Creative Commons: Please Share Your Money To Figure Out How Sharing Makes Money

Guest Post By Alan Graham  (Twitter @agraham999 )
A former music major, I’ve worked in technology for over 20 years. I’ve always been a proponent of technology and in the past have supported many of the principles of the EFF and Creative Commons, but as time has gone by I’ve found myself more and more on the side of the creative class. I’ve watched many friends of mine who work in the music industry start to experience what I’ve personally experienced as a writer in the past 15 years.
Years ago, during the bursting of the first tech bubble, I took a career detour as a paid writer, actually making a living by earning around $1 per word for my work. My last book earned me an advance of $8k, and the total cost to print it, get to market and on actual shelves was somewhere around $50k. I eventually stopped writing professionally, but I happened to see many of my friends later scraping by on the equivalent of $.01 a word, with bonuses of a couple hundred bucks if they could out perform their peers in traffic. I’ve watched the decimation of the creative class due to the “sharing economy” from the inside out, and with ad blocking, it looks like things might just get worse. Is that even possible? Yes it is.
Today I ran across a Kickstarter from the Creative Commons, trying to raise $50k to create an e-book about how you can use the Creative Commons to make a living, and I about lost my fucking mind.
Let’s just begin with a quote from their intro video for the project.
“How do you make money to sustain what you do when you are letting the world reuse your content? We think this is one of the most important questions of the digital age. And we don’t have answers. It’s still too early for simple formulas or plug and play business models built on sharing.”
Holy shit.
It is 2015 and the Creative Commons was founded in 2001. Why are you just now getting around to asking this question? I agree, it is one of the most important questions of the digital age and one I think might have been good to ask 14 FUCKING YEARS AGO.
Must…reduce…rage.
The Creative Commons has had very close ties to the tech industry, accepting millions in grants from companies who benefit from the erosion of copyright under the guise of a public service. Last time I checked (correct me if I’m wrong about this), actual copyright has allowed you to make a living off creative works for quite some time. Now, 14 years after its founding, the CC is finally going to get around to explaining (after they discover the answer) through an e-book how to make money using the CC. Print is on its last legs, the music industry has been Kill Bill’d in half, and don’t even get me started on photos, all predicated on the simple fact of making sharing without permission, payment, or penalty, business as usual.
Let’s dig further into this project:
“Although it will involve the entire Creative Commons staff and community, this project will be spearheaded by Paul Stacey and Sarah Pearson.
Is this not super ironic the writers/creators of this project are already paid employees of CC and therefore don’t need to make money off a work of Creative Commons? No, they have no risk at all of whether they start or finish a project such as this one. At the end of the day, successful Kickstarter of not, they get paid. How about the fact that at least one of those in charge of assembling this project makes over $100k a year? What’s the average take home of a writer these days? What’s the average advance on a book? $50K? Not even close!
So if those assembling the book are already paid, where is this money really going?
Let’s keep going:

With the proceeds from this Kickstarter, CC will:

  • Create in-depth profiles of 24 successful CC business/revenue models based on your votes
  • Visually depict each business model and extract at least 3 high-level lessons for each one;
  • Distill common strategies and patterns in the various business models and publish 6 long-form articles on Medium;
  • Create a lightweight interactive online tool that helps people design open business models;
  • Publish an ebook (licensed CC BY-SA) that combines all of the profiles, analysis, and recommendations from this project.
Whoa whoa whoa. Since when do you let people pay money to buy votes to nominate which “successful” businesses appear in what is in essence a study on the power and validity of the Creative Commons? But that’s not all, if you pledge a minimum of $250, you get an opportunity to co-edit the book. Yes, instead of being paid for your work, you pay them. That’s how writing books works, right? Brilliant! They’ve cracked this whole thing wide open! I’m curious, if I put my credit card down right now and buy some votes AND co-edit the book, can I have my own chapter where I show a real business using regular copyright making money and can I just edit out all the other bullshit? That’s gonna be a short book.
If you pay enough, CC will also personally review your business plan or visit you to help consult on making your business more “open”. This is the same group that has no idea how to actually make money from “open,” but are more than happy to take your money to give advice on that which they don’t currently understand. Actually, that’s not a bad way to make some money, if they were an actual business, but they aren’t. They are a non-profit entity. And speaking of being a non-profit entity, 85% of the donations to the Creative Commons in part go towards Program Services which includes, Culture, Education, International/Affiliates, Legal, Litigation, Science, and Technology. Doesn’t this project fall under education? If you’re going to make the case for how great CC is, shouldn’t you use your existing grant money and donations to make that case?
Not to mention they are releasing some blog entries and a fucking e-book. It doesn’t even have print costs. So outside the costs that should likely be covered by their budget for outreach, why do they need to raise $50k?
Via the Kickstarter:

“Our goal is to begin to answer what we consider one of the most important questions of the digital age: how do creators make money to sustain what they do when they are letting the world reuse their work? 

Again, you don’t already fucking know? I mean it has been almost 15 years. Should you not have this answer already? I get that it has been problematic considering when you say “reuse” you mean give away for free. It is really hard to make money off of stuff when you teach people it has no value other than attribution, hugs, and hi-fives for how open we all are now. Although all that openness does often work in the favor of those who wrap ads around everything.

But in fact, doesn’t this Kickstarter offer proof that your sharing model doesn’t work? You are asking us to fund a study to find the answer to something that I can answer already. I can point you to thousands of businesses and citizens that use regular ol’ copyright and licenses and make money every single day, but I can’t think of a single CC sharing model in the past 15 years that has been a windfall for creators that doesn’t turn them into some exploitable product wrapped around some other sellable product. Boom…where’s my Kickstarter?

We are starting this work by trying out our own open business model here on Kickstarter. We want you to both support us, and help steer this project.”

Right, because what you want from a study is a bunch of backers who give money in order to have influence over the project. Yes, anyone with a credit card gets to put their $.02 in. That’s the American system alright. God I’m so tempted to back this right now…must resist!
Creative Commons is not a business, but a not-for-profit organization, so the idea that they are trying out their own “open business model”, seems contrary to their stated purpose. And since when is Kickstarter a business model? If you are using Kickstarter to make a point of a successful business model, you have already failed, as Kickstarter isn’t designed at all for making a living, but (and watch what I do here very carefully breaking it down) KICK-STARTING a project by which you will then be able to make money off of once it is released. Of course this e-book and project will be offered free and will make no money at all which again tells me your “open business model” is not a business at all. If you are holding this up as an example of how to run a business, then you have already failed.
…which then begs me once again to ask…
Why do you need $50k to assemble a free e-book project? I wrote an e-book a couple years ago in a few months (that’s still sitting on my hard drive) for free. All the tools for assembling it were also free. So what are we talking here, labor? Aren’t you already paid by the CC anyway? Why not simply ask for submissions? Aren’t you all about sharing free content? Won’t people freely share that feedback if you ask them? Creative Commons is entirely built on the premise of sharing, asking, and giving…for free. So, why not simply ask, share, and then just attribute?
“Note: Creative Commons is a 501(c)(3) nonprofit organization. Your contribution is tax-deductible to the extent allowed by law. CC will issue tax receipts for all donations exceeding $250.” 
 
Kickstarter forbids any charitable giving or financial incentives, but they do allow tax deductions. I wanna say that giving money in exchange for a tax deduction qualifies as a financial incentive, but I don’t make Kickstarter’s rules. Sure, you get an e-book and a bunch of blog posts for pledging, BUT SO DOES EVERYONE ELSE…it’s going to be released for free! You aren’t paying for the next great coffee-making doohicky, you are donating money to a cause, which returns to you a tax-deduction, that then gives the final product away.
That isn’t business, that’s charity.  
This organization gets millions in donations and here they are asking us to crowdfund something that should fall under their charter to produce and release as a public service. If you believe so much in your mission, put your millions in grants where your mouth is. In fact, if you read the CC wiki under Affiliate Project Grants, you’ll find the following information on past grants:

Creative Commons is excited to announce the CC Affiliate Project Grants. These grants are part of funding from Google to help strengthen and support the work of CC’s Global Affiliate Network.

The Project Grants are designed to seed affiliate projects that support and forward CC’s mission in your country or region and promote a broad understanding and adoption of open policies and related practices around the world. Depending on the final number of selected projects, proposals submitted by CC affiliates and community members will be selected to receive up to $20,000 USD towards their project(s).

So if Google and CC are so keen to give out money to show how great open policies are, why not grant $50k to an outside objective team to put together these materials without having donations…er…backers buy votes to influence the outcome of the project?
I feel like this is one more fleecing of people who don’t understand what is at stake by supporting this shit. We should call them on their bullshit and this should be pulled down. Creative Commons, you should pay for this out of your own pocket…eat your dog food!
There was as time, many years ago, when I respected what these organizations were trying to accomplish by making the web work better, but I realized through my experiences and those of my peers and friends (who were creators), that these organizations were founded by people sympathetic to tech companies. Technology companies have used tools like Creative Commons to their advantage to fill their platforms full of the creations of others, all the while teaching them that their own creations have no value at all, other than the occasional attribution from those who often don’t bother to even give credit where it is due.
Almost 15 years with the promise that Creative Commons would make everything better. But it isn’t better. We’ve been given anecdotal evidence again and again how great the sharing economy is for the creative class, and to hear from Creative Commons now that through all these years…
“…we don’t have answers. It’s still too early for simple formulas or plug and play business models built on sharing.”
…is infuriating.
Still too early? How much time do you need? The creative class of artists is teetering on the bring of utter collapse, and they want us to fund a study based on something they should have researched years ago. It makes me angry.
And you should be angry too.
Alan Graham is the co-founder (along with legendary songwriter/artist/producer Rupert Hine) of the world’s first micro-licensing/micropayment engine for apps/platforms that builds bridges between rights owners, rights users, and the apps and platforms they love. It helps remove the complications of copyright (no takedowns), delivers always approved pre-cleared content, uses zero DRM, ensures every use of media has a payment associated with it, and every creator gets paid (regardless of what type of media). Called OCL, it is a hybridized solution of centralized and decentralized technologies, utilizing the untapped potential of blockchain/crypto to deliver solutions the world has never seen before.

Deflecting Blame Away From Spotify Berklee Gets it Really Really Wrong on Publishing

If you are not ready to go down into the weeds on this I suggest you stop reading right here.  But I hope you do.  Because this is probably the most important post that we will do on the Berklee College of Music/Rethink-Music/Kobalt Music (Google Ventures) flawed transparency and fair pay report.

The Berklee report takes a particularly uninformed and misleading swipe at HFA (Harry Fox Agency) and black box collections:

As an example, mechanical royalties owed by Spotify to the publishers for the use of their music are paid to HFA, which then distributes the monies to each publisher represented by HFA. If an artist’s publisher (usually smaller publishers) is not represented by HFA, the only way to collect mechanical royalties from Spotify is to make an administrative agreement with HFA or forge a direct agreement with Spotify, which could be a managerial nightmare.

Since organizations like HFA collect most of the mechanical revenues from streaming services on behalf of writers and publishers (and take a cut for their services), it’s worrisome that some royalties may be withheld from songwriters simply because they do not have an administrative agreement with HFA. When a mechanical-payment check does arrive, there may be a lack of transparency in the breakdown of what a writer or published is owed, or it may end up in the black box, with the money never reaching its rightful owner. That can be particularly problematic for songwriters.

First of all–I’d be surprised if HFA collects “most” of the mechanical royalties from streaming services due to various direct deals and compulsory licenses.  But second, by law Spotify is the entity required to get licenses from songwriters and then pay and account to them.  Not HFA.

The only reason HFA is involved is because Spotify hired HFA to license songs  and send out royalty statements on their behalf.  And from what I understand they are mostly obtaining compulsory licenses.  That means that HFA is mostly sending (for Spotify) what’s called a “notice of intention to use” under the compulsory license clause of the Copyright Act (Section 115) and “certified statements of account” of the kind we’ve all received (remember those $0.01 checks).  HFA didn’t insert themselves into Spotify’s business, Spotify invited them in.

The workflow is pretty standard stuff these days.  Spotify probably tells HFA what music they have used (likely violating federal NOI rules that require 30 days notice before use) and then HFA tries to match the song owners by song share to the songs used by Spotify.  HFA sends out the NOIs (now likely defective retroactive notices) to the known copyright owners unless there’s a direct license between the publisher and Spotify (I haven’t read about direct licenses for Spotify so they’re probably using compulsory licenses for the most part).

Based on my own experience, if HFA can’t match the songs, Spotify uses them anyway, at least when it comes to my own songs.  As far as I can tell, the decision to use my songs without a license/NOI  in place is made by Spotify not HFA.*

The way I understand the digital services like Spotify work  is that they hire an administrator to send out NOIs to exercise the compulsory license.  This is usually HFA (example, Spotify), MRI (example, Amazon) or Medianet (example, Beats).  After the song share NOIs are sent out (based on usage information given to the administrator by the service), the service sends a “use file” to the administrator that the administrator relies on to make the certified statements of account.  The administrator tells the service the royalties they have to pay to who based on what song shares the administrator can match to the service’s “use file”.

From what I hear, when HFA is working for a digital service like Spotify, HFA doesn’t charge the normal collection fee to its publisher members.  This makes sense since Spotify hired HFA and charging a fee to publishers would be “double dipping.”  That means that this line in the Berklee report is simply false:

Since organizations like HFA collect most of the mechanical revenues from streaming services on behalf of writers and publishers (and take a cut for their services)…

The Berklee report also fails to mention anything about NOIs, which are probably the bulk of Spotify’s licensing.

Since some publishers don’t go through HFA at all and some publishers only go through HFA for certain licenses, it’s a red herring to talk about publishers being forced to sign an admin agreement with HFA. This line in the Berklee report is simply false:

If an artist’s publisher (usually smaller publishers) is not represented by HFA, the only way to collect mechanical royalties from Spotify is to make an administrative agreement with HFA…

Followed by this line which is misleading:

it’s worrisome that some royalties may be withheld from songwriters simply because they do not have an administrative agreement with HFA.

It would be “worrisome” if it were true that songwriters only get mechanicals because they let HFA collect their royalties, but it’s not true.  Note the strategic use of the word “may” in “may be withheld.”  It’s also “worrisome” if the Sun “may” rise in the West, but it won’t happen.

What’s really “worrisome” is if some royalties are withheld from songwriters because a digital service uses their songs but never gets a license.  I bet that’s the reason I’m not getting paid.  I bet that’s also the reason why others are not getting paid, too.  So why would Berklee manufacture these statements?  Maybe because Kobalt–that paid for the Berklee report–views HFA as a competitor?

The reason I’m not getting paid is because Spotify is using my songs without a license and evidently I’m not getting matched somehow.  That means I end up in Spotify’s black box.

Let’s talk about that “black box.”  The term usually applies to money that was payable but was not paid because the song owner couldn’t be found–or no one bothered to look.  Or there was no license and the song was used anyway.  The term “black box” is usually used to criticize PROs, record companies or HFA-type administrators.  There may be valid criticisms for all these, but that’s not what’s happening with Spotify.

When a mechanical-payment check does arrive, there may be a lack of transparency in the breakdown of what a writer or published is owed, or it may end up in the black box, with the money never reaching its rightful owner. That can be particularly problematic for songwriters.

Using a song without getting a license is not “a lack of transparency” it’s a lack of rights.  “Transparency” doesn’t fix what you can’t see.

Because Spotify (and other digital services) are always in control of the money, and because they only pay royalties based on what they can match, the money in Spotify’s black box is not located anywhere but at Spotify (although HFA may have a record of how it came to be there).  So the black box for digital services is under the control of the digital services.  And yes, the money does end up in the black box and yes it may never reach its rightful owner.  And yes that is particularly problematic for songwriters.

There’s an easy fix for this Spotify black box issue though–don’t use songs without a license.

Here’s the reality for the Berklee report though.  If digital services find accounting to songwriters to be a “managerial nightmare” the solution is not cryptocurrency.  The solution is not using the songs until you have the license.

If digital services think it’s too burdensome to account to each songwriter, then what they object to is the creative process itself.  Songs are cowritten and each songwriter has to be accounted to for their ownership interest.

Is Berklee advocating some kind of “eminent domain” where the government takes away your property rights and forces an even more compulsory license so no service has to do the research to know what the service can and can’t use?

If they don’t like having to account to songwriters, they are in the wrong business.  Try starting another pets.com, it’s easier.

No one asked them to get in the music business and no one will miss them if they get out.

++++++++++++++++++++++

* Spotify can also send the NOI for unknown publishers to the Copyright Office.  The Copyright Office keeps track of these requests in a database but doesn’t try to find the copyright owner as that’s not their responsibility, it’s Spotify’s.  And in my case I don’t notices for my songs in the Copyright Office database.

NCES “Transparency Report” on Berklee College of Music

The Berklee College of Music has released a report on fair pay and transparency in the music business  (ed note- but it’s not clear they actually wrote it, check fig 4.)

The Trichordist is all for transparency and we agree with many of the reports findings, even if it is funded by our frenemy Kobalt Music (a Google Ventures company).

We want more transparency!  Unlike the Berklee School of Music we want the call for transparency to apply not just to the publishers, record labels and PROs, we want it to apply to the tech companies that distribute are music.  You know, companies like Google/YouTube, Spotify Apple, Pandora etc etc.   That’s why we ran this post:

http://thetrichordist.com/2015/07/22/even-more-transparent-5-omissions-from-berklee-collegerethink-musics-report/

As a faculty member at a major research university with a music business program I find it odd that Kobalt Music (Google Ventures) would go to an institution that spent $0 on research in the last year for a major research project. Where is their research staff? What is their expertise?  Who wrote this report? There are conclusions in the report that are based on anonymous sources.  How would anyone verify the conclusions? Was any of this peer reviewed?  I could go on and on.  IMHO this looks more like one of those inside the beltway pay to play reports not a serious academic study.  This report does a real disservice to artists by misdirecting artists ire only towards the record labels while giving the digital services a pass.   Sadly Berklee is fighting the last war.  If they had a real research department they might note that the digital services are completely opaque.  Even the ethically challenged investment banks complain about this.

So just for the hell of it why not a little transparency on Berklee College of Music? What kind of institution are they?  Are they good at their job? Do students get what they pay for? Are they revenue or public service oriented? Here are some highlights from the National Center for Education Statistics.

Full report on Berklee College here

Even after 8 years only 55% of berkley students graduate.

Even after 8 years only 55% of Berklee students graduate.

Screen Shot 2015-07-23 at 11.41.44 AM

Total cost of attending Berklee is almost $60K a year!

42% of Berklee students are amassing significant student loan debt.

42% of Berklee students are amassing significant student debt.  On average $7,742 EACH YEAR.

Berklee spent $0 on research in 2014

Berklee spent $0 on research in 2013

But faculty Salaries are generous for an institution of this Carnegie classification!

But faculty Salaries are generous for an institution in this Carnegie classification!

Antitrust Lawfare Breaking Out by Google and Spotify Against Apple–Using Your Music

davidclowery:

Why does this story matter to artists? Spotify free ad supported rates are killing artists. They pay just 1/7th of what the subscription services pay. Just when it looks like there is some hope that a large premium only streaming service will gain traction  (Apple Music) Spotify is doing everything to kill it. Remember Apple Music will pay at least 8 times as much as Spotify free!  Spotify is basically trying to take money out of your pockets with this move.  Torches and Pitchforks time folks.

As we have reported here before, since Spotify hired Jonathan Prince a former Obama administration official to run their DC operations they have aggressively engaged Lawmakers and Federal Regulators to intervene on behalf of the private company. So far this strategy has worked. In the latest twist they have managed to get what appears to be a pay to play investigation by the FTC of their much smaller rival. The investigation appears to be pure harassment as it wants the FTC to investigate Apple’s 30% that it marks up apps and music sold in the iTunes store. This is the rate the company has charged since the stores inception. So what is the point of the FTC investigation? Is profit margin somehow illegal? This is Crazypants™ Is the FTC gonna start mandating the profit margin on your business? Chris Castle is exactly right someone needs to do a “Freedom of Information” request. All emails, phone records, etc between Spotify and FTC. Here is how you do this:

https://www.ftc.gov/about-ftc/foia/foia-request

Finally are there any academics/ post docs out there willing to research and investigate the lobbying efforts of Spotify with FTC, Attorney’s General and EU?  Need someone experienced in FOIA efforts.  I’m willing to find grant or fellowship money for you.  This is not a joke.

Originally posted on MUSIC • TECHNOLOGY • POLICY:

As reported in The Verge, that ever-reliable source for Spotify press releases, the Federal Trade Commission is apparently continuing its investigation of Google….no wait…Apple.  Sorry, that’s the European Commission that’s investigating Google.  We’ll come back to that.

And what is the FTC investigating this time and at whose request? Spotify’s misleading and muddled advertising campaign trying to get Spotify users on iOS devices to drop their subscriptions through the Apple App Store and resubscribe directly through Spotify?  So Spotify could use its dominant position in the global music subscription market to avoid paying App Store commission?

No, not that.

Maybe this, as reported by the highly credible tech journalist Kara Swisher in the widely-read Re/Code:

Omid Kordestani, who has just temporarily replaced Nikesh Arora as chief business officer of Google, is joining the board of Spotify, according to people with knowledge of the situation.

In addition, sources…

View original 1,508 more words

Even More Transparent: 5 Omissions From Berklee College/Rethink Music’s Report

I love transparency.

Last week Berklee College of Music/Rethink-Music/Kobalt Music released this report on transparency and fair pay in the music business.  The report eviscerates the record labels, publishers and performing rights organizations for failing to provide the proper level of  transparency and fair pay to artists.

While we can agree with some aspects of Berklee’s Kobalt Music-funded report, Berklee’s report doesn’t even mention the opaque deals and revenue calculations used by many of the ad supported music services.  Berklee’s report only looks at downstream royalties–what the services pay to rights owners–not upstream royalties, the revenues earned by services that those downstream royalties are based on.

For example, Google will not disclose the revenue that its YouTube subsidiary generated last year but Morgan Stanley estimates that YouTube generated nearly $6 billion. Almost as much as the entire US recorded music business. How much was paid back to YouTube’s “partners”, the songwriters and performers?  Berklee wants us to focus on the royalties that get paid out by rights owners rather than the monies paid to the rights owners.

Songwriters in particular are paid on a formula based on a percentage of advertising revenue.  How do we check if we are getting paid correctly if Google doesn’t publicly reveal those numbers and if songwriters can’t audit those advertising revenues? I’m not saying Google is necessarily underpaying us but how could anyone check?  This is like labels not disclosing manufacturing records.

For this reason we’ve compiled a list of five additional points of transparency that Berklee College of Music/Rethink Music/Kobalt Music should incorporate into their report.

1. Congress should amend the copyright act to include an audit right for all compulsory licenses.  Many find this unbelievable but it’s true. There isn’t one?!!   Digital services often take advantage of these federally mandated licenses but artists usually have no right to audit these services.   This is just patently unfair.

2.  Digital services like Spotify and digital aggregators should clearly distinguish between the revenue generated from the free ad-supported tiers and premium tiers when accounting to artists.  As we have reported the free tier of Spotify pays 1/7th the premium tier.   Transparency on this issue would allow artists to make informed choices as to whom they should license their music and under what terms.

3. Digital services should stop insisting upon non-disclosure agreements with artists. What could possibly be less transparent than an NDA?

4. All ad supported digital streaming services need to come clean on the “acquisition expenses” they deduct from the advertising revenue before they even begin to divide the pie between the service and the rights holders.  Artists should be able to audit these expense since they significantly shrink the pie before artists  get paid.  Are these expenses 20%? 30%?  We’ve heard rumors that on some services  it’s as high as 50%! Who get’s this revenue?

5. Digital services should disclose how much money they have “black boxed.”  Further like SoundExchange they should periodically publish a list of artists for whom they are holding revenue but have been unable to locate.

 

P.S.  Maybe we should demand transparency on funding sources and conflicts of interest on these types of reports.  For instance:

Report Funding by Kobalt Music.  Kobalt Music is a Google Ventures company.  Google owns YouTube.   Maybe that’s why they didn’t mention Youtube.   Google runs the ad networks that serve ads on these services.  Maybe that’s why they didn’t mention the ad acquisition costs.

 

 

 

 

 

Spotify’s Failure to License My Songs in US Illustrates Rethink Music’s Call For Transparency

I spent the weekend reading the Rethink Music report which blasts much of the modern music ecosystem for a lack of transparency.  It’s a good read, if a little wacky at times. Proposed payment by Bitcoin/Blockchains? Are we Russian mobsters?  And curiously the famously opaque and secretive YouTube is spared.  Of course there is a reasonable explanation for that: The report was funded by Kobalt which is partially owned by Google.  Perhaps YouTube is too sensitive a topic.

All joking aside, here’s the report, everyone should read it.

Fair Music: Transparency And Money Flows In The Music Industry,

All in all it’s a decent analysis of where we are in the music business as we transition from ownership to streaming: It’s a mess.  I know this from personal experience with my own catalogue of over 400 recordings and songs.   And the companies that exploit these songs.

For example,  the past two years I’ve been trying to figure out how it is that Spotify has legally made available many of the songs that I have published under Camper Van Beethoven Music and Bicycle Spaniard Music. In  order to make my songs available on their service in the US, Spotify must enter into a direct license with my companies or an assigned agent.   OR they must serve an NOI (notice of intent) to take advantage of the statutory compulsory license.   After two years I find no evidence that they have properly licensed most of the songs that are currently available on the service.  This is the equivalent of a record label releasing an artist’s music  without having a contract with the artist  (To be fair Apple owned Beats Music may  have this same problem as well.)

Further I can find no evidence that they paid the US “mechanical streaming” royalty to my companies or my agents. This is the equivalent of a record label failing to account to, and pay the artist.  It is possible that they have been improperly paying the wrong party. However my work is properly registered and my companies are easy to find (through the BMI website).  I even went so far to see if Spotify filed a special notice required by the US Copyright office when a service can’t find a rights holder but still wish to use the song and “blackbox” the money.  No luck.

So yes we welcome more transparency in the music business but you can’t have transparency without first getting paid!
Camper Van Beethoven Music Catalogue

51 7 Registered 7153325
A C COVER Registered 1806954
ABUNDANCE Registered 3860
AGED IN WOOD Registered 15139907
ALL HER FAVORITE FRUIT Registered 21170
AT KUDA Registered 8893861
ATKUDA Registered 8893861
AXE MURDERER SONG Registered 1806950
BABY DON T YA GO Registered 9541080
BACK TO BEDROCK Registered 77318
BAD TRIP Registered 80449
BALALAIKA GAP DEMO Registered 5448583
BEFORE I MET YOU Registered 9541076
BORDERLINE Registered 139736
BROADCASTING LIVE FROM THE MCI WORLDCOM AT AND T Registered 5761769
CAMP PENDELTON Registered 17316671
CATTLE REVERSED Registered 191364
CHAIN OF CIRCUMSTANCE Registered 195736
CHANGE YOUR MIND Registered 197951
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Bicycle Spaniard Music

AIN T GONNA SUCK ITSELF Registered 7877453
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EVERYBODY GETS ONE FOR FREE Registered 8634312
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EYES OF MARY Registered 5331732
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FOREVER Registered 5971338
GENTLEMAN S BLUES Registered 4848075
GET ON DOWN THE ROAD Registered 18557421
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GOOD LIFE Registered 4738002
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Advertisers: How is YouTube Any Different Than Reddit?

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July 15 2015 Screen capture from YouTube video by hate rock band Kill Baby Kill which depicts  skinheads killing and burning non-white immigrants.  These channels and playlists are at this very moment being used by violent groups to recruit new members.  

In the wake of the “resignation” of Reddit’s CEO Ellen Pao much has been written about the violently misogynist and racist views expressed on some especially sickening subreddits.   Sam Biddle at Gawker has been particularly courageous in covering the controversy and the cesspool that is reddit.   Read him here, here, here and here.

But in the mainstream press much of the discussion quickly turns to Reddit’s failure to clean itself up and become a profit making company.   Specifically how does one attract mainstream advertisers when your site (in the name of “free speech”) permits a subreddit devoted to pictures and videos of black men being killed and allows users advocate for genocide?

I can see how that would be tough to attract advertisers like American Express and Chevrolet.

What is mystifying to me is why advertisers somehow think YouTube is any different from Reddit?   Remember the scandal back in March when CNN reported that YouTube/Google ran Aveeno and Bud Light advertisements before an ISIS video inciting violence.  This was not an isolated incident.  YouTube shares Reddit’s same absolutist (and legally wrong) conception of free speech.  YouTube is full of violent, racist and misogynist videos that often depict unspeakable cruelty.   Some may argue that there is some sort of educational or newsworthy value to the videos.  But read the comments. Look at the user names.  That is not what is going on here.

Back in 2013 I wrote an open letter to the artists that appeared on the YouTube Music Awards asking them to ask YouTube to clean up its act.   Since this letter is so similar to the complaints about Reddit I thought we should re-run this story.  It is posted below.

YouTube Music Awards Artists Can Help Clean Up YouTube

http://thetrichordist.com/2013/11/07/ytma-artists-can-help-clean-up-youtube-an-open-letter-to-jason-schwartzman-lady-gaga-spike-jonze-m-i-a-arcade-fire-and-macklemore/

11/07/2013
This is not about whether the YouTube Music Awards were a train wreck or not.  I’m not going to criticize the overall quality of the show’s production.  Live shows are tough.  I’m a performer, I know.   I’ll leave the criticism or praise of the show itself to others.   I enjoyed the show and thought it had its moments.  It was nice the public got a vote. And hey Eminem even got an award for an album that wasn’t out yet!

This is not a pile on.  This is about something entirely different.

This is about YouTube’s lack of corporate responsibility and artists’ traditional role as the first to use their influence to demand corporate responsibility in the face of massive corporate influence. 

This is about otherwise sensible and decent artists who I LIKE AND RESPECT that seem to have been unwittingly duped into lending their credibility to a site that hosts and often directly monetizes (with advertising) videos that promote hate, animal cruelty videos, human trafficking ads, beheading videos, jihadi recruiting videos, playlists devoted to violence against women and other disgusting stuff.  This site is YouTube.

Think about it.

 

*Would artists perform on the MTV music awards if MTV broadcast hate videos from bands like Final War, Skrewdriver or Kill Baby Kill?  (That would never get past MTV’s standards and practices)

*Would an artist host the Grammys if The Recording Academy  were in the business of distributing cat kicking videos? (That would never get past CBS’s standards and practices)

*Would artists perform for a network that also had channels that seemed to be exclusively devoted to rape scenes? Real and from movies?

*And again, would artists make videos for a company that distributed a snuff film that shows a man decapitating his wife?

(Ed note: It should be noted that extreme violence,violence towards women, racism, hate, etc are all standard exclusions in artists recording and publishing agreements for licensing – and for good reason.  Why should YouTube get a pass on this?)

Now I feel confident that no artist who participated in the YouTube awards would knowingly support this kind of activity. I have to assume that they are as unaware as I was that this unspeakable stuff is on YouTube and YouTube is profiting from its repeated viewings.   If it weren’t for my University of Georgia research I would not have been aware of the extent of the problem either.

However, unlike many problems in the world, this is a problem artists can actually do something about and do some good in the process.

Assuming that YouTube does their music awards next year,  artists could do good by demanding that YouTube clean up their act before participating.  And there’s no time like the present to get started with the clean up.

I anticipate that YouTube will say that the videos violate YouTube’s terms of service and that YouTube will take down the videos if they are notified by a sufficient number of members of the YouTube community.  Or you could say that YouTube will take them down if YouTube gets caught enough times. (They never say how many “flags” are enough.)

Many of the videos already have graphic content disclaimers.  Someone–presumably YouTube itself or the YouTube community–has already flagged these videos, so YouTube knows what they are hosting!   I think YouTube needs to be much more proactive in cleaning up their act, and the artists who associate themselves with YouTube have an opportunity to do something about it.

Artists who performed this year could do good now by publicly  demanding that YouTube take down these offensive videos, stop advertising on the videos and give to charity Google’s share of all revenue generated to date from these videos.  For instance, the revenue from the Final War song below could be donated to The Anti-Defamation League.

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Beheading Videos.

I’m leaving out the screen capture on this one.  But if you search YouTube for “Beheading Mexico”  you will find a snuff film of a man decapitating a woman, (purportedly for infidelity). There is no news or freedom of speech issue here.   There is no editorializing or reporting here.  Just the raw footage.  You also find the chainsaw beheading execution of a man by the a notorious drug cartel. The reason the drug cartel filmed this execution was to intimidate and terrify people. Same with decapitation by various radical jihadi groups.  By hosting and profiting from these videos YouTube is amplifying the terror these groups intended to cause.

In the past when I queried this search on YouTube I came up with sponsored (advertised) videos for “male baldness cures” and other odd products that relate to the head. This leads me to believe there is some sort of keyword specific advertising going on.

Playlists Devoted to Violence Against Women

YouTube has thousands of videos that depict rapes and violence against women.  Some are scenes from movies but others appear to be real footage from security cameras, cellphones and even professional cameras.   Regardless they are often grouped into playlists.  It should also be pointed out that many of the rape videos purport to be of underage girls (see below). I believe these titles are designed to specifically appeal to pedophiles.   If anyone does not believe that these videos have any effect on the young men who watch them just read the comments.   I dare you.

Here’s one such playlist “YouTube Mix – rape camera”   (I’ve catalogued dozens). The first video below “sketch” may seem to have an innocent title but trust me you don’t want to watch it. This playlist also contains a notorious and disturbing real video of a young teenage girl apparently being groped and molested on a school bus.   Note the advertising from Inspirato/American Express, Airborne and Xfinity.   Tweet at American Express.  Tweet at Xfininity.

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Neo Nazi bands and recruitment.

There are hundreds if not thousands of videos by Neo Nazi and  hate bands on YouTube.   Check the ADL list of “Bigots that Rock” and try a YouTube search yourself. Two things quickly become apparent.

1) Many of these videos YouTube has monetized with advertising.

2) The YouTube channels that host these videos appear to be actively recruiting members for various hate groups.  Look at the comments and email addresses displayed in the videos.

In the example below RNskins88 channel appears to be run by a Greek neo nazi group but in comments I’ve highlighted a supporter of the Aryan secessionist group Northwest Front actively recruiting. (BTW 88= Heil Hitler)

Tweet at Showtime.  Tweet at Chevrolet. 

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Do it for the kids.

These are just a few of the numerous categories of vile videos you find on YouTube.  It’s really quite startling when you begin to examine what they will host and monetize.  But to me the much bigger problem is that YouTube’s key music demographic are children.

If you have children you know that they don’t listen to Spotify or iTunes radio.  They get their music from YouTube.  They watch TV on YouTube.  They get the vast majority of their entertainment from YouTube.  While YouTube theoretically age restricts videos all the videos above are available even if you are not logged into an account.  Thus they are not age restricted unless you are logged in. I didn’t even get a graphic content warning on several of the most violent videos.   So basically when your kids are on YouTube ALL of this content is there and available to them to watch.

Music videos drive a large percentage, if not a majority of the traffic to YouTube so we artists have a special obligation to ensure that we are not a “gateway drug” for the really disgusting stuff that YouTube hosts.  I humbly ask you to join me and ask YouTube to clean up their act.  Do it for the kids.

This is not a matter of freedom of speech or censorship.  YouTube is a private company and they can choose NOT to host certain videos. They already choose NOT to host porn and certain other content.   If someone really believes they need to show the world a beheading video they can post it on their own website.  YouTube is not required under first amendment principles to host it.  That is a false argument.   And they are certainly not required to monetize videos like these with advertising.

If YouTube really wants to be an alternative to television and have the YouTube music awards be a rival to the Grammys they are gonna have to clean up their act.

Cause and Effect? NPR exits Mic-Coalition and Pandora Stock Plunges

We are not really sure if these two events have anything to do with each other.  But we’d like to think they are related.  It serves as warning to other companies that decide to rely on government lobbying and mandates instead of old fashioned hard work and innovation to create a profitable company.

NPR Withdraws from Mic-Coalition.

http://www.billboard.com/biz/articles/news/legal-and-management/6633535/npr-follows-amazon-in-withdrawing-from-mic-coalition

Pandora stock falls 6.66%

http://finance.yahoo.com/q?s=P

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Why Innovate When You Can Legislate, Investigate and Intimidate? Spotify Wants Government to Save it From Competition

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A Timeline of Spotify hardball lobbying efforts with EU, State AGs, Executive branch, DOJ, FTC and Congress since hiring former Obama/Clinton administration official. 

We have been tempted to stay out of the debate over Apple Music and let the three big music tech companies Apple, Spotify and Google/YouTube rip each other apart.  After all,  real market competition from these companies for our recordings and songs could eventually lead to better pay for artists.

But we can’t sit this one out.   Why?   Because Spotify as usual seems to be up to its habitual dirty tricks using our money.  This time by hiring a recently departed Obama administration official and apparently using his revolving-door political connections and some of Pandora’s lobbyists to engage the U.S. Congress, the Federal Trade Commission and state Attorneys General to protect Spotify’s  untenable and money losing business model.  The end goal of these efforts WILL negatively impact artists.

Jonathan Prince Employment Timeline--Open Secrets

Jonathan Prince Employment Timeline–Open Secrets

If you zoom out and look at Spotify’s lobbying activity in sum total they appear to have three goals:

1) Protect their free tier (which pays artists 1/7 of what the premium subscription service pays) but makes them more valuable at IPO or as a takeover target to an advertising-driven company like Google.

2) Get Apple under some kind of anti-competitive regulation in EU, US and state AGs.

3) Get rights holders of sound recordings (Artists and Record Labels) under some sort of anti-competitive regulation in EU, US and US states  so they are obligated to license sound recordings to Spotify outside of the free market (like the ASCAP and BMI rate courts).

Yes, we were disappointed with Apple’s initial attempt to not pay artists during it’s 90 day free trial (they’ve since changed their tune), the fact is Apple is still better than Spotify for artists:

1) Apple free trial pays about $0.002  a spin while the last time we checked Spotify pays about $0.0009 per spin on their ad supported free tier  (Online advertising rates have experienced a secular decline since then).

2) Apple free trial is 3 months.  Spotify free tier is forever. After 3 months Apple free trial ends and subscribers move up to subscription tier.  We expect Apple’s subscription tier to pay more than Spotify subscription so this means a significant increase in revenue per spin to artists.  Plus–we don’t have to go through the absurd revenue share calculation of the advertising peddlers.

3) Spotify is actively trying to get users to unsubscribe from its premium service offered through the Apple App Store, which will likely mean an overall net reduction in revenue to artists due to inserting inconvenience into the transaction.  Apple is actively trying to encourage subscription uptake which will mean an overall net gain in revenue to artists.

Artists have an interest in seeing a competitive marketplace for streaming services that isn’t dominated by the duopoly of YouTube and Spotify. According to Kara Swisher, the top tech journalist:

Omid Kordestani, who has just temporarily replaced Nikesh Arora as chief business officer of Google, is joining the board of Spotify, according to people with knowledge of the situation.

In addition, sources said, one of the search giant’s former execs, Shishir Mehrotra, will become a special adviser to CEO Daniel Ek and the company’s management.

The move is a fascinating one, especially since sources inside Google said that new YouTube head Susan Wojcicki has expressed interest in acquiring the popular online music service if it were for sale.

YouTube and Spotify share a board member! (DOJ: where is that anti-trust investigation?)   Every quarter when artists get their royalty statements they have tangible evidence of the damage created by this duopoly.

Here is the kicker, we should welcome investigations by the  European Commission, State AGs, Congress and DOJ into anti-competitive  behavior and collusion in the digital music licensing marketplace for sound recordings.  But it must include ALL players!  Broaden it to include Spotify, Google/YouTube,  Pandora, Amazon, IHeartRadio, NPR, MERLIN (indie label licensing authority) and the major labels. (The feds already have songwriters and their PROs under DOJ supervision).

Fair is fair. Democracies don’t function when certain politically connected companies and individuals get different treatment under the law.  Further the government needs to get out of the business of licensing music. (See my argument in detail here.) We are wasting vast amounts of federal manpower and taxpayer dollars  when our nation(s) faces other more important challenges.  Seriously we’re worried about streaming services profit margins when we face very real threats from Greek bankruptcy? A resurgent and expansionist Russia? Chinese hackers?Federal cyber breaches, and ISIS inspired terrorism?

Let me remind you once again: Artists are not asking for a handout from the federal government. In this debate it is the multi-billion dollar streaming services asking for the handout. Spotify is asking for protection from competition. Artists welcome competition. Artists are simply asking the federal government to do less and stop regulating the market, let our songs and sound recordings be priced in the free market.

References For Timeline

http://www.odwyerpr.com/story/public/3207/2014-09-25/prince-shuffles-spotify-head-comms.html

http://www.billboard.com/articles/business/6480332/spotify-vp-public-policy-lobbying-dc

http://www.theverge.com/2015/5/6/8558647/apple-ftc-spotify-app-store-antitrust

http://9to5mac.com/2015/05/04/doj-investigation-apple-beats-music/

http://9to5mac.com/2015/05/07/apple-beats-music-spotify-complaint/

http://www.theverge.com/2015/5/19/8621581/sony-music-spotify-contract

http://www.rollingstone.com/music/news/leaked-sony-spotify-contract-reveals-inner-workings-of-streaming-music-20150521

http://www.nytimes.com/2015/06/10/technology/2-states-look-for-collusion-between-apple-music-and-major-labels.html

http://www.reuters.com/article/2015/07/11/us-apple-music-antitrust-idUSKCN0PL03O20150711?9to5

http://www.politico.com/story/2015/07/spotify-makes-case-against-apple-in-congress-119976.html

IMMF Is Not MMF: But are they even worse?

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The International Music Managers Forum is the parent organization which nominally oversees the Music Manager Forum affiliates in various countries around the world.  Last week we broke a story that a whistleblower indicated the Music Managers Forum in the UK along with its sister organization Featured Artist Coalition are taking money from Google and Spotify.  We have since had a second source corroborate this.

This is important because MMF and FAC have been  strong advocates for Spotify and its low paying ad supported free tier. Further many artists feel betrayed that MMF/FAC hosted a series of “informational” meetings with Spotify while apparently taking money from Spotify.   It’s not a good look for the (formerly) well respected institutions.

Naturally  in the wake of this revelation we received communications indicating that certain members of the IMMF were not happy with this news, and seemed to want to distance themselves from the MMF.

Fair enough.  So we looked into the IMMF to see what they are about.  What we found is just as ugly:

1) The IMMF is a member of  Copyright 4 Creativity. Other members include the artist-hostile-anti-copyright-Google-funded EFF as well as the CCIA and CDT.

2) The Executive Coordinator of  Copyright 4 Creativity is Clara De Cook.  She also appears to be the lobbyist for Google in the EU.

3) The IMMF is a signatory to the Copyright 4 Creativity manifesto which contains this clause:

“Ensure Monopoly Rights are Regulated in the Online Environment: Limitations and exceptions act to counter-balance the lack of competition that is created by the granting of monopoly rights in copyright law. In order to protect creativity and innovation we must ensure that these monopoly rights are also regulated in the online environment.”

Sounds okay right?  No one likes big monopoly corporations!

Uh… except that’s not the kind of  monopoly they are talking about.  They are talking about YOUR individual rights as a monopoly!! Specifically your copyright “monopoly” over your songs and sound recordings, which is the same kind of “monopoly” you have over your guitar, your car, your house or your body, not an anti-competitive monopoly.   “Regulating” means taking away your right to decide how your sound recordings and songs are exploited in the online environment and at what price.   Implicit is the government would somehow set the rates and uses.

What could possibly go wrong?  The big internet companies would never out lobby and out spend us in Washington and force us to take rates we’d never agree to in a free market!  That would never happen!  Right?  (See Pandora Media.)

4)  The Copyright 4 Creativity Manifesto which is endorsed by the IMMF  contains cute little graphics like this cartoon:

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This is some real intelligent thoughtful stuff here.   Next manifesto maybe they should try using only decade old internet memes.  And BTW the last frame to be accurate should read:

“Lawsuits! When the artist figures out the manager stole his copyrights”

Not cool at all.  But it’s really no surprise.  Sleazy managers ripping off artists? Again?

Same as it ever was.