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.

@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.

@davidclowery and @musictechpolicy Talk Copyright Royalty Board on Who Knew: The Smartest People in the Room

Big thanks to Tom Truitt and the wonderful audience!

David and Chris discuss improvements in the Copyright Royalty Board rules and procedures including:

–A songwriter advocate as a permanent independent representative of songwriter interests and participant in the Phonorecords proceedings with full rights of a participant. All other participants would bear the cost of the advocate. Other participants would be prohibited from using the advocate as a way to engage in overreaching discovery against individual songwriters or their publishers.

–Each participant would be limited to one lawyer representing their interests in the Phonorecords proceedings. This would counteract the current abuses forced upon the CRB and intimidation tactics of Big Tech.

–Songwriters would be permitted to form a bargaining collective with a general antitrust examption.

–Music users who appeal the Judges’ rulings must pay higher rates pending appeal.

–Discovery would be extremely curtailed to protect songwriters from abuses by Big Tech to punish and intimidate songwriters such as that currently being imposed by Google and other Big Tech companies without songwriter consent or even notification.

–Should songwriters get an across-the-board antitrust exemption under competition law (like the Sherman Act)?

@DavidCLowery: Address on Acceptance of the American Eagle Award from the National Music Council

June 2nd 2022 Anaheim California

Hello and thank you. Thanks to the board for this award. President James Weaver. Chair Charlie Sanders. Thanks to David Sanders for help with logistics.

And while I have him here, special thanks to Rick Carnes for his help a few years ago with the University of Georgia Artists Rights Symposium.

I wanted to start out today, by saying it is a great honor to receive this award.

When I look at past recipients and see names like Odetta, Dizzy Gillespie, Quincy Jones, Lena Horne, Hal David, Phil Ramon and Kris Kristofferson, I feel like the protagonist in the Talking Heads song:

“How did I get here?”

You see, my original claim to fame is the song Take The Skinheads Bowling. How did the guy that wrote that song end up amongst such musical luminaries?

By way of introduction and explanation:

The song Take the Skinheads Bowling is the first single from a band I started in 1983 in Santa Cruz California.

The band is called Camper Van Beethoven. And it’s still around after 39 years.

I would describe that band as a psychedelic folk-rock garage band but we didn’t have a garage. We actually rehearsed in an attic.

Three flights of stairs… SVT.

Go figure.

Around the same time I started an indie record label to promote and distribute the records of Camper Van Beethoven. We later signed to Virgin Records.

I then started another band called Cracker. This band went on to have platinum hits. You’ve probably heard a few.

I produced albums by groups like Counting Crows.

I ran a recording studio complex for many years.

And in 2012 I began to speak out on behalf of artists at various technology conferences.

In particular I wrote a rather long essay, quite controversial at the time, “Meet the New Boss, Worse Than the Old Boss?”

In this essay I argued that the emerging digital landscape for music was one in which the new bosses (mostly tech companies) would pay nothing up front for our work, and very little on the back-end. I predicted this would shift most of the financial burden and risk onto those who could least afford it, the working class artist.

Unfortunately, my predictions were correct.

Now, It is important to note I am not hostile to technology and technology companies per se. Indeed I graduated with a degree in mathematics from UC Santa Cruz, and before Camper Van Beethoven became my full time job I worked as a computer programmer.

In addition I have had some success as a seed investor in technology startups. Since we are at NAMM I assume you all have heard of Reverb.com?

Technology is important in my life. It’s important to how I make music. Most other artists I know feel the same way. I don’t think technology companies and artists should always be at odds.

So let’s rewind for a second…

“I started a band in my attic (not garage) and later a record label.”

The foundational myth of Silicon Valley is the garage startup that becomes a global brand.
(Think Apple).

Look at my own startup: Camper Van Beethoven. A few kids in a faded beach town start a band. With a small personal loan from a singing cowboy-true story- we made a record and went from the attic to competing on a global scale in a few short years.

In the 80’s and 90s, this story was replicated, to different degrees, by hundreds of indie rock bands all across The United States.

And this story is not unique to the US or rock music. In1990 while traveling around Morocco I met many musicians who sold their recordings on cassettes in souks all across North Africa, the Middle East and southern Europe.

In 2014 I toured China as a cultural and Intellectual property ambassador for the US State Department. I met a Mongolian folk-rock ensemble that was doing essentially the same thing across central Asia.

If Silicon Valley is widely hailed for its entrepreneurial energy and innovation shouldn’t artists and bands also be praised and seen in the same light? We are certainly as creative.

We generate jobs and substantial economic activity. Some political scientists even think it was really American Pop Music that ended the cold war.

It has always seemed like something worth protecting to me.

Turning our attention back to this room, I see a similar entrepreneurial spirit in the boutique amp, instrument, and music software makers represented here by the National Music Council.

Conversely the big manufacturers and major rights holders represented here have problems that will feel familiar to artists:

The unlicensed use of their intellectual property and designs.

We have a lot in common.

Now this award is ostensibly given to me for my work as an artists rights activist. But I want to put that in a bigger context.

Many of you may have first heard of my efforts on behalf of artists when I filed a class action lawsuit against Spotify for failing to pay self published songwriters.

This, indeed, was a milestone as it gave songwriters the first opportunity in the digital age to extract some concessions from digital services.

Also the 2018 Music Modernization Act may be understood as an unintended consequence of this lawsuit.

But in the big picture, this lawsuit was a minor skirmish in what I call “the long war” to protect the rights of the creators.

And In this long war, I submit, I am just a foot soldier.

I look at the members of the National Music Council, whether music creators, unions, manufacturers, music associations, labels, educators or performing rights organizations and I can think of many many times when I have been aided in my efforts by the good folks from these organizations.

Because ultimately, we have this in common:

We are all fighting to protect our intellectual property

our copyrights,
our neighboring rights,
our patents,
our trademarks
and our designs

We fight to protect them from freeloaders that too often convince policymakers and courts that in the name of “innovation” they should have access to our Intellectual Property without permission or payment.

Sadly this is nothing new. There have always been and there will always be unscrupulous schemers that claim their exploitative business model is somehow “the future.”

The problem is, that in their vision of “the future” they get rich while little of that money trickles down to us. Those that create the intellectual property.

To paraphrase Led Zeppelin: The scam remains the same.

But it is here that the National Music Council has always been helpful. The council and its members provide the long lasting intellectual infrastructure that allows individual artists like myself, to fight.

To fight Today.

To fight 5 years from now

and to fight into the foreseeable future.

I humbly accept this award as someone who has simply followed in the footsteps of other council members and award recipients.

Keep up the good fight my friends,

You are truly on the right side of history.

@DavidCLowery to Receive American Eagle Award at NAMM 6/2/22

[Big thank you to the National Music Council for recognizing David with their American Eagle Award.]

Dear Mr. Lowery,

I am writing on behalf of the Board of Directors of the National Music Council, which is well aware of your inspiring and longstanding work in both music education and the championing of music creator rights (especially in regard to ensuring fair remuneration to composers, songwriters and artists). In that regard, I am pleased to inform you that the opportunity arose today (as we sat in our board meeting at the BMI Offices in New York) for NMC to honor with you with its American Eagle Award for 2022.

Unfortunately, due to the exigencies of the pandemic, we are on an incredibly short timeline regarding the presentation of the Award at the NAMM Conference Dinner just two weeks from now (the NAMM Dinner on June 2 at 7pm in the Los Angeles area). It was unclear until today
that the Dinner Event would actually take place. Your transportation and lodging would be paid for by NMC, and the presentation would be made by your colleagues SGA President Rick Carnes and NMC Chair Charlie Sanders.

As you may know, the prestigious American Eagle Award is given each year to individuals who have made a truly significant contribution to the support, development and teaching of music in this country. Past winners have included Kris Kristofferson, Lionel Hampton, Dizzy Gillespie, Van
Cliburn, Benny Goodman, Morton Gould, Dave Brubeck, Marian Anderson, Lena Horne, Roberta Peters, Clive Davis, Hal David, Tom Chapin, Sesame Street Productions, Herbie Hancock, Quincy Jones, Roberta Guaspari and many other musical and educational luminaries.

The awards presentation will be the evening of Thursday, June 2nd. The ceremony will take place in Anaheim, CA. The ceremony will coincide with the NAMM show.

Series 3 of the @ArtistRights Watch Podcast is here! Nik Patel, @DavidCLowery, @MusicTechPolicy and @KCEsq Discuss The Future of Frozen Mechanicals — Artist Rights Watch

Series 3 of The Artist Rights Watch Podcast is here! Nik, David, and Chris are joined by attorney Kevin Casini to talk about the latest with the Copyright Royalty Board and mechanical rates in the Phonorecords IV proceeding and discuss alternatives so songwriters are better represented at the CRB compared to the status quo. 

Check out the podcast here!! Available on all platforms! 

ARW Podcast S3E1: Unfreezing Mechanicals show notes

On the this episode of the Artist Rights Watch, Nik, David, and Chris sit down to talk about the recent developments with the CRB and mechanicals with lawyer and advocate, Kevin Casini. The Copyright Royalty Board who herein will more than likely be referred to as the CRB, ‘is a US system of three copyright reality judges who determines rates and terms for copyright statutory licenses and make determinations on distribution of statutory license royalties collected by the US Copyright Office.’ The US mechanical royalties are determined by the CRB and they meet every 5 years to determine the rate. Songwriter groups argued for a higher rate, and the CRB agreed. On March 29, 2022 the CRB agreed to unfreeze the $0.091 mechanical royalty rate which would commence a fight for a new rate in the 2023-2027 period. Over the past few years, there has been numerous criticisms about the constant rule for freezing the mechanical royalty rate. The royalty rate currently is $0.091 which was set back in 2006, and frankly, songwriters are making less  money due to economic inflation.

Show Notes and Background Materials

Copyright Royalty Board’s Rejection of NMPA, NSAI, Sony, Warner, Universal settlement

Survey Results from Songwriter Survey on Frozen Mechanicals

Selected Frozen Mechanicals Comments:

Rosanne Cash

Helienne Lindvall, David Lowery, Blake Morgan

David Poe

Abby North, Erin McAnally, Chelsea Crowell

Kevin Casini

NMPA, NSAI, Sony, Warner, Universal Comment with Copy of MOU4

Below are some links about Guest Kevin Casini:

Tweets by KCEsq

https://kcesq.medium.com

Below are some links for further reading:

https://completemusicupdate.com/article/us-copyright-royalty-board-rejects-proposal-to-keep-mechanical-royalty-on-discs-and-downloads-unchanged/embed/#?secret=CDnkY1xuT7#?secret=GoUJkY3oLr

https://variety.com/2022/music/news/copyright-royalty-board-crb-rate-1235219872/

https://musictechpolicy.com

https://www.crb.gov

https://variety.com/2022/music/news/songwriters-win-copyright-royalty-board-mechanical-royalties-1235259518/ 

https://www.musicbusinessworldwide.com/record-labels-and-publishers-ink-major-settlement-moving-from-9-1-cents-to-12-cents-per-track-for-us-mechanical-royalties-on-physical-sales1/

Below are our social links and terms of use:

Chris: http://www.christiancastle.com/chris-castle

David: https://twitter.com/davidclowery?s=20

https://www.instagram.com/davidclowery/

Nik: https://www.instagram.com/nikpatelmusic/

www.nikpatelmusic.com

Website: https://artistrightswatch.com

Facebook: https://www.facebook.com/artistrightswatch

Twitter: https://twitter.com/ArtistRights?s=20

Terms of Use: https://artistrightswatchdotcom.files.wordpress.com/2021/01/arw-podcast-terms-of-use-v-1-i-1.pdf

Intro/Outro song: “All My Years” by Nik Patel

Clowns to the Left of Me, Jokers To the Right: When Will the MLC Show Us the Money?

If you’ve received one of these emails from the MLC about having to recast their monthly statement inside of a single month, when you’re eying that $500,000,000 of supposedly unmatched money that’s sitting in the MLC, Inc.’s bank account (maybe?), or if you’re trying to figure out when they are launching the vastly overdue claiming portal, you’re probably wondering–who’s in the clown car today? Bozo or Pennywise?

But maybe they’re smarter than they look. Because all they have to do to distribute that $500,000,000 on a market share basis is keep you looking at the bright and shiny object while they run out the clock.

And if you’re waiting for the Copyright Office to save you because they have “oversight”, you’re going to be waiting for a long time. Here’s the reality–nobody is minding the store. There’s a difference between “oversight” and “overwatch.” In Washington, “oversight” means finding someone else to blame and from the very beginning it has been clear who the MLC intends to blame–you. Because you didn’t “play your part” or sufficiently “connect to collect”.

The Copyright Office has done a couple things while under the supervision of the current head lobbyist for Spotify. They’re good at studies, terrible at oversight, so let’s give credit where it’s due. But also realize that’s where it stops because they have about as much moxie as a starfish. (And if you think the NMPA is going to save you, take a look at the frozen mechanicals debacle and ask yourself if a rational person could really take that seriously.)

At the core of the MLC’s business model is the ability to match. Matching is kind of a “See Spot run” building block. If you can’t match, it’s very close to saying you can’t count. Because it depends on what the definition of “match” is.

So what is a match? Or as the Bard might say, how can I screw thee? Let me count the ways. The Copyright Office produced the Unclaimed Royalties Best Practices study partly on this very topic. Notice the difference between “best practices” and “rules.” “Best practices” is not the same as “rule”. If you violate a best practice, nothing happens to you, so therefore perfect for Washington. If you violate a rule, bad things happen to you. The connective tissue is enforcement. If you violate a rule at the Securities and Exchange Commission, you wear stripes. If you violate a rule at the Environmental Protection Agency, you will pay a fine, for sure. If you violate a rule at the MLC? There really aren’t any so it can’t happen. In other words, it’s just like the Harry Fox Agency.

But that’s what we have so let’s look at one passage in particular from the Best Practice Study because that’s the closest we have to a rule book.

The Office recommends that the MLC make all [matching] metrics publicly available, except to the extent it would cause confidential or business sensitive information to be improperly disclosed. [God forbid.] Specifically regarding match rates, the Office acknowledges the MLC’s point that “vendors can easily increase their claimed ‘match percentage’ by simply dropping the confidence level at which they call something a match.” For that reason, the Office recommends that the MLC provide appropriate context for its metrics, including information surrounding how it defines a match, relevant confidence levels, and how confidence levels are tuned. Additionally, so that they are clear and precise, and to avoid possible confusion, the Office recommends that all royalty figures be provided both with and without accrued interest. [How about a best practice of how they are practicing complying with best practices best?

The Office recommends that in addition to providing annual statistics in its annual report, the MLC also have a dedicated public webpage displaying all of these metrics in a clear, well-organized, user-friendly, and accessible manner. The webpage should be interactive and allow users to search, sort, and break down the data so it may be more easily reviewed and analyzed. The webpage should also have an export or download feature, including bulk exporting/downloading, to aid public consumption and dissemination. The Office recommends that the webpage be updated monthly after each batch of new reports of usage arrive and go through initial matching processes. All metrics should be retained and made available online indefinitely (though the MLC could distinguish between current and historic metrics in the future) so long-term trends can be assessed and to ensure the public and the Office have access to them in connection with the review of the MLC’s designation every five years. The MLC should also be very clear about how applicable metrics may change in response to DMP reporting adjustments and the reconciliation of any related royalty underpayments or overpayments permitted by the Office’s regulations. Relatedly, the Office also recommends that the MLC make publicly available relevant metrics about DMP reported usage that the MLC determines is not subject to blanket licenses (e.g., where it is subject to a voluntary license instead, public domain musical works, etc.), such that any related paid royalties have been credited or refunded back to the DMP.

What would also be nice is to tell you how much of your money they are holding and how you get it back. Maybe they could practice the best out of that.

There’s nothing particularly insightful about any of that, right? It’s the kind of thing that any songwriter giving the subject a moment or two of thought could have figured out at any point in the last 100 years. It’s also the kind of thing that you would have expected to have been built into the MLC’s system–which is essentially the HFA system–from the beginning.

It doesn’t matter what they say they aspire to do. Naturally they have to say they aspire to get it 100% correct–because otherwise that raises some interesting questions about intent, right?

Will they ever be called to account for their failures? Doubtful. The only business in the world where you can get the government to let you hold $500,000,000 of other people’s money and then keep it because paying it out was just too hard for you.

Do you think this mess is what Congress had in mind after they were fed a bunch of crap by the know-nothing lobbyists?

So let’s ask again–Bozo or Pennywise?