Allen B. Klein died of Alzheimers in New York, the Times says. The description of him in the headline—”managed music legends”—is a joke. He ripped off music legends. He was the biggest crook pop music has ever seen.

Among other things he pulled off the crime of the century—stealing the Rolling Stones’ music from the band.

You don’t hear about this much; it’s just one of the ways the music press sucks.

Basically, Klein went to the Stones in 1966. The band was frustrated; it was selling millions of records, but not getting any money. The band members were essentially broke. Klein told them he could pry money out of Decca, and, after an impressively profane and confrontational meeting with the company’s lawyers, succeeding in vastly improving the band’s deals with the label.

Sounds great, right? That was just the setup. The band’s company was called Nanker Phelge Music. Klein created a new company, Nanker Phelge Music USA. In the band’s new contracts, the band’s money and control of its creative output was vested in Klein’s company.

Now, it must be said, one assumes this set-up was all there in black and white in the contracts the band signed. On one level it’s their fault. But from the record that remains (I’m basing all of this on the accounts in the numerous histories of the band and what coverage Rolling Stone provided, back in the day, of the group’s subsequent lawsuits with Klein), it seems as if the band would have had to have the presence of mind and suspicions to initiate a pretty sophisticated financial and legal review of the documents that their own manager was putting before them. (For example, even if they noticed the slight change in the name of the operative company, they would have had to figure out that Klein had incorporated it.)

It’s unlikely that Klein was in any way operating at the band’s direction (”Hey Allen, we want to give you control of all our master recordings. We won’t take no for an answer. We want you to have control of our masters and make all the money off of them. Not just temporarily. Forever”) or with its financial interests in mind.

According to my namesake’s meticulous history of these years, Stone Alone, once the band tried to untangle itself from Klein it found their options extremely limited. Wyman says the band’s lawyers thought they were owed $17 million; in the event, they settled for $2 million, half of which went to Jagger and Richards for their songwriting. To this day Klein owns the band’s pre-1970 masters outright, and administers the Jagger-Richards publishing as well.

(That’s why you see Klein’s company name, ABKco, on the classic 1960s-era Stones CDs. There’s even some evidence he has his fingers in some post-1970 work by the band as well. A sense of his control over the band’s output is that his company released the Rock ‘n’ Roll Circus CD and DVD in recent years. I can’t confirm it right now and I’m open to being corrected, but my understanding is that for some reason he also controls the rights to the band’s unnervingly powerful 1972 concert film, Ladies and Gentlemen the Rolling Stones, which has never been released on VHS or DVD.)

That’s just part of his grimy history*, of course, and again, he did operate as a singular force in rectifying some of the unfair label-band contracts of the era. All that said, he stole one of the most valuable artistic treasure troves of the second half of the 20th century. He was a crook and should have died in jail.

——–

* His interactions with the Beatles were similarly rococo. One amusing footnote to rock history I found in a 1969 Rolling Stone: Klein’s extended explanation of why Lennon and McCartney didn’t need to buy back control of their publishing operation, Northern Songs, from the larger company that controlled it. The name of that bigger company? ATV Music. Had that happened at least one extravagant musical career would have been much different.

As the labels continue to see their public business models implode, you gotta figure they’re going to spend even more time making sure that their private ones don’t.

The private ones, of course, involve screwing artists by not paying them royalties. I was just catching up on the latest suit involving such shenanigans.

Cher is suing Universal, saying it owes her and the heirs of Sonny Bono royalties from two compilation albums. There’s a fairly substantive Hollywood Reporter story on it here.

The article doesn’t make it 100 percent clear, but the issue seems to be the difference between royalties and licensing fees. Universal farmed out both Cher’s and Sonny & Cher’s music to another label for compilation purposes; in general terms, that would fall under the rubrick of licensing, fees from which might typically be split between label and artist fifty-fifty.

This is how the fees break down if an artist’s song is used in a movie, or is picked up for a Now That’s What I Call Music collection, on the grounds that it’s essentially free money.

A normal record sale, by contrast, would generate a normal royalty payment, which might typically be 20 percent of the wholesale price of the CD.

Cher’s suit says that Universal let a Warner repackaging arm put out the compilations, but tried to route the money back to make it look as if it had come in through normal Universal sales channels, and subject to the lesser percentage.

As the labels continue to sue file-sharers—and generate press clippings that cite unchallenged the labels’ crazily high estimates of their alleged losses—it’s important to remember that the real criminals are the labels themselves. They routinely underpay royalties, and then make it punitively difficult to audit.

The RIAA and MPAA have not been coy about suggesting that what the U.S. needs is a “three strikes” law like the one under consideration in France, under which serial illegal downloaders, say, would lose their internet access after a series of warnings.

Hitsville favors this approach if the principle is extended to other aspects of the debate.

If Mitch Bainwol, the head of the RIAA, lies three times to reporters via email, he loses his internet access. If he lies three times on the phone, the RIAA has its phone lines cut off.

If the RIAA files three frivolous lawsuits, it loses access to the courts.

If Warner Bros. is found to have not paid three artists their royalties, it is prohibited from selling CDs. If Sony records is found to have paid off three radio stations to play songs by its artists, in violation of federal payola laws, it loses all access to terrestrial radio.

Am I on to something?

The iTunes Store went live with its new increased prices this week. Most coverage, NYT and LAT included, led with the fair and balanced news that the store was raising the price of many hit singles to $1.29 and lowering more obscure tracks to 79 cents.

In reality, since the $1.29 price will be for the most popular songs, the ratio in terms of sheer number of sales will be highly skewed to the new high price, and should in the short term significantly increase the income at the store.

That’s what all the talk about more “flexibility” in the prices was all about: Selling things for more money.

In classic record industry fashion, this does indeed look good in the short term, but not in the long term.

Why?

The downside for the labels is that the price hike came only after they agreed to remove the DRM from the iTunes.

Did Jobs get the best of the labels yet again?

Imagine two teens buying music. They are used to buying songs for 99 cents. They notice the price is higher … but the restrictions on just emailing a downloaded song to a friend has been removed.

Aren’t the labels giving them a rationale to buy the track once and send it around to their friends? And as the learning curve for that rises, won’t the rate of sales for the higher-priced songs start dropping?

“Oh, Madison, we shouldn’t—file-sharing is illegal! It’s stealing!”

“Oh Barlow, don’t be silly. They just jacked up the prices! And besides, they specifically changed it so we can just email songs. They want us to!”

There will be a learning curve, of course, but how long is it going to take 14-year-olds to get into the habit to emailing any song they buy to a half-dozen friends?

Greg Sandoval at Cnet was first to report that Apple has finally cut a deal with Warner, Sony and Universal to sell DRM-free tracks on iTunes.

The catch—Steve Jobs is apparently retreating from his long-time insistence on a 99-cent consistent price:

Apple has cut deals that will finally enable iTunes to offer songs free of copy protection software from the three largest music labels, according to two sources close to the negotiations. In exchange, Apple has agreed to become more flexible on pricing, the sources said.

Note how even Cnet is using the phrase “become more flexible on pricing” in its record-industry preferred way, as a euphemism for “raise prices.” (See my previous discussions of this tendency here.) The piece is a little too-industry friendly overall:

The good news is that the price of catalog music is falling to 79 cents per song. The labels will get an opportunity to price some hit songs for more than 99 cents but eventually those songs will drop to 79 cents, according to one source.

Before iTunes users get too worked up, they should remember that song prices at iTunes haven’t increased in five years. According to the Consumer Price Index, a 99-cent song in 2002 would be worth $1.17 today.

Since the bad news was “flexibility,” the good news makes things seem all better. The real bad news, which the piece doesn’t say flatly, is that the hit songs of the day Apple is going to allow the companies to charge more for will of course make up a huge percentage of a day’s typical sales.

As for the CPI, the peer-to-peer networks offered music for the competitive price of zero in 2000. Today, adjusting for inflation, the price there is still … free.

Last graf of the Cnet piece:

Not only will new music downloads be free of copy-protection software, but Apple and the labels will begin removing DRM from music already available in the iTunes Store, the source said. However, it’s unclear what will happen to songs that have already been purchased.

Removing the DRM from already purchased music would be an important and somewhat ameliorative gesture by the labels how wrong their insistence on DRM was.

—–

The question of selling non-handcuffed music raises the question of how much the companies are going to be sacrificing in sales. Without the copy protection, purchasers will be able to do what comes naturally: Email a friend a song, right after purchasing it at the iTunes store.

It’s possible to pass along legitimately purchased music to friends right now in any number of ways, ranging from simply letting them rip a store-bought CD to the more laborious one of burning a physical CD from one you bought on iTunes (i.e., thereby removing the DRM) and letting them import that.

The new way, obviously, is going to be easier, and ironically enough it’s going to hit the hits, most minor and major, most heavily, because someone who eagerly buys a new Beyoncé track will presumably have a friend or ten who are interested in it as well and can now immediately and easily pass it on. If you’re digging up an old song from Nirvana’s first album, by contrast, it’s unlikely you have ten friends who are going to want it that same minute.

You’d think, in fact, that the industry would charge less for hits (to encourage people to buy it online rather than get it from a friend) and price catalog higher—if you want that old Nirvana song, you’ll pay the extra quarter, and the chances are lower a friend of yours would have it.

I think Jobs, for all his severity, was appealing to the better nature of people with consistent pricing. In a world where you don’t have to buy, the image of an industry playing fair, for once, on pricing couldn’t have hurt.

The WSJ has a fairly shocking story about two books that just came out on Clear Channel. The first, by Alec Foege, you might remember from the extended interview Hitsville did with him on the book’s release a month or two back. Foege is a longtime reporter on the music industry and the author of several other books.

That exchange is here.

The other was written by Reed Bunzel, a onetime radio trade journalist. But there’s more to the story; let’s let the Journal’s Sarah McBride tell it:

In 2005, radio-giant Clear Channel Communications Inc. learned that a writer named Alec Foege was planning a book about it. The book’s working title, “The Monster That Ate Mass Media,” suggested something less than a puff piece was in the works.

Clear Channel mounted a counteroffensive, lining up its own writer to tell the Clear Channel story its way.

As a result, dueling books about Clear Channel have recently hit the shelves. Mr. Foege’s book—now titled “Right of the Dial: The Rise of Clear Channel and the Fall of Commercial Radio”—chronicles the company’s role in the consolidation of the radio industry.

It competes with “Clear Vision: The Story of Clear Channel Communications,” by Reed Bunzel, former editor of the trade magazine Radio Ink. Mr. Bunzel says Clear Channel paid him to do the book but declines to say how much. Another journalist says he was offered more than $100,000 to take on the project. The book doesn’t disclose Mr. Bunzel’s financial relationship with Clear Channel, but careful readers may notice that the company holds the copyright to the book.

Allow me to make a few observations McBride is too polite to. One, this is strong evidence that Clear Channel remains a thuggish company that utilizes dirty tricks and subterfuge to get what it wants.

And two, Reed Bunzel is …. wait, what do you call someone who provides certain intimate service for money but who doesn’t reveal it to his readers? What’s the term I’m looking for?

a) A journalistic whore?

b) A sellout, lying, corporate toady?

c) A fake author, a cheat, and a sleazebag?

d) all of the above?

In Billboard ($), the magazine’s “With the Brand” columnist, Josh Rabinowitz, says the time has come to award a Grammy for best song and use of music in a commercial. His five arguments:

1. With a flailing record industry in full effect, many of the significant recording “players” of the academy world have migrated to the branding music world. Thus, in effect, the Grammys can continue to support their industry.
2. With the dissolution of meaningful radio, advertisements—whether on TV, in cinema or on the Web—are bridging music from artists big and small, known and not, to the masses. Feist’s breakout via an Apple commercial is a most relevant, current example of this. But how many more can you name without really thinking?
3. Some of the biggest artists are creating music specifically for ads, in partnership with brands, and they are just beginning to be nominated for Grammys. Nas, KRS-One and Kanye West, along with producer Rick Rubin, earned a nod for the Nike ad track “Better Than I’ve Ever Been.” And the Lifehouse song “From Where You Are,” created specifically for an Allstate ad, debuted at No. 61 on the Billboard Hot 100 last fall.
4. The brands, like Wal-Mart, Target and Apple, are becoming key distributors of recorded music in the States.
5. As younger people embrace mobile and digital technology as their sole means of gathering information, communicating and accessing their entertainment, it’ll be the music from ads and brands that blare and/or purr through their headphones. Why not stay in tune with the future consumers of music?

This is a long-overdue proposal. My only complaint is that it is too timid. We can look forward to the day when Head On commercials get nominated for Best Picture—and those Ketel One magazine ads make the Booker Prize shortlist.

The New York Post has an unexpectedly substantive story about the funds from the settlements the majors made with the various file-sharing networks some years back. If you recall, Napster alone shelled out more than $250 million to three of the four major labels. (Sony/BMG by that time had corporate connections to the service.)

None of this had yet been disbursed to the artists. (They are the ones the record companies are fighting for, right?)

A contingent of prominent artist managers claims that little to none of that money has trickled down to their clients. They are now considering legal action.

“Artist managers and lawyers have been wondering for months when their artists will see money from the copyright settlements and how it will be accounted for,” said lawyer John Branca, who has represented Korn, Don Henley, and The Rolling Stones, among others.

“Some of them are even talking about filing lawsuits if they don’t get paid soon.”

The story talks to an unnamed company source who said that after legal fees there wasn’t much left. The writer also quotes Irving Azoff, who says that some labels are trying to assess the money against unrecouped advances.

Ars Technica notes the year anniversary of the RIAA’s war on college students with a chat with RIAA prez Cary Sherman.

As Billboard noted in a column I mentioned last week, CD sales are down another nearly 20 percent for January from last year. The effect the RIAA’s campaign against its customers is having can only be described a truly excellent. Sherman is now in the precise position of a captain of a sinking ship directing his crew to take pot shots at the rats leaving it.

But Ars is polite.

Here’s how the numbers look after a year. The RIAA has sent out 5,404 letters in 13 “waves” to over 160 colleges and universities. Of the 5,003 settlement letters sent prior to the batch of 401 that went out last week, “more than” 2,300 of those have resulted in the targeted students settling with the RIAA. 2,465 students have been hit with lawsuits, and all of those are moving through the legal system at different rates. At $3,000 per settlement, over 2,300 settlements translates into at least $6.9 million.

There are other numbers you can generate from those figures. For instance, let’s estimate, I don’t know, $5,000 in RIAA legal fees for each of the cases it pursues. Multiply that by the roughly 2500 cases, and you have more than $10 million. Even if the group’s legal fees are half that, it’s still a wash financially, before you take into account the millions more its silly media campaign costs. And, as the continuing decline in sales indicates, it’s obvious the group’s war is having no effect.

You want to call the effort quixotic, but Don Quixote wasn’t sadistic, vengeful and grim.

The interview is mostly filled with Sherman’s spinning whatever questions Ars asks. Like this:

“Our basic survey data is that the majority of consumers don’t have a problem with the lawsuits,”   [Sherman said]. “You would never know that from reading blogs and websites, [but] when you go out to the general public, our favorables/unfavorables haven’t changed at all.”

But of course, among not the general public but music fans, one suspects the group’s unfavorables have changed. (On the other hand, it’s possible they couldn’t go any lower!) There are two interesting discussions. One is when Sherman contends that the leveling off of activity on the music networks is a result of the RIAA suits. But a rep from Big Champaign, which monitors such activity, says it’s simply a case of market saturation.

The other is when Sherman is asked why Harvard is absent from the list of schools the RIAA has targeted. Ars speculates that it’s due to the industry’s being afraid of teeing off some of the legal talent at Harvard. That seems a little thin; a lot of colleges and universities have serious law schools, right?

As R. Kelly awaits trial in Chicago on child porn charges, a new sideshow on the R&B star’s personal life has opened up. It turns out he was boffing his publicist’s daughter.

You’re probably wondering how old the daughter was; fortunately, she’s 21, which is pretty old for Kelly, who is 41 and has been involved in at least three child-sex or child-pornography investigations.

The woman, Maxine Daniels, is the daughter of Regina Daniels, until recently a longtime publicist for Kelly, and George Daniels, who is described by the Chicago Sun-Times as a “noted music retailer” in Chicago. George Daniels has accused Kelly of having an inappropriate relationship with his daughter.

After Regina Daniels’ departure, Kelly’s camp released a statement, saying,

It’s hard to take seriously the moral outrage expressed by George and Regina Daniels over R. Kelly’s relationship with Mr. Daniels’ adult daughter, Maxine. The fact is that they had no problem with the relationship—indeed, they encouraged it—while Ms. Daniels was on Mr. Kelly’s payroll.

The statement continues:

It was Regina Daniels, then working as a publicist for Mr. Kelly, who persuaded him to attend her stepdaughter’s 21st birthday party. And it was Regina Daniels who shortly thereafter gave her stepdaughter Mr. Kelly’s private phone number, with the admonition: ‘Don’t tell your father.’ It was only after Ms. Daniels resigned her position to avoid being fired for incompetence that her stepdaughter’s relationship suddenly became an issue for her and her husband.

There matters stood, until the daughter, Maxine Daniels, came out last week to say what really happened. Her version, given to a Chicago Sun-Times reporter, is this:

I take full responsibility for my actions. My stepmother and father didn’t know about my relationship with the singer because I knew and he knew that they wouldn’t approve … so I tried to keep it a secret, but when my stepmother found out about our relationship, she resigned because she felt that Rob had ‘crossed the line’ by dating a girl that he has known since she was 7 years old.

The “crossed the line” phrase comes from a statement from Regina Daniels when she left Kelly’s employ: “There are some lines you don’t cross.”

Let’s see: Over the 14 years she worked for him, R. Kelly married a fifteen-year-old, lied about it, and then was forced to have the marriage annulled; had a video tape become public showing him performing a variety of sex acts on a girl—including urinating on her—police say was in her early teens at the time; and had a digital camera surface containing what police said were photos of him having sex with another underage girl. (Kelly goes on trial on charges stemming from the videotape in May; charges from the digital camera were dropped after a judge in Florida disallowed the search of the house that produced the camera. )

Those are the documented charges against Kelly. Even by the elastic moral rules of the music business, the lines that Regina Daniels thinks you can cross seem pretty out there.

(By the way, how can you assess the competence of a publicist who has a client like that to work with? The amazing thing about Kelly is that he has been able to continue his career in the five full years since the videotape came to light, enabled not just by a seemingly incompetent court in Chicago but also the radio stations that continue to play his music, the promoters who book his concerts, the other artists who record with him, and the fans who buy his tickets. Isn’t it weird that he’s allowed to tour, where young girls pay money to be in the same room with him? )