Will the @CommonsDCMS Committee Ask How Apple and Spotify Got Away With Hundreds of Millions in Black Box for So Many Years?

One of the questions that immediately comes to mind with the announcement of the MLC’s $424 million black box payment is how did they get away with owing so much money to so many people for so long? Tough question to get an answer to for the average songwriter, but good news: The UK Parliament’s inqiury into the economics of streaming is meeting on February 23 and will have before it senior representatives of Amazon, Apple and Spotify! Great timing! These three companies alone account for $350,000,000 in black box, or 82% of the total.

MLC Payments

So not only can the Committee inquire into how long the companies got away with it and the justification for holding onto so much of other people’s money for so long, but the Committee could also inquire as to whether there are any UK songwriters included in the respective companies black box payments for exploitations in the US during the worst pandemic in living memory.

Remember, these services are required by law to obtain a license to exploit all these songs. This was always the deal and they knew going into business what was expected of them. The law requires them to find the songwriter or not use the song. It doesn’t require them to not find the songwriter but use the song anyway.

The MLC Announces the Inception to Date Black Box Payments: $424 million

According to an MLC press release, the MLC has $424,384,787 from digital music services:

The Mechanical Licensing Collective (The MLC) announced today that it has received a total of $424,384,787 in accrued historical unmatched royalties from digital service providers (DSPs), together with corresponding data reports that identify the usage related to these royalties.  

A total of 20 DSPs separately transferred accrued historical unmatched royalties to The MLC as required in order for them to seek the MMA’s limitation on liability for past infringement. In addition to the accrued unmatched royalties transferred to The MLC, the DSPs concerned also delivered more than 1,800 data files, which contain in excess of 1.3 terabytes and nine billion lines of data. 

This is a lot of money, but you do have to ask if this is what they admit to, now much is really there? Time will tell. You also have to ask whether they would have paid the money at all if it weren’t for the lawsuit brought against Spotify and the Harry Fox Agency by Eminem publishers Eight Mile Style and Martin Affiliated. Once the services got it through their heads that moving the goalposts wasn’t going to get them off of the front pages of the class action lawyer magazines (with a map that said “X MARKS THE SPOT”), the money was forthcoming.

Here’s the list of services that the MLC says paid the headline number:

MLC Payments

Note that the top five payments are from Apple, Spotify, Amazon, Google and Pandora. It is simply laughable that of this group, the two biggest offenders are Apple and Spotify for different reasons. Apple tries to position itself as a friend to artists and songwriters and is the worst offender. Spotify has literally no excuse as they have been sued multiple times and as we now see for good reason. Amazon and Google are two of the biggest technology companies in commercial history, but they can’t find songwriters.

The moral of the story is that you can’t find what you don’t look for. And of course the one sided drafting of the Music Modernization Act basically gives the services a pass on whether this payment was even accurate. You have to think that if the accounting was so sloppy that these paragons of technology missed the target by 100s of millions, there very easily could be 100s of millions more that we’ll never get. Do not let anyone tell you that this is some great victory by the lobbyists–this is a great victory by the lobbyists for Big Tech. They are paying us with our own money through a pig in a poke. If our lobbyists are going to celebrate anything, they need to celebrate when every penny is accounted for and paid to the right person. And there should be no cost-benefit analysis because as we were told many times, the services are paying for it. So they should pay for all of it, including the distribution to the long tail. In other words, our lobbyists should celebrate only if the market share distribution is zero. Surely they thought of this.

But now the hot potato is at the MLC which is financed by all these same offenders. We need to ask if the money reported by the MLC is the exact sum that they received from the participating DSPs or if there were any “fees” that disappeared from view before it was reported. We also need to ask if the monies received by the MLC is the exact same dollars that were paid by the DSPs and whether any “fees” disappeared before the money got to the MLC.

But all in all, a potentially good day provided that money immediately begins flowing to songwriters. There’s a long way between here and there, but keeping pressure on will keep attention on that juicy target.

Guest Post: Good News for Music Tech Startups: DLC Changes Fee Structure for Using Blanket Compulsory License

by Chris Castle

(This post first appeared on the Music Tech Solutions blog)

Title I of the Music Modernization Act established a blanket mechanical royalty license, the mechanical licensing collective to create the musical works database and collect royalties, the Digital Licensee Coordinator (which represents the music users under the blanket license) and a system where the services pay for the millions evidently required to operate the MLC and create the musical works database (which may happen eventually but which currently is the Harry Fox Agency accessed via API).

Title I also established another first (to my knowledge):  The United States became the first country in the world to charge music users a fee for availing themselves of a compulsory license.  The way that works is that all users of the blanket license have to bear a share of the costs of operating the MLC and eventually establishing the musical works database (and whatever else is in the MLC’s budget like legal fees, executive pension contributions, bonuses, etc.).  This is called the “administrative assessment” and is established by the Copyright Royalty Judges through a hearing that only the DLC and the MLC were (and probably are) allowed to attend, yet sets the rates for music users not present.

The initial administrative assessment is divided into two parts: The startup costs for developing the HFA API and the operating costs of the MLC.  The startup costs for the API, vendor payments, etc., were assessed to be $33,500,000; that’s a pricey API.  The first year MLC operating costs were assessed to be $28,500,000.  Because it’s always groundhog day when it comes to music publishing proceedings before the Copyright Royalty Judges, the method of allocating these costs are a mind-numbing calculation that will require lawyers to interpret.  With all respect, the poor CRJs must wonder how anything ever actually happens in the music business based on the distorted view that parades before them.  You do have to ask yourself is this really the best we can do?  Imagine that the industry elected to solve its startup problems by single combat with one songwriter and one entrepreneur staying in a room until they made a deal.  Do you think that the best they could come up with is the system of compulsory licensing as it exists in the US?  Maybe.  Or maybe they’d come up with something simpler and less costly to administer in the absence of experts , lobbyists and lawyers.

My feeling is that the entire administrative assessment process is fraught with conflicts of interest, a view I made known in an op-ed and to the Senate Judiciary Committee staff at their request when the MMA was being drafted.  The staff actually agreed, but said their hands were tied because of “the parties”–which of course means “the lobbyists” because the MMA looked like what they call a “Two Lexus” lobbying contract.  Not for songwriters, of course.

Yet, the DLC appears to have reconsidered some of this tom foolery and should be praised for doing so.  The good news is that the market’s gravitational pull has caused the allocation of the assessment on startups to come back to earth in a much more realistic methodology.  Markets are funny that way, even markets for compulsory licenses.  While still out of step with the rest of the world, at least the US precedent appears much less likely to have the counterproductive effects that were obvious before MMA was signed into law due to the statute’s anticompetitive lock in.  And the DLC should be commended for having the courage and the energy to make the fairness-making changes.  That’s a wow moment.

Hats off to the DLC for getting out ahead of the issue.  I recommend reading the DLC filing supporting the revisions (technically a joint filing with MLC but it reads like it came from DLC with MLC signing off).  It’s clearly written and I think the narrative will be understandable and informative to a layperson (once you get past the bizarre structure of the entire thing).  The DLC tells us the reasons for revisiting the allocation:

Since the Judges adopted the initial administrative assessment regulations, the Parties [i.e., the DLC and MLC since no one else was allowed to participate even if they had a stake in the outcome] have gained a better understanding of the overall usage of sound recordings within the digital audio service industry, as well as the relative usage of various categories of services. This information has led the Parties to conclude that the allocation methodology could have significant impacts on smaller Licensees, and that the allocation methodology should be modified to better accommodate these Licensees, and that such is reasonable and appropriate. This is particularly the case as these Licensees transition to the new mechanical licensing system set forth in the Music Modernization Act (“MMA”) and navigate new reporting requirements, and further as the country continues to generally struggle through the economic and health effects of the ongoing COVID-19 pandemic. While the cost, reporting requirements, and impacts of the pandemic are experienced by all Licensees, the Parties believe that it is reasonable and appropriate to modify the administrative assessment to better address the situations of smaller Licensees.

The “old” allocation resulted in this payment structure for services buying into the blanket license (setting aside download stores for the moment):

Old Assessment Alloction

It was that $60,000 plus an indeterminate share of operating costs that was the killer.  The new allocation is more precise applicable to other than download stores:

New Assessment Alloction

This makes a lot more sense and one can believe that some startups actually were asked what they think. Remember, David Lowery sent an open letter to the CRJs in 2019 raising this exact point reacting to the bizarre initial administrative assessment hearings:

The Judges should take into account that no startup has been present or able to negotiate the many burdens placed on them by this settlement. In particular, they have not been able to be heard by the Judges on the scope of these financial burdens that their competitors—some of the richest multinational corporations in history—have unilaterally decided to place on them with no push back.

This isn’t to say that any would be brave enough to come forward and challenge their betters if given a chance. But they should at least be given a chance.

There are some twists and turns to the new rule which was adopted by the CRJs as a final rule on January 8, 2021, and any startup should obviously get smart about the rules. But–these latest amendments have established two really great things: First, the DLC is paying attention. That is very good for the reasons David raises. The other is that the DLC is apparently actually talking to someone other than Google and Spotify and coming up with reasonable compromises. This is very, very good. Let’s hope it continues.

We’ll be watching.

Results and Recommendations of the Artist Rights Watch MLC Awareness Survey

Guest post by Chris Castle

Our sister site Artist Rights Watch fielded a Mechanical Licensing Collective Awareness Questionnaire during January targeting songwriters attending our MLC webinar.  (MLC Awareness Questionnaire 1/31/21 n=120.)  The purpose of the questionnaire was to give the panelists some idea of the awareness level of attendees about the issues we intended to discussed based on early responses to the survey.  You can read the analysis of the responses here, but I’m going to discuss them briefly.

Of the 120 people who responded, responses suggest that approximately 70% of respondents personally handled the business and administration of their song catalogs, 50% were self-administered, and 50% administered song catalogs of 100 songs or fewer.  In other words, the majority of respondents were exactly the kind of self-administered songwriters or administrators we sought to connect with and who are eligible to stand for the MLC board seats devoted to self-administered songwriters if the right insiders nominate them .  We are still analyzing the geographic data, but about 16% were from California zip codes with the rest distributed across Texas, Georgia and other fly-over states predictably not represented on the MLC’s board of directors.

The basic questions about the MLC awareness we were trying to better understand were whether respondents even knew what we were asking about, and if so, how did they know.  This will help understand the success of the information efforts to date by the MLC, the DLC, and the Copyright Office.  We also wanted to know if respondents felt that they knew enough about the MLC to advocate for themselves with the MLC as an effectiveness metric for other educational efforts to date.

An encouraging 63% of respondents had heard of the MLC, but 22% had not.  Less encouraging was 6.67% who had both heard of the MLC and successfully registered and 4.17% who had heard of it but had not been able to register.

When asked how they had heard of the MLC, respondents were asked to respond to a list of potential sources, including “other”.  The largest source of information was “news media” at 27.35% and the next largest was “other”, which included a variety of sources including The Trichordist, Artist Rights Watch and MTP.  

However, given the other answers, the education efforts of the MLC (including HFA), the DLC and the Copyright Office did not seem to be making much penetration into these respondents, although the Copyright Office led the pack, sometimes by a lot.  This is curious because it’s not really the Copyright Office’s job and they are not being paid millions to do it.

MLC Quesion Source

As a measurement of the cumulative effectiveness of the educational outreach by the MLC, DLC and Copyright Office, we asked whether respondents felt they could advocate for themselves with the MLC.  60.83% answered “no” or that they “could use some help.”  This was surprising, and I would have preferred to see that number down in the single digits.

Of those who tried to register with the MLC, 15.38% of respondents successfully registered, 12.5% were told to use HFA, but 32% were “not sure” what they were told to do by the MLC.  I think that it’s safe to explore whether the data indicate that the educational outreach has resulted in an abysmally low registration rate.

For whatever reason, this language has appeared on the MLC’s website in recent days:

Prior to January 1, 2021, DSPs operating under a compulsory license were required by law to account to rightsholders on a monthly basis, within 20 days after the end of each month. Starting on January 1, 2021, DSPs operating under the new blanket license will have 45 days after the end of each month to send their usage reports and royalty payments to The MLC. The MLC will then take 30 days to perform its matching functions and calculate the royalties due to each of its Members. That means that The MLC will send out royalty payments and statements to Members roughly 75 days after the end of each monthly period. Because the total duration of the new distribution process will be longer than the old process, there will be a two month gap at the beginning of 2021 between the time rightsholders receive their last monthly statements and payments from DSPs under the old process and the time when they receive their first monthly statements and payments from The MLC under the new process. 

12% of respondents said that they were paid monthly and 60% of respondents were paid quarterly or “other” than monthly or quarterly.

We will be studying the responses over the coming weeks, but I had a few thought on the responses and a couple recommendations.  

  1. I’m going to ask if ARW can field the same questionnaire periodically to see how responses vary over time. UPDATE: ARW will be fielding a new survey with a few additional questions, you can participate at this link.
  2. It appears that of all the media the experts are using to get their messaging out, the one making the greatest penetration for mere awareness is news media.  However, respondent’s lack of confidence in their ability to register with the MLC as well as the low level of successful registrations hasn’t yet supported a conclusion that the experts’ well-funded efforts are producing greater MLC registrations or a greater understanding of how to register, or, and most importantly, actual registrations.
  3. There seems to be considerable confusion for whatever reason about someone else doing the registration for songwriters, be it administrator or publisher.  Outside of the survey, we have anecdotal evidence that songwriters are finding that their songs are not registered with the MLC after having been assured they would be by their publishers.  Because of the announced songwriter payment gap that the MLC anticipates in the first few months of its operations, songwriters may only find out they are not registered when their payments stop.

    Recommendation:  One technique I observed with a  SoundExchange information session was that artists were able to bring their laptops to a seminar where they were literally walked through the SoundExchange registration process step by step after the informational Q&A session concluded.  Even during COVID this could be accomplished using screen share.  

    By using this technique, the MLC could make sure that the end result of their webinars, etc., was that songwriters or publishers registered works and learned how to do so for the remainder of their catalog.  Plus they knew who to call if they had any problems or further questions.  This takes time, but the whole process takes time and you’re only fooling yourself if you think otherwise, to be blunt. I would say that it matters less how these people managed to waste two years in which they could have been doing this than it does to fix the problem right here, right now.  Do not let them tell you that the need only arose on the License Availability Date of 1/1/21 because that is just a CYA lie.

    Recommendation:  The experts should make a focus of their messaging a very clear statement that if you don’t register you will not get paid.  That is the harsh reality.  By hiding that ball, they do everyone a disservice.  Maybe an unregistered songwriter will eventually be able to claw their royalty back from the black box at some point in the future, but in the time of COVID, that claw back comes with a mortality rate.

    Recommendation:  No accrued but unpaid royalties for the first two or three years of the MLC’s operations should be able to be placed in the black box.  Not that they wait to pay out black box for 3 years, but they cannot use any of this money for black box–ever.  Like state unclaimed property offices, they hold the money forever.  The reason is that there is a greater than 50% chance that the reason funds are unmatched is because of the MLC’s startup missteps, not anything the songwriter did.  

Songwriters Alarmed Biden Admin Looking at Google/Amazon Attorney for Antitrust Chief

The Intercept is reporting that the Biden administration is considering appointing Renata Hesse as Assistant Attorney General for Antitrust. The potential appointment has raised eyebrows in the press since Hesse in private practice worked on antitrust cases on behalf of both Google and Amazon. Google is already under antitrust investigation and if Hesse were to become AAG she’d at the very least have to recuse herself. Is it even appropriate to appoint someone that deeply conflicted? Were there no other antitrust attorneys in Washington DC to take the job?

But it’s even worse than it first appears.

Talk to any songwriter even tangentially involved in public policy and the story is much more alarming. Hesse isn’t just any Google/Amazon attorney. Hesse has a terrible history with songwriters. Last go around when Hesse was acting AAG for Antitrust in the Obama administration she tried to promulgate a new rule for songwriters that would have greatly benefited Google as it faced a $1 billion dollar lawsuit from an organization that represented songwriters. It was never clear why the DOJ took this action. It didn’t seem to emerge from any of the DOJ staff attorneys or public comments from licensees. She alone seemed to have pushed the change. The rule was so poorly reasoned the DOJ eventually drew two lawsuits. The DOJ lost one case and dropped/settled the other before it could be decided by the courts. During the fiasco it was revealed that Hesse had purposely omitted from her official DOJ bio her private practice work for Google fending off state antitrust investigations. As a result many people including myself have speculated the entire episode only made sense if the rule change was purposely proposed to help Google. In other words it looked suspiciously like a case of high level corruption that should have been investigated. It never was.

Here are the details:

First, the two biggest songwriter organizations BMI and ASCAP have been under “temporary” DOJ consent decrees since the early 1950s. Because of this songwriter public performance licensing and royalty rates are under the control of the DOJ. A single federal judge essentially sets the rates and terms for BMI songwriters and another judge for ASCAP. (Crazy right?) In the last 20 years digital broadcasters have become adept at exploiting this process to lower public performance royalties paid to songwriters.

As a result some songwriters have left these organizations and joined smaller organizations like Global Music Rights, because they are not under DOJ control and it is sometimes possible to get better royalty rates.

In 2014 Global Music Rights (GMR), alleged YouTube did not have the performance rights to about 20,000 works by artist GMR represents. These artists included some of the biggest artists in the business like the Eagles, Pharrell Williams and John Lennon. When Google refused to take down the works a lawyer representing GMR told the Hollywood Reporter that if Google doesn’t blink, “there will be a billion-dollar copyright infringement lawsuit filed.”

Not long after this happened the DOJ Antitrust section III (out of the blue) proposed a new rule for BMI and ASCAP. So called “100% licensing.” The rule basically said, if BMI or ASCAP controlled any portion of a song they could be forced to license the full 100% of the song. Not sure how the DOJ can force someone to licenses someone else share of a song, but I’m not a lawyer. Why does this matter? If you weren’t aware most hit pop songs are written by teams of songwriters and thus ownership is often shared by many writers. Professional songwriters typically enter into private contracts (co-administration agreements) with each other stipulating that they each administer and license their own shares of a song (fractional licensing). So if a movie studio wants to use a song, each of the writers must sign off on the contract. The DOJ proposal, 100% licensing, was odd. It went against longstanding industry practice. Further the DOJ antitrust section itself required this sort of fractional licensing in many of the contracts it supervised.

Songwriters and songwriter organizations were thus stunned by this development. At least until they realized that this was clearly helpful to Google in its dispute with GMR and thus made sense in a crony capitalist sort of way. Why? Well it is highly likely that many of those 20k tracks at the center of the GMR lawsuit were co-written with BMI and ASCAP writers (BMI and ASCAP writers/co-writers some weeks represent more than 90% of music streams). Thus by forcing the BMI and ASCAP cowriters to license songs on behalf of the GMR co-writers, the DOJ would effectively take hundreds of millions of dollars in statutory damages out of this lawsuit.

That is when attention began to focus on Renata Hesse. As Chris Castle at Music Tech Policy noted at the time:

Ms. Hesse appears to be the thought leader behind imposing 100% licensing on the songwriter community. I arrive at this conclusion by process of elimination, as the DOJ professional staff do not appear to be taking credit for coming up with it on their own. Ms. Hesse is the one who has authority over the process, at least most directly, so if the DOJ professional staff did not originate the idea, and if no one in the voluminous consent decree public comments came up with it, it must have come down from on high. At least within the DOJ or even higher.

However, it is worth noting that the ASCAP/BMI consent decree review started before Hesse took over as head of the Antitrust Division from Bill Baer.

I doubt that Ms. Hesse came up with this all on her own, so I asked myself how did this person end up being in the position she is currently in with the authority to do so much damage to so many people who don’t deserve it. Not to mention the fact that when it comes to anything that the Google network touches, which is pretty much everything in human experience, the U.S. Government–at least currently and unlike their European counterparts–only seems to be interested in enforcing the antitrust law to protect Google, not to challenge it.

Up until this point no one had noticed that Hesse seemed to have manipulated her official bio to omit the fact that during her last stint in private practice she had worked mostly as outside counsel to Google to head off numerous antitrust actions and investigations at the state and federal level. Other juicy details emerged. It was revealed in Texas Hesse worked hand in hand with Ted Cruz to lobby the state government on Google’s behalf. That is quite a thing to leave out of your bio. Especially in the antitrust division. Hesse for some reason knew she had to downplay this. Why?

Meanwhile songwriters (and privately many licensees that were not Google) began to loudly complain how disruptive this new rule would be to the entire music licensing ecosystem. For one, songwriters were quick to inform the DOJ that much of their repertoire was subject to private co-administration contracts, and the rule would require them to violate those contracts. The response from Hesse’s antitrust division was stunning. They instructed songwriters to renegotiate private contracts or remove the songs from the repertoire of BMI and ASCAP to comply with the new rules.

The consent decrees that the DOJ imposed on songwriters are ridiculous and need to go away. However there is one good argument for them as they provide a great degree of market efficiency. The consent decrees force BMI, ASCAP, to license their songwriters entire repertoire. This in turn influences the other two songwriter organizations to license their entire repertoire as well. These are called “blanket licenses.” Thus a radio station need only obtain four licenses to enable it to freely play any song. But removing thousands if not millions of songs from the BMI and ASCAP blanket licenses would require a radio station to enter into thousands if not millions of contracts to have the same freedom to play whatever they want. This change would completely undermine the entire rationale for the DOJ to regulate music licensing in the first place. Almost everyone involved on the songwriter side (as well as many licensees) became convinced this rule change was designed to help Google. This is stunning corruption. The entire DOJ antitrust division was being used to benefit a single company. A company that one could argue is/was involved in anti-competitive monopoly.

Around this time BMI and then Songwriters of North America (SONA) a songwriter advocacy group sued the DOJ. Essentially the lawsuits argued the federal government was forcing songwriters to violate private contracts or retroactively make previously legal activity illegal. (Ex post facto lawmaking is prohibited by the constitution.) Instead of backing down Hesse’s antitrust division responded with a new and dangerously unhinged claim: The consent decrees always required 100 percent licensing so songwriter fractional licensing contracts between songwriters were always illegal. This despite the fact the consent decrees never required 100 percent licensing and in case after case BMI and ASCAP were required by DOJ to license fractionally. But most embarrassingly as we noted at the time:

“If 100% licensing already existed why did the DOJ spend the last year asking for comments from songwriters, publishers and music services on whether to make this change or not?

It was a clown show. At this point several members of congress began to poke around in the matter. One congressman asked a different federal agency, The Copyright Office to weigh in on the matter. This was precisely because Hesse had wrecked the reputation of the entire antitrust division of the DOJ. And it smelled like corruption.

Eventually Hesse left the antitrust division, but she didn’t settle the cases before she left. She left the cases to drag on. I suspect out of spite. How many millions of dollars did these cases cost taxpayers and songwriters? I’ve always thought Hesse should have been investigated, if not for corruption then at least for incompetence.

It will be a very sad day if Biden appoints Hesse to oversee the antitrust division. 80 million Americans didn’t vote for Biden because he promised to put a Google attorney in charge of Antitrust at DOJ.

Guest Post: Streaming and the Embarrassment of COVID Riches

By Chris Castle (first appeared on MusicTechPolicy)

We’re starting to see a narrative emerging from the digital music services in reaction to artists chafing under the misery of streaming royalties.  Streamers want lawmakers to focus attention on the allocation of current period revenue that they pay to creators and deflect attention from the company’s stock market valuation (or private company valuation).  That’s a grand deflection and misdirection away from the true value of artists, songwriters and their recorded music to streaming companies like Spotify.  But they can’t escape the embarrassment of riches by discounting the value of stock price through deflecting attention to loss-making revenues that companies like Spotify keep artificially low through a kind of Malthusian reverse pricing power to drive growth.  It may be rational for investors, but it’s not sustainable for the creators of the company’s sole or primary product.

We saw this with Pandora–lawmakers were told how much of Pandora’s monthly revenue the company paid out in royalties as though revenue was the primary metric.  The deflection worked until lawmakers started realizing that Tim Westergren was booking $1 million a month in stock sales.  Then it rang pretty hollow.  But the commoditizers are at it again.

No matter how much Big Tech tries to commoditize music, this is not about selling widgets at a deep discount–it’s about people’s lives.

“Get Big Fast”

Let’s be clear–companies like Spotify don’t get into business to eke out a profit.  They get into business to get their snouts into the trough of IPO stock as fast as possible and share that wealth with as few people as possible.  (And get out of corporate governance before the chickens come home to roost.)  So looking at revenue allocation without the accretive boost of stock market valuation is simply a grand deflection.  Abracadabra!

That deflection is particularly galling when the executives dip into current revenues to reward themselves like drunken sailors.  This is the profit fallacy—I would go so far as to say that in Silicon Valley, “profit motive” is very 1980 and long ago was replaced by the motive of  “get big fast.”  These companies seek to capture public stock market valuation, and share price valuation implies a belief in top line earnings and market share growth–not current period profit or–God forbid–dividends to shareholders.  And “get big fast” is working for Spotify.

share of streaming services

There is also controversy about a perceived “allocation” of music royalties payable by the streaming services particularly between record companies and recording artists or PROs and songwriters (especially the PROs and authors’ societies that Silicon Valley would dearly like to replace).  The allocation theory again focuses on revenue instead of the total value transfer. It goes something like this: Streaming services pay 69¢ of each dollar for royalties. When the artists or songwriters complain, it’s not because the saintly streaming services don’t pay enough, it’s because the greedy record companies or PROs take too much of that 69¢.

There is a lot that is not said with that fallacious allocation statement. I think a focus on revenue “allocation” is the wrong way to look at the royalty issue from a policy perspective.  The “allocation” focus presupposes there is an aggregate payment for music that is somehow misallocated.  

Pie-ism a la Mode

This allocation or “pie” fallacy is a very familiar argument in the U.S. It often comes from broadcasters fighting equitable remuneration for recording artists on terrestrial radio by attempting to limit their total payment for both sound recordings and songs to the amount that broadcasters historically have paid for songs only.  Instead of acknowledging the value of sound recordings, the platforms confound song performance royalties with “music”.  They say, “We pay $X for music, we don’t care how you allocate it between songs and recordings.”  This is like comparing apples to oranges and producing a pomegranate.

I call this thinking the fallacy of the pie, a derivative of the fallacy of composition.  It makes creative sectors fight each other in a kind of digital decimation.  

There is nothing particularly sophisticated about this strategy.  But the policy challenge for industrial strategists is to how to grow the pie, not to cut smaller pieces for everyone.  Growing the pie is particularly relevant when the platform seeks to monetize its valuation in the public financial markets. At that point, focusing solely on the allocation of revenue to the exclusion of the total valuation transfer is simply a kind of cruel joke.

Here’s the sad reality broken down to current per-stream rates that are entirely based on service revenue:

etude-ecoute-en-continu-streaming-montants-spotify-apple-music-google

This is front of mind as we see reports of Believe Digital (owner of the independent pre-pay distributor Tunecore) contemplating a €2 billion IPO drafting behind the reported COVID-fueled success of streaming and the Spotify public offering.  Government may play a role in requiring a share of riches transferred from the public financial markets to be shared by those artists and songwriters who gave the issuer its valuation, particularly when the issuer did not invest in the creative community.  

Get COVID Profitable Fast

If profit were really the target, one could make Spotify more profitable almost overnight by moving their U.S. headquarters to Syracuse, Cedar Rapids or even Austin rather than multiple floors of the World Trade Center in Manhattan.  One could cut executive compensation, one could do many things to reduce their Selling, General and Administrative costs.  But profit is not the issue for them.  Valuation is the issue and valuation is driven by bets on future growth.   In Spotify’s case, growth is often measured as subscriber growth and subscriber growth implies competing on price because Spotify offers more or less the same product as its competitors in a triumph of the commoditizer.  Which in turn implies keeping retail prices down (and Monthly Service Revenue) in a race to the bottom on subscription price and to the top on share price.  You may find that analyzing the economics of who wins in streaming is similar to who wins a gas war among price cutting petrol stations.

COVID has nearly destroyed the live music business that sustained the artists who previously tolerated their mils per stream Spotify royalties.  Far from being harmed by COVID, COVID has been rocket fuel for Spotify which adds to the unfairness of the “big pool” revenue share royalty system.  As the COVID Misery Index demonstrates, Spotify’s growth in valuation has outpaced its fellow oligopolists:

COVID Misery Index 1-8-21

Given the urgency of the COVID crisis, it is important to understand the difference between the creator community and other workers affected by COVID.  For example, restaurants are not failing while some other entity succeeds in extracting value from their customers.  As the COVID Misery Index demonstrates, Spotify’s stock price has more than doubled since the onset of COVID.

Again, Spotify’s success is largely predicated on keeping both royalties and prices low and bargaining for special royalty treatment.  I don’t object to the company’s pricing decisions so much as the complete failure of Spotify to share its success with independent artists who make up a significant amount of its offering but who are doomed to scrap at the decimal point in search of a positive integer.

Instead of launching billion-dollar stock buy-back programs to juice their share price, it would be a simple thing for Spotify to credit the royalty accounts of independent artists and songwriters with a cash infusion not connected to the revenue share deflection.  They have a direct billing relationship with thousands of artists and songwriters and they could simply deposit some thousands in these accounts which overnight would help balance the inequities and also provide an alternative to government support payments.  We have experienced government payments to creators in Austin, and one of the biggest problems was the mechanics of getting the money from the government’s account into the creator’s account. 

Spotify could just do it today as a thank you for doubling the value of their company while artists and songwriters suffered. Or perhaps Daniel Ek could just pay it out of his own pocket since he loves creators so damn much.

Whether it’s driven by the embarrassment of riches or a guilty conscience, the commoditizer’s grand deflection is back. Don’t let them fool you twice.

Save the Date! January 14 at Noon CST, Zoom Panel with @musictechpolicy @northmusicgroup @sealeinthedeal for Independent Songwriters

This image has an empty alt attribute; its file name is https%3A%2F%2Fcdn.evbuc.com%2Fimages%2F122288515%2F87998774455%2F1%2Foriginal.20210105-173522

By Chris Castle

I’m grateful to Texas Accountants and Lawyers for the Arts, Austin Texas Musicians and the Austin Music Foundation for hosting an information webinar next week on the impact of the new blanket mechanical license under the Music Modernization Act on independent songwriters. We will also cover the nuts and bolts of dealing with The MLC, Inc. and a unit on the Digital Licensee Coordinator.

I couldn’t be happier to have two great panelists in music publisher and song data solver Abby North and my fellow Austin music lawyer Gwen Seale.

While this panel has an Austin origin, the topics are not Austin-centric and will apply to all songwriters in the world just like the MLC does.

Please RSVP to Eventbrite if you think you might attend at this link and also take a moment to complete the anonymous 10 question MLC Awareness Questionnaire on Survey Monkey at this link. The Zoom code to join will be posted through Eventbrite.

I’ll be posting some other materials, but for those who want the more nitty gritty background, you can read this package of documents at this link.

Please take our Mechanical Licensing Collective Survey

Please take a moment and complete the ArtistRightsWatch new anonymous 10 question survey regarding The MLC at this link. We’re gathering general anonymized information about how songwriters and publishers have heard about The MLC and whether you think an independent advocate (or an “ombudsman”) would be useful to you. This will help us plan future programming and input.

The survey is available to everyone and will be open until January 31, 2021.

Thanks!

Optimism is Contagious, Too: @nivassoc’s #SaveOurStages Included in COVID Stimulus–Update

Guest post by Chris Castle

Thanks to the hard work of the National Independent Venue Association and their allies, it looks like some stimulus relief is finally coming to small venues, theater operators, bars and restaurants. The NIVA effort began with the  Save Our Stages Act that authorizes the Small Business Administration (SBA) to make grants to eligible live venue operators, producers, promoters, or talent representatives to address the economic effects of the pandemic on certain live venues. Save Our Stages will be included in the new COVID stimulus bill. The stimulus bill text was released yesterday (Dec 21) and was voted on last night by both the House of Representatives and the Senate in Washington, DC.

SOS Act authorizes the Small Business Administration to make (1) an initial grant of up to $12 million dollars to an eligible operator, promoter, producer, or talent representative; and (2) a supplemental grant that is equal to 50% of the initial grant. An initial grant must be used for costs incurred between March 1, 2020, and December 31, 2020, but a supplemental grant may be used for expenses incurred through June 30, 2021. I haven’t seen the final language of the COVID stimulus bill, but I would imagine it will be carried over.

Many people pulling together have helped to deliver a miraculous Christmas present for music cities like Austin, Texas and the country. The bi-partisan Save Our Stages Act was carried by two members of the huge Texas Congressional delegation, Senator John Cornyn and Austin Representative Roger Williams alongside their outstanding colleagues Senator Amy Klobuchar and Representative Peter Welch. As we saw in the CLASSICS Act and later in the Music Modernization Act, Senator Cornyn is a strong advocate for the Texas music industry which needs him more than ever.

We also have to thank Governor Greg Abbott and the Governor’s Texas Music Office for their efforts in getting SOS passed and in supporting the local music economy–tireless is an overused word, but the Governor has never forgotten Texas venues in the State’s plans to open in the middle of the 25/8 whole of government response to the pandemic. I’m sure there are many others to thank in many other states and cities, but I know these folks have been white-knuckling the express train for months.

The lobbying effort to pass SOS was a heartening example of our business pulling together with the artist community in the vanguard. That extensive lobbying effort led by NIVA highlighted the importance of live music and music tourism to the local economies of cities across the country. I don’t know if it’s even possible to measure the global economic impact of the lockdown approach on our business, but given the pre-COVID economic impact of the festival business alone, it’s got to be over a $1 trillion loss. As Universal’s Michael Nash said at the University of Georgia Artist Rights Symposium earlier this year, the label was very concerned about keeping live music alive even though labels might not be directly involved. According to MusicAlly, Nash said “The reality is that the health and welfare of our artists is central to everything we do, and so we do have a stake in what’s happening in the broader ecosystem.” That view was reflected in the broad support for SOS from RIAA and other industry groups as well as Universal’s commitment to major investments in live music destination hotels.

It appears that the limitation on liability for businesses like venues that reopen is not going to make it into the stimulus bill. That’s unfortunate because the liability issue is a critical piece, and the situation cries out for a federal solution when there’s a lawyer behind every cough. You may ask why such a crucial aspect of reopening is still a question mark at this late hour? Rep. Stephanie Murphy (D-Fla.), a member of the bipartisan Problem Solvers Caucus, summed it up: “I am frustrated to be part of an institution that is so dysfunctional that it doesn’t even work until the last minute.” Well, frankly, no surprise there. The liability issue will have to be dealt with in the new Congress.

The question has always been if you lock down the venues without protecting that investment, will we have an live music infrastructure to reopen? Austin is an all-too-perfect example. We have no idea what Austin will look like when we get past the pandemic. SOS is too late to save Margin Walker and many others. But with this cash infusion we have a better chance that post-pandemic Austin will bear some resemblance to what it was and can hopefully help get some people back on their feet in Austin and around the country, which is the point. The team is moving in the right direction and will attract others. Universal’s investment in the future is an example of leadership and optimism for the survival of our live music venues and all the wonderful people who run them. Optimism is also contagious, and is more likely to accelerate with Save Our Stages.

The good news is the bad news is wrong–our work is not over, but we live to fight another day–or another 300 days. And that is a Christmas miracle in many households.

Here is the press release from NIVA:

Save Our Stages Act just passed as part of the COVID-19 Relief Bill! 

Thank you for helping to #SaveOurStages! You responded in an overwhelming fashion. NIVA thanks those across the country who sent 2.1 million emails to their elected officials expressing their support for the Save Our Stages Act. All 535 Congresspeople heard from their constituents through SaveOurStages.comWithout your support and continued attention, we could not have accomplished this goal.

Our gratitude also extends to Sen. John Cornyn (R-TX) and Sen.Amy Klobuchar (D-MN) in the Senate, Rep. Peter Welch (D-VT) and Rep. Roger Williams (R-TX) in the House, champion leader Chuck Schumer (D-NY), and 230 bipartisan cosponsors in Congress.

The Save Our Stages Act will provide emergency relief to independent venues and promoters that have been devastated by the pandemic’s shutdown. This legislation will enable these mom-and-pop businesses to hold on until it’s safe to gather, reopen fully, and once again return to serving as the economic engines for their communities. Read NIVA’s full statement and thanks here

The legislation provides critical help to shuttered businesses by providing a grant equal to 45% of gross revenue from 2019, with a cap of $10 million per entity. This grant funding will ensure recipients can stay afloat until reopening by helping with expenses like payroll and benefits, rent and mortgage, utilities, insurance, PPE, and other ordinary and necessary business expenses.

WHAT’S NEXT

NIVA hopes to work with the Small Business Administration to ensure the emergency relief is dispersed as Congress intended, that the instructions and process to apply for grants ensure that the process is implemented accurately, fairly and as expediently as possible.

Since it could take many weeks, even months for the funding to flow, the NIVA Emergency Relief Fund, with The Giving Back Fund as its 501(c)3 fiscal sponsor, continues to raise money to assist the venues at greatest risk of permanently going under as we wait for the grants to be issued. Anyone wishing to donate can do so here.

Guest Post: What is the Intention of Justice? Notice and Stay Down is the Government’s Responsibility

By Chris Castle

ARTHUR

Let’s get back to justice…what is justice? What is the intention of justice? The intention of justice is to see that the guilty people are proven guilty and that the innocent are freed. Simple isn’t it? Only it’s not that simple.

From …And Justice for All, written by Valerie Curtin and Barry Levinson.

Law out of balance is no law at all.  I suggest that the DMCA is just this imbalance and the unbalanced DMCA has created other imbalances that in turn transferred wealth from the many to the few.  One of the biggest dangers to our society currently and in the future is erosion of the third estate (or the “musician’s middle class”) into the concentration of wealth in fewer and fewer hands.  This erosion is accompanied by its inevitable trend toward authoritarianism enforced by the mandarin class of Silicon Valley.  Not to mention the policy laundering operations funded by transferred wealth like the Chan Zuckerberg Initiative (that’s the Chan Zuckerberg who asked Xi Jinping to name her then-unborn child).  

Serfing in the Apocalypse 

This kind of neo-feudal concentration of wealth is most obvious in the tech oligarchy, especially in companies like Facebook, Google and Spotify with their dual class supervoting stock that concentrates the corporate decision making and wealth not in the shareholders but in the hands of Mark Zuckerberg, Sergey Brin, Larry Page, Eric Schmidt, Daniel Ek and Martin Lorentzen.  And then there’s Amazon with the world’s richest man, Jeff Bezos—the future space mogul.  (Bezos’ Blue Origin and Google’s adventures in biometrics and AI in China are examples of the second order knock-on effects of the Internet oligarchy become defense contractors.) 

I also suggest that one of the driving forces that has accelerated this concentration of wealth and power over the last twenty years has been the 1998 Digital Millennium Copyright Act.  Unless substantially reversed, the DMCA will continue to accelerate the wealth transfer from creators to oligarchs.  It must also be said that state actors or near state actors like TikTok either profit from, promote or protect massive online piracy based in DMCA-type alibis.  This topic is another conversation, but anyone who has dealt with the huge pirate sites has felt the cold hand of truly bad guys with top cover.  In addition to the tech oligarchs, Russian oligarchs think the DMCA idea is really pretty groovy.

The DMCA Alibi

You’ve probably heard the expression “notice and takedown” applied to copyright online.  It was the DMCA that created the “notice and takedown” alibi regime for piracy and near-piracy.   These notices have come to be called “DMCA notices” and the Congressional plan that implemented that call and response has unambiguously failed.  You may have also heard the expression “value gap.”   The “value gap” is shorthand for illicit profits made from exploiting the DMCA loophole which itself is a prima facie case of law out of balance.  The “value gap” is the predictable consequence of “notice and takedown.”

Google alone has received nearly five billion DMCA notices just in the current reporting period.  That’s 5,000,000,000.  I’m still waiting to see the conga line of Members of Congress and Senators who say that was exactly what they intended (and many who were involved in drafting the DMCA are still serving).  I’m also waiting to hear lawmakers acknowledge that when something happens 5,000,000,000 times, it’s a feature not a bug just like the Ford Pinto’s exploding gas tank.  No one ever asked them until Senator Thom Tillis began a series of hearings before the Senate Judiciary Committee’s Subcommittee on Intellectual Property earlier this year.

If we’re lucky, in coming days Senator Tillis will be introducing a legislative overhaul of this gaping wound reflecting the many hearings he’s chaired this year to investigate the DMCA imbalance that created one of the biggest wealth transfers in history.  That wealth transfer is not only caused by the perpetual state of piracy or near piracy created by the DMCA, it is also caused by the cost of enforcing copyright that has fallen on all creators in all copyright categories.  Not to mention the sheer scale of the burden imposed by lawmakers on creators.  Hopefully Senator Tillis’s investigation will bear fruit and will right the imbalance.

And as we have exhaustively endured for over 20 years, law out of balance is no law at all.   In the music business, performers—like all creators—have been effectively powerless to stop this latest great imbalance in justice created by the copyright infringement safe harbor disaster and piracy force multiplier.  That value gap has hollowed out the performer community (as well as record companies) after 20 years of wealth transfer to the Big Tech oligarchs from commoditizing the recordings that performers created.  And Big Tech have used their DMCA-driven profits to hire even more lobbyists around the world to create even more loopholes in the human rights of artists in the endless maelstrom of Malthusian decline.  That decline manifests itself in the ennui of learned helplessness of creators around the world as companies like Google seek to impose Google’s version of notice and takedown around the world.

Notice and Staydown

But—there is a new term in our lexicon that hopefully will appear in new legislation from Senator Thom Tillis: Notice and stay down. What does it mean?  It’s a mid point between a pure negligence standard and the intent of the DMCA to provide a responsible alternative dispute resolution system.  Instead of the endless whack a mole iterations of catch me if you can posting and reposting of infringing works, online service providers would be required to actually do the right thing and keep the infringing work off of their service.  It’s really just a properly enforced repeat infringer policy.  It’s hard to believe that adults persist in this whack a mole but they do.  There’s big money in those moles that don’t actually stay whacked.

How in the world did we arrive at the status quo?  A page of history is worth a volume of logic to fully understand this leading edge of the Great Reset.  

The Great Copyright Reset

In the late 1990s, the large ISPs had a legitimate concern about this Internet thing. If ISPs (like Verizon or AT&T) are providing ways for the many to connect with each other over the Internet, they were inevitably empowering essentially anonymous users to send digitized property to each other by means of that same technology.  That property might take the form of an email file attachment (or link to a file) that contained a copy of a sound recording, movie or an image.  ISPs wanted to be protected from responsibility for things like copyright infringement they had nothing to do with.  (This knowledge predicate is where the games begin.)

The ISPs needed a zone in which they could operate, a zone that came to be called the “safe harbor.” The deal essentially was that if you didn’t know or have a reason to know there was bad behavior going on with your users, or didn’t have knowledge waiving like a red flag, then the government would provide a little latitude to reasonable people acting reasonably.

This safe harbor idea was a great privilege conferred upon online service providers and balanced the democratizing nature of the Internet with the need to enforce the law against bad actors.  Lawmakers were caught up with the idea of bringing people together.  What they didn’t realize sufficiently was some of those people previously only met on Death Row.

Artists’ rights to protect themselves were not entirely extinguished by this new safe harbor for big companies but were severely burdened. Record labels and film studios had to devote substantial resources to whack a mole that could have been spent on their core businesses–making records and movies.  If a copyright owner thought there was infringement going on that didn’t qualify for the safe harbor, then the intention was that individual artists shouldn’t have to file a lawsuit, they could just send a simple notice to the service provider. If it turned out that there was a bona fide dispute over the particular use of the work, then the parties could go to court and hash it out if necessary. The notice part of “notice and takedown” was perceived as an inexpensive remedy that would be available to artists who did not want to take on a lawsuit as well as ISPs with litigation budgets.  The Congress did not factor in the charlatans who would come later like Google and Facebook, neither of which existed in 1998.

This is documented in the legislative history from 1998, i.e., both before Google and and Facebook and before the Electronic Frontier Foundation discovered Morpheus or Mrs. Lenz:

This ‘‘notice and takedown’’ procedure is a formalization and refinement of a cooperative process that has been employed to deal efficiently with network-based copyright infringement.

Section 512 does not require use of the notice and take-down procedure. A service provider wishing to benefit from the limitation on liability under subsection (c) must ‘‘take down’’ or disable access to infringing material residing on its system or network of which it has actual knowledge or that meets the ‘‘red flag’’ test, even if the copyright owner or its agent does not notify it of a claimed infringement. 

Sounds very civilized, don’t it? Sounds like something that could be considered to be just. How could something that sounded so right go so wrong so fast?  Notice and takedown has become notice and shakedown after the charlatans arrived.

The Inevitable Notice and Shakedown

The one thing that nobody thought was that it was the intention of Congress that there would be ad networks, multinational corporations and international piracy rings whose business model is in large part built on exploiting the “notice and takedown” loophole in that safe harbor.  

These organizations ignored the DMCA’s knowledge predicate and repeat infringer requirements and adopted what is essentially a “catch me if you can” version that allows them to infringe until they get caught by the copyright owner and then continue to infringe if they are not sued–the exact opposite of what the DMCA intended.  What once was a reasonable exception was almost immediately tainted as a massive loophole that the government has done little to nothing to correct much less enforce.

The “safe harbor” is no longer a loophole, it has graduated to a full blown design defect as indiscriminately harmful as any exploding gas tank.  So now when artists ask that some common sense be applied to this grotesque distortion of the law-supposedly passed in part for the benefit of artists-some would tell artists that it’s not up to government to tell them what the law means. As Kafka-esque as that sounds.

Will You Believe Me or Your Lying Eyes?

Isn’t it obvious that having to send a notice for the same work on the same service hundreds of thousands of times an absurd burden? In other words — is the government actually defending whack a mole with a straight face? Did the government actually intend that 5,000,000,000 take down notices in a year are a new normal?  If they did, evidence of that intent is not in the statute or the legislative history.  Would Congress offer protection to an exploding gas tank after they already knew it was a threat because it was designed that way?

Whack a mole is not automatic-it requires human intervention. As we saw in BMG’s precedent setting and victorious lawsuit against the ISP Cox Communications over Cox’s grotesque failure to enforce its repeat infringer policy, a person has to decide to repost the infringing file even while knowing the file is or is very likely an infringement. Whack a mole actually defies the entire purpose of the safe harbor-whack a mole is not a little latitude for reasonable people acting reasonably.

Whack a mole is a design defect.  Is it just that Congress should protect any design defect?

Let’s get back to justice. Not only does the status quo require creators to tell lawmakers (including courts) what their law means, the U.S. Government has utterly failed artists with the fundamental justification for the Sovereign common to our jurisprudence and political theory. 

Crucially, it must be acknowledged that the government has failed to protect artists.  The government has failed to enforce the laws, essentially overseeing and giving legitimacy to one of the largest wealth transfers of all time from the hands of the many into the overflowing pockets of the few.  All based on an extreme interpretation by Google and its ilk of the government’s laws.  Direct challenges to these interpretations involve costly and protracted litigation — with the inescapable whack a mole continuing all the while.

It would not be unreasonable for artists to think that the whole thing smacks of crony capitalism, particularly when one of the biggest beneficiaries of the loophole is a major lobbying influence like Google. While some ISPs have at least tried to address the issue, the Googles of this world are noticeably absent.

So I would beg pardon here-I do not feel that it should be necessary for artists to tell the Congress what would be acceptable in the way of parameters for “notice and stay down”, at least not initially. I think artists have the undisputed right to ask-actually to demand-of the Congress, what was their intention?

Enter the Foxes

Don’t underestimate the knock-on effects of the DMCA wealth transfer that funds self-preservation for the DMCA beneficiaries.  Who can forget Google’s dominance of the Obama Administration?  It’s clear that like Google learned from Microsoft, Facebook has learned from Google (and both joined forces to try to defeat the European Copyright Directive, so expect more of the same foxes coming for the henhouse when Senator Tillis introduces his bill).  

We note the irony that the ethics czar for the Biden transition team is from Facebook, as is the director of legislative affairs a former Facebook lobbyist.  A former Facebook board member co-chairs the transition team and there is a sprinkling of other former Facebook board members in other roles.  Three transition team members are former Chan Zuckerberg Initiative employees.  And Google’s Eric “Uncle Sugar” Schmidt will have a leading role.  

Once they get into power, you can expect that DMCA reform will get exponentially harder, but the Tech Transparency Project will have even more work to do.

Senator Tillis Could Make Real Progress Toward Reversing the DMCA Cronyism

The safe harbor is the government’s law. They wrote it. They voted for it. They represented voters—including creators—when they did so. They presumably have some idea what it is supposed to mean. Many who voted for it are still in the Congress. The Congress needs to come clean on what they intended. Isn’t that the better place to start? Why should artists have to tell the Congress what the Congress’s intention was?

If it was the intention of the Congress (and President Clinton who signed the law) that the current state of whack a mole was the plan all along, then let them say that — and perhaps more importantly, point to where they told the electorate that was their intention at the time the DMCA was passed in the Congress and signed into law.  If it is not their intention, then it should be reversed with no daylight.

Google alone is on track to receive over five billion take down notices this year alone. If this was the Congressional intention, then let them say that. If their intention was there should be no upper limit on the number of takedown notices any one company could receive in a year, then let them say that. And explain themselves.

And let’s be clear-Google does not appear to view these billions of notices as a design defect, although that would be a perfectly reasonable conclusion. And neither do Facebook or Twitter. One has to believe that if a company the size of Google viewed billions of notices as a problem, they could fix that problem. They haven’t. In fact the number of notices grows exponentially every year. Perhaps they view billions of DMCA notices as a feature set.  Because along with the billions of notices comes a fortune for Google just like Facebook, Twitter and the rest.  Big Tech’s defenders would say of Pirate Bay and Megavideo, they’re just like Google.  Yes, that’s right.  Google is just like them and they are just like Google.  Serfing on the DMCA apocalypse.

What is the intention of justice? That the guilty are proven guilty. But if lawmakers won’t tell us what it means to be guilty much less prosecute the politically connected wrongdoers, then what justice is that?

Notice and stay down is a reasonable reaction to whack a mole, and one that is entirely consistent with the original intent of the DMCA notice and takedown regime that has gone so far wrong. Hopefully Senator Tillis will be leading the charge.

It might actually be that simple.  Notice and stay down.

As Arthur told the jury, “If he’s allowed to go free, then something really wrong is going on here.”