give Turntable the ability to turn things around. Right now, when I visit the service I don’t see any of my pals there. And while I’m sure I could find some cool people playing cool songs there if I dug around for a while, I don’t want to do a lot of digging.

One thing the deals won’t do is give Turntable the ability to open its doors to users outside the U.S. But it does give the company a better chance of getting international deals done.

That would give Turntable a leg up on rival Pandora. But there are a gazillion legal ways to get your hands on digital music, for very little money these days — from Spotify to Rhapsody to iTunes Match to Deezer. Getting heard above that din will be a challenge.

It’s a pretty slick overhaul, or at least it seemed to be when I took a preview spin. But it’s up now, so you can see for yourself, which also means I don’t need to spend much time describing it.

I do want to point out one feature. Like every other Web site in the world, Vevo wants to make itself more social, by making it easier to tell your pals what you’re watching, and easier to see what your friends are watching. No surprise there. What’s interesting to me is that when you log in to the site using your Facebook credentials, Vevo will have already “socialized” you — even if you’ve never used the site and none of your friends have, either.

Vevo can do that by tapping into the music data that Facebook has already compiled about you, based on songs and bands you’ve “Liked,” and any music you’ve played via Facebook-connected services like Spotify.

I know that Facebook’s “frictionless sharing” mechanics — where every action you take on the site is broadcast/spammed out to all your friends — built up an important data warehouse for Mark Zuckerberg.

But I hadn’t quite processed that he was willing to share it with outside developers. Who will, of course, be that much more interested in working with Facebook, for that very reason.

Speaking of Facebook: One reason it’s so important for Caraeff to make his site stickier is that his joint venture, which is co-owned by Sony, Universal Music, and other investors, is dependent on Google’s YouTube for the majority of its traffic. In the U.S., YouTube generates about two-thirds of Vevo’s views.

Caraeff is starting to renegotiate a deal with YouTube that expires at the end of the year, and it makes sense for both sides to make it work. But Caraeff also wants options, which is why he is talking to Facebook, among other suitors.

Those would-be partners would have to offer Caraeff traffic and revenue guarantees to make a deal work. But even with those in place, it would be even more crucial for Vevo to have a standalone site that users really cared about.

Caraeff would be overhauling Vevo, in any case. But if the new look makes his site that much more attractive to partners, even better.

AllThingsD.com

Yet now that the attacks have subsided, it’s time to see them for what they are: Nothing more than a blunt instrument that accomplishes nothing constructive.

As of today, only one of the Web sites attacked by the hacker troupe Anonymous is still apparently affected, and that belongs to the Universal Music Group recording label. It currently displays only a message saying “The Site is under maintenance. Please expect it to be back shortly.” Others that had been attacked yesterday, including the sites of the U.S. Department of Justice, the Recording Industry Association of America and the Motion Picture Association of America all seemed to be operating normally.

Thursday’s attacks, which have been described as the biggest action yet organized by Anonymous, were launched in apparent revenge for the FBI’s arrest of several people associated with the file-sharing site Megaupload.com over suspicions of online piracy. Taking place against the backdrop of a wider, more civil protest against anti-piracy legislation currently before the U.S. Congress, the atmosphere around the attacks has been politically charged.

As Molly Wood of CNET put it, the #OpMegaUpload attacks — coming as they did on the heels of Wednesday’s peaceful anti-SOPA protest — seem like an “unsettling wave of car-burning hooligans that sweep in and incite the riot portion of the play,” spurring equally unsettling reactions from the powers that be.

Many outlets have portrayed the attacks as “hacks,” implying that someone had picked a lock in order to commit some kind of sabotage. But the tactic used — a distributed denial-of-service (DDoS) attack — is more aptly compared to a blunt instrument, requiring neither skill nor knowledge, only large numbers of willing participants who team up to swarm a site with more requests than it can accommodate and thus overwhelm its ability to function normally.

The adjective “willing” is debatable, and perhaps inaccurate. Anonymous was able to generate such impressive numbers with the operation — it claimed more than 5,000 participants — by spamming a link in chat rooms and via Twitter that, when clicked, triggered a tool used to launch the attack. People tricked into following the link are given no context or information, and so may or may not have any idea that they’re participating in the execution of a crime.

For the record, it is illegal in the U.S., the U.K., Sweden and other countries to launch and participate in a DDoS attack like the one Anonymous organized. As anyone who has observed the evolution of Anonymous (and its various affiliates using the names LulzSec and AntiSec) should know, the FBI arrested 16 people last July, many of them charged with participating in a DDoS attack against PayPal in protest of its shutting down an account used by WikiLeaks.

In 2009, a New Jersey man was sentenced to a year and a day in prison for launching a DDoS attack against the Church of Scientology. And in 2010, a 23-year-old Ohio man was sentenced to 30 months in prison for launching DDoS attacks against several prominent U.S. conservatives, including the author Ann Coulter, former New York City mayor Rudolph Giuliani and Fox News commentator Bill O’Reilly.

Records like that suggest to me that DDoS attacks never accomplish anything that the people who organize and carry them out attempt to do. At most, they inconvenience the people who visit and operate the targeted sites for a few hours, until the attention spans of the attackers shift elsewhere. They also generate headlines that are forgotten by nearly everyone except the targets, and sometimes law enforcement.

And so it will be this time. Mark your calendars, because the Megaupload revenge attacks will spur a series of arrests later this year. Some of those arrested will be people who didn’t know they were committing a crime. And that certainly won’t help Anonymous’ image. Nor will it further a single bit of what passes for the Anonymous agenda.

But this one has a twist or two. The media company is Grooveshark, an increasingly popular music service that’s also being sued by all of the major music labels.

And Grooveshark doesn’t want information about alleged lawbreakers. Instead, it wants details about an anonymous user who posted comments on Digital Music News, an industry news site.

Paul Resnikoff, the site’s owner, publisher and primary writer, writes about the subpoenas (and posts them in their entirety) here. And Ben Sisario of the New York Times has a good summary of the story. So I’ll try to do my version very quickly:

• Universal Music Group, the world’s biggest label, is suing Grooveshark over copyright violations, and has cited an Oct. 2011 story that Resnikoff published, along with comments made by one more readers, in its case.
• The story concerned claims by musician Robert Fripp and his team, who argued that though they didn’t want Fripp’s music on Grooveshark, the company wouldn’t take his songs off its site.
• The comments in question came from someone who said they were a Grooveshark employee, and that they had specific instructions to upload music from the big labels to the site, without permission from the labels or artists. “And,” the commenter adds, “to confirm the fears of [Fripp], there is no way in hell you can get your stuff down.”
• Grooveshark is demanding that Resnikoff hand over “any and all correspondence or other communications” between himself and Universal Music over the story. They also want “any and all documents concerning the identity of the First Anonymous Commenter, including, without limitation, that person’s name, address, telephone number and e-mail address, and the IP Address and ISP associated with that person.”

Resnikoff says he won’t comply with the subpoenas. He tells me that even if he wanted to hand over information about his anonymous commenters, he couldn’t. He says that as a matter of policy his site routinely “flushes” any information about anonymous commenters within two days of their posts.

And Resnikoff says that even though the comments in this case contained explosive allegations about Grooveshark, he never tried to verify the commenter’s identity: “What the world sees is what we have.”

In his post, Resnikoff suggests he’ll be protected by whistleblower laws when he fights Grooveshark’s demands. But he tells me that his legal team isn’t sure what laws they’ll cite yet. “We’re just incredibly committed to protecting any informants or sources of information,” he says.

This fight has plenty of interesting gray areas. For instance: What kind of legal responsibility does a news site have for claims that its commenters make? But I’ll let media law experts weigh in on that. For me, the notion that a Web publisher that isn’t directly involved in a legal suit can be forced to cough up names and addresses of contributors makes me shiver.

That scenario also strikes me as similar to some of the worst-case scenarios that SOPA/PIPA opponents have been making in recent weeks — this is a Web site faced with big legal problems over the actions of a single user, right? So I’ll be interested to see if they jump on Grooveshark over this one.

But Grooveshark doesn’t seem to think anyone will get riled up about this. This afternoon, I received an unsolicited email from Edelman, its PR firm. The email contained a copy of the subpoena, and a statement Edelman wants attributed to Grooveshark: “Grooveshark reaffirms its confidence that it will prevail in this litigation and that this filing represents the next step in reaching that end.”

(Image courtesy of Shutterstock/photobank.ch)

The music companies, Sony Corp.’s Sony Music Entertainment and Access Industries Inc.’s Warner Music Group, joined in an amended complaint to a suit filed last month by Vivendi SA’s Universal Music Group in U.S. District Court in Manhattan.

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In this case, it’s Madonna’s new pact with Universal Music Group. The New York Post says she’ll get around $1 million an album for a three-album deal, and music industry folks say the paper has its numbers right.

This is a very reasonable contract. Madonna is long past her music-selling peak, and the music industry is a decade past its peak, too.

Still! Reasonable contracts — especially for superstars — are still very new things for the music business. Not too many years ago, Sony handed Bruce Springsteen a reported $100 million, and that was well into the post-Napster slide. So let’s just walk through what each side gets here:

• Madonna gets the kind of money, upfront, that she would have laughed at in the past. A million bucks is what you used to give a hot “baby band” no one but a few hipsters had heard of. But the world’s biggest music company will buy her billboards, etc., and that’s still worth something. Plus, on the off chance that one of these albums does take off, the low advance means she could actually earn royalties on the sales.
• Universal gets bragging rights and one of the music industry’s few living worldwide icons, for what amounts to walking-around money. And, again, who knows? She might still sell some records, perhaps on the back of her upcoming Super Bowl appearance.
• Universal doesn’t get Madonna’s lucrative back catalog — Warner Music Group still has those songs, which it continues to sell, repackage, and sell some more. And Universal doesn’t get a piece of her lucrative touring business — concert giant Live Nation has that. (Remember when Live Nation was also going to be a big deal in the record business? What happened to that?)

But wait a minute. Why does Madonna need a record deal at all? Couldn’t she just sell her music on her own, like Prince and Radiohead and the Eagles and lots of folks?

Sure. But not everyone wants to be Louis C.K., who has just declared his direct-to-fan experiment a huge success. (To play devil’s advocate: Even though everyone who bought one of his concerts blogged about it (more than once, in some cases), he has still only reached 130,000 people — far less than would have seen him had he done an HBO deal or a Netflix deal. And those guys would almost certainly have paid him more, too. Though if you want to be a contra-contrarian, you can note that he could still do that. (Which I have!)

Some people, it turns out, are still happy to take money up front from Big Media companies and hope they can deliver the Big Reach, which the do-it-yourself Web can’t guarantee.

My favorite story related to our case is the story of a kid who appears in front of the judge for sentencing for the crime of having murdered both his parents saying judge have mercy on me cuz I am an orphan.

– Grooveshark chairman Sina Simantob, from a series of internal emails from 2009 that were made public as part of Universal Music Group’s copyright lawsuit in federal court against Escape Media Group, Grooveshark’s parent company

But not so fast. Before we can get there, we need to review some history, then engage in some speculation.

First, the past: Way, way back in 2000, EMI was supposed to merge with Warner Music Group. But the deal, which would have created a company that controlled 25 percent of the world’s music market, didn’t fly with European regulators.

And since Universal is the world’s biggest music label, and the new combination will create a company with about 40 percent of the world’s music market, you’d think antitrust types would have a problem with this one, too. (Maybe even in the U.S., which has usually let most industries consolidate, but recently perked up when it came to AT&T’s proposed T-Mobile deal.)

Bear in mind that back in 2000, there were five major music labels. Since then Sony swallowed up BMG, so we’re down to four. And Universal wants to shrink it down to three.

Universal’s answer, of course, will be that today’s music business looks nothing like it did 11 years ago when Britney Spears was selling millions of CDs, Napster was a novelty, and Apple’s iTunes store didn’t exist. Most important: Back then, music sales were a $37 billion business. By the end of last year, that number was down to $16 billion.

But simply arguing that the pie is smaller won’t convince regulators. If Universal is really going to get this deal done, it’s almost certainly going to sell off some pieces, particularly in markets like Germany and France, where a combined EMI/UMG could end up with something like 80 percent of the music market.

I think it will also work very hard to convince people that even the world’s biggest music label doesn’t have any power when it comes to Apple, which controls the world’s digital music market.

That part won’t be that hard, because it’s at least partly true. But it will still be interesting to see Universal, which has longstanding ties to Apple, go out of its way to publicly complain about the relationship, without actually straining it for real.

And in any case we’re going to have quite some time to watch this one develop. EMI CEO Roger Faxon told his staff yesterday that approvals, etc., for the split-up could go “well past” March 31, 2012, when EMI’s fiscal year ends. Music industry folks assume that a realistic timetable would be closer to 12 months from now.

[Image via Jason Mrachina]

Barring a last-minute hitch, EMI’s recorded-music unit will be sold to Vivendi SA’s Universal Music Group for $1.9 billion, while a group spearheaded by Sony Corp.’s music division will buy the publishing operation for $2.2 billion, according to a person familiar with the matter. The deal, valued at $4.1 billion in total, could be announced later Friday, but the bank may wait until the weekend, the person said.

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Said strings: You have to visit a certain brand’s Facebook page, “Like” their page or jump through a similar hoop, and then pick your songs from a limited assortment of freebies.

But if you find one you like, you can download it in MP3 format. And it’s yours forever, and you can play it anywhere, anytime you want, on any device. Even a Zune!

Zero cents for a song is a pretty good deal for music fans. The question is whether Free All Music, which is making this possible, can turn it into a business.

The two-year-old start-up has been moving slowly as it tries to figure that out. In a cheap-money go-go era for start-up funding, it has raised a mere $1.7 million. New CEO Habib Khoury, who replaces founder Richard Nailling, says his company is “en route” to a proper Series A.

On paper, at least, the business model is a simple mashup of two gambits we’ve seen before: Marketers who buy music and give it away for promotions, and marketers who reward Facebook users for “Liking” them.

In this case, Free All Music buys songs from labels like EMI Music and Universal Music Group at the same wholesale price that retailers like Apple and Amazon get — around 70 cents a song. Then it works with brands like Budweiser and American Express to give the songs away via their Facebook pages. Free All Music charges the brand a CPM of $5 to $8, and says that spread should allow it to make money.

Free All Music is still missing distribution deals with two of the big four labels — Sony and Warner Music Group — and even if it gets them, it won’t ever be a free music service that’s going to battle the Facebook giveaways currently underway via the likes of Spotify, MOG and Rdio. Those services give you unlimited music on demand, but only via streaming. Free All Music’s giveaways are one-offs, just like a bank giving away a toaster.

But much cooler than a toaster. Here’s the Jack White/Loretta Lynn song I downloaded gratis yesterday, in exchange for giving Budweiser a virtual thumbs-up.

Viacom and Google, who have been tangling over copyright violations at YouTube since 2007, will be at it again today at a federal courthouse in New York. The two sides will start oral arguments for Viacom’s appeal of the case, which Google won decisively in a 2010 ruling.

In the past, both sides have tried digging up evidence to discredit each others’ arguments, and while both came up with plenty of embarrassing stuff, they couldn’t find a smoking gun.

So now we’re back to the basic question of the case: How much protection does the Digital Millennium Copyright Act offer YouTube, or any other site that lets users upload and distribute content they don’t own?

That question has come up to the courts in at least three different suits in recent years: Viacom versus Google, Universal Music Group versus Veoh, and EMI versus MP3Tunes. And in all three cases, federal judges have offered up the same response: The DMCA gives Web sites enormous latitude. As long as the site serves a legitimate function, it can’t be held responsible if users upload stuff they don’t own. If copyright owners find something that shouldn’t be there, and they ask the site to take the offending piece down, the site has to comply. But that’s about it.

So far, that’s very encouraging news for all manner of digerati. And in theory, it’s quite threatening to media companies and other people who create, finance and distribute intellectual property for a living.

But things might not be quite so dire for the media guys. While you can read the recent court rulings as an invitation for a free-for-all, it looks a little different in the real world.

YouTube, for instance, has spent a lot of time and money creating systems to filter content on its site, which hoovers up more than 24 hours of stuff every minute. And it works hand in hand with most big media companies to help them keep stuff they don’t want off the site — and to help them distribute other stuff they do want there.

Included in that list of companies playing very nicely with YouTube — Viacom’s sister company, CBS. And once this suit finally gets settled — which could still take years — my hunch is Viacom will want to work closely with the world’s biggest video site, too.

[Image credit: Sweetheart/Shutterstock]