Indie Labels Should Demand that MERLIN and Caldas Immediately Repudiate Pandora Filing or Step Down.

We’ve been hearing from Indie labels and musicians all day wanting to know what to do about this threat to our SoundExchange income.

I’ll give you more on this later this week but FIRST we need to back SoundExchange in this fight.  Since unlike MERLIN they really do have our interests at heart. They only make money if we make money. We need to let SoundExchange know that as performers MERLIN does not represent our interests.

Secondly we need to put pressure on Caldas and MERLIN.  They got us into this mess, they need to get us out.  They need to repudiate the PANDORA deal. Publicly and Loudly.

But first let me be honest here.  I’ve never been a fan of Caldas.  In my short career as an artists’ advocate one of the most blatant examples of the record business squandering an opportunity was Caldas’ “response” to my Letter to Emily in Gizmodo.    The whole piece is classic “Old Boss” music business condescension (maybe worse).  “Oh these temperamental artists they don’t know what they are talking about.”  Which in a way is true.  Because people like Charles Caldas cut secret NDA deals with Spotify on “our behalf.”  So yes, we have no idea what the terms of the Spotify deal are because of people like Caldas.  HOWEVER somehow the reporter at Gizmodo was “leaked” a confidential report of just how much Spotify pays the indies associated with MERLIN. (Gee who leaked that confidential report?)   So yes unlike reporters who happen to now work for Spotify we artists don’t know the details of these Spotify deals because of condescending and patronizing jerks like Caldas.

The whole Gizmodo piece was so clumsy and transparent I actually felt bad for the dude at the time. Even though it was clearly a hatchet job directed at me,  I couldn’t help feeling sadness for the reporter and Caldas.  There but for the Grace of God go I.  Without my music career I may have had to become a paid PR hack for some low grade industry trade organization or pretend to be a real music tech journalist (while secretly working for Spotify)  Can you imagine coming home at the end of the day if you did such dishonest work? It also made me sad that these guys didn’t even have half a lobe.  Someone with half a lobe would be smart enough to NOT emphasize that all those Spotify deals and information are confidential.

To civilians confidential=sleazy.  

“Why do they have to hide it from Artists?”

These guys weren’t even very good at being hacks. Sad.


But that’s not even stupidest thing about Caldas’ rebuttal.  Look at the big picture.

Virtually no artist had dared to speak out against piracy and in defense of the recorded music industry since Lars.  Almost 13 years!  And when I finally did speak out the piece went viral. So what did the guy who represents those thousands of  long suffering indie record labels do?   He rebutted it.  On a tech blog.  WTF right?    And apparently like all these record business geniuses that know so much more than we ignorant artists, hIs rationale for doing so was truly and spectacularly myopic.

My read is he was riled up about one tiny little itsy bitsy thing.  Apparently one of the legal music choices I chose to recommend was MOG (it later became Beats).  Caldas had not cut a deal with MOG but had cut a deal with Spotify. Towards the end of this ludicrous and pathetic hatchet job he gets to what’s really bugging him. I quote:

“We won’t do a deal with any platform that doesn’t properly recognize the value of our repertoire, so we’re in business with Spotify and Rdio. We’re not in business with MOG [which Lowery recommends].”

Holy Shit!!!!  I picked the wrong streaming service!!!!!  That’s what this whole thing was about??!!  If I had just said Spotify instead of MOG none of this would have happened???

Right.  This is some serious long term strategic thinking going on here.  This is the guy negotiating on behalf of Indie labels.

So apparently Caldas and MERLIN think I”m wrong about streaming?  Fine.  But may I just remind you how fucking wrong these guys were  with the Pandora deal?  Pandora suckered them into giving them the deal they needed to lower performers SoundExchange royalties by nearly 50%.  This is almost exactly what Chris Harrison of Pandora did when he was at DMX.  The artist (myself) who Caldas implies doesn’t really understand this new fangled  world of digital technology (Funny since I have degree in Math, and am on the board of an angel fund) remembered this DMX deal.  Further we predicted that Pandora would use this deal to lower all our digital webcasting rates the way they did with it was done with the  DMX deal.  So who is it that doesn’t understand this new fangled digital music licensing world again?

Now all you UK artists, labels and managers better hope I’m wrong about what happens next.   Pandora will now take this deal to the PPL.  They will try to lower UK rates as well by citing the PANDOLA deal as evidence of a fair market rate.

Let’s hope I’m wrong.


So in case you’ve been in a cave let me explain this again:

In a jaw-dropping bonehead move, Merlin cut a direct deal with Pandora to license songs at about 1/2 the rate proposed by Sound Exchange IF Pandora plays Merlin songs more often than everyone else. ( Isn’t that called payola?  Pandora is an FCC broadcaster after all!)  But what’s important here is that Pandora has now taken this deal to the Copyright Royalty Board and wants EVERYONE’S rate cut.  And it may very well work. Pandora’s lawyer did something similar when he worked at DMX and it worked.  You see if they present a “willing seller” rate to the board as evidence of the market value of songs,  the board can conclude that this is the market value of our songs. And MERLIN and Caldas just supplied them with a “willing seller” document. Instantly we all get our Sound Exchange Royalties slashed.  Thanks Merlin. Thanks Caldas.

Let em know how you feel:


Did Merlin’s Caldas Lie in Billboard Article About Lower Rates?

On Aug 6th this article  written by Glenn Peoples in Billboard Magazine  “Pandora Signs First Direct Label Deal With Merlin”


Caldas added the partnership will financially benefit Merlin’s artists and labels. Although no financial details were made available, he suggested the terms are no worse than the statutory rates previously received. “We wouldn’t do any deal where there was any risk we were going to get paid less.”

“No worse than statutory rates previously received”  which when used by normal  human beings means not lower rates.

But we now know from the Pandora filing (even with the redactions) that this is not true.

Read the pandora filing here:

Will Billboard call him out on this?  Did Billboard MisReport?



MERLIN “Pandola” Secret Deal Violates WIN Fair Trade Principles

What is the point of “secret” deals like MERLIN’s “Pandola” pay-to-play deal with Pandora Radio?   I mean the terms are not secret to the label that signs the deal right?   And the terms are not secret to Pandora Radio right?   So who is not in on this secret?



I don’t care if you are an “independent” label. If you make secret deals involving artists recordings that’s sleazy.

Doesn’t this violate spirit and  principles of WIN Fair Trade Principles:

We wholly disapprove of certain practices which leave artists under-recompensed and under- informed in the digital marketplace and will work together with the artist community to counter these practices.

We saw this from MERLIN with the Spotify deal as well.  No one knows what equity and other terms the indie labels got from Spotify.  Here is Charles Caldas talking to a “reporter” (that later turns out to be a Spotify employee) about Spotify.  The reporter has received “leaked” documents from “someone”  that shows Spotify payments.  Caldas clearly knows the details. But Caldas is criticizing artists like myself for being misinformed. Well, yeah cause Caldas cut secret deals with Spotify.  It’s like 1984 here.


Charles Caldas of MERLIN: Independent Labels’ Minus $15 Million Dollar Man

Indie Music’s Minus 15 Million Dolllar Man


MERLIN is theoretically an organization that looks after the rights of independent labels and independent artists. Charles Caldas is the CEO.  Last month they made a high profile deal with Pandora.   We knew what would happen at the time. We knew that Pandora would use the deal as evidence in Copyright Royalty Board hearings to lower ALL OF OUR RATES.  And yesterday they did just that.  According to the Radio and Internet News these new lower rates that Pandora has asked the Copyright Royalty Board to impose on ALL performers and labels are about half the proposed SoundExchange rates.   Thanks MERLIN!  Thanks Charles Caldas!

We conservatively estimate that  this will save Pandora approximately $150 million a year starting in 2016. And of course this is $150 million dollars out of the pockets of rightsholders.    If the 20,000 independent labels that MERLIN claims to represent are 10% of Pandora spins, this means that MERLIN just cost it’s own labels $15 million dollars a year!

Henceforth Charles Caldas will be known as “The Minus $15 Million Dollar Man”

And you have to ask why did they have to do this now?
What was the hurry?
Were labels really telling Caldas “Quick let’s cut a deal with Pandora?”

I highly doubt it.

If I were forced to bet on it, I’d say its more likely that Pandora was urging the deal.  It coincides nicely with the line they’ve been privately feeding stock analysts that they’ve “made up” with the music industry.

The only company that clearly benefitted from this deal was Pandora.  This is classic ego-driven music business nonsense. Put your name on a deal. No matter how bad.

Or is it even worse?  This deal already looks like it’s Payola.  Is money changing hands somehow?   No, that would never happen between labels and broadcasters, cause that is illegal. And no label or label group  would ever do anything illegal like that.


WIN Fair Digital Deals Declaration vs MERLIN’S “PANDOLA” Deal

If there were ever two deals and two indie music organizations to contrast and compare these would be the two. WIN and MERLIN

As A2IM reported back in July

On Wednesday, July 16th, the Worldwide Independent Network (WIN), of which A2IM is a member, issued the Fair Digital Deals Declaration, a commitment by Independent labels to support fair accounting to artists. Currently, many music licensing deals include payouts covering unshared compensation, which include equity stakes, minimum revenue guarantees not related to performance, renewing advances, etc. (aka “Breakage”) — all of which are creating issues in digital licensing between services and labels (read previous A2IM item about Breakage HERE).

Meanwhile Merlin cut a direct deal with Pandora to license songs at about 1/2 the rate proposed by Sound Exchange IF Pandora plays Merlin songs more often than everyone else.

UH….  Isn’t that called payola?  Pandora apparently owns a terrestrial radio station and is an FCC broadcaster after all!

Or should we call this deal  Pandola?

So not only  did MERLIN get expertly played by Pandora and as a result ALL performers may lose almost half their SoundExchage revenue,  MERLIN’s excellent deal for Indies artists is warmed over Payola?

That’s really farsighted (sarcasm).    What’s to stop the majors from cutting the same deal with Pandora and outbidding us for airplay?   I suggest the folks at MERLIN read  Hit Men: Power Brokers and Fast Money Inside the Music Business.  Just the first chapter.  The majors specifically used “indie promoters” and payola to lock independents out of the radio market.

So on one hand you have a deal by WIN that is farsighted, egalitarian and benefits all artists.   On the other hand you have MERLIN with their sleazy secret payola deal that could potentially screw all artists across the board.


Set, Match and Game to Pandora and Chris Harrison: MERLIN Gives Pandora the Rate Cut They’ve Always Wanted.


Harrison trounces performers and labels with MERLIN deal.  Congratulations. 

In the past I’ve had rather unkind things to say about Pandora and their chief legal strategist Chris Harrison.  But today I’d like to sincerely congratulate them on a game well played.  Pandora and Harrison have successfully outflanked performers by exploiting us where we were  weakest (and stupidest).  That weak spot?  The independent label rights licensing association known as MERLIN.

MERLIN led by Charles Caldas represents over 20,000 independent labels.  In a jaw-dropping bonehead move ,Merlin cut a direct deal with Pandora to license songs at about 1/2 the rate proposed by Sound Exchange IF Pandora plays Merlin songs more often than everyone else.  Isn’t that called payola?  Pandora is an FCC broadcaster after all!

We at the Trichordist knew what would happen next. Pandora would present this as evidence of a “willing seller” rate and then ask  the Copyright Royalty Board  to IMPOSE this rate on EVERYONE (even those of us that  never asked Charles Caldas to represent us).  Yesterday we learned that this is exactly what Pandora did.  How did we predict this?   We’re not particularly smart it’s just that  this is exactly the same move that Harrison used when he was at DMX.  You had to be pretty dim to not see this coming.  Apparently MERLIN did recently part ways with a  turnip truck.

Fool me once shame on you.

Fool me twice shame on Charles Caldas.

Congratulations Pandora!  Congratulations Chris Harrison.  Well played sirs, well played.

Record Business Geniuses: MERLIN Sells Out All Indie Labels.

MERLIN is theoretically an organization that looks after the rights of independent labels and independent artists.  Last month they made a high profile deal with Pandora.   We knew what was gonna happen at the time. We knew that Pandora would use the deal as evidence in Copyright Royalty Board hearings to lower ALL OF OUR RATES.  As RAIN reports

In a revealing document submitted to the U.S. Copyright Royalty Board (CRB), Pandora argues for lowered music licensing rates in the 2016-2020 statutory royalty period. The proposed rate range is about half the amount suggested by SoundExchange in its submission to the CRB. (See David Oxenford’s coverage here.) In its argument Pandora discloses aspects of its privately negotiated licensing agreement with indie-label coalition Merlin Network (RAIN coverage here).

Thanks Merlin. Thanks for the 50% pay cut.   With friends like you who needs enemies?  Could you be any stupider? Independent labels should hold MERLIN accountable.  50% pay cut.  They just cost you millions of dollars.  Hope someone at Merlin at least got some sort of kickback. At least then it would make sense.

And artists you know what time it is right? It’s time to break the system.

MayDay PAC: Has Lawrence Lessig Become Silicon Valley’s Karl Rove?

2012 Lawrence Lessig

Lawrence Lessig

Photo Credit: Copyleft

Since it’s election season we thought we’d take a break from artists’ rights today and see what one of the “usual suspects” is up to this elections season.  In this case we look at Lester Lawrence Lessig III the piracy-defending-party-pokering-Harvard law professor and former Anton Scalia clerk.  Looks like he has a new Silicon Valley billionaires “grassroots” PAC that is aimed at getting “big money” out of politics by injecting “big money” into politics.  No this isn’t an Onion article although it should be.  

MayDay Pac: Has Lawrence Lessig Become Silicon Valley’s Karl Rove?

Short answer:  NO.   I doubt that Rove would be foolish enough to personally and repeatedly  taunt a sitting house committee chairman from his personal twitter account.  A Chairman that may very well survive the election.  But I’ll get back to this in a minute.

Long answer?

Ever since Lester Lawrence Lessig III launched the MayDay PAC -” the PAC to end all PACs”- I’ve been watching this with some interest.  Mostly because the whole proposition itself seems pretty suspect.  In order to “reform” campaign finance, in order to get billionaires and corporate interests out of politics he went out and collected millions from billionaires  and corporate interests?  Huh?  Especially suspect since one of the biggest donors (Peter Thiel) appears to oppose all campaign finance reform.

As the Huffington Post noted:

Support from Thiel for Lessig’s campaign to reform campaign finance laws is not only eyebrow-raising because of his libertarian politics — the Libertarian Party has called for the repeal of all campaign finance laws since at least the 1970s — but also because of a political treatise he penned in 2009 declaring, “I no longer believe that freedom and democracy are compatible.”

This is classic Lessig: co-opting a seemingly populist cause like copyright reform, while faithfully carrying forward a corporate agenda. In this case  the MacGuffin is campaign finance reform but to my eye the real plot line involves a clever new way for Silicon Valley to influence (or threaten)  our elected representatives with BIG money.  Just look at the list of donors  especially the big donors.  It’s a who’s who of Silicon Valley and anti-copyright ideologues. No surprise the serial innovator of artist rip-offs, Sean Parker (Napster, Facebook, Spotify), tops the list at $500,000! But something else becomes readily apparent when you dig down deeper into the midsize donors:  there sure are a hell of a lot of Google employees who’ve donated to this PAC.  So many that one shouldn’t be faulted for questioning whether this was coordinated.  I’ve helpfully compiled all the donors listed on the FEC documents  into a single Excel file that you can search and sort on 22 fields. Don’t believe me?  Dig in and draw your own conclusions.

Excel here: MayDay PAC addresses redacted


What is Lessig up to here?   On the surface he claims to be trying to clean up politics and get the “dark money” out of campaigns.  But is he really?   Here are some funny things I’ve noticed about the PAC.

1. Lessig promised total transparency and was supposed to  list the names of all his donors.  And then he didn’t.   Even the Sunlight Foundation (he is a board member) had to note the irony.

2. Of the more than 65,000 donors Lessig claims, less than 10% have been disclosed. (Lessig never really disclosed many of his donors and instead left it to the FEC and the FEC doesn’t require disclosure of small donors.)  This still means there are 59,000 undisclosed donors to a PAC that said it was gonna disclose it’s donors! MayDay PAC doesn’t know who it’s donors are? Why? Either you are against “anonymous  money”  in politics or you aren’t? Isn’t this your homework Larry?

3.  I conducted an experiment with the MayDay PAC website and it’s payment processor.  As a result I believe that you can donate repeatedly to the PAC using fake names and addresses and they will not catch it.  I have concluded the name and address a donor provides to the MayDay PAC does not have to match the credit card!  Thus it seems it’s possible that a big donor could avoid disclosing by repeatedly donating $100 under different names and addresses. I’m not familiar with FEC laws but this doesn’t seem right.

4.  On at least one occasion the experiment involved donating money using  a non-U.S. address while simultaneously using a VPN to make it appear like I was in that  foreign country. Didn’t the Watergate break-in have something to do with foreign donations to the Nixon campaign?

5. Why accept BitCoin donations? The whole point of BitCoin is it’s untraceable virtual cash.   Given the fact it’s the de facto currency of the “dark web” it’s by definition “dark money.” How does this fit with the  MayDay PAC dedication to “transparency” and opposition to “dark money?”

6. With all the Silicon Valley money in this PAC we can only assume they had some very bright people build their website.  Why would they leave what appears to be a “back door” (some would say barn door)  for anonymous donations? Was this intentional?

7. This is totally subjective but it seems incredibly bizarre that they would raise more than half their 5 million in small online donations over 4th of july weekend?  Much of that during the hours most people are cooking out and watching fireworks?

8.  Why is there now a “missing” 5 million dollars in the PAC?  Were they counting donations they hadn’t received?  Did they count some of the  big matching donations as part of the original “small donors?”  Why are public statements at odds with FEC documents?

Finally  shouldn’t a PAC that claims transparency have a transparent  process for how they decide to spend their  money? Who decides which candidates to support?   What is the process? For instance in California’s 17th district  Silicon Valley is backing the tech-buzzword-spewing Ro Khanna against the old pro labor democratic stalwart Honda.  Will MayDay PAC let their rank and file donors decide who they back?  Or will they just follow the big Silicon Valley money and back Ro Khanna?

So if this PAC isn’t really about transparency,  campaign reform or even the wishes of the  little donor what is it about?   Sadly I think this is about Lessig establishing himself as some sort of King Maker.  The guy who doles out the Silicon Valley money.   When I read Lessig or listen to him speak I don’t get the impression he is a humble guy.  This is a guy that wants to be in politics  (or on the Supreme Court like his former boss Antonin Scalia).  That is why he’s out there personally taunting candidates that he is spending against.

This is not the mark of a true behind the scenes power broker like Rove.   When an artists’ rights blogger who knows nothing about PACs and politics can find this many loose threads in an hour or two it’s definitely amateur hour.

Ultimately this whole thing is a tragedy. Thousands of small donors have been tricked into supporting a “grassroots” campaign finance reform PAC  that is not really what it seems.  I commend any real attempt to get big money out of politics and return to a government of the people, a government where the rich and powerful don’t get to choose who becomes Mayor, Governor, Congressman, Senator and President.   But MayDay PAC looks like the opposite of that.  This appears to be yet another clever way for the rich and powerful to co-opt a populist movement and use it to pick a candidate that will look after the narrow commercial interests of Silicon Valley.  Lessig should be called out for perpetrating this intellectual and political  fraud on the good people of this country.


PS. Lessig has a new book called “Lesterland.” It’s a sort of fable written in his overly pedantic style that tells the story of “Lesterland” which is just like the United States with it’s 311 million citizens but an elite 150,000  pick the candidates.   He calls this elite “Lesters”  because there are about 150,000 people named Lester in the U.S.

Including the author Lester Lawerence Lessig III.

Does anyone else find it incredibly weird?   It’s at least confusing.  Is he calling himself an “elite” or is he manifesting some sort of weird form of self-loathing?   Maybe there’s both a “Larry” and a “Lester” inside the old noggin. “Lester” supports “Citizens United” and was a clerk for Justice Scalia.   “Larry” is a liberal law professor and has started an Anti-Citizens United PAC to contain “Lester”.   This will make a great movie one day.  Maybe as good as the  Roy Cohn movie.

Will Spotify IPO Show Managers and Artists Got Options and Stock? Who Will Get Legal Scrutiny?

I can’t wait for the Spotify IPO filing.  That’s when Spotify must disclose all kinds of things.  Like which artists, artists representatives and managers  got stock options.

It’s  entirely possible that a bunch of artists and managers are gonna find themselves on the wrong end of the Securities and Exchange Commission’s pointy stick.

Why? When you present yourself as an expert in the music business and sing the praises of a music business company  going public  without disclosing that you have a financial stake you can end up in a lot of trouble.

Those managers, artist representatives  and artists who have been blogging or writing guest editorials  concerning the financial viability of Spotify and streaming  have the biggest problems.  An attorney can argue that they were part of a conspiracy to defraud investors if the company goes belly up because it has no viable business model.

Even those that spoke at the invitation-only Spotify meetings the last few weeks may be in trouble as well. There may have been  potential investors  in the room or what was said may get repeated to potential investors.  The SEC doesn’t like it when you don’t disclose your financial stake in those situations public or private.

If someone somewhere knows that the company is a piece of shit this is PUMP AND DUMP and then EVERYONE gets investigated. And if you didn’t disclose your financial stake in the company? You’re gonna look guilty whether you are or not.   Might as well put a big target on your back.

Shit, you may be in trouble if you took anything of value from Spotify?  Data? Promotion?  Promise of a job?

Doesn’t matter how smart you may think you are,  it just takes one idiot to screw it up for everyone.

So how do we know that Spotify is gonna tank?  Do the math.   $5 a month streaming subscription even at 100 million households (the penetration of cable and satellite)  70% of revenue to rightsholders means that recorded music is a $4.2 billion dollar business.  That is mass adoption of Spotify shrinks the business dramatically from it’s current 7 billion.  THIS IS SIMPLE MATH AND ANY EXECUTIVE WHO CAN”T DO THIS MATH SHOULD BE FIRED.

But it is highly unlikely that all the streaming services put together will ever reach that level of paid subscriptions.   Why?   they offer a free version.   Why would 100 million subscribers pay for something they get for free?  It’s more likely that streaming creates a much more dramatic drop in recorded music revenue.

Do you think someone like  Lucian Grainge is gonna let his revenue get cut in half? or worse?  No he isn’t.  Therefore Spotify in it’s current incarnation and model dies.  If you don’t want to be investigated by the SEC you better hope that this happens before the IPO.

We also believe (we have access to Soundscan too!) the widely reported dramatic drop in paid downloads radically understates the problem to record labels. Digital downloads have a higher “net” to the recorded music business than physical sales.  Physical sales have much higher expenses associated with their manufacture, distribution and delivery.   Outside of the magic unicorn land of Silicon Valley, profits do matter.  And profits are gonna get nuked this year.  This means real job cuts and real salary reductions.

Finally we should mention we had  moles in many meetings on the recent Spotify roadshow.  Including the manager only meetings.  WE KNOW WHO ATTENDED AND WHAT WAS SAID.  This could really end up being a shit show.


Later this week:  How  record executives may be PERSONALLY  liable in potential lawsuits that argue that artists were defrauded in the deals labels cut with Spotify.




Is Google still serving ads on illegal sites?

I searched a website during my panel at Columbia Law School. It’s a website that is well known for infringing content. I also captured the source code. There is code on this website that shows this site is expecting advertising from parts of Google’s Advertising ecosystem. I have reason to believe this site and advertising code will shortly disappear. II post these screenshots here to preserve the evidence.  (redirectes to  by Google’s own DMCA Transparency Report ranks this site as #3 in the number of takedown notices received.





Here is website.





“served” source code clearly showing the website is expecting “ads by google” to be served into this page.  It also displays some sort of publisher ID which would presumably identify this website to the Google Ad servers.





A second block of code farther down the page which also seems to be waiting for google ads to be served.  Again note the publisher ID.