The Questions that HDNet Wouldn't Answer

By Alan Cohen and Mike Orren 

When we asked Jeff Cuban for an interview about the new series of True Music DVDs, he offered an email interview with his brother, Mark, instead. He asked us to email him questions. Mark and Jeff then refused to answer these questions. (Click here to see Mark's response to our query.)

Below are the questions exactly as we posed them.

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Hey Mark,

Thanks for agreeing to answer a few questions for us.  I first want to let you know where we are coming from.   As you know, TexasGigs.com covers music and musicians in the DFW area.  We first started researching this story when we noticed an Amazon ad on our site promoting DVDs of local artists.  When we began asking artists about the new DVDs, we received a great deal of concerned feedback because they were not aware (even if perhaps they should have been) that such videos were being sold.  We started from a belief that those concerns deserve to be addressed, but that then triggered an internal discussion about the growing opportunities and risks that both artists and media companies face in the ever-expanding and medium-agnostic media world today. In short, while we’ve got some questions about the specific artist rights on these DVDs, we’re not trying to develop a “gotcha” here – We think the piece is about the tough issues for New Media content creators and distributors, including HDNet and even our own company.

As is our practice on interviews like this, we’ll put the appropriate quotes in the story and link to an unedited transcript so there can be no risk of misquoting. (Most of our interviews are audio, so that generally takes care of itself.)

I’ll start with questions that deal with artist’s place in the changing media world:

 --  It is interesting to us that the “True Music” DVDs were released on Amazon.  Of course, Amazon was a centerpiece example of the Long Tail theory. Looking solely at the Long Tail in terms of music products, DVDs of artists like Salim Nourallah or Spector 45 are great examples of items that would fall towards the far end of the Long Tail. Also proving the Long Tail theory, as soon as an Amazon ad popped up on our site with those items, we were immediately very interested, while I imagine that Rolling Stone or Entertainment Weekly would never have taken note.

While it has always been part of the theory that if utilized correctly, corporations could use the Long Tail principles for profit, it had always seemed that they also had benefit for the lesser-known musicians at the end of the tail because they would be able to get more outlets to carry their music.  Yet in the case of the “True Music” DVDs, the artists would not see a dime from the DVD sales because they have no claim to royalties.  Someone searching for Salim items may very well choose to buy the HDNet DVD knowing HDNet’s reputation for quality over the Salim CD that could make him some money.  Are we starting to see a world where corporations that utilize the Long Tail principles will begin to cut into the potential revenues of independent musicians like Salim? Or are they being paid sufficiently with the free promotion they get through HDNet?

-- Whenever people examine the innovations that you and Todd are working on in the movie industry, they look at the interconnecting parts of the media companies you have invested in, particularly HDNet and movies.  Because you and Todd may be the first to put together all the disparate channels, your companies serve as a lab for the future interconnectivity of media.  So in this day and age, when a performer tapes a free promotional concert for a television show, is that seen in your eyes as also making a contribution to movie and television soundtrack library that is free from licensing and royalty costs?  Do you feel this is a  natural way for movie makers to cut production costs in the 21^st century?

--  Music has global appeal.  We see many local artists with big followings overseas that are relative unknowns in the U.S -- Texas musicians, particularly, have big followings in Eastern Europe.  Our understanding is that HDNet has already begun licensing “True Music” performances internationally.  Can you tell us more specifically where and how these performances have already been licensed out?  Does HDNet have plans to expand international licensing, marketing, or sales of “True Music” performances?

--  Are the videos being sold in any retail outlets other than Amazon and Google Video? Why are titles that are available from other outlets not available on HDNet’s website?

--  It is our understanding that substantial amounts of the musical performances were “left on the cutting room floor” in creating the show. Are there plans to make commercial use of that content?

--  What was the thinking in releasing the DVDs as exact reproductions of the show? One of the attractions of the show for broadcast is its diversity – but in a retail environment, it would seem to make more sense to group similar artists together, or sell by individual artist.

--  From what we’ve gathered, your agreements with bands have a wide array of terms dealing with their length and rights. In our business, we’ve actually taken a pretty hardline stand in terms of “one-size-fits-all” agreements. Are “long tail” bands shooting themselves in the foot by making it too much trouble to do business with them when they insist on different terms?

In the end, MySpace, YouTube, True Music, and even Pegasus News/TexasGigs are making their money on content created by others – and in many cases, these creators have not had so viable a public platform before. Should these content creators expect to monetize their contributions? And if so, how?

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 Now I’d like to switch gears and ask some questions based on concerns we have heard that specifically deal with “True Music” and the new line of DVDs and Google Video offerings.

 Some of these questions are blunt, but I assure you, we are jumping to no conclusions nor will we fully analyze any issue until both sides have been heard.  We certainly appreciate the likelihood and are hoping to report in regard to these specific issues that HDNet has always had the best intentions and any actions that are inconsistent with those intentions were unintended oversights.

 --  When we first saw the DVDs, we were a bit surprised.  Normally, we would have expected to have seen artists writing about the DVDs on their websites and MySpace pages weeks in advance of release.  Yet of the 43 bands that appeared on the DVDs not a single one made mention of them on either their websites or blogs.  Further, of the many artists that we contacted, all were surprised about the DVDs.  Why weren’t the artists informed that these discs would be hitting the market? Wouldn’t that have been a natural part of the marketing campaign?

 --  While all the artists we’ve spoken with knew that they would be appearing on a television show, none of those artists realized that their performances would be sold for profit.  We’ve seen a version of the “True Music” contract that gives HDNet the rights to do whatever it wants with the performances.  That is not the issue.  The solicitation letter that artists receive asking them to be a part of the show certainly does not make clear any ancillary uses of the performance.  In fact, it could be argued that the letter makes it sound like the performance will be used for promotional use only.  Katie Daryl emailed me a copy of that solicitation letter, and I’ve attached the document to this email.  When you read this, can you understand why many artists may not have expected these performances to be sold?  Do you think that there is a good faith responsibility to let artists that create free original content for your network know the full scope of your intended use for that content?

--  The rights granted by artists in the contracts we’ve seen are extremely broad (emphasis mine):

“In consideration of the Artists appearance in the Program, and without further consideration from HDNet, HDNet and its designees shall have the sole, exclusive, and perpetual right to simulcast, telecast and/or broadcast, the Concert and the Program and/or any portions or excerpts thereof on HDNet’s affiliated and related programming services, as well as the right to exploit the Program, in whole or part, in any and all other media now and hereafter known, throughout the universe and in perpetuity.”

Recently, MySpace had to back down in a controversy over its broad terms of use (http://news.bbc.co.uk/1/hi/technology/5224146.stm). And on our site, we’ve had to walk a fine line between making terms too restrictive for us to do business and so expansive they would scare off artists. Are your terms primarily geared for protection, or is there a larger plan to repurpose this content many times and in many different ways?

--  One of the DVDs in the “True Music” series is of particular concern.  That DVD features Salim Nourallah, Spector 45, Deathray Davies, and Max Stalling.  These performances were filmed at the Lakewood Theater during a benefit for David Cunniff, the man who was severely beaten at an Old 97s concert that took place at the Gypsy Tea Room.  The artists that performed were doing so solely to help David with his medical bills.  I have two questions regarding this particular DVD.

 1)      In the March 10^th, 2005 issue of the Dallas Observer, you were quoted as saying the following about HDNet’s plans to film the benefit:  “We just thought it would be great to help out David…and recognize the bands for their efforts and great music as well.”  However, based on this DVD, it appears that the episode of “True Music” that featured music from this concert did not make one mention of David, or directly mention that the bands were playing for a selfless cause.  Viewers of the show were not given any information on how they could help David with medical bills.  We understand that this episode aired in the past, and you cannot go back in time.  We also certainly can appreciate that you were most likely not the one in the editing room.  But since the performances look like they will continue to be distributed in the future, shouldn’t someone go back into the editing room and highlight the goal of the benefit for future viewers?

2)      Bands whom we have spoken to that appeared on this DVD felt strongly that the goal of the night was to help David, not to profit financially.  The bands strongly believed that any profit from a DVD of this show should go to the Cunniff family.  Are there any plans for that?  In hindsight, shouldn’t any such plans have been discussed with the Cunniff family in advance of these DVDs being released?

 Thanks so much for your time.  We really do appreciate it. I’m sure I’ll have some follow-up questions. While we don’t have a firm deadline on this, it’s our intent to publish sometime this week, and we can’t start writing the story until we hear back from you.

 

-Alan Cohen

http://www.pegasusnews.com