Sirius XM in Some Sirius Trouble

What Happened?

Sirius XM is a company that provides satellite radio in the United States. As of 2013, Sirius has had as many as $25.6 million subscribers. Of course we know all of the details about Sirius XM radio as I'm sure that most everyone know what it is, or has Sirius XM radio in their car. What's great about Sirius XM is not only that they offer commercial free radio and a wide variety of stations; but often times they play recordings from live events. Over the summer you can tune into their Alt. Nation channel and hear live festivals. This year they had a stream going of the Governor's Ball which was hosted on Randall's Island in New York City. It's recordings like these that have landed Sirius XM in a bit of hot water.

This group of goofy looking gentlemen are know as, The Turtles. The Turtles are a group that was mostly popular in the mid to late 60's and wound up disbanding in 1970. Now that name might not ring a bell with most people born after the 1970's but chances are you've heard their hit song, "Happy Together." It's been featured in countless movies and commercials throughout the years. So why is Sirius in such hot water? As I mentioned before in this paragraph, the Turtles were a band from the mid 60's and early 70's. The tracks that were recorded by the Turtles predate the Copyright Act of 1976. Sirius did not seek to claim a license for playing those live tracks from the Turtles and also had no intentions on paying the group royalties. 

"Happy Together" - The Turtles

In retaliation for using their songs without permission, The Turtles filed class-action lawsuits in three states (NY, CA, FL) against the satellite radio behemoth for $100 million dollars. If you're wondering what Sirius XM's revenue was for 2013 like I was, it was $3.8 billion. That $100 million is still a large chunk of change to any company and is nothing to be scoffed at. In the wake of the result of the lawsuit other groups have come forward and have filed lawsuits against Sirius XM and Pandora. According to the New York Times, SoundExchange, which is a digital performance rights agency that specializes in the music industry, is promoting a bill named the Respect Act which will require digital music services to pay royalties to recordings prior to 1976.

Is it Wrong?

From the New York Times article about this case it sounded like Sirius XM had no intentions of paying The Turtles for using their recordings of live performances. It does seem like one of their DJs might have made an honest mistake seeing as though they play recordings of live music and live music seemingly all the time. Sometimes you can even tune in and hear a couple of live recordings of Beatles tracks if you find the right stations. Will Sirius XM see it as just an honest mistake? Probably not, they probably fired the DJ responsible or someone else who should have been overseeing the DJ and should have known better. This is kind of a grey area in terms of ethics. Since the Copyright Act of 1976 didn't go into effect until after The Turtles were done performing, does their work still apply?

I would argue that they do have a right to claim the lost royalties from groups that are playing their music without proper licenses. There were some great artists before 1976 that didn't receive their proper royalties because of the way that groups like Pandora and Sirius XM have interpreted the law. The way that they see it is that they don't have to give royalties of pay a licensing fee to groups that released music prior to 1976. This includes recent Rock and Roll Hall of Fame inductee Cat Stevens. Take his Cat Stevens' song, "Wild World," for example which was recorded and released in 1970. In the minds of Pandora and Sirius XM, they can play his song without having to pay Cat Stevens. However artist Garth Brooks, who recorded a cover of Cat Stevens' song does require royalties since his version was recorded after the Copyright Act of 1976 was passed. 

While I do think that I side with the musicians in this case, not only because The Turtles and Cat Stevens are great artists, but because they have a legitimate reason to be angry with music distributors like Pandora and Sirius XM. What Sirius and Pandora did might not have been legally wrong since they were following a loophole in the law; but it surely is not an ethical decision. It seems like this has become a common practice on the part of music distributors since The Turtles aren't the only ones trying to sue these two companies. The problem is though that the ruling made which granted The Turtles $100 million dollars was only a state level ruling. Hopefully with the passing of the Respect Act, older groups will be able to collect their payments that they deserve. Then maybe the two sides can live, "happy together."

Links to articles used for blog post:

http://www.billboard.com/biz/articles/news/digital-and-mobile/6042278/why-rock-hall-inductees-are-not-getting-the-royalties

http://www.nytimes.com/2014/09/24/business/media/sirius-xm-loses-suit-on-royalties-for-oldies.html?_r=0

http://www.soundexchange.com/?s=Respect+Act

LinkedIn's Freemium Pricing Strategy

LinkedIn is a social networking service that mainly targets business-oriented users. It was co-founded in 2002 and launched in 2003 by Reid Hoffman and other founding members of PayPal. Today, LinkedIn is traded publicly on the New York Stock Exchange under the symbol LNKD. Since its launch, the site has enjoyed an estimated two new users per second resulting in their network of over 300 million users worldwide.

What They Offer

LinkedIn offers people the opportunity to create their own professional profile and create connections to people that they may have worked with via a social network much like Facebook. Users can post photos of themselves, see who has been viewing their page, save job postings that they would like to apply for, and follow companies or professionals that they are interested in. As of 2013, LinkedIn has more than 300 million users that are located in over 200 countries and territories. Due to the growing popularity of the site internationally, LinkedIn has adapted and is now offered in twenty different languages including: English, French, Spanish, German, Tagalog, and Malay.

Anderson's Taxonomy Model

Chris Anderson explains in the article, Free! Why $0.00 Is the Future of Business, that the definition of freemium which was coined by Fred Wilson is, "What's free: Web software and services, some content. Free to whom: users of the basic version." Businesses who decide to use the freemium pricing strategy usually implement it using a tiered system. These tiers usually range from the lowest, free, to some form of, "pro" account or executive level account. One thing that is common amongst websites that utilize this pricing strategy is that the ratio of paying users to users using the free version of the website is low; as low as 1% in most cases. LinkedIn offers four different tiers to their customers, with the majority of its users opting for the free package.

If you're anything like me, then you didn't actually know there were paid accounts for LinkedIn. Which led me to believe that maybe there are other sites that are doing a better job at creating a professional network with more features, but that also costs money. What I soon found out was that LinkedIn is actually leagues ahead of the competition in terms of number of users. Viadeo, which is like LinkedIn but French, only has 50 million users. The only other competitor is XING, which is a German version of LinkedIn has roughly 10 million users. Even though the vast majority of LinkedIn users are only using the free version, it doesn't seem to matter because their user base is so much larger than their competition. This undoubtedly attracts bigger businesses to the site to look at the larger pool of potential candidates.
That's all well and good, but does it mean that they're actually making more money than their competitors XING and Viadeo? LinkedIn in 2013 reported $1.52 billion in revenue compared to XING which reported $70.1 million in revenue and Viadeo which in 2009 reported $40 million (I wasn't able to find more current data for Viadeo on their current revenue). LinkedIn is clearly doing well for themselves based on their number of users and their financial strength. Just to pour on some more data here; LinkedIn is the 10th most visited website in the world according to the Alexa rankings of the top 500 global websites.