@SchneiderMaria Rolls Over YouTube in Her Copyright Infringement Case

By Chris Castle

It’s been just over two years since Maria Schneider sued YouTube for copyright infringement. But the court has now cleared a path for her to actually proceed with her main case by dismissing–emphatically–YouTube’s motion to dismiss for failure to state a claim.

According to Reuters:

Schneider sued YouTube in 2020 on behalf of a proposed class of small copyright owners, arguing the platform only protects large copyright owners from infringement while allowing pirated content from others in order to draw in users. The group said major companies have access to YouTube’s advanced Content ID software to scan for and automatically block infringing content, while individual creators are left “out in the cold.”

But that’s not the critical part. Maria’s lawsuit alleges that YouTube YouTube removed copyright management information (CMI) in violation of 17 U.S.C. § 1202(b)–potentially intentionally.

The amended complaint states that YouTube knew that files containing audio and/or video works routinely contain CMI, that CMI is valuable for protecting copyright holders, and that the distribution of works with missing CMI on YouTube has induced, enabled, facilitated, and concealed copyright infringement. The plausible inference from these and similar allegations is that YouTube removed the CMI from plaintiffs’ works with knowledge that doing so carried a “substantial risk” of inducing infringement. 

One could see how anyone who intentionally removes one brick from the complex wall that protects big infringers like YouTube from truly massive liability for copyright infringement would be in a whole heap of trouble for inducing infringement (which gets you into Grokster land).

Personally, it’s my view that this is exactly what YouTube and Google do on a massive scale and that they should pay the class damages that will dwarf all the fines these people have already paid for everything from violations of the Controlled Substance Act to competition law violations. Truly Carl Sagan level damages…billions and billions.

We’re lucky Maria’s on the side of the angels. Fight on.

@MMercuriadis on the @CMAgovUK’s Whiff on the Streaming Report

Hipgnosis CEO Merck Mercuriadis had a strong statement in Music Week about the Competition and Markets Authority’s swing and a miss at the obviously absurd music streaming system as it was clearly identified by the groundbreaking report from the Digital Culture Media and Sport Select Committee of the UK Parliament. Given the good work done by the DCMS committee, the CMA report is simply insulting to those Members of Parliament.

Bob Welch and Reggie Jackson, Game 2 1978 World Series

Unfortunately the CMA report reads like a lobbyist’s press release and Mercuriadis lays it down and calls them out. Even though this is a little inside baseball in the UK, Trichordist readers understand that the underlying issues involve every songwriter and involve every artist regardless of where you live and regardless of where you claim as home. Mercuriadis is exactly right, the money is there it’s just not getting to the right people.

The battle continues.

“[Hipgnosis] would like to thank the Competition and Markets Authority for acknowledging in its report today the lack of transparency in the music streaming market, and for highlighting the continued dominance of the market by the major labels and recorded music, along with the severely adverse impact this is having on songwriters’ ability to earn a living,” he said. “However, with 70% of all those responding to the CMA consultation calling for reform, it is regrettable that the CMA is not minded to investigate and address the clear failures its study identified.

“The Digital Culture Media and Sport select committee in its July 2021 report on the economics of music streaming – ‘Music streaming must modernize. Is anybody listening?’ – called for the CMA to address the economic impact of the music majors’ dominance.

“Today the CMA has not acted to address the impact on the creative songwriting community, and this is a missed opportunity to follow up on those concerns raised by Members of Parliament on the Digital Culture Media and Sport select committee. It is a disappointment for songwriters who earn pitiful returns from streaming, not because there is not enough to go round, but simply because it is not being shared fairly and equitably.”

Mercuriadis added: “Hipgnosis will continue to call for fundamental reform of a broken system which does not recognise the paramount role of the songwriter in the music ecosystem. We have always believed that the ultimate solution lies within the music industry itself and we will continue to advocate on behalf of songwriters with the major recorded music companies to push for a fair and equitable split. There would be no recorded music industry without songwriters.

“Legislative and government authorities have the power to redress the economic imbalance where major recorded music companies that own and control the major publishing companies are purposefully undervaluing the songwriter’s contribution. The Intellectual Property Office [UK’s Copyright Office] has a key role to play in redressing the imbalance and we will continue to support its work and efforts.

“Hipgnosis will continue to campaign for change at the highest levels, using our success to advocate and fight on behalf of the songwriting community and to take the songwriter from the bottom of the economic equation to the top.”

The @CMAgovUK UK Competition and Markets Authority’s Missed Opportunity: Reaction from @MrTomGray #BrokenRecord

The literature suggests that in the presence of…positive feedbacks [from the Get Big Fast strategy], firms should pursue an aggressive strategy in which they seek to grow as rapidly as possible and preempt their rivals. Typical tactics include pricing below the short-run profit-maximizing level (or even below the cost of goods sold), rapidly expanding capacity, advertising heavily, and forming alliances to build market clout with suppliers and workers and to deter entry of new players. Intuitively, such aggressive strategies are superior because they increase both industry demand and the aggressive firm’s share of that demand, stimulating the positive feedbacks described above.

Limits to Grown in the NEw Economy: Exploring the Get big Fast strategy in ecommerce https://scripts.mit.edu/~jsterman/docs/Oliva-2003-LimitsToGrowthInTheNewEconomy.pdf

By Chris Castle

You may have seen that the UK Competition and Markets Authority released a report on music streaming in the UK. Of course, because the same players dominate the UK market like they do in France…sorry, I meant Germany…sorry I meant Canada…sorry I meant Sweden…sorry I meant the United States…how different could the competition issues be for US artists and songwriters? You have the biggest corporations in commercial history (Apple, Amazon, Facebook and Google) and the “get big fast” wannabes like Spotify (and Pandora in the US) on one side, the three major labels and the music publishing affiliates on the other side and the artists, songwriters, indie labels, indie publishers and especially the session musicians and vocalists squeezed in the middle.

Plus you have all of the biggest of Big Tech companies as well as wannabe Get-Big-Fast acolytes like Spotify and Pandora setting almost identical price points and freezing them there for a decade while refusing to exercise pricing power and nobody finds that just a trifle odd? Then in the grandest of grand deflections passing this off as the “pie” that everyone should look at instead of acknowledging that it’s the poptart served at the kid’s table in the nursery instead of the feast at the adult’s table in the dining room where the gravy bowls of shares of public stock are handed out dot-bomb style with a side of advertising barter. All while singing an apologia for payola and consumer welfare based on cheapness? You know there’s another way to get really, really cheap goods for consumers that ain’t quite so well received in history.

And yet somehow the Competition and Markets Authority passes this off as good for the consumer? With no meaningful discussion of the Malthusian and anticompetitive effects of the pro-rata model and pretty much summarily ignoring the actual revenue earned by “successful” artists in the beggar-thy-neighbor pricing and revenue charade. Not to mention the complete failure to discuss the supervoting stock at Spotify, Google and Facebook and all the other accoutrements of power that give Daniel Ek, Martin Lorentzen, Tim Cook, Sergey Brin, Larry Page, Mark Zuckerberg and Jeff Bezos control over the global music industry–pale males one and all and also looking pretty stale around the edges the singularity notwithstanding. And then there’s Bytedance and Tencent.

The logic of the CMA in avoiding these issues rivals the Warren Commission’s Single Bullet Theory. But makes total sense as the triumph of the lobbyists for the biggest corporations in commercial history. And sometimes you just might find you get what you need.

We will continue to dig into this latest report and its methodology as will others like Tom Gray, the dynamic founder of the hugely effective #BrokenRecord campaign that led to this investigation which is not over by a long shot. Tom had this reaction to a what’s next question and we take his guidance:

The CMA’s initial findings are:

the music market doesn’t have much competition;

the actions of the Majors and DSPs actively reduce that competition;

artists and songwriters are mostly, if not entirely, doing badly out of it;

but they accept the status quo using the narrowest paradigm of competition and its value to the consumer. It doesn’t go near the fact that the Majors used market power to create the very ‘norms’ the report resigns us to.

A difficult read: one which points to the weakness or indifference of national ‘authorities’ in the face of the gross expansion of multi-nationals unfettered by regulation. Monopolies should be broken to protect citizens and workers, not only to defend consumerism’s need of a saving.

What’s most ironic is you could take the CMA’s findings to a different authority with a more progressive outlook and get a completely different result. They simply don’t seem to have considered it their job to care about the hugely visible negative consequences of concentrated power on musicmakers.

If you would like to tell the Competition and Markets Authority what you think about their statements they want to hear from you.

Streaming Mechanical Complexity Begets Complexity Begets Legal Fees

Remember how the physical mechanical increased from 9.1¢ to 12¢? And it applies to each record sold? If a songwriter got a cut and the artist sold 100 records, the songwriter got $12. That’s $12 today, next month, six months from now. You could plan. You could complain about a statement to the record company. If the record company wanted you to write more songs for their artists, they’d listen and might even fix an error on your statement. Remember: On records and downloads, the record companies pay.

But what about streaming? The record companies don’t pay on streaming, Big Tech pays. The biggest corporations in the world pay: Spotify, Amazon, Apple, Google, Pandora, and their dozens of lawyers. Artist Rights Watch posted a series of Tweets that shows excerpts from the proposed regulations to calculate streaming royalties–and remember this is the one that we’re told is the important one, the one that dozens of lawyers spend millions in legal fees to come up with. It reads kind of like a drunk you can smell a block away but who sits down next do you and asks how do they look for three days?

The first think you realize is that unlike the 12¢ rate for physical, there’s no way anyone call tell a songwriter how much they’re going to make today or next year on a per play. They can’t even tell you how much you’re going to make today for a burger next Tuesday. Or Wednesday. Or Thursday. But one thing you definitely know is that the lawyers are going to make bank writing this crap, appealing this crap, renegotiating this crap. This section here is a big part of what the fight is all about, can you believe it? This is what the Big Boys and Girls think is important and you can understand why. It puts more legal fees on the table and you know who eventually pays for the legal fees one way or another? Take a look in the mirror.

And understand this: If you get a royalty statement for streaming royalties, take a look at the per-stream rate! It usually starts three or four or even five zeros to the right of the decimal place. It’s even worse than the recording royalty. And DIMA wants us to fight among ourselves against the record companies after all this?

David Brooks and @knopps Give The Other Side of Dynamic Pricing: Big Tech Scalpers

What we don’t like about dynamic pricing is that it’s necessary because of free riding scalpers and the artists get blamed.

Bruce Springsteen fans had a rough introduction to the world of dynamic ticket pricing Wednesday (July 20), as many logged into Ticketmaster’s Verified Fan platform to buy tickets for his upcoming tour with the E Street Band and experienced sticker shock at the cost of the best seats.

Those prices – which climbed into the thousands of dollars, as widely reported – represented about 1 percent of the tickets listed on the Ticketmaster Verified Fan sale, but they became a sore point for fans who felt that they no longer had a shot at great seats after years of loyalty to the Boss.

By selling high-priced platinum tickets, Ticketmaster argues, the company can prevent the best seats from being bought and resold by scalpers. That money can instead go to Springsteen. However, this only works when the tickets cost enough to prevent scalpers from making a profit.

Sources tell Billboard that early numbers show that less than 10 percent of tickets sold for the five concerts that went on sale Wednesday ended up on the secondary market – lower than average – and that despite complaints about four-figure prices, only 1 percent of tickets were above $1,000.

Read the post on Billboard

Judge Rejects Spotify’s Privilegium Regale Theory, Ek Must Be Deposed Under Oath

By Chris Castle

Judge Trauger rejected Spotify’s theory of privilegium regale that would have protected Daniel Ek from being deposed in the Eight Mile Style case against Spotify and the Harry Fox Agency. His Danielness will now have to submit to deposition testimony under oath in the case that seeks to show Spotify failed to comply with their Title I of the Music Modernization Act as drafted by Spotify’s lobbyists and the regulations overseen by Spotify’s head DC government relations person.

The Judge ruled that Spotify was pushing a theory that the relevant rules applicable to the deposition should be more deferential to high level executives. As a matter of law. That hasn’t been true since Magna Carta. (In 1215 for those reading along at home.)

Oopsie.

Needless to say but I’ll say it, it will be an absolute side splitter if Spotify ends up losing the safe harbor they drafted into US Copyright Law to protect themselves from songwriters seeking justice. And then there’s the HFA issue–you know, the ones that are backend for the MLC that can’t match $500,000,000 of other people’s money.

Stay tuned kids.

@KerryMuzzey Calls Out Chinese Streamer iQiyi and Tencent for Massive Infringement of Composers

Readers will recall Kerry Muzzey, a leading film composer and outspoken advocate for composers. Kerry’s testimony before the U.S. Senate is some of the best analysis of the struggle of independent creators against the DMCA onslaught. We’ve also been lucky to have him post on MusicTechPolicy and Trichordist.

As Kerry has taught us, composers are often ripped off by some of the biggest names in streaming, some of which are based in China. This is particularly ironic given the long arm of companies like Tencent into the legitimate music business.

Never say never, but it does seem like the mainstream trade press never reports on this angle: These companies are ripping off our artists in a whole other kind of human rights violation because artist rights are human rights.

@davidclowery is back at the Supreme Court, this time with added Attorneys General

David is petitioning the Supreme Court of the United States to stop Google’s cy pres payola system of class action settlements. This is David’s third trip to the Supreme Court. This time, 21 state attorneys general agree. Read their friend of the court brief here. The Court has not granted a hearing yet, but we’ll be keeping an eye on it.

More to come on this topic.

Must See Documentary: The Way the Music Died: Why You Should #DitchSpotify

Big thanks to Jon at Camden Live for posting about this really important documentary about the deep, down and dirty effects of Spotify on music, musicians and the creative process.

It’s always been a hard road for musicians to make money from their songs. Nonetheless, selling tons of singles and albums was at least a target and something bands could dream about.  Of course, there were many ways the labels could work the sales figures to get their shares out first, and only then the bands might see something. Despite the conflict between the often industrial-strength labels and the upcoming artists, there was at least hope that money was flowing back to the content creators.  Now though in the age of streaming music, the connection between making music and making a living is profoundly broken.

This schism is the subject matter for Lightbringer Production’s documentary film “The Way The Music Died” featuring insights from musicians and industry pros, including Mishkin Fitzgerald from Birdeatsbaby.  The film probes the spirit of artists determined to keep writing songs in the face of the meager payouts from the giant and ever-growing music stream service Spotify. Find out why this is ripping-out the heart and soul of new music.

AFL-CIO Backs Artist Play for Radio Play and the American Music Fairness Act #irespectmusic

Hooray! The @AFLCIO’s 12.5 million members have joined the fight to pass the American Music Fairness Act. The USA is the only democratic country in the world where artists don’t get paid for AM/FM radio airplay. This act will change that. #IRespectMusic https://t.co/CoGJtoWSbk — Blake Morgan (@TheBlakeMorgan) June 20, 2022 Really great news, the largest […]

AFL-CIO Backs Artist Play for Radio Play and the American Music Fairness Act #irespectmusic — Music Tech Solutions

Really great news, the largest union organization in the US has joined the fight for fairness for the world’s recording artists and session performers! 

MusicFirst leader Joe Crowley said: 

We applaud the AFL-CIO for standing by artists and music creators and lending the strength of its 12.5 million members to fight for passage of the American Music Fairness Act.

This legislation will benefit artists across the country – including the tens of thousands who are members of SAG-AFTRA, the American Federation of Musicians and other AFL-CIO unions – by correcting a decades-long injustice fueled by corporate greed that has left artists uncompensated for their use of their songs on AM/FM radio.