New York Times Standards: We Don’t Care About the Facts

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Check this email out.  It’s from the “standards editor” at the New York Times, Greg Brock.   WTF? Right?  This came to me in response to the various links I sent to stories that criticized and disputed, the premise, the statistics and conclusions in this article  “The Creative Apocalypse that Wasn’t.”  In particular I excerpted and noted when the statistics could not be logically used to support arguments or when the statistics themselves had been brought into question by other researchers.  At no time was I insulting or rude to Mr Brock personally.  I simply thought I was helping The New York Times maintain some sort of integrity, by helpfully forwarding criticism to the Standards Desk (as suggested by the office of the Public Editor).

Not only does Mr. Brock refuse to acknowledge the serious questions about the statistics used in the article he seems to resort to a gratuitous ad hominem attack on me personally.  Does this email look like it comes from someone that wants to get the facts straight?

So the premise of this blog is “The New York Times Standards Desk does not care about the facts.”   I believe that I can make this case.  May I?

  1.  Thomas Lumley  posted this article which notes that the OES changed their methodology on counting musicians, music directors and composers.   This means that the “increase” in “professional musicians” cited in this story is actually due to a change in methodology.  As Lumley keenly observes the survey began counting music teachers at schools.   Without the addition of the teachers there would have been a decrease in professional musicians. Since the author spends a lot of time discussing this key statistic,  the New York Times has an obligation to its readers to note the problems with this particular usage of the dataset.  Mr. Brock acting on behalf of the New York Times has chosen not to note this fact.
  2. In the article in question the author notes   “According to one source, the top 100 tours of 2000 captured 90 percent of all revenue, while today the top 100 capture only 43 percent.”   The problem here is that the number of tours has grown since 2000.  Therefore the top 100 tours represents a larger percentage of the tours in 2000  than it does in 2015.   For instance if the number of concerts has doubled (by some measures it has) and say 100 concert tours represented 2%  of all tours in 2000 it would only represent 1% in 2015.  So naturally the percentage of revenue received by the top 100 tours would decline.  Therefore this fact can’t be used to support the authors statement  “touring has become more egalitarian.”     I pointed out this in an email to the New York Times Public Editor and to the Standards Desk.   The standards desk has chosen not to correct or note this logical fallacy for its readers and just for good measure decided to personally insult me.
  3. The Future of Music Coalition note that they were consulted as fact checkers on this article.  The Future of Music Coalition has since declared  “NYT Magazine chose to publish without substantive change most of the things that we told them were either: a) not accurate or b) not verifiable because there is no industry consensus and the “facts” could really go either way.”   Why then did they publish the article when the fact checkers were telling them that something was wrong.  THIS ALONE REQUIRES THE PUBLIC EDITOR TO INVESTIGATE THIS INCIDENT.
  4. Many other authors have commented on shortcomings and omissions in this article.  They all appear to have valid points.  Most concern the omission of statistics and figures that would undermine the author’s rosy picture of life for creators in the digital age.  They are all linked below.   Despite all of this Greg Brock Senior Editor of Standards has declared “There will be no Correction.”  So basically no matter what facts may come to light The New York Times has officially declared in advance they will not change the article.

Amazing. I rest my case.  Truth is dead at the New York Times.

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

Other sources criticizing the NY Times “The Creative Apocalypse that wasn’t.”

http://www.salon.com/2015/08/24/the_new_york_times_sells_out_artists_shallow_data_paints_a_too_rosy_picture_of_thriving_creative_class_in_the_digital_age/

http://www.billboard.com/articles/business/6677568/are-creators-really-thriving-in-the-digital-age-doesnt-look-like-it

http://flavorwire.com/534772/so-about-that-ny-times-magazine-piece-on-the-creative-apocalypse-that-wasnt/

https://musictechpolicy.wordpress.com/2015/08/23/why-is-the-new-york-times-coverage-on-artist-rights-so-oddly-inconsistent/

http://futureofmusic.org/blog/2015/08/21/data-journalism-wasnt

http://www.statschat.org.nz/2015/08/22/changing-who-you-count/

View profile at Medium.com

http://illusionofmore.com/steven-johnson-thesis-isnt/

Official Whitehouse.gov website is #TeamSpotify Despite Unfair Pay to Artists

 

The White House is #TeamSpotify.

https://www.whitehouse.gov/blog/2015/08/14/white-house-just-joined-spotify-listen-presidents-summer-playlist

This is an official US government site.  Staffed with employees of the federal government.  The writer clearly implies this is an official act of government and an official White House Channel.

Let the White House know what you think about the low rates paid to artists by these highly exploitative services.   Doubt we can get through through to the president but we can let the the head of digital strategy know:  Kori Schulman.  Twitter @KS44.  As always be polite.  It’s unlikely that The White House or staff has any idea how exploitative these services truly are.

Screen Shot 2015-08-14 at 8.09.42 PM

 

Full PDF here below:

 

The White House Just Joined Spotify: Listen to the President’s Summer Playlist | whitehouse.gov

Lawrence Lessig for President. Not a Joke.

Screen Shot 2015-08-11 at 3.27.18 AM

What the fuck does this slogan even mean?  Equal citizens go first?  Unequal citizens have to wait their turn?  

Lawrence Lessig for president.  Hahahahahahahahahahahahhahahahahahah.  Amazing.

I thought this was a joke.  The man who has worked relentlessly to relieve individual creators of their constitutionally protected rights wants to run for president.  Let’s elect the man who when faced with the choice of whether to side with an individual’s right to control their artistic work or a tech corporation desire to exploit the work, never seems to take the side of the creator.

Yeah this really seems like a guy who will look out for the little guy.The man who Wired magazine once declared would “smash apart the copyright machine” (to benefit big tech) is running for president.

But forget copyright for moment.  The real danger is that this guy is the Manchurian candidate for Silicon Valley billionaires.  Sure he seems like a progressive guy, “reforming” copyright, Creative Commons founder, Free Press board member,  but when you really dig into everything that he has done and proposed,  it becomes clear his efforts have benefited his financial supporters mostly large tech companies and tech investors while hurting individuals who make their living from copyright. 

Don’t believe me? Just follow the money. Lessig launched his career at the Google funded Berkman Center at Harvard. Look at all the tech billionaires that supported his Mayday Pac. Check the open secrets website for his PAC . Look at all those  Silicon Valley venture capitalists.  Among them the arch libertarian Peter Thiel who has declared he no longer believes in democracy nor does he think women voting is the best idea.  Yeah we should vote for Thiel’s candidate.  Good idea!

Oh and then there is that pesky little matter that he took money from a self-confessed felon to bankroll his causes.  And even ickier read this.

Yet Lessig with a complete straight face claims his campaign is built on “equal citizens first.”  What does that even mean?  Some citizens are equal and they get to go first?  Unequal citizens have to wait?  Huh?

Well come to think of it, that pretty much describes the political worldview of Silicon Valley. Fake progressive political “talk” while “walking” a crony capitalist walk. 

Lessig who admits to alternating between extreme right wing positions and extreme “progressive” positions would like to “hack our democracy” and become president.  Do you want some politically unstable ethically challenged Harvard professor “hacking” our democracy?   I don’t.

Look clearly we have a problem with our democracy when big money interests can essentially buy our government.  We should fix that. But a guy supported mostly by big money interests isn’t gonna fix it by attempting to buy/hack the presidency with the backing of these same moneyed interests. 

Watch the video. It’s fucking unbelievable.

Fun with Digital Royalties | The Cynical Musician

The excellent blog “The Cynical Musician” has accepted our challenge to debunk the  latest Berklee College of Music/Rethink Music set of flow charts on digital music royalty flow.  Really excellent work by Faza. It’s devastating to Berklee.  Check it out. While this whole exercise has been fun for us,  it has to be embarrassing for a $60k a year academic institution that offers a degree in the “music business” to demonstrate that they fundamentally do not understand how digital royalties work.  

The Trichordist posted a challenge to disassemble Rethink Music’s royalty chart today and I do so love a challenge. I won’t be pasting the whole of it – just the juicy bits – so make sure you read their post.

Let’s start with the breakdown of internet radio royalties:

Read the Full Post :  Fun with Digital Royalties | The Cynical Musician.

$100 Dollar Prize! Be First To Illustrate all the Flaws in this @BerkleeCollege of Music Chart

 

Screen Shot 2015-08-07 at 11.52.32 PM

MC = musical composition, SR = sound recording, PP = public performance, MR = Mechanical Royalty (by which they really mean the so called “streaming mechanical” ).

Berklee College of Music/Rethink Music just issued a rather defensive follow up  in response to our criticism of their original Kobalt Music/Google Ventures funded report on fair pay and transparency in the music business.

Well we must confess we’ve been laughing our asses off all day at these guys. Why? Because while Allan Bargfrede and Panos Panay have been busy taking the low road by suggesting we are luddites and comparing us to “birthers” (WTF right?), they’ve also been distributing digital royalty flow charts that are completely wrong . Guess they thought we stupid and ignorant artists wouldn’t notice.

There are at least two major errors in the flow charts above, maybe more depending on what the authors were trying to illustrate (it’s actually not clear).   I teach a music publishing and digital royalties class at UGA.    I teach undergraduates but I guarantee you that after week ten 90% of them will be able to spot the errors in these charts. I will be using these faulty charts on my tests in the fall!

So look I don’t want to come out and explain what’s wrong here. Let’s have a little fun here.  First person to most accurately describe the flaws in this chart and submit a hand drawn “markup”, chalk, paper or whiteboard illustration of the errors gets $100 “professor whiteboard” prize!  We will publish winning submission here.

Here is a link to a higher res copy.

flawed rethink music followup

http://web.archive.org/web/20150808043822/https://medium.com/@allenbargfrede/music-paid-fairly-5df29f2b3924

 

@BerkleeCollege Shows They Aren’t Serious, Responds to Our Criticism with Straw Man Argument

Professor Whiteboard Trichordist vs Berklee item 1

Berklee College of Music has still not addressed our fundamental criticism of their report. 

A few days ago I had an email conversation with Panos Panay who may or may not have authored the flawed Berklee College of Music report on transparency and fair pay in the music business.   In our conversation he indicated that he thought our list of omissions were valid criticisms of their report.  I encouraged him to issue a follow-up report or letter.

Yesterday Berklee did indeed issue a follow-up.  But it was less of an actual correction or update and more of a defensive “fuck you.”  Yes, they squandered their opportunity to have a real discussion, by following up with a bullshit straw man argument, that completely misrepresents our criticism of the report.  These guys are not interested in a real and honest discussion.  Therefore don’t expect an honest discussion at their conference either. In other words don’t waste your money.

Here’s what they say about our criticism in their follow up:
“Some have questioned the role of digital services in this debate. It is important to remember that most online music services pay 70% of their revenue to rights holders (except YouTube, who should be encouraged to pay more than their current 50%), and we believe that this technology for distribution is a good thing. It is impossible to put the “Internet genie back in the bottle” — let’s not forget that the main source of industry woes 5 years ago was piracy — and at least a business model has evolved that has people paying for music again” 

Classic straw man argument.

We don’t think “the technology” is a bad thing, and we are not trying to put the “internet genie back in the bottle.”  If you want to put it in terms of “internet genies” we are asking the internet genies to drop their NDAs and to exhibit more transparency on advertising revenues and expenses.   This is clearly illustrated in the whiteboard photo above.  Further the email record clearly  indicates that Panay understands our criticisms.  The only conclusion is that Berklee knowingly misrepresented our criticisms of their report.

This is classic demagoguing.  Trying to neutralize your critics by dishonestly claiming they are saying something they are not.  Berklee implies we are “trying to put the internet genie back in the bottle”  or somehow we are against streaming technology because they wish to portray us as hopeless luddites that are completely out of touch with the modern world. Yet facts are facts, our criticism illustrates a deeper understanding of the revenue flow in the digital world than their sloppy and biased report.

I don’t understand how someone at an academic institution can engage in this sort of demagoguing and still have a job.   My academic institution would really have a problem with me issuing an official statement in the name of the institution that engaged in this level of dishonesty.

At the very least from a public relations stand point Berklee needs to learn to stop “poking the bear.”  Especially this bear.  They just gave us at least five new posts on why rights holders and artists should NOT go to their “Rethink”  conference.

 


BUT SPOTIFY IS PAYING 70% OF GROSS TO ARTISTS, ISN’T THAT FAIR? NO, AND HERE’S WHY…

 

Why Digital Exec’s ARPU is Bad Math and also Bad Philosophy for Artists.


 

 

“Professor Whiteboard” Explains What’s Wrong With @BerkleeCollege Of Music Report

Professor Whiteboard Trichordist vs Berklee item 1

All figures approximate, but based on numbers provided by Morgan Stanley and IFPI.

1. Berklee College of Music/Rethink Music report on fair pay and transparency in music business primarily focuses on “black box” at traditional music industry players like labels, PROs and publishers. Ignores black box at the digital services.

2.  The Berklee College of Music/Rethink Music report derides the NDA (non-disclosure agreement) culture that pervades the digital music business, but implies that this is a problem with the labels, publishers and PROs.  But it is a well known fact that it is the digital services that demand the non-disclosure agreements.

3. The Berklee College of Music/Rethink Music report was funded by Kobalt Music which is a Google Ventures company. And Google owns YouTube.  Rethink Music was started by The Berkman Center.  The Berkman Center is an “academic” institution that has close ties to Google.  For this reason we believe this report to be a damaging piece of propaganda that distracts artists from the bigger problem: Low pay and no accountability from the digital services like YouTube.  At best Berklee College of Music is “fighting the last war” and in effect protecting those who exploit their students.

 

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.

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* 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.

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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!