CMU Daily 27.06.17: Guvera accused of misleading investors, Pandora to exit Australia as CEO steps down

Guvera being investigated by Australian Securities And Investments Commission
Flunked streaming music firm Guvera is being investigated by the Australian Securities And Investments Commission over allegations it misled inexperienced investors who have been left wondering what happened to the $180 million that was pumped into the company.

As previously reported, Australia-based Guvera finally crashed out of business last month. The company had never really recovered from its failed attempt at an Initial Public Offering a year ago, when the Australian Securities Exchange blocked the flotation in a highly unusual intervention based on concerns over the firm's prospectus and business plan.

In the wake of the failed IPO, Guvera bailed on a number of countries and put two of its Australian subsidiaries into administration. One co-founder, Darren Herft, stood down from his executive role at the business, leaving the other co-founder, Claes Loberg, to run the company. He insisted the service could still succeed in certain emerging markets.

Then in May it emerged that Loberg had now resigned, and only Herft was left on the company's board. At the time he said he was looking for two of the firm's investors to join him on that board to help "rebuild our company", reckoning that Guvera Limited still owned some "valuable IP" and was due a sizeable tax refund.

According to ABC, the ASIC has begun questioning a number of the company's investors about how they came to invest in the risky business of streaming music. In the spotlight is how Guvera - and a private equity outfit also run by Herft - raised money from a large number of small-time investors via a network of accountants.

It is alleged that the accountants who encouraged their clients to invest in Guvera received referral fees and commissions, and/or free trips to investor conferences in places like Hawaii and Dubai. The ASIC is also reportedly investigating whether the marketing of Guvera shares breached sections of the country's Corporations Act which are specifically designed to protect inexperienced investors.

ABC quotes one such investor, who bought $90,000 of Guvera shares in 2014, as saying "we're asking the question: where did all the money go?" adding that "they should be held accountable. We should have answers".

Responding to ABC's questions by email, Herft insisted that Guvera had not abandoned its 3000 investors, declaring: "We have a platform and access to music rights and a company to fix for 3000 people". Which suggests Herft thinks he can still make a go of Guvera, possibly via an Initial Public Offering on the Macedonian Stock Exchange of all places.

We know this because Herft last week announced that he'd persuaded two new people to join the board of the Guvera company, but one of those then immediately resigned after finding out about the Macedonian Stock Exchange plan, because of a potential conflict with other business interests he has in the East European country.

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Failed Fyre Festival seeks dismissal of at least one post-debacle lawsuits
Fyre Festival co-founder Billy McFarland would like to have dismissed at least one of the mountain of lawsuits that have been filed since his luxury island festival crashed and burned in April, in part based on a technicality in his contract with the plaintiff.

As well as being sued by his suppliers and customers, McFarland - who conceived the Fyre Festival shambles with Ja Rule - is also being sued by some of his financial backers.

As previously reported, Oleg Itkin loaned the Fyre business $700,000 and went legal in the wake of the event's collapse in a bid to get his money back. Itkin is seeking to freeze McFarland's personal assets in order to reclaim his loan plus damages, totalling $1 million.

McFarland argues that only $200,000 of the monies Itkin loaned to his business came with a personal guarantee - and he has put that sum, plus interest, in an escrow account pending the outcome of this legal spat. The rest of the loan was not guaranteed in this way, so Itkin can't go after the Fyre founder himself for that money.

Besides, McFarland says in his response to the lawsuit, his agreement with Itkin said that disputes would be settled via arbitration rather than by going to court.

According to AMP, McFarland's recent court filing states: "The investment agreement contains a broad arbitration clause requiring any disputes related to the agreement to be settled via arbitration - not in this court. Accordingly, the court should deny plaintiff's motion for summary judgment and instead dismiss or stay plaintiff's action in favour of the arbitration mandated by the agreement upon which his claim is based".

So that's all good fun isn't it? We look forward to finding out what other technicalities will be cited as McFarland's lawyers work their way through that stack of Fyrey litigation.

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Dappy gets suspended sentence over knife possession charge
Former N-Dubz rapper Dappy has been handed a nine month suspended sentence in relation to the altercation last month in which he was seen near his home in Hatfield brandishing a knife.

Dappy, real name Costadinos Contostavlos, was arrested amidst allegations he had assaulted his partner Imani Campbell, and threatened others with a knife, after a lively argument between the couple at the home they share with their baby daughter spilled out onto the street.

The prosecution ultimately accepted Contostavlos's not guilty plea in relation to the charge of common assault, but the rapper admitted to being in possession of a knife at the time of the fracas.

Reports last month suggested that, after being told the police had been called, an angry Dappy declared that he would "stab the Old Bill in the face". He's also said to have pointed the knife at members of the public who were concerned about Campbell.

However, she played down the significance of the incident in court, insisting that, in Contostavlos, she "couldn't ask for a better father and partner".

In addition to the suspended jail sentence, the rapper must attend a relationship programme and was given an additional ten day rehabilitation requirement order.

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Chart rules to change to thwart Ed Sheeran and his ilk
Hey, so you remember that week when Ed Sheeran pretty much took up the entire UK top 20 singles chart, and everyone said the charts were broken and the Official Charts Company should do something about it? Well, the Official Charts Company has done something about it. It's made everything slightly more complicated. Hooray!

The last big change in the singles chart was back in 2014 when streaming data was first added to it. There it was deemed that 100 plays of any track was equivalent to one sale. Then last year the chart makers decided that was all wrong, and actually 150 streams was equal to a sale. The aim there being to stop big streaming hits clogging up the chart for weeks on end and preventing newer tracks from having a go.

Then that bloody Ed Sheeran came along with his new album, and suddenly he had nine songs in the top ten. Surely that wasn't supposed to happen. Surely something must done. Won't someone think of the children! By which I mean, newer artists not getting into the chart simply because other people are more popular.

Under the new rules, which will kick in next month, an artist will only be allowed to have their three most popular songs in the top 100 at any one time. So none of that Ed Sheeran business anymore, oh no.

"The move will make it easier for new hits and artists to feature in the chart by preventing multiple tracks from popular artists dominating the singles chart", says the OCC. "The move will minimise double-counting of album tracks between the Official Singles and Albums Charts and make the two charts more distinct. The new changes are expected to boost the number of chart hits by around 10%".

Calling out artists who have been hogging the chart by being too popular, the official stat counter went on: "In the past twelve months, artists including Drake, Stormzy, Kendrick Lamar, Chainsmokers, Little Mix, The Weeknd and Ed Sheeran have had multiple tracks in the Top 40. The changes will limit the domination of such artists".

Presumably for most artists, the three most popular songs are likely to be the singles from their latest album, so the charts will look a bit more like they used to in the olden days. But at the same time, the sudden popularity of an unofficial single - a 'Ding! Dong! The Witch Is Dead', or whatever - will still also get a look in. I hope you're all happy now.

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East London venue apologises for saying bashment and trap music attracts a "poor quality demographic"
An East London venue has apologised after its General Manager told the promoter of a benefit show being staged to raise money for victims of the Grenfell Tower fire that the acts he had booked would attract a "poor quality demographic".

Taireen Hussein from Haqiqi Events posted a screenshot of the email he received from Jordan Wells at the Trapeze Bar in which the venue's GM says he has seen the publicity for the promoter's event and "I am disappointed that I see your artwork and flyers have described your music genres include bashment and trap music".

The email says that the venue was not aware that this was the kind of music due to be played at the benefit show, before stating "these types of music are crap and we do not entertain them as they attract [a] poor quality demographic and result in problems".

The venue's comments, of course, suggest discrimination against certain genres based on the kinds of audiences it is assumed they will attract. Such discrimination has been criticised in the past, though usually its licensing authorities and police forces who are accused of employing such discriminatory practices.

After Hussein cancelled his event and posted the venue's email to Twitter, the company that operates the Trapeze Bar distanced itself from Wells's comments. Miroma Leisure also pledged to make its own contribution to the Grenfell appeal if Haqiqi Events decided to stage their show at its venue after all.

According to IQ, the statement from Miroma Leisure reads: "The owners of Trapeze apologise for the recent actions and opinions expressed by the Trapeze General Manager. Trapeze [is] committed to a policy of welcoming all guests into the venue and does not discriminate in terms of race, age, colour, sex or national origin".

It goes on: "The management team of Miroma Leisure, owners of Trapeze, are undertaking a full investigation of the matter and will take affirmative action following the outcome. We have spoken with the promoters and offered them another date of their choice and offered to double the money raised on the night for Grenfell as a gesture of goodwill. We plan to assist the promoters to raise awareness of the new date. We will be proud to announce the new date in due course and do everything possible to make the event a resounding success".

Hussain is yet to decide whether to reschedule his show at Trapeze.

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Tim Westergren to step down as Pandora CEO, as Australian operations close
Pandora CEO Tim Westergren is stepping down from the role, according to sources who have spoken to Recode. Meanwhile, AdNews has reported that the streaming service's operations in Australia and New Zealand are closing down, meaning it will become a US-only business once again.

A co-founder of the streaming business, Westergren was also CEO at Pandora in the early days of the company. He returned to the position last year, to the displeasure of some investors. Major shareholder Corvex Management felt that his return indicated that Pandora was not working towards selling itself off, which Corvex had been pushing for.

More recently, Pandora instigated a strategic review of its business, during which a sale was indeed considered. Then earlier this month a sizeable stake in the company was sold to SiriusXM, which had long been mooted as a potential new owner. At the same time Pandora also sold off its ticketing business, Ticketfly.

Although Westergren is expected to stay on at Pandora in another role, his departure as CEO may be a move to appease shareholders still concerned about the lack of profit at the streaming service. If Recode's sources are correct, it seems that there is no one in line to replace him as yet, making his departure as sudden as his return last year.

Meanwhile, it has been reported that Pandora will cease to be available in Australia and New Zealand. Originally US-only, where it benefited from a specific compulsory licence under American copyright law giving it access to recordings at rates set by the Copyright Royalty Board, the personalised radio service launched down under in 2012. However, the majority of its 81 million active users remain US-based, with 1.2 million actively using the service in Australia and New Zealand.

Jane Huxley, who launched Pandora in Australia and New Zealand and had been its Managing Director since, stepped down from the company in March. At the time, Westergren praised her for having "firmly established our brand in the ANZ market". Head Of Revenue Operations in the Australian office Taly Yaniv has been acting as interim MD since then, but no permanent replacement has been announced.

Pandora has had global ambitions at various points in its history, and the move into the Australian market was seen as a first step in that plan. More recently the service was talking about a launch into Europe, though that was before the aforementioned strategic review.

While Pandora is currently still available in Australia and New Zealand, if it does indeed leave the market, that will be yet another reduction in the range of streaming services available in the country following the collapse of home grown Guvera. Deezer also closed its local office in Sydney in 2014, but continues to operate in the country.

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Deerhoof hit out at Daytrotter website over the monetisation of their 2009 session
Deerhoof published a Facebook post over the weekend cautioning artists considering recording a session for Daytrotter, the long established US-based website that presents a steady stream of original live session recordings.

Although starting off by conceding that "the vast majority of musicians have no doubt had a good experience working with" the site, and that "I am not legally permitted to say whether any of the following happened to Deerhoof", the post then goes on to describe the band's experience with Daytrotter, relating to a session they recorded for the site in 2009.

Deerhoof's two main grievances are that their session was put behind Daytrotter's paywall despite them being told it would be available to fans for free, and that a subsequent physical release of the session went out without the band's permission. The band say that at different points in the saga they were either met with a flood of apologies from the Daytrotter team or radio silence, until, that is, they started dealing with the owner of the site's parent company, the sometimes contentious Wolfgang's Vault.

At that point, they allege, they were told the company would "take appropriate action" if they were to "disparage Daytrotter in any way" to the music community. The site's management and lawyer then subsequently insisted that, under US copyright law, Daytrotter controlled the masters in the band's session and could do whatever it liked with the recording. The band say that it was only at that point that they began "to understand that what happened [was] not in fact a screw-up, but the legal and deliberate business practice of [the Daytrotter] company".

Responding to Deerhoof's post, a spokesperson for Daytrotter told Pitchfork: "Over the last eleven years, Daytrotter has recorded more than 7000 bands and 32,000 songs in Daytrotter sessions. Daytrotter has had a membership model for eight and a half years. The price of the monthly membership is used to keep our studio open and cover our costs. Daytrotter has never in its history been profitable. Daytrotter sincerely appreciates all of the artists that it has had the opportunity to work with, and looks forward to continuing to having artists from all over the world coming to Daytrotter's well known studios to produce great music and share this music with everyone".

On Deerhoof's specific allegations, the site added that the band had "recorded its session eight years ago and there was an agreement between Sean Moeller, the founder of Daytrotter [now departed], and Deerhoof in regards to releasing their Daytrotter session on vinyl. The current Daytrotter team looks forward to continuing to record and promote bands for years to come".

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Widowspeak announce new album
Widowspeak will return with a new album, 'Expect The Best', on 25 Aug. The follow up to 2015's 'All Yours', news of the release is accompanied by first single 'Dog'.

Vocalist Molly Hamilton says of the new record: "In the past I've felt compelled to write songs that are more optimistic than I'm actually feeling, as if I could make it true, as if everything in the past was significant or beautiful in a way, even if it was painful. But the truth is that not everything makes sense, and not every day of your life is an experience of clear cut emotional clarity".

"I struggle with this compulsion to pull away from people", she continues. "Pull away from the things I enjoy doing, and sometimes literally picking up and moving away when I am feeling uneasy and anxious about my future in a given space, physical or mental. Social media these days can exacerbate that as well".

Watch the video for 'Dog' here.

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IndieCon, FastForward, Liam Gallagher, more

Other notable announcements and developments today...

• An Australian version of the UK's indie-label focused IndieCon conference will take place alongside the annual awards of the Australian Independent Record Labels Association on 27 and 28 Jul.

• The people behind the Amsterdam music conference FastForward are launching a London spin-off event called, well, FastForward: London, on 15 Sep at the British Library.

• Liam Gallagher's debut solo album 'As You Were' will be out on 6 Oct. "I didn't want to be reinventing anything or going off on a space jazz odyssey", says he. "It's the Lennon 'Cold Turkey' vibe, The Stones, the classics. But done my way, now".

• Clean Bandit and Marina And The Diamonds have released their collaboration, 'Disconnect', following their performance of it at Glastonbury.

• Grizzly Bear have released new song, 'Four Cypresses'. New album, 'Painted Ruins', is out on 18 Aug.

• Broken Social Scene have flapped out another new song. Here's 'Stay Happy'.

• Guided By Voices will released a new album, 'How Do You Spell Heaven' on 11 Aug. From it, this is 'Just To Show You'.

• Tempa has released the video for Swifta-produced new single, 'Gimme Respect'.

• Joy Crookes has released new single, 'Power'. "'Power' is a song about the misuse of power", she says. "I felt like it was important to speak on this issue especially considering our current social climate. This song is dedicated to those who feel powerless"."

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Ed Sheeran didn't mime at Glastonbury, who is even saying that?
Ed Sheeran has hit back at people who have accused him of miming during his set at Glastonbury. Well, not playing the guitar bits live, anyway. The controversy arose from his use of a Loop Station to build his own backing tracks live. Apparently some people felt this was a kind of black magic that shouldn't be allowed.

"Why is he bothering with a guitar, it's carrying on in the background when he stops playing", wrote one person on Twitter, for example. "Why is Ed Sheeran miming playing a guitar to a backing track", asked another.

As this criticism apparently grew, Sheeran wrote on Twitter yesterday: "Never thought I'd have to explain it, but everything I do in my live show is live. It's a Loop Station, not a backing track. Please Google".

I am very obedient, so I Googled away. And now, thanks to the Mirror, I know that a Loop Station is better known as "Ed Sheeran's controversial Glastonbury gadget".

I also just spent a lot more of my morning than I really had time for watching videos of people playing music using loop pedals. So, to pass this off as research, I will share some of them with you now.

Here's the 'Later' performance using one that shot KT Tunstall to fame back in 2004.

Here's the final of this year's Swissbeatbox Grand Beatbox Loop Station Battle.

And here's Ed bloody Sheeran giving a tutorial in how he uses his loop pedal to cheat at music all the way back in 2012.

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