Remember the “MIC Coalition” or as we prefer to call them the McCoalition?   This is an astroturf trade group organized by Pandora, National Public Radio, the National Association of Broadcasters, Google/YouTube, DiMA, CCIA, CES and others to oppose paying artists and songwriters for radio airplay.  In particular, the McCoalition intends to fight the Fair Play, Fair Pay Act introduced by Representatives Jerry Nadler and Marsha Blackburn.  Based on the McCoalition mission statement, songwriters are next.

According to the always reliable Ed Christman writing in Billboard, Amazon has left the McCoalition, the first member to exit.  In his post, originally titled “Amazon Pulls Out of Anti-Fair Play Fair-Pay Coalition” before the editors got their hands on it,  Amazon’s representative states that Amazon’s motives for joining the McCoalition was “transparency” in ownership of music rights.  A little odd because the McCoalition’s public messaging only tangentially mentions “transparency” but it does say this under “Mission“:

We join together with a collective voice because all stakeholders in the music marketplace – artists, content owners, users and distributors – benefit when current and accurate information about copyright ownership and payment to artists is easily accessible. In order for the music marketplace to grow and thrive, we need balance in copyright and competition policies that will benefit all participants rather than the few – the major record labels and publishers.

Kind of gibberish straight out of 1999, right?  Sounds like these companies with multi-trillion dollar market caps and their trade associations are going after the major record labels and publishers.  And trying to intimidate their artists and songwriters.

Whatever Amazon’s reason for leaving, that’s a good thing.  They don’t need the headache of being associated with the pariahs of the online music business like Pandora, Google and YouTube.

Which leaves National Public Radio.  As an NPR whistleblower told us, NPR’s decision to join the McCoalition was all about the lobbying staff at NPR trying to feather their collective nest by making common cause with these pariahs–albeit rich pariahs–and the move evidently was made without the knowledge of NPR’s music and news divisions according to an internal email we leaked:

We have joined the MIC Coalition through NPR’s Policy and Representation division, which is charged with representing the needs and interests of NPR Member Stations before federal legislative and regulatory bodies. This role is stipulated in NPR’s charter which provides that it is part of NPR’s mission to represent our members in matters of mutual interest.

Our participation in the coalition is completely separate from NPR’s newsroom. NPR journalists and music curators have absolutely no role or involvement in the coalition,

We’re prepared to believe that the NPR newsroom wasn’t involved at the outset, but what is becoming increasingly apparent is that NPR is there to provide cover for the pariahs and their anti-artist trade associations like DiMA, CCIA and CES, not to mention the restauranteurs who play music that is subsidized by the US taxpayers paying foreign songwriters (under the Fairness In Music Licensing Act arbitration award).

The rumor is that NPR did not pay a membership fee to join the McCoalition.  If true, why was that?  Maybe NPR is paying for its membership “in kind”?  NPR is after all a major influencer of public opinion and the music division brings years of tastemaking credibility to the bargaining table.  Any evidence of that motivation?

Yes, there is.  NPR’s music news group (“The Record: music news from NPR“) has started a series called “Streaming at the Tipping Point” that in our view is simply boosting the goals of the McCoalition–without ever disclosing to listeners the fact of NPR’s membership in the organization much less the purposes of the organization or identifying the financial benefit to NPR of boosting streaming to the great benefit of MIC Coalition members.  For example, in “How Streaming Services Are Remaking The Pop Charts,” NPR fails to even mention that the Billboard “consumption chart” penalizes soundtracks and branded compilation companies like Ministry of Sound in NPRs rush to boost streaming services:

The prominence of streaming on the Billboard charts — comparable if not quite equal footing with radio and sales — is appropriate, given how important streaming is for the recording industry, and how (relatively) novel it is as a form of music consumption. Unlike radio, with streaming the consumer gets to choose what she hears. And unlike music retail, after she plays the song, she doesn’t keep a copy.

NPR fails to mention that Billboard itself is in the streaming business in China (“Billboard Radio China”) and so may have a conflict of interest in how it weights the “consumption charts”.  NPR also fails to mention the Turtles litigation against Pandora and SiriusXM that are both screwing pre-72 artists.  Strangely, NPR’s music news division has failed to cover the class certification for the Turtles in their lawsuit against SiriusXM–a win for artists that is not in the interests of the MIC Coalition.  Even though The Street reported that the ruling took 1.54% off the Sirius market cap.  Maybe that wasn’t news.

But more importantly, NPR is not disclosing the fact that it is a member of the MIC Coalition and that the spin in its reporting on streaming benefits the McCoalition’s goals of screwing artists through sheer multinational corporate market domination.

As we feared, NPR has compromised its journalistic integrity by joining this McCoalition–aside from NPR’s membership being a slap in the face to artists who go out of their way to help NPR Music be relevant and tastemaking.

Plus, there actually are laws about this kind of thing that NPR may be violating.

It’s called “plugola,” the cousin to payola.  Plugola usually involves on-air talent taking payments to plug products or services, or plug products or services they have an undisclosed interest in.  You know, like a free membership in the McCoalition.  As one expert summed it up succinctly, plugola is “promoting the non-broadcast activities of the station licensee or an on-air personality on the air. Plugola occurs only when the financial interests are those of persons ‘responsible for including promotional material in a broadcast.'”  (Read David’s FCC comments on the NAB’s application for a waiver of the payola rules “The Return of the $50 Handshake.”)

Granted, the recipient of the under the table benefit for NPR’s streaming coverage is NPR itself and its fellow MIC Coalition members, but do they really want to raise that as a plugola defense?

Regardless of whether NPR is violating the law, it certainly appears that they are violating every standard of objective reporting in NPR’s “Streaming at the Tipping Point” series.

It’s just more sleaze from people we thought better of.  We really hope that NPR sees the corner they’ve painted themselves into and follows Amazon in exiting from the McCoalition.

The Austin Music Office and Economic Development Department of the City of Austin commissioned the Austin Music Census that was released this week to a standing ovation at a standing room only meeting of the Austin Music Commission:

Coverage of the Census in Texas Monthly suggests that the “middle class musician” is mostly a myth:

“Musicians often get paid less—or, at best, the same—as they’d make ten years ago. In the tech industry, if wages in 2015 were the same as wages in 2005, it’d be awfully hard to keep coders.”

The Census garnered a supportive post from the editorial board of the Austin-American Statesman (“Austin Music Census finds city at tipping point as Live Music Capital”):

Less talked about are the struggles local musicians, venues and other industry professionals endure in a city with an ever-growing affordability problem. The Austin Music Census released this week is the first comprehensive attempt to quantify what the industry is up against.

The city-commissioned report, presented during the Austin Music Commission meeting, shows what many have long suspected: Local musicians and music venue owners are finding it more difficult to live and do business in a city that is increasingly becoming unaffordable for middle- and lower-income workers [like San Francisco].

You can read the study at the ATX Music site.

It’s not every day that we can get two “Big Lies” out of one Daniel Ek interview, but the Claire Atkinson reporting in the New York Post shows a distinct lack of fact checking that let him get away with another whopper.  (“Spotify CEO says middlemen gobble cash“)

Ek suggests there are perhaps too many middlemen, coupled with the problem of antiquated collection systems. “Some systems and processes use physical pieces of paper. How do you do that when every unit would be in the billions? That’s a lot of paper,” says the tech-focused Swede.

Antiquated?  You know who uses “physical pieces of paper”?  Google.  Anyone knows this who gets a Google royalty statement which is pretty much everyone.  You can elect to get accounted to electronically (which usually signs you up for a bunch of other sneaky stuff), but the default is a paper statement.

But–but–if you read the Spotify agreement with Sony that was posted on The Verge (and has now been taken down), specifically Paragraph 2 “Reporting and Payment,” you would know that all of the statements from Spotify to Sony are required to be in “machine readable” form.  You can safely assume that all the major labels are accounted to the same way–in fact, everyone we know who gets a statement from Spotify gets a digital statement  We can also tell you that we have never heard of anyone who got a paper Spotify artist statement.  (Which, by the way, doesn’t mean that the statement is correct, paper or digital.)

They may send paper statements to publishers, but as far as we know, all of the major publishers and administrators require digital statements, particularly for streaming services.  This would include companies like Kobalt, Ole, Songs, Peer and many others, including ASCAP, BMI and SESAC.  There’s really no believable way that anyone with a catalog of any size could get a paper statement from Spotify because there would be hundreds if not thousands of pages even for a relatively small catalog.  And a check for $9.  The paper for the statements would cost more than the earned royalties.

We are just mystified as to why an outstanding reporter like Claire Atkinson would allow Ek to get away with what is clearly a questionable statement.  Unless Ek never read his contracts and never talked to his royalty department, he knew the statement was false when he made it.  Claire Atkinson should have asked him for names or picked up the phone and asked any CFO or accounting manager in any of the labels or digital aggregators that do business with Spotify and they could have told her off the top of the head that Ek was making a false statement.

We don’t see how it could have been anything other than a knowingly false statement, also called a lie.

Why didn’t anyone fact check it?  Because just like the “greedy middlemen” headline, it fits the 1999 narrative that Ek and the McCoalition are still trying to peddle.  The music business is so antiquated that they’ll never been as hip as “the tech-focused Swede” with his monopoly music service.  Just like nobody questions how Spotify gets a valuation that’s higher than any record company.  Ek is sooo 1999 from biting the hand that feeds to the Dot Bomb valuations.

Hey, Mr. Bit Torrent–1999 called and wants its bullshit back.  And shame on the New York Post for publishing these rants without checking the facts.

Billboard reports that the International Music Managers Forum has more than the usual helping of sanctimony about the terms of Spotify’s deal with Sony (and by inference all other major labels).  Curiously, Billboard doesn’t seem to question the credentials of managers to speak on behalf of all artists.  We do.

Ask yourself this–how many managers have screwed artists to the wall?  Want to talk about sunset clauses?  Commissioning income the manager had nothing to do with producing?  Expense charges for first class tickets to MIDEM and $1000 dinners that suddenly appear when the artist wants to leave the manager?  Charging cars for the manager’s mistress to the artist’s credit card so the wife doesn’t catch him?  Sure, there are plenty of great managers who would take a bullet for their artists or dangle an offending promoter out of a window, but let’s not pretend that managers as a class are without sin.

Let’s also not pretend that artists feel like they can question their manager’s transparency or conflicts of interest.

Speaking of sin and the sanctimony of transparency–here’s a few questions for those in the glass house of the IMMF.

1.  How much money do you get from Google, directly or indirectly?  There have been rumors for years that IMMF is in Google’s pocket, so how about publishing your books online?  Anything to hide?

2.  Did any of your members get stock from Spotify, Bit Torrent or any tech company your organization promotes?  Were you given the opportunity to invest or did you get the stock for service rendered?

3.  Any IMMF members been hired as consultants by Google?  Spotify? Bit Torrent?

4.  Do your members have an obligation in their management contracts to disclose all sources of their income to their artists (like Spotify stock)?

5.  Who gets to decide whether the manager has a conflict of interest?  The manager?  Or the artist?

6.  How many of your members knew about the Spotify major label terms before the Verge leak?

7.  If your member got stock from a tech company what was it for?  Their wisdom or their access?

We’re reminded of a story about a manager who made a fortune managing a particular superstar and then wanted to sell his management company (and the superstar’s contract) for a bundle.  The artist wished him well and had just one question:

Where’s my 80%?

More on this later, but The Verge leaked the 2011 license between Spotify and Sony Music.  Considering the source, we have to assume that the Verge intended to make Sony look bad, but here’s the reality:  The total advances for 3 years that Spotify committed to pay to Sony was $42.5 million.  Given Sony’s huge market share and strong artist roster, this isn’t exactly chump change, but it’s pretty low.  Reasonable, in fact.

Given all the braying that’s come from Spotify about how many millions they have paid to the “music industry”, we have to imagine that these advances actually recouped.  Here’s a hot tip for the Verge–an “advance” is a prepayment of royalties.  The fact that you got an advance on your catalog doesn’t excuse the label getting the advance from paying royalties on streams or sales.

The label may “keep” the advance, but they turn around and pay it out as they get royalty statements from Spotify.  An advance only becomes “breakage” (i.e., an overpayment) if the advance is greater than the sales at the end of the contract, not at the beginning.  Given the relatively low advances in the Sony deal, it doesn’t reek of the contrived breakage where the label gets an advance that is clearly going to result in a grotesque overpayment.  (We think all the goodies should be shared, but what you would want shared in this case is the overpayment at the end of the contract term, not the total advance paid at the beginning of the term before it’s reduced by royalty payments.)

Granted there were some other goodies thrown in like discounted advertising inventory available to Sony, but in a sourceless article (very Googlely) the Verge has no evidence that Sony ever used any of that inventory.  Or if they did, whether they “sold” it to a third party rather than advertising their own records.  Since Sony’s not in the advertising business–unlike Spotify–it seems unlikely that Sony would be selling that inventory to a third party.  The Verge really needs to come up with some better facts–probably from the same person who was in a position to leak the Sony contract.

We would imagine that thanks to the Verge, Sony artists are hoping that their label isn’t quite so generous to Spotify in their renegotiation.

But here’s the other thing.  Now that we know that Spotify was making deals with major labels with significant advances and all kinds of goodies thrown in presumably to justify a lower royalty rate, how did Spotify stand there with a straight face and ask independent artists to take an even lower royalty with no goodies?  Why should we get the hillbilly deal?

Who are these people?