GEMA President Harald Heker said during the association’s annual press conference that negotiations with Spotify are still ongoing, with a final meeting scheduled for March 26.

“I’m pretty optimistic that we will find common ground,” he was quoted as saying by the German IT news site Netzwelt.de. However, Heker also clarified: “We don’t have a contract with Spotify, which means we also don’t have a preliminary agreement.”

Spotify acknowledged that fact by telling local press that it continues to negotiate with GEMA.

To be fair, this isn’t the first time that a music service launched in Germany without settling all the details with GEMA. Many years ago, Universal Music launched its own download service — dubbed Popfile — in the country without any contract with the rights holders group. But being at odds with GEMA can also lead to lots of trouble: Negotiations between the group and YouTube over licenses for music videos broke down two years ago, and numerous music videos have been blocked in Germany ever since.

It’s unlikely that things will escalate to that level between GEMA and Spotify. Heker told press this week that Spotify has demonstrated it is willing to play by the rules, according to Netzwelt. However, the exact interpretation of those rules could decide how long Germans will be able to enjoy those free plays on Spotify: GEMA’s standard rates call for payments of up to 0.006 Euro per song played – an expensive proposition for any music service that offers up songs for free.

Update: Spotify got back to us with this statement: “Spotify offers a legal service in Germany. We are in ongoing discussions with GEMA to formalise a long-term agreement. We are paying composers and lyricists in Germany, just as we pay composers and lyricists in all other countries in which we operate.”

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Netzwertig was told by multiple sources that Spotify’s launch in Germany will happen within two weeks, with one person pointing to 03/13 as a likely launch date. The blog wasn’t able to get a confirmation from the company. However, there are other signs pointing to a timely launch as well: the company already has an office in Berlin, and it recently hired Groupon’s former German PR manager to run public relations for the German-language market.

Germany hasn’t exactly been an easy market for digital music ventures; YouTube has yet to come to an agreement with rights holders over royalties for ad-supported video streams, and Grooveshark recently left the country because of what it called “unreasonably high” licensing costs.

Still, there are some competitors already active in the country. U.S.-based Rhapsody recently acquired Napster’s German music subscription service, and local Spotify competitor Simfy launched in May 2010. Simfy CEO Gerrit Schumann dismissed some of the criticism made by Grooveshark in a recent conversation with local media, calling Germany’s performance royalty rates “acceptable.”

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KeepRecipes is starting out small. It has signed deals to distribute the contents of five cookbooks from two publishers, Gooseberry Patch’s 101 Recipes and Harvard Common Press’ Not Your Mother’s cookbook series. The site is also hosting individual recipes from seven famous chefs and authors, including Masaharu Morimoto of Iron Chef fame and New York Times food columnist and cookbook writer Mark Bittman, giving the portal’s members access to 1,000 different dishes, priced at 99 cents each. But CEO and founder Phil Michaelson said he is hoping he can build off that small core of cuisine, proving to publishers that there is money to be made distributing their cookbooks online and convincing consumers that some online recipes are worth paying for.

The comparison to iTunes isn’t just a gimmick. It is uncanny how closely KeepRecipes is following Apple’s music distribution model, all the way down to direct integration with the iPhone. The recipes are bought and stored through KeepRecipes’ online portal, where they can be sorted and searched, organized into collections — recipe playlists, if you will — and shared with up to five friends in the KeepRecipes community. A mobile app allows members to access their collections through the iPhone.

What’s more, those paid recipes become part of the members’ overall digital recipe collection within the portal. Michaelson said KeepRecipes is trying to do away with the concept of the digital cookbook as just another e-book, trapped in between electronic covers. Instead, the portal aims to help its members build a comprehensive digital cooking library — a task I can tell you from experience is almost impossible to do — by bringing in recipes from multiple sources.

“We want to provide a place where you can keep all of your recipes in one spot, whether it’s your family recipe, a web recipe or premium content,” Michaelson said.

Recipes found online can be grabbed through KeepRecipes’ bookmarklet or by entering its URL through the website. You can enter your own recipes manually, and you can “keep” any nonpaid recipe in your friends’ collections. Just as customers can annotate, comment and add pictures to their own recipes, they can do the same for the ones they have paid for.

The remaining obstacle to building a complete digital cooking library is integrating the thousands of recipes that sit bound on our bookshelves. But Michaelson is working on that problem as well. KeepRecipes is working with its publishers to allow members to download the digital contents of their physical books for a fee of $5 per cookbook.

If you read my post earlier this month on why digital recipes need to emulate digital music, this idea might sound eerily familiar. I thought I was being pretty creative at the time, but it turns out Michaelson and his developers have been developing that concept since KeepRecipes’ inception. Michaelson has already found solutions for problems that I merely posed, such as how to deal with digital rights management and controlling distribution.

In fact, KeepRecipes seems to have all the tools in place to make a comprehensive online recipe library possible. What it lacks is scale. That is understandable, considering KeepRecipes only launched in August, has only 10,000 members — of which about 15 percent are active — and is still in its early stages of funding. For a company of that size to have attracted the attention of even small publishing houses is impressive.

Michaelson said he has found cookbook publishers are eager to go online, but many of them see the inherent limitations of the e-book format, which is why they are working with KeepRecipes. Publishers are also concerned that once they make their cookbooks more digitally accessible, their recipes will escape into the wilds of Internet, where they won’t be able to charge for them. “They are very intrigued by the idea of a social portal and sharing on Facebook and Twitter,” Michaelson said. “But they’re also fearful of a total loss of control.”

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Artists are entrepreneurs, too, and deserve to be able to monetize their work

SOPA is clearly too extreme to be a practical solution, and it threatens core pieces of what make the Web great. In spite of even the best-intentioned efforts of those in the film and music industries, I do not expect this legislation to pass. Still, the issues that the act seeks to address are very real, and the impact of non-action will continue to affect those of us in film, music and television. Those of us who are so up in arms about SOPA also risk forgetting that the underlying issues are nonetheless quite pressing — not just for the big media companies, labels and studios, but for the artists who produce great content, and whose livelihoods depend on viable monetization of their commercial work.

We forget that artists are entrepreneurs, too — every new record, and every new film production is its own startup, so to speak. Lost in all of the anti-SOPA backlash (whether you agree with it or not) is the fact that these artist-entrepreneurs create incredible value every day, and deserve much better from all of us. What if your proprietary source code was stolen, and shared freely with anyone? What about your underlying data? What about your breakthrough algorithm?

The technology industry has progressive cultural habits like open-sourcing that have proved out new modes of ownership, and community. Artists from Radiohead to Louis C.K. have taken notice, and experimented with radical new distribution models that challenge traditional notions of “free” and “commercial.” But technology also has more patent warfare than we know what to do with, not to mention uniformly sharp competition. Words like “moat” and “proprietary” are music to any VC’s ears.

The “discovery” benefit doesn’t actually translate to profits

The Internet is neither a panacea nor an imminent danger — it produces enormous benefits, and some unfortunate byproduct. We need to seize opportunity and mitigate risk simultaneously. SOPA swings the pendulum too far to one side. But this issue isn’t going away, either.

Why?

Because the “discovery” benefits, of free-flowing music, film, and TV, contrary to popular belief, do not generally trickle down to the actual artists who create these works. This is important to understand. There are exceptions, of course, breakout hits and outliers. But for most artists, the magic hand of discovery is never realized. New fans do not in fact materialize out of the Internet and start paying for content, as if on cue.

As general manager of Austin City Limits, I live this reality day in and day out. We’re a nonprofit, and for us and the artists we diligently work with to create unforgettable musical experiences, the discovery argument rings hollow in practice. The benefits are more directly realized by marketing departments, maybe, and top artists who are already trending. Stating that a Lily Allen or Arctic Monkeys were “discovered” or  that they “broke” via the Internet is a convenient copy point in a label-written artist bio, but for each of these valid success stories, there are thousands of artists losing the income necessary for them to live and dedicate themselves to their craft.  For every pirated download or freely shared file, there is not in fact a new fan created who will someday purchase a concert ticket or t-shirt.

Don’t believe me? Read this article and absorb the research. Take for example the number of record labels that have been shuttered, or the large number of layoffs at the music companies that are still in business, or the statistics showing the drastic decline in sales over the last 10 years  — it’s apparent that free online music discovery does not generate new fans — at least not fans who are interested in making purchases.

Now, some may say that that’s part of the creative destruction of the old music industry model, the big business run by a few major labels crumbling as a new model of all-digital distribution takes its place. That may be the case, but the artists don’t make money off the new model, either. In Forrester’s report, cited in the same article, it found that “just 44% of U.S. Internet users and 64% of Americans who buy digital music think that music is worth paying for.”

We do need reform, but we need the right reform

As an artist-first company, Austin City Limits endeavors to bring the highest quality live music programming to our weekly television audience. Beyond television, we are always looking at new ways to share the Austin City Limits experience with as many fans as possible through online and mobile technologies. We’re innovating on a lot of different fronts and 2012 will be a groundbreaking year for us. Certainly, innovation and reinvesting in great experiences is part of the path forward. And the proposed SOPA legislation, while targeting pirates, will also threaten the ability for legitimate content producers to innovate and bring great experiences to their respective audiences.

But at the same time, if zero limitations are put on the sharing of creative intellectual property — the internet will continue to harm artists, and the people and companies that support them, by hobbling their ability to be fairly compensated for their talents and work. The future of artists and filmmakers lies in the balance.

Legislation that chokes out the same creative flame that it seeks to protect is not the answer, but we’ve got to find some middle ground. The two extreme points of view being represented right now — on one hand, taking over the internet as regulatory infrastructure and punishing many for the acts of a few — and on the other, advocating royalty-free access with legal impunity under a deceptive “free and open” ethos — well, neither is going to work.

For those protesting SOPA for its shortcomings — you are absolutely right. But also know that reform needs to come, and will come, and that we’d all do well to collaborate and shape the right policy, instead of watching, and commentating.

Tom Gimbel is the general manager of Austin City Limits, the award-winning KLRU produced music television show.  Prior to joining ACL, Gimbel’s career includes more than 20 years in the music industry including senior positions at Arista Records and as serving an artist manager at High Wire Music.  In 2009, Gimbel founded Clatterhead, a social media marketing company.

Image courtesy of Flickr user BurgTender.

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LimeWire was one of the pioneers of P2P file sharing, and the company attracted millions of users after competitors like KaZaA and Napster were forced to shut their doors. At one point, estimates put LimeWire on every third PC worldwide. The company was eventually sued by the major labels in 2006, which alleged that it knowingly contributed to its users’ copyright infringement.

Company executives tried to deflect the lawsuit with a number of initiatives aimed at monetizing file sharing, which included an MP3 store, an ambitious attempt to monetize contextual advertising within LimeWire and finally a music subscription service. The big labels didn’t want any part of that and insisted that LimeWire instead had to shut down and pay for its sins. They eventually got what they wished for when U.S. District Court judge Kimba M. Wood sided with the music industry in May 2010, only to order a shutdown of the service in October.

LimeWire’s client has since been unusable, and the website links to a PDF of of Kimball’s court order instead of the LimeWire software. That doesn’t stop countless visitors from stopping by every month: Google Analytics clocked 1.1 million visitors in August alone. 85 percent of these were new visitors, which makes sense: The current injunction notice really doesn’t make you want to come back. 47 percent of those visitors came from the United States, and 53 percent were from other countries — a tribute to the fact that LimeWire was available in close to 20 different languages. More than half — 55 percent — of LimeWire.com traffic came from search.

In other words: LimeWire still has excellent Google juice, and it’s still very much on people’s minds despite having been all but dead for close to a year. Granted, converting all these file sharing users into paying customers is not an easy feat. However, services like Spotify have been fairly successful with freemium business models that capture people in need for free music and eventually get them to pay for a premium version. Maybe LimeWire should have been allowed to try the same. After all, chances are that all those folks who Google for LimeWire simply search for The Pirate Bay next.

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Fox is the first broadcaster to introduce this kind of authentication, by mid-August, but similar requirements are already in place for anyone who wants to watch anything on HBO Go as well as new episodes of some cable shows on Xfinity.tv and DishOnline.com. Expect other broadcasters to follow suit soon, and be prepared to show your cable customer ID at the door of the majority of TV-content catch-up sites.

It’s not about cord cutting

Fox executives have said that the fear of cord cutting motivated them to put up the pay-TV wall around their online assets. Content needs more protection to keep people from freeloading: Does that argument sound familiar? Right, it’s exactly what music companies said about Digital Rights Management (DRM) back in the day.

And just like back then, the argument seems to backfire: Protected music files certainly didn’t stop anyone from using KaZaA, LimeWire and BitTorrent. TV Everywhere could also drive a substantial number of customers back to piracy, simply because an unlicensed download is more convenient than a stream that’s only available behind a pay-TV wall, for a limited amount of time, with unskippable ads.

“People don’t like to be inconvenienced when they are playing by the rules,” said Eric Garland, from the media measurement company BigChampagne, when we recently talked about the impact the Fox restrictions will have on piracy. In other words: If you treat people like pirates, they might just take you by your word and walk the walk.

However, all of this is beside the point. TV Everywhere isn’t primarily about cord cutting, just like DRM was never primarily about piracy. Both schemes are simply means to lock down and control markets. The best example of this is Apple’s iTunes music store, back in the day, when Steve Jobs hadn’t discovered his love for unprotected music yet.

Apple used to use its own Fairplay DRM scheme to protect its music and refused to license the technology to anyone else, in effect securing that anyone who bought music at Apple could only play it on an Apple device. Even more important than this direct effect on consumers was the lock-in for music companies dealing with Apple: If you were a content provider who believed in the necessity of DRM, the only way to get your content protected on an iPod was to sell it through Apple’s iTunes store and give Steve Jobs a 30 percent cut. That, coupled with really good hardware, is how Apple got to dominate the digital music market.

Broadcaster’s favorite new cash cow

The same is about to repeat itself in the realm of online video, with a twist: Much like piracy was a pawn to force the market to adopt DRM back in the day, the bogeyman of cord cutting is now used to force everyone behind the pay-TV wall. And once again, it’s not about what consumers do or don’t do but about dividing a market and cashing in on the results. Case in point: CBS announced on Tuesday that its earnings are up, in part due to the growing importance of retrans fees. Retrans fees are the money that cable and satellite operators have to pay to carry the family of CBS channels.

Carrying broadcast channels used to be free, but in recent years broadcasters have discovered retrans fees as a new revenue source, and they’ve been pretty successful at forcing providers to pay up. One powerful weapon in their arsenal has been blackouts: Fox blocked Cablevision’s access to its programming for 15 days last fall, until the cable operator finally gave in.

Of course, these blackouts aren’t really much of a threat if viewers can simply go online to watch all the things they missed on TV, which is why Fox also briefly forced Hulu to block Cablevision customers from accessing their shows. The move foreshadowed things to come with TV Everywhere: You’ll be able to access all of your shows online, as long as you are a pay-TV subscriber — and your pay-TV provider writes big-enough checks.

The losers of these chess games are obviously going to be consumers. Not only will watching TV online become much more complicated; prices are also likely to go up as operators hand down some of the carriage fees to their subscribers as well. The good news is that the reign of DRM, at least in music, didn’t last forever. Companies like Amazon and record labels wary of Apple’s online-music-market dominance eventually embraced DRM-free audio files, and the price of much of the music offered online went down as a result.

Image courtesy of (CC-BY-SA) Flickr user Ben Cumming

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Jonze’s short film Scenes from the Suburbs was scheduled to be made available for free online to promote the release of a limited edition of the Arcade Fire album The Suburbs. The 28-minute video features music from the band and was co-written by Jonze and Arcade Fire band members, as well as brothers Win and Will Butler. It has been described by a reviewer as a dark coming-of-age story, and was scheduled for a worldwide online premiere on MUBI.com.

MUBI’s founder and CEO Efe Cakarel told me that he got notified at the last minute by the band’s manager that the short film could not be shown in the four countries to protect the release of the physical album. The album was released on Monday as well in a number of countries, but won’t be available in the U.S. until August 4. It will come with a DVD featuring the entire short film as well as additional material.

“Obviously, we are very disappointed,” Cakarel said. He couldn’t tell whether the site will have a chance to show the video to viewers from the U.S. and the other affected countries anytime soon. “I hope that viewers will get to watch this film at some point,” he said.

MUBI, which got its start under the name The Auteurs, made itself a name for showing indie and arthouse movie productions online. Dealing with what is essentially a long-form music video was a bit of a different experience for the Palo Alto, Calif.-based startup. “It’s an order of magnitude more complicated,” explained Cakarel. However, his team felt like it had to act when the chance to show the Jonze film came along. “When we saw it, we tought: This is good cinema,” he said.

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Tickets are sold out, which means that most of us will miss out on long lines in front of smelly porta potties, midday heatstrokes and other joys of summertime open-air festivals. However, we can still join in on the fun that is the music of Bonnaroo, thanks to a live stream hosted by Vevo.

The stream starts Friday at noon ET (9 a.m. PT) with a gig from the Drums and concludes at 8:15 ET with first-day headliner My Morning Jacket. Saturday’s live stream starts at 11:30 a.m. ET with Del McCoury & Preservation Hall Jazz Band, and headline band the Arcade Fire enters the stage at 9:30 p.m. ET.

The live stream resumes Sunday with Smith Westerns at 12:30 p.m. ET. The Strokes will be onstage at 6:45 p.m. EST, and the last band of the day happens to be Widespread Panic at 8:45 p.m. EST. Check the Bonnaroo site for a complete schedule, and visit Vevo.com to access the live stream.

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Without going into too much history on the subject, what makes music copyright a bit unique when compared to other media is that the law recognizes two co-existent copyrights: the underlying musical composition, and the recorded performance. The law requires permission, usually in the form of a license or royalty fee, from both parties to sell a song for download, play it on the radio, play it in a bar or restaurant, and so on. Licensing is handled by publishers and record labels, and blanket licenses for certain uses are provided by performing rights organizations (PROs) like ASCAP, BMI, SESAC, SoundExchange and the Harry Fox Agency.

While certain uses, like “synchronization” rights to use an audio recording in a movie or on TV, or “master use” rights to put a recording on a compilation album require a specific agreement, a CD comes with an implicit license for the buyer to play the music for their own personal use. It does not allow public performance. However, the American music industry long ago recognized that it would be in their best interests to simplify licensing for certain public performance uses, like recording a song someone else wrote on your record, using a short sample on a hip-hop record, playing a CD in a bar or restaurant, or playing a song on the radio. The rates for these uses are set by congressional statute. These statutory licenses allow radio stations to play music without negotiating a specific license for each and every song with both the publisher and the record label.

In a twist of historical circumstances, U.S. copyright law treated radio airplay differently in that it required the payment of publishing royalties for the songwriter, but not performance royalties for the recording artist or their label. It was thought that this arrangement would be fair because radio airplay would help market the record and drive sales for the recording artist. Internet radio, which emerged in the mid-90s, challenged the status quo because it could lead to a future where all music would be streamed over the Internet, and only songwriters would get paid and recording artists would get nothing.

So for just over the last 15 years or so, the music industry has been trying to work out how to craft an arrangement that compensates everyone — writers, publishers, recording artists and record labels — in the face of changing technologies that demolish laws and contracts crafted in the days of AM radio. The current law requires non-interactive digital streaming services like satellite and Internet radio to pay both publishing and performance royalties, but traditional broadcasters like AM/FM radio still only pay the publisher. Interactive online services (like Rhapsody, Rdio, or Spotify where the user picks the songs) are not allowed to use statutory licenses, and have to negotiate their own deals with publishers and record labels.

For Apple, the issue is determining if their new cloud music service changes their role from a music retailer, to that of a broadcaster, or an interactive streaming service.  Should they have to pay a royalty each time that song is played or streamed over the Internet? Can they pay the statutory license fees, or do they have to negotiate with the labels?

Amazon has chosen not to reach an agreement with publishers and record labels. Google, rumored to have been rebuffed by the labels in their negotiations, is now in a similar position. They both argue that their services are simply cloud storage for digital downloads for which the consumer has already paid a one-time permanent license. By their argument, there is no difference between using a digital media player to access a file stored in the cloud, and accessing a file on a computer hard drive over your home network.

Apple is going straight to the publishers and the record labels to work out a deal that will allow them to offer the music service they want to provide at a cost that makes sense. As rumors describe it, Apple’s service would not be an interactive subscription to any music (such as Rhapsody or Rdio), but rather on-demand access to only music you’ve purchased.

One of the sticking points is reported to be the “scan and sync” feature to avoid unnecessarily uploading copies of songs from the user’s music library if Apple already has them on file. It worries record labels that Apple might scan an illegal copy of that song on the consumer’s computer that was never paid for, and then “sync” that song to provide access to a legal copy on Apple’s service. The rumored solution is that Apple is willing to pay some amount for every “synced” song, no matter if it was originally purchased on the iTunes store or not. Despite the licensing cost to Apple, it does save Apple from paying for the bandwidth usage for everyone to upload gigabytes of music, and it saves the cost of storage to keep 10 million copies of Lady Gaga’s latest single.

While it’s difficult to predict what will happen, it does seem likely that Amazon and Google have made Apple’s offer more attractive to the record labels. Even in the complicated world of music licensing, any royalty, even if smaller than the labels desire, is infinitely better than no royalty at all.

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