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

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

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

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

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

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

To civilians confidential=sleazy.  

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

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

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

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

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

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

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

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

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

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

Let’s hope I’m wrong.

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

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

Let em know how you feel:  http://www.merlinnetwork.org/contact

About David C Lowery

Platinum selling singer songwriter for the bands Cracker and Camper Van Beethoven; platinum selling producer; founder of pitch-a-tent records; founder Sound of Music Studios; platinum selling music publisher; angel investor; digital skeptic; college lecturer and founder of the University of Georgia Terry College Artists' Rights Symposium.