Music 2.0 - Exploring Chaos in Digital Music

Tim Arango of Fortune Magazine pointed out that if you click on the iTunes music store and punch ‘Beatles’, many songs will appear – none of which are the real deal. That’s because the Beatles has yet to license its music for online distribution.

However, if you click on the IFPI-sanctioned Top100.cn music store and punch in “Beatles” under artist search, more than a few of the Beatles albumswill pop up including Sergeant Pepper’s Lonely Hearts Club Band and The White album and they are all the REAL DEAL. Fans wishing to download the actual Fab Four in digital format don’t have to wait for iTunes for these songs - they can already buy them for as little as US$0.12.
Ever since Fortune broke the news yesterday that “iTunes is close to a deal to bring the Beatles catalog online” in an exclusive deal, there has been widespread anticipation and excitement at the prospect.
However, the indisputable fact is that Beatles tracks have been openly available as digital downloads at the EMI endorsed partner site Top100.cn in China since early this year. Top100.cn’s online sale of Beatles tracks is no secret. The New York Times, Billboard, Digital Music News and South China Morning Post have all reported on the fact since February. Digital Music Newson Beatles tracks being available at Top100.cn as recently as September.

And yet inexplicably, EMI has done nothing to stop the sale of unlicensed Beatles tracks by a website that it officially supports. In February, EMI went on record as part of a Top100.cn press release stating:

“Top100.cn has in-depth knowledge of music products, understand perfectly about Chinese music market and they are so clear about their vision of building up Top100 music branding in China”

At best, EMI appears to be supporting a website engaged in piracy. At worst, it could be argued that through its commercial links with Top100, EMI is itself profiting from unauthorized distribution.So exactly what is going on here that Beatles’ Apple Corps should know about? How is it that such a high profile, commercial music website partly owned by NBA basketball star Yao Ming has been allowed by EMI to sell Beatles tracks for so long without any accountability? The Beatles themselves sued EMI for unpaid royalties as recently as a year ago when Apple Corps manager Neil Aspinall stated,

“Despite very clear provision in our contracts, EMI persist in ignoring their obligations and duty to account fairly and with transparency. Apple and the Beatles are, once again, left with no choice but to sue EMI.”

If this is the fate that befalls arguably the biggest band on the planet, we can only fear the worst for lesser bands who do not have the means to demand clarity of royalty accounting in court. This saga also goes some way to justify the Beatles’ seemingly inexplicable decision to hold out from online sales for so long. The stark fact remains that artists seem to have little means of checking digital sales revenues reliably and in a timely fashion and this lack of accounting is especially worrying.It is all too easy for major labels to blame unauthorized distribution on P2P networks and the like while their constant diatribes against consumers who download music online sound like a broken record.

But what transparent measures do labels and their online retail partners have in place to ensure that their artists are paid fairly? This is especially important when no physical products change hands and customers take home their purchases as bits and bytes. Revenues for digital music can, and do, easily disappear into black holes of ‘accounting piracy’ – even when big labels and big artists are concerned.The Beatles-iTunes story will inevitably hog the spotlight. But while we are busy looking that way, how many other instances of misplaced nuts and bolts are occurring across the globe? If EMI’s ineptitude in managing the intellectual property rights of a band as big as the Beatles is anything to go by, one can only wonder how many other similar cases continue to slip under the radar.