Curiouser and Curiouser: Strange Loose Ends with Apple Music and The MLC

[Guest post by Chris Castle. This post first appeared on MusicTechPolicy. This is interesting because songwriters don’t often see shenanigans from Apple Music but it is probably due to the overpowering litigation magnet of the MMA. Put this in The MLC redesignation file]

Here’s an update on the bizarre saga of Apple Music and The MLC. Remember that HFA sent to its publishers this termination notice from Apple Music on Apple’s lyric and cloud services licenses (and assume for the moment it was also sent to other non-HFA publishers):

Apple Termination

This is remarkable because the Music Modernization Act limits the kind of licenses that the MLC can administer because the blanket license only applies to a limited number of activities (on demand streaming, limited downloads and permanent downloads). It does not apply to lyric licenses or cloud services because the blanket license is not available for those rights. Those rights would still need to be licensed under the very type of agreements that Apple is terminating.

This question came up during a recent MLC webinar moderated by MLC executives Kris Ahrend (CEO) and Serona Elton (Head of Educational Partnerships). These two executives were asked the obvious question, how can The MLC do lyric licensing for Apple. An eagle eyed MTP reader sent this screen capture from the chat:

MLC Apple Answer

So you have to ask, if The MLC can’t license lyrics, why did Apple terminate their lyric licenses and transfer to The MLC?  And what does “separately from us” mean?  The answer is not really responsive to the question.

Separately from us could easily mean that while The MLC is not licensing lyrics, some other entity is. (Presumably the lyrics are from songs that are subject to the blanket license so the MLC would play a role.)   Remember that the termination notice came from HFA.  Could it be that “separately from us” means HFA would be issuing a side by side lyric license on behalf of its publishers?

And remember that the notice from Apple includes this language:

[W]e intend to move our licensing and royalty administration for Apple Music to the MLC starting from January 1, 2021.

Congress did not intend that The MLC offer licensing and royalty administration for DMPs like Apple.  That would mean that The MLC would be paying itself for Apple’s blanket activities.  That is what HFA does through a rather porous ethical wall (and for which they have been at the center of two class actions and numerous copyright infringement lawsuits and are currently a co-defendant with Spotify in another post-MMA lawsuit).

It has long been assumed that somehow some way The MLC intends to offer bundled licensing which is currently prohibited.  Bundled licensing could take the form of performances, ex-US rights, sync, even general licensing.

It seems like that effort is quietly underway.  What is an alternative explanation for Apple terminating a large number of agreements and transferring its licensing and royalty administration functions to The MLC?  Is the plan that The MLC gets the business and HFA does the work that The MLC is prohibited by statute from performing (at least until they move the goalposts again)?

This does help to explain why there is no MLC database and all The MLC’s “data quality initiative” corrections and improvements are being performed on the HFA database (which HFA owns and will use for work not limited to the blanket license).

Curiouser and curiouser.

The DLC Finally Confirms (Sort Of) How Much is in the MMA Black Box–Bigger than a breadbox

By Chris Castle

[This post first appeared on MusicTechPolicy]

We’ve all heard rumors about how much is in the “inception to date” black box at the digital music services. The main reason that nobody knows is another example of the dismal drafting of the Music Modernization Act.

Limitation on Liability

Wouldn’t you think that if the class actions against Spotify gave the insiders the leverage to negotiate the MMA giveaway that they could at least have gotten an immediate accounting from the services for how much of the songwriters’ money they’ve been holding all these years? But no, it’s sleepy time in Washington yet again. From the Land of Frozen Mechanicals they bring you more Brinksmanship 101. The retroactive black box payment is due to be made by the services to the MLC and its data vendor, HFA–remembering that HFA was also the data vendor for at least some of the services that created the black box in the first place.

limitation on liability 2

However, there is some activity at the Copyright Office now about how to get this money paid. It’s at the Copyright Office because while drafting the aircraft carrier revision to the Copyright Act (aka Title I of the Music Modernization Act), the hard parts were never drafted and were left to the Copyright Office to handle through regulations. Musicians–you’ve seen this before. This is the Washington version of “we’ll fix it in the mix.” So you do have feel sympathy for the Copyright Office in the situation when all the smart people leave them twisting in the breeze.

Not that I necessarily believe this number, but for the first time the services have given a bigger than a breadbox idea of how much is in the black box. The DLC’s lawyers filed an “ex parte” letter in which they made that revelation (along with the known universe: Artist Rights Alliance Ex Parte Letter (Nov. 17, 2020)Digital Licensee Coordinator Ex Parte Letter (Nov. 17, 2020)Mechanical Licensing Collective Ex Parte Letter (Nov. 17, 2020)Music Artists Coalition Ex Parte Letter (Nov. 17, 2020)Nashville Songwriters Association International Ex Parte Letter (Nov. 17, 2020)National Music Publishers’ Association Ex Parte Letter (Nov. 17, 2020)Recording Academy & Songwriters of North America Ex Parte Letter (Nov. 17, 2020)Songwriters Guild of America et al. Ex Parte Letter (Nov. 18, 2020).)

The DLC itself is at the mercy of its members in terms of revealing this number but they claim the following in the Digital Licensee Coordinator Ex Parte Letter (Nov. 17, 2020):

DLC also provided a rough estimate of accrued royalties that are available to be transferred to the MLC, based on a limited survey of a subset of DLC members at a particular point in time, and with the crucial caveat that the precise amounts are in flux as digital music providers continue to engage in robust matching efforts. Specifically, DLC estimated that several hundred million dollars were available to be transferred to the MLC as accrued royalties, even after accounting for the derecognition of accruals based on preexisting agreements containing releases to claims for accrued royalties.

DLC also explained that the accruals that were derecognized because copyright owners were paid and provided releases were a fraction of that amount—on the order of tens of millions of dollars.

So now we know at least that much. We know there are “several hundred million” dollars at issue in the black box and we generally know where the money is. We may know that DLC members hold the money. We also know that this money has not been identified, but we at least know enough to get the nose of the camel in the tent.

Thank You @irvingazoff!

“These people, when they start out — whether it’s Facebook, Snapchat, TikTok, whatever — they resist paying for music until you go beat the f— out of them. And then of course, none of them pay fair market value and they get away with it. Your company’s worth $30 billion and you can’t spend 20 grand for a song that becomes a phenomenon on your channel? Even when they pay, artists don’t get enough. Writers don’t get enough

Thank God for Irving Azoff! (Although how about $1 trillion?) In a must-read profile interview with the LA Times, The Great One lays down the only strategy that works with Big Tech–not unity dinners, not lobbyist sell-outs, not sucking up to monopolists like Daniel Ek. And you know why he’s right? Because they do it to us and weakness in the face of bullies is not an option.

Yes, Dr. Azoff has identified the Tech Gene that turns entrepreneurship into a kleptocracy faster than you can say disrupt. But what should we expect in the coming years given the Tech Gene pandemic? The Big Tech kleptocracy goes way beyond stealing from creators.

Moonalice band member and venture capital investor Roger McNamee recently wrote a good description of policy expectations in Wired:

One of the policy areas that demands a new approach is technology. New technologies like facial recognition and artificial intelligence have been plagued by racial and gender bias, with particular harm in areas like law enforcement, job hiring, and mortgage applications. Internet platforms like Facebook, YouTube, Instagram, and Twitter have amplified hate speech, disinformation, and conspiracy theories, undermining our politics, our pandemic response, and the safety of our citizens. More than 1,000 marketers have joined the #StopHateForProfit campaign, agreeing to pause their advertising on Facebook for a month or more to protest the amplification of hate. In addition, many companies in Silicon Valley have been accused of racial and gender bias relative to employees, most recently Facebook, where an employee and two applicants filed a complaint of alleged racial bias. For all its past contributions to our nation, Silicon Valley now has issues with culture, business models, and business practices that require government intervention.

Imagine my disappointment last week when The New York Times reported that President Obama had suggested that you work with two members of the Silicon Valley establishment, former Google CEO Eric Schmidt and LinkedIn founder Reid Hoffman. I know both men well. They are brilliant and very successful. Their money and expertise may be valuable to your campaign, but I hope you will not turn to them for policy guidance. They were architects of the culture and values that produced the problems I described above.

I hope you will take to heart the words of Albert Einstein, who said, “We cannot solve our problems with the same thinking we used when we created them.” This is particularly true in tech.

And the New York times story said:

Mr. Biden’s campaign and transition team include advisers with ties to tech companies and other industries that worry liberals. Avril Haines, a former Obama national security and intelligenceofficial who is helping to lead Mr. Biden’s transition team, was a consultant for the data-mining company Palantir and WestExec Advisors, a firm that represented a major tech company it hasn’t identified.

A WestExec co-founder and Obama State Department official, Antony J. Blinken, is running the Biden campaign’s foreign policy operation. WestExec has worked with the philanthropy started by Eric Schmidt, the former Google chairman, and with Google’s in-house incubation unit, Jigsaw. But Mr. Blinken and Ms. Haines did not participate in that work, according to the Biden campaign, which said both advisers stepped away from WestExec this month.

Cynthia C. Hogan, a former White House lawyer for Mr. Biden who is helping to lead his vice-presidential selection process, was a lobbyist and government affairs executive at Apple. She tendered her resignation from the company in April, according to the Biden campaign.

If you’ve never heard about these advisory network, don’t be surprised. As the Times tells us:

list of rules provided to members of the policy groups, a copy of which was obtained by The Times, instructs participants not to disclose their participation “on social media such as Facebook or LinkedIn or in your professional bio.” It also warns them not to discuss or distribute names of other committee members, contents of committee conversations, emails from the committee or to talk to the news media.

“Simply put, do not talk to the press,” the document reads, emphasizing “do not talk to the press” in boldface.

Biden Press

And what is Eric Schmidt doing?  According to Recode:

Google Cypress

Yes, to paraphrase former government official Susan Crawford, it looks like “Uncle Sugar” Eric is trying to “geek around the nation state.” Why? It’s very odd but it’s exactly the kind of thing that Roger McNamee warned of. As Recode tells us, it could be a COVID play to allow Uncle Sugar to travel to raves in Europe more easily (as Cyprus citizenship gets him an EU passport), but:

[I]t is still uncommon to see Americans apply to the Cyprus program, according to published data and citizenship advisers who work with the country. The program is far more popular with oligarchs from the former Soviet Union and the Middle East, and it has become mired in so many scandals that the Cypriot government announced last month that it was to be shut down.

But not for Uncle Sugar. So there goes the confirmation hearing. Why did Uncle leave Google again? We never got an answer to that or why his NY pad is soundproofed–from the inside.

Yes, they’re psycho kleptocrats just like Irving says, and it looks like they’re back. But thankfully we have Irving Azoff and we’re not waiting for the cavalry to save us–which they never have.

Chris Castle’s Copyright Office Comments on the Black Box Controversy

Here’s some more MLC news you’ll never read about in the trade press.

Yesterday we posted a shocking revelation from the MediaNet/SOCAN ex parte letter to the Copyright Office: It appears that the digital music services have no intention of complying with the much ballyhooed benefit to the Music Modernization Act–in return for the “reach back” safe harbor that somebody decided to grant the services retroactively, the services would pay over (or you could say “disgorge”) all the unmatched and unpaid mechanical royalties that they were holding, sometimes for years, and always secretly. (Adding insult to injury, MediaNet seems to think that referring to SOCAN’s ownership of MediaNet somehow makes screwing us over into a songwriter-friendly act of good fellowship and felicity. More likely, SOCAN itself knows nothing about it.)

Remember, MediaNet straight up threatened to decline the reach back safe harbor and not pay over the black box. As it turns out, MediaNet’s position is not unique–as Chris Castle identified in his reply comment on the Copyright Office’s black box study, all of the services represented by the DLC made that exact threat to the Copyright Office. As Chris observes, these are not idle threats. They are made by the biggest corporations in commercial history, one of which may be broken up due to antitrust investigations on two continents.

Something must be done and done quickly before the DLC decides to take the blanket license without the limitation on liability for past infringements having successfully scared off anyone who could have sued but didn’t thinking that there was a fixed reach back safe harbor. That seems like it will result in the big guys having paid off the big guys in the NMPA’s secret settlement that was being negotiated simultaneously with the MMA (the NMPA’s umbrella December 17, 2017 Pending and Unmatched Usage Agreement referenced in the MediaNet ex parte letter and talked around in other filings. Remember–the MMA was introduced a few days after the secret NMPA agreement on December 21, 2017 and Wixen Music Publishing felt they had to sue Spotify by December 31, 2017 because of the reach back safe harbor. So everyone except the songwriters–and perhaps most Members of Congress–seems to have known that the fix was in on black box.)

Another fine mess they got us into. Here’s the except from Chris Castle’s reply comment:

The DLC’s Quid Pro Quo Revelation

The concept of a “black box” distribution is a pale mimic of a simple
fact: It is not their money. The fundamental step that Title I excuses
is basic and would solve much of the unmatched problem if Title I did
not exist: Don’t use a work unless you have the rights.

It is a fundamental aspect of copyright licensing and it is not metaphysical.
Yet the message from all negotiators concerned in this process seems
to shelter legitimacy in a complication of dangers to the black box that
come down to another simple fact: Obey and be quick about it or the
law will take your money and give it to someone else.

How much is in the black box? They won’t tell you. From where? Not
your business. From when? Confidential. Is it yours? Already paid it
to someone else before you even knew it was there. And Lord knows
that money once taken incorrectly in the dark is unlikely to be paid
correctly in the light.

Comments by the DLC demonstrate conclusively that addressing the
black box has taken on even greater urgency. The DLC’s Initial
Comment in a related docket is unusually revelatory for a group with a
multitrillion dollar market capitalization that loves them some
protective orders. This passage is particularly breathtaking:

This was the heart of the deal struck by the stakeholders in
crafting the MMA: to provide legal certainty for DMPs, through
a limitation on liability, in exchange for the transfer of accrued
royalties.

If that were “the deal” it is news to me, and I like to think that I’ve
been reading along at home pretty attentively. If I wasn’t aware of
“the deal”, I’m sure I wasn’t alone in my ignorance, but I’m far more
understanding of why the negotiators would have been motivated to
keep “the deal” under wraps if that’s really what it was.

If “the deal” wasn’t kept quiet, someone might have asked why there
was a “deal” when the services were simply agreeing to pay money
they already owed and that they were already obligated to pay for infringements that already occurred. Yet, services still got the new
safe harbor trophy to put on the wall in the copyright hunting lodge
next to the DMCA and Section 230.

The gall doesn’t end there, however. The DLC goes on to make this
threat of imminent harm:

[The “deal”] is a crucial point for the Office to keep in mind as it
crafts rules in this space. If the regulations make it less likely
that a DMP will be able to rely on that liability protection when
it needs it—i.e., if it increases the risk that a court would deem a
DMP to not have complied with the requirements in section
115(d)(10)—a DMP could make the rational choice to forego the
payment of accrued royalties entirely, and save that money to
use in defending itself against any infringement suits.

It is a bit odd that the DLC seems to think of Title I as their private
contract, but there it is. The DLC members’ anticipatory repudiation
of the purported deal that the world now knows underpins Title I was
both refreshingly brazen and starkly shocking. Given that the Eight
Mile Style
case against DLC member Spotify (and both Spotify and
The MLC’s vendor the Harry Fox Agency) is a live action, the DLC is
not making an idle threat. The DLC tells us that if its market cap isn’t quite high enough to suit, Spotify could immediately dip into the black
box for “money to use in defending itself.”

The relationship with the services apparently has settled into the
customary laying about with threats and blackguarding both
songwriters and the Copyright Office. That’s reassuring in confirming
that human nature hasn’t actually changed and these companies really
were the Data Lords we had always known our betters to be after all,
sure as boots.17 Maybe one day the scorpion really won’t sting the frog.
Maybe another “unity dinner” is in order. But not today.

Regardless, it is clear that the Copyright Office is almost the only place
that songwriters can go for relief and an explanation of how the MMA
is to be implemented whatever secret deal the DLC now purports to
have made. Given the DLC’s unequivocal threat on behalf of its
members, there is no doubt of the imminent danger that the black
box currently being held is about to vanish into thin air if something
isn’t done immediately to preserve the status quo. The balance of
hardships pretty clearly tilts in favor of the songwriters as the safe
harbor services control the money and always have.

MediaNet Trying to Cut Off Black Box Payments

You can’t say these people aren’t cagey. Remember that one of the big selling points for the Music Modernization Act was that in return for the under-reported reach back safe harbor, songwriters would get paid on “black box” income by each digital music service dating back to the inception of each service. This is what the Copyright Office wants, too, unsurprisingly since that was the deal.

The reach back safe harbor was used as a scare tactic to keep songwriters from filing infringement lawsuits against these services and the MMA’s promoters went right along with it.

But–now that the bill is about to come due, guess who wants to change the deal? Services are beginning to threaten to decline the reach back safe harbor (and with it the blanket license, presumably) if they have to treat songwriters fairly on the black box. Instead of the MMA free ride that was handed to them on a silver platter, they now want to leverage the scare tactic and run out the clock on the statute of limitations that they will no doubt say had been running. That way they’d create their own safe harbor and never pay the black box but still try to use the blanket license.

So everyone should sue all of these loathsome people today and toll that statute. If enough of these services want to play hardball, there’s a real question of why bother having the blanket license at all.

Here’s an excerpt from MediaNet’s “ex parte” letter posted today:

We understand that the Office is contemplating that the cumulative report will provide data on unmatched usage back to the launch of the service. MediaNet, however, launched its service nearly 20 years ago. In light of that, and the change in vendors, we are requesting the Office adopt a narrow exception in the cumulative reporting regulations. We think such a regulation would be consistent with the overall statutory scheme. Notably, the statute references reporting pursuant to the “applicable regulations,” when discussing the information that must be provided to the MLC. That is a reference to the pre-existing reporting regulations. Significantly, those regulations provided that documentation related to royalties and usage for a particular period of time needed to be preserved only for a period of five years.

To be clear, MediaNet is not asking the Office adopt a regulation that allows a digital music provider to exclude all data from periods of time more than five years prior to license availability date (though such a rule would be consistent with the statute). Instead it is seeking a narrower provision that will provides all available data to the MLC. This would be in the form of a new paragraph in 37 C.F.R. § 210.20(c)(4) of the proposed rule:

(iii) The digital music provider shall be excused from providing the information set forth in paragraphs (i) and (ii) where the usage is from a period of time more than five years prior to license availability date, and the digital music provider certifies the following: that the information was solely held by a vendor with whom the digital music provider no longer has a business relationship, the digital music provider has requested that information from such vendor, and the vendor has informed the digital music provider that it cannot or will not provide that information.

Absent this narrow exception, MediaNet may decline to take advantage of the limitation on liability, which may deprive copyright owners of additional accrued royalties.

@CISACnews and BIEM’s Copyright Office Comments on the MLC

[Songwriters outside the United States should pay close attention to the disconnect between their CMOs and the MLC. It’s becoming increasingly apparent that The MLC is very US-centric and at that very Anglo-American centric in its myopia. We haven’t done a point by point comparison, but we have posted CISAC and BIEM’s comments in the past and we can’t help noticing that their current comment has a few references to prior comments that seem to have been largely ignored. They are very polite about it (maybe too polite about it) but the consequences of ignoring the CMOs is that any ex-US songwriter whose songs are exploited in the US and who relies on their CMO to collect their US earnings may find their streaming mechanicals reduced to zero after 1/1/21 if the HFA database that The MLC is using is not properly mapped.

The MLC’s continued disregard for CMOs is puzzling unless you think perhaps that The MLC doesn’t think CMOs will continue to play a role in the international copyright system. Whatever The MLC’s long-term goals, it is clear that the Music Modernization Act was drafted from an entirely US-centric point of view and that the concerns of our international partners were never taken into account while at the same time forcing them to accept the MMA’s terms. Another example of the haphazard approach that is rapidly becoming the hallmark of the MMA.]

Read the entire comment here.

The International Confederation of Societies of Authors and Composers (“CISAC”) and the International Organisation representing Mechanical Rights Societies (“BIEM”) would like to thank the U.S. Copyright Office (“the Office”) for the opportunity to provide comments on the Proposed Rulemaking on the Public Musical Works Database (“Database”) and Transparency of the Mechanical Licensing Collective (“MLC”). This submission follows our previous comments to the Office, in particular on the Notifications of Inquiry from September 2019 and April 2020 (SG19-1116; SG19-1284; SG20-0614).

As already explained in previous submissions, CISAC and BIEM are international organisations representing Collective Management Organisations (“CMOs”) worldwide that are entrusted with the management of creators’ rights and, as such, have a direct interest in the Regulations governing the functioning of the Database and the transparency of MLC’s operations. CISAC and BIEM would like to thank the Office for highlighting the existence and particularity of entities such as CMOs that are not referred to in the MMA (page 58175 of the Proposed Rulemaking1) and should be treated equally.

CISAC and BIEM are grateful that some of their comments were taken into account by the Office in the Proposed Rulemaking, but would like to reiterate their concerns on certain provisions which, if not adequately addressed, may affect the administration of rights of foreign rightsholders in the US, as follows…

A/ Copyright ownership information and shares

As part of the list of mandatory information for matched works, the Office lists “the copyright owner of the musical work (or share thereof), and the ownership percentage of that owner” (for unmatched works, it is the same as long as the owner has been identified but not located).

For the sake of clarity, we reiterate the need to have CMOs clearly recognized as “copyright owners” under the provisions of the Proposed Rulemaking. Indeed, as already explained in several of our previous submissions, outside the U.S., the “copyright ownership” of the work is attributed to the CMOs managing the mechanical rights of the so-called BIEM repertoire. This would mean that the “copyright owner” share as defined in the Proposed Rulemaking should refer specifically to the share controlled by the CMO as administrator of the work, as opposed to the actual composer/songwriter share.

This clarification also has direct consequences with respect to the determination of sensitive and confidential information which cannot be made publicly accessible through the Database, as further argued in CISAC and BIEM’s comments to the Proposed Rulemaking on Treatment of Confidential Information (see SG20-0562).

If, however, it is considered indispensable for the DMPs and the MLC to have creators’ information and percentage shares for identification and distribution purposes, such data should not be disclosed to third-party entities or made publicly accessible in the Database for the reasons stated in our previous submission. In particular, in the 28 May 2020 comments to the Proposed Rulemaking on Treatment of Confidential Information submitted to the Office,2 CISAC and BIEM explained that there seemed to be no business need to include the creator percentage shares in the musical works, as this information was not required to license or distribute musical works, and constitutes particularly sensitive and confidential financial and business information for creators and their representatives.

Personal identifiable information

CISAC and BIEM fully agrees with the Office with regards to the withdrawal of the date of birth from the list of mandatory public information to be included in the Database. However, CISAC and BIEM continue to be very much concerned with the general compliance of MLC’s operations, including the Database, with data protection laws. As for now, the Proposed Rulemakings are silent on this, although this is a key issue for CMOs worldwide and probably also for other rightsholders.

CISAC and BIEM thus respectfully suggest that the Regulations include clear language on the MLC’s full compliance with data protection laws, and in particular with the European General Data Protection Regulation, as the MLC will process personal data of EU creators. This means that the Database shall be construed in compliance with the GDPR requirements from the building-up of the system (i.e. privacy by design) until the processing operations, providing the requisite security guarantees.

Point of contact for inquiries and Complaints

CISAC and BIEM welcome the inclusion of the need for the MLC to provide a point of contact for inquiries or Complaints. However, as requested in our submission SG20-0614, the Proposed Rulemaking should go further and also make mandatory the publication of the rules that will be applied by the MLC’s dispute resolution committee. This will help to streamline and give more transparency to the dispute resolution process, which will benefit both copyright owners and DMPs.

Future of Music Coalition Warns Against Vendor Lock-in in Copyright Office Comments

[The Future of Music Coalition joins the chorus of concern about shenanigans at The MLC, Inc. with special access and treatment of its vendors regarding the “public” database. As others have pointed out, there’s a real question as to whether The MLC, Inc. is actually building its own database or is just building up the data muscle of its vendor the Harry Fox Agency (formerly owned by MLC promoter and nonvoting board member NMPA. The MLC is prohibited by law from licensing other than the narrow window of streaming mechanicals, but HFA is not.]

[I]t’s important that MLC’s chosen vendors not be able to leverage their
status with the MLC to advantage themselves in other business activities not covered under the MMA. If a vendor was able to leverage its status with MLC to the detriment of competitors in other kinds of licensing activity (even informally), that wouldn’t serve competition, consumers, or creators. Additionally, the Office needs to ensure that provisions about database vendors being replaceable are meaningful.

We see no reason to expect that the MLC’s chosen vendors aren’t up to the task, but songwriters and composers need assurance that if a vendor ends up having problems and a change is necessary, that change will really be possible.

The Office can require the MLC to disclose what it is doing to prevent any vendor from being too operationally enmeshed with the MLC that it either enjoys an unfair advantage through that relationship, or that it would be practically impossible for another vendor to step in.

Read the entire post here.

Songwriters Guild and Society of Composers & Lyricists Copyright Office Comments on Database Ownership and Songwriter Credit in Public Database

[The Songwriters Guild of America and the Society of Composers & Lyricists filed a joint comment with the Copyright Office on proposed rules implementing the public database that The MLC, Inc. is charged with stewarding. They raise a host of issues, but also focus on the ownership issue raised by the Alliance of Recorded Music and the songwriter credit issue raised by Kerry Muzzey.]

Ownership of the Musical Works Database

As to the issue of “ownership” of the Musical Works Database, SGA and SCL were gratified by the USCO’s clear statement quoting the MMA that:
[w]hile the mechanical licensing collective must ‘establish and maintain a database containing information relating to musical works,’ the statute and legislative history emphasize that the database is meant to benefit the music industry overall and is not ‘owned’ by the collective itself. Under the statute, if the Copyright Office designates a new entity to be the mechanical licensing collective, the Office must ‘adopt regulations to govern the transfer of licenses, funds, records, data, and administrative responsibilities from the existing mechanical licensing collective to the public, either for free or at marginal cost, pursuant to the MMA.’

Nevertheless, we feel compelled to repeat once again the admonitions voiced by attorney Christian Castle in his recent submission to the USCO concerning practical issues, problems and anomalies that have arisen even prior to the commencement date of MLC public operations concerning the construction of the Musical Works Database:

I believe that The MLC is encouraging songwriters to correct their song data in the HFA database and that no data from HFA has been transferred to The MLC as yet, and may never be. If The MLC is having data corrected and filled out in the HFA database, then the rules applicable to vendor access to the database may not apply because the Congress’s musical works database is not actually being created at The MLC, it’s being created at HFA. Time will tell if I am correct about this, but it does seem that if I am correct, then The MLC and HFA are working together to exploit an imagined loophole in Title I that violates Congressional intent and certainly the spirit of MMA. Respectfully, the Office should find out what is going on.3

SGA and SCL believe that these are important questions of fact that require answers to ensure that data ownership issues are as clearly defined as possible in advance of any conflicts that may arise. Clarifying that (i) all data and corrections made through HFA will be mirrored in the Musical Works Database in real time, and (ii) that being compelled to provide data to HFA under color of authority from Title I does not constitute a license to HFA for any other purpose, will be important steps forward.

As we have also previously stated, the contractual role and authority of HFA (or any other vendor) should be subject to transparent scrutiny by all interested parties, includingthe music creators whose works are the subject of all information that resides in the database. That includes examination of the contractual rights of the vendor in regard to the data flowing through its own systems and/or those of the MLC, the ancillary vendor use rights (if any) of such data during both the pendency and post-expiration/termination periods of such contract(s), and the clarity of rights ownership of data by the MLC and successor iterations of the MLC (including as regards the Musical Works Database). We respectfully call on the USCO to address more robustly these important issues of transparency and data ownership, and ignore unsupported assertions that transparency and scrutiny of vendor relationships will invite inefficiencies as opposed to clarity and competition.

Songwriter and Composer Names in the Public Musical Works Database

As the USCO is aware and has recognized, SGA and SCL have been consistently outspoken concerning the fact that out of all pertinent identifiers for musical compositions, the names of the music creators of a work are among the only constant and unique data points. In all but the rarest of circumstances, such information is never subject to change, and therefore one of the most important and reliable elements necessary for accurate identification and matching of works.

Moreover, the extension of proper credit to human creators as part of this crucially important Musical Works Database –rather than simply limiting identifiers to the names of corporate assignees of rights which are frequently subject to change and termination– is both appropriate and essential to the fulfillment of the ideals and underpinnings of the MMA set forth in Article I, Section 8 of the US Constitution. As that section makes clear, copyright protections are first and foremost meant to serve the interests of the creators and the public, not the corporate entities that serve in an instrumental but secondary role as rights administrators.

We have therefore remained completely at a loss to understand why this crucial category of information was omitted from the MMA as a specifically required identifier (and why the music publishing community for some reason failed to support our efforts to correct that oversight), and are especially thankful that the USCO has put forth a proposed rule

that requires the MLC to include songwriter and composer information in the database. SGA and SCL continue to remain disquieted, however, with the additional qualifier added by the USCO concerning the standard to be applied by the MLC in seeking music creator data: “to the extent reasonably available to the collective.” Such a limited standard serves to diminish the requisite and explicit value of songwriter/composer identifying information.

We respectfully believe that music creator information should be more clearly defined as a mandatory data point required to be pursued for inclusion in the database by the MLC with vigor, and suggest once again that the rulemaking more specifically reflect the imperative nature of this duty. A more appropriate standard would be, in our view: “to the extent available to the collective through its best efforts to secure such data.” The avoidance of creating loopholes that may permit music publishers to omit music creator information from the data they voluntarily provide to the MLC is essential, and the independent community of songwriters and composers continues to seek the assistance of the USCO in this regard.

In respect to the foregoing, we desire to make clear that SGA and SCL also continue to support the rights of those music creators who may wish not to be publicly associated with certain musical works. That is and must continue to be right of any songwriter or composer. We therefore support the proposed rule put forth by the USCO that grants the MLC discretion to allow music creators the option of having songwriter/composer information listed anonymously or pseudonymously. We would, however, prefer that such a regulation be extended into a mandatory direction to the MLC to accept such direction from a music creator.

Read the whole comment here.

Copyright Office Comments by Composer @KerryMuzzey: Include Songwriter Credits in MLC Database

[Kerry Muzzey is an independent classical and film composer and artist rights advocate. In his comment to the Copyright Office on the MLC regulations he asks why songwriter names are not required to be included in the public database currently being stewarded by The MLC, Inc. Including songwriter names in the database seems like a fundamental building block of identifying a song–assuming that’s what you want to do. It would be like SoundExchange reporting not including an artist name in the transaction data. It makes no sense. Yet, it’s an issue as we will see.]

My name is Kerry Muzzey. I am an independent classical and film composer, and am self-published. It is crucial that the MLC database be searchable and completely public-facing, not only by song title but by writer’s name and publishing entity name or by ISWC or BMI/ASCAP IPI/CAE. Independent artists and music publishers must have the ability to search the “black box” of royalty collection, not only for unpaid royalties, but for accrued royalties that appear under a misspelling of an individual’s name, publishing entity, or in the event that a similar song title has resulted in the misattribution of the writer/publisher credit to another writer/publisher or artist. This transparency is essential not only for accurate accounting of royalties for an individual, but also for any works that are co-written, have multiple publishers, and/or whose performance rights are represented by multiple PROs. Any composer, songwriter or music publisher should have the ability to “disambiguate” their works from any other similar- or matching-title works or similar or identical writer names, by a simple error submission/correction process (after completing any necessary verification of identity). 

Read the entire comment here.

Copyright Office Comments of the Alliance for Recorded Music: Confirm the public owns the public database

[We’re continuing to post selections from the comments filed at the Copyright Office about implementation of the Music Modernization Act. There are a host of new regulations on the operation of the Mechanical Licensing Collective. It’s important to read up on these comments as they cover topics that simply are not covered by the mainstream music press. It’s the kind of thing that if you don’t make the effort to find out what is being said, the Copyright Office will make the new rules without you. Nothing sinister, it’s just how it works. You’ll wake up one day and find out your mechanical royalties haven’t been paid or the statutory mechanical royalty rate has been frozen for 14 years. A day like today.

There are a number of organizations and individuals–other than the usual suspects and conflicted parties–who are taking the time to comment extensively on the proposed new rules and you should know who they are and why they are concerned. We will select a few excerpts and link to the full filings so you can decide for yourselves. Because we believe that artists and songwriters should be told the truth.

The first issue is who owns the public’s musical works database. This is a vital question that has become strangely nuanced. We start with a great comment from the Alliance for Recorded Music represented here by Richard James Burgess of A2IM and Susan Chertkoff of RIAA.]

The Alliance for Recorded Music asks the Copyright Office to confirm who owns the public database in the temporary stewardship of the MLC, among other things in the full comment.

The Alliance for Recorded Music (“ARM”) is pleased to provide these Comments in response to the Notice of Proposed Rulemaking (“NPRM”) published by the Copyright Office (the “Office”) on September 17, 2020 regarding the public musical works database and transparency of the Mechanical Licensing Collective (“MLC”). See 85 Fed. Reg. 58170.

ARM is a nonprofit coalition that represents the recorded music industry in the United States, including the major record companies and more than 700 independently owned U.S. music labels. RIAA and A2IM are both members of ARM. The companies that ARM represents collectively create, manufacture, and/or distribute nearly all of the sound recordings commercially produced and distributed in the United States. As the creators, distributors, and copyright owners of most of the commercially valuable sound recordings available through the digital music providers (“DMPs”) intending to use the new blanket mechanical license, as payors of mechanical royalties and as potential users of the MLC’s musical work database, ARM’s members have a vested interest in the regulations that govern the MLC and its public database.

Database Ownership.

The NPRM makes clear that “the statute and legislative history emphasize that the database is meant to benefit the music industry overall and is not ‘owned’ by the collective itself.” 85 Fed. Reg. at 58172. It also notes that the MLC “agrees that the data in the public MLC musical works database is not owned by the MLC or its vendor.” Id. We agree with this view and were disappointed to find no corresponding clarification of this important concept in the proposed regulations. To avoid any future misunderstandings, and in the interest of consistency with the statute itself, we encourage the Office to make this point explicit in the regulations.

Read the full comment here