Author: thetrichordist

Step Right Up: The Chamber of Progress’s Ticketing Chamber of Horrors Fools Nobody

It’s one of those sad facts there are people you meet in life who just always seem to have the wrong side of the deal. Sometimes it’s emotionally understandable in the case of kids like the Cox character from William Boyd’s Good and Bad at Games or even Smike from Nicholas Nickleby. But when you see one of these cringy Silicon Valley policy laundries like “Chamber of Progress” keep getting the wrong side of the deal, there’s a much simpler explanation.

And now they are wrapping themselves in the flag of progressivism as they run the thimblerig on–of all things–ticketing. And cutesy names like “Chamber of Progress” notwithstanding, the group’s latest “report” if you can call it that would have state legislators believe that the StubHubs of this world are actually on the side of all that is good, just innocent puppies scampering across the stage with an IPO in their mouth. 

These high minded choir boys fancy their souls are just purer than everyone else’s in their cyberlibertarian progressivism who oppose asymmetrical commercial power except when it suits them and only when it suits them. We see it with Chamber of Progress’s “Generate and Create” obfuscation campaign to promote Silicon Valley’s interests in the “fair use” copyright exception absurdly applied to generative AI. This under the guise of “supporting” artists while destroying their craft and, yes, their humanity. OK, I went there. And we now we see it in ticketing, too. Can’t these guys get a real job?

As we will see, what the Chamber of Progress is really about when it comes to our community is locking in asymmetrical power relationships and protecting Silicon Valley’s cybergod-given right to extract money from relationships where they are not wanted and transactions where they don’t belong. Far from “forget the middleman”, StubHub’s entire business model is based on imposing themselves as the middleman with, it would appear, some pretty nefarious partners. While Chamber of Progress wants to point to the pending Department of Justice case against LiveNation as an excuse for just about anything you can think of, it is well to remember that pending cases don’t always turn out as advertised and flags can become shrouds. Since they seem to like DOJ investigations so much, let’s not forget there’s another one that may be in the offing they’ll like a lot less.

The Flawed Premise of Faux Property Rights

The report starts off from a very flawed premise and a classic projection about the plethora of state ticketing laws backed or opposed by StubHub & Co. The Chamber tells us that “legislators should adopt resale ticketing laws to foster competition, reduce ticket prices, and increase transparency.” Reduce ticket prices? Really? If anyone is acting to increase ticket prices it’s the middleman resellers whose very existence undermines the longstanding economic relationship between artists and fans. Economic relationships that thrive in an environment of classical enforceable property rights.

It begins like a lot of these propaganda campaigns do–identify your villains (those you want to unseat) and then trot out a parade of horrors you create by shading the facts. By the end, a busy legislator or staffer is ready to believe they discovered the cause of cancer and that the potholes are somebody else’s fault!

But here is the essential flaw that I think brings down the entire chamber of horrors this report tries to manufacture. They really want you to believe that once an artist sells a ticket, that ticket can then be resold or repackaged because the artist has sold the right to control the ticket to the purchaser. This tortured analysis of the artist’s property rights is simply incorrect and this one error is the beginning of a cascading effect of really bad stuff for everyone in the chain. Here’s what the report says:

The use of “license” language in ticketing legislation has created a loophole that unscrupulous venues can exploit. When a ticket is defined as a “license” rather than a property right, it gives venues and event organizers the power to revoke the license of any ticket that is resold. This means that even if a ticket was legally purchased, the venue can declare it invalid if it is resold to another party. 

Resale freedom laws provide essential benefits to consumers by ensuring their rights to buy, sell, and transfer tickets without arbitrary restrictions by primary sellers like Live Nation. These laws help to keep ticket prices affordable and enhance consumer choice and access to live events. Resale freedom laws ban anti-consumer practices and empower fans to find tickets on the platform of their choice, increasing their chances of securing seats for popular events. 

See what they did there? First, they are selling “freedom” as in “resale freedom.” This is both laughable but truly Orwellian Newspeak, as in SLAVERY IS FREEDOM. This is not supposed to be a funny joke, somebody paid a lot of money for this report. Yet what do you expect from people who think “Chamber of Progress” is a great brand?

But seriously, they skip over the fact that the artist sets the price for their ticket. They skip over it because they have to if they want to make their sponsor’s case. That doesn’t make them correct, however. The report bungles the economic relationships in ticketing because they either fail to understand or don’t want to understand the reality.

The Report Gets the Economics Backwards

Live shows are not fungible or interchangeable. The ticket starts out as the artist’s property and the artist decides the ticket’s face price based on the economic relationship the artist wants with their fan. As David Lowery has said many times, the economic relationship between artists and fans is analogous to a subscription, it’s not a one-time transaction from which the artist wants to extract the net present value of all possible transactions with the fan. The resellers have the opposite relationship with the fan because to them, fans are fungible. Resellers want to extract the maximum from each fan transaction because they don’t care about a long-term relationship with the fan. Upside down world, right?

When the artist sells a ticket, they sell a right to attend the show under certain conditions. They don’t sell a piece of property. They don’t sell a pork belly or a can of Coke. They sell an emotional connection. That’s not a “loophole.” Pretending that a ticket is a pork belly is creating a loophole out of thin air.

That is true of cover charge for bands at your local dive bar and it is true of Taylor Swift at your local soft-seat venue or stadium. It’s also true in dynamic pricing situations–I’m not a fan of dynamic pricing, but I respect the artist’s decision if they think it’s right for them. Big or small, this is the core relationship that must be respected if you want live music to survive and it’s something I think about in Austin where the city styles itself the Live Music Capitol of the World.

So Chamber of Progress objects to state laws that confirm this license relationship, and that’s an important distinction. These laws confirm the reality of the true original property right, they don’t recreate an alternate reality out of whole cloth. The fact that it is even necessary to pass these laws belies the oligopoly power of StubHub & Co. 

But Chamber of Progress goes even further because the point of the report is to identify a villain. And here is where the fudging starts. They tell you “When a ticket is defined as a “license” rather than a property right, it gives venues and event organizers the power to revoke the license of any ticket that is resold.”

Not true. The artist has that right and delegates that right to the venues as part of the ticketing function. But even StubHub is leery of attacking artists directly so they devise this bizarre rhetorical construct of licensing vs. ownership in order to blame venues, and for what? Preventing scalpers from profiting from their scams and preventing resellers from profiting from their arbitrage. 

Bots and Scammers

This fallacy alone is really enough to refute the entire report, but wait, there’s more. There are two key foundations for the ticket reselling business at scale: bots and making a market for scammers to sell what they don’t own, aka speculative ticketing. They need bots because it allows scalpers to beat fans to tickets in quantity and they need spec ticketing because it allows them to sell a ticket that doesn’t even exist yet but for which there is demand.

Remember–bots are illegal. The Better Online Ticket Sales Act of 2016 sponsored by Senators Marsha Blackburn and Richard Blumenthal banned the use of bots for ticket sales in the US. The National Independent Talent Association asked the Federal Trade Commission to investigate open and notorious bot technologies on sale at the big ticket resellers convention:

Our organization recently attended the World Ticket Conference organized by the National Association of Ticket Brokers (NATB). At this event, we observed a sold-out exhibition hall filled with vendors selling and marketing products designed to bypass security measures for ticket purchases, in direct violation of the BOTS Act.

Realize, this isn’t a question of whether or not resellers profit from the use of bots on their platforms–the question is why aren’t people being prosecuted for violating the BOTS Act. But the Chamber of Progress wants you to believe there is something wrong with passing state laws to give state Attorneys General the power to prosecute these laws shoulder-to-shoulder with the overworked and under-resourced FTC.

Bills that purportedly claim to enhance transparency through speculative ticket bans, protect consumer rights through anti-bots legislation, or improve access through customer data sharing often contain hidden provisions that restrict competition and limit consumer choices. 

In other words, the report opposes banning speculative ticket sales–selling something you don’t own is already illegal, probably since the dawn of our legal systems–and opposes state anti-bots legislation–already illegal under the federal BOTS Act. This should tell you all you need to know.

It’s Just Business: Racketeering, Silicon Valley Style

The real story that goes unreported is that StubHub is currently being sued in a New York class action for violating the civil Racketeer Influenced and Corrupt Organizations laws in selling tickets to a UK football match without rights. They have managed to punt that case based on their one-sided adhesion contract requiring arbitration in their terms of service, but interestingly the federal judge overseeing the case has retained jurisdiction. Imagine the risk factor in the StubHub IPO prospectus about how they could be subject to the RICO laws.

I recently posted about a “model” ticketing legislation that some of these characters were trying to get adopted by ALEC (the conservative state lobbying operation) which I gather has been dropped since the old link to the model bill is dead. It looks to me like the Chamber report is a new offensive rising out of the ashes of the ALEC lobbying effort. 

“Progressives” Who Fail to Address Asymmetry between Big Tech and Artists are Not Progressives

So once again, our friends in Silicon Valley are trying to elbow their way into a place they are not wanted, not needed, and are poisonous all in the aid of making them even richer all under a miasma of crap about “reseller freedom.” Fortunately, the public is getting wise to their scams no matter how much they try to sell their oppressive tactics as some kind of freedom. If they want to really be progressive, they’d help artists establish a resale royalty so that we could share in the riches from their arbitrage in return for a right to resell our tickets. Don’t hold your breath.

As we’ve seen with their logical backflips in AI and now with ticketing, the Chamber of Progress may be a lot of things, but “progressive” they ain’t. Maybe we can help them find productive work in this season of hope.

[A version of this post first appeared on MusicTechPolicy.]

by thetrichordist

Kim Dot Com Emerges from the Memory Hole

By Chris Castle

“If you get down on your knees and beg to be arrested, don’t be surprised if you are.”

That was what I told a TV news anchor in an interview I did in 2012 right after Kim Dot Com was arrested on his vast estate in New Zealand.  Dot Com’s arrest started a long running extradition proceeding between the United States and New Zealand that Dot Com and his team of lawyers somehow managed to drag out until this year.  That’s right—twelve years.  That puts him right up there with Roman Polanski and Meng Wanzhou.  So now Dot Com is subject to extradition back the US to face criminal charges, and yet nobody in New Zealand seems to be in a big hurry to arrest him and send him Stateside.

The first time I connected the dots on Dot Com’s piracy site Megaupload was when film maker Ellen Seidler launched a site called Pop Up Pirates.   Megaupload figured large in her site for a simple reason:  When you tried to access a film stored on Megaupload, it launched a popup with an ad.  At that time, many of those ads included a credit saying “Ads by Google.”  Ellen gave me a short clip of her launching the Mega popup in real time with a close up of that ad.  I played the clip on a panel with one of the Google charm offensive folks who I thought was going to vomit when he realized what I had just shown the audience.  I thought I conclusively demonstrated that Google profited from piracy and paid pirates—being Kim Dot Com aka “Defendant.”

Shortly after, I started posting about this obvious connection, which is how Dot Com and his confederates were getting rich from their the-Hong Kong-based pirate site.  And of course, I would find it hard to believe that anyone was operating a lucrative pirate site from Hong Kong without taking care of people if you know what I mean.  So there’s that.

Fast forward a year and I was in front of the National Association of Attorneys General demonstrating Google’s many, many connections to crime, terrorists, and general issue bad guys.  

Right about this time I got a call from a distinguished music industry executive who asked me whether I was seriously suggesting that a public company was involved in funding crime.  I said that’s exactly what I was saying.  If that were to happen today, nobody, and I mean nobody, would question that Google is the paymaster of the dark web.

Which leads me to the Dot Com indictment.  It turns out that we are not the only ones who made the connection between Google and massive piracy. The Department of Justice did, too, and describes the connection quite clearly in the indictment.

Adbright and Google were Sequoia investments and PartyGaming was one of the big donors to Creative Commons (and the whole Lessig/Nesson poker lobbying extravaganza).

So who had an interest in keeping Kim Dot Com out of an American jail in case he might negotiate a plea deal as did his confederate Andrus Nomm back in 2018? According to the New Zealand Herald:

While [Dot Com] and his co-accused have denied all charges, Nomm testified in support of the US case. As an insider, his testimony will be key to supporting prosecution arguments the so-called “Megaconspiracy” knew what it was doing, attacking any claim the accused were acting in the belief the website was lawful.

Nomm’s testimony was included in the case for extradition in New Zealand but documents showing how will not be made public until after the judge’s decision has been made. The Herald is unable to report the details of the US case that Nomm pleaded guilty to in the United States until then.

The press release from the U.S. Department of Justice tells us:

In court papers, Nomm agreed that the harm caused to copyright holders by the Mega Conspiracy’s criminal conduct exceeded $400 million.  He further acknowledged that the group obtained at least $175 million in proceeds through their conduct.  Megaupload.com had claimed that, at one time, it accounted for four percent of total Internet traffic, having more than one billion total visits, 150 million registered users and 50 million daily visitors.

In a statement of facts filed with his plea agreement, Nomm admitted that he was a computer programmer who worked for the Mega Conspiracy from 2007 until his arrest in January 2012.  Nomm further admitted that, through his work as a computer programmer, he was aware that copyright-infringing content was stored on the websites, including copyright protected motion pictures and television programs, some of which contained the “FBI Anti-Piracy” warning.  Nomm also admitted that he personally downloaded copyright-infringing files from the Mega websites.  Despite his knowledge in this regard, Nomm continued to participate in the Mega Conspiracy. 

An extradition hearing for co-defendants Kim Dotcom, Mathias Ortmann, Bram Van der Kolk and Finn Batato is currently scheduled for June 2015 in Auckland, New Zealand.  Co-defendants Julius Bencko and Sven Echternach remain at large.

This case is being investigated by the FBI’s Headquarters and Washington Field Office.  The case is being prosecuted by Senior Counsel Ryan K. Dickey and Brian L. Levine of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jay V. Prabhu of the Eastern District of Virginia.  The Criminal Division’s Office of International Affairs also provided significant assistance.

So if there was a “conspiracy”, it takes more than two to tango. That racketeering and money laundering conspiracy might have included the advertising companies that played an essential role in providing illicit revenue to the “Megaconspiracy”. Recall that Google got caught in a federal sting operation, paid a $500,000,000 fine and entered a nonprosecution agreement with the same DOJ for promoting the sale of illegal drugs online, all at roughly the same time as they appear to have been the paymaster for Mr. Dot Com. Why else were Adbright, Google and Partygaming mentioned in the indictment?

Stay tuned, boys and girls.  The plot sickens.

by thetrichordist

Guest Post: Taylor’s Guitar

By Charles J. Sanders

Recently, a viral video originating from Waxahachie, Texas made the social media rounds featuring the winning bidder of a Taylor Swift guitar immediately, publicly destroying it with the auctioneer’s hammer.  The perpetrator claims the stunt was intended as a light-hearted act of political satire protesting celebrity endorsements of a presidential candidate he does not support.  Most folks of a similar political bent cheered gleefully, while members of the other camp generally eye-rolled and shrugged their way through what appeared to be a somewhat more mean-spirited statement than the disgruntled, new owner was willing to acknowledge.  It’s tough to tell, but hey, free speech is free speech.

I suppose that in a world in which the legendary, guitar-smashing prowess of a Pete Townshend or Jimi Hendrix has long been celebrated, and in a country where Stan Laurel and Oliver Hardy turned the dismantling of upright pianos into an art form, perhaps the nonchalant reactions over the sad end to the icon’s former axe are understandable.  We are surely a country and a music community with bigger issues on our plate.  That reality, combined with the dangers of crying wolf being what they are, would ordinarily render the engagement in a humorless, long-winded diatribe against a gavel wielding, wannabe cowboy defacing a guitar a meaningless exercise. 

But in my role as chair of the National Music Council of the United States, the Congressionally-chartered umbrella organization of American music groups advocating for the advancement of musical culture and education, I feel obliged to at least offer reflections on what some may consider to be the far less-benign overtones of this seemingly trivial event. In simplest terms, the alternative of silence is made unacceptable by the ghastly results that such a non-response has produced in the past, particularly when it comes to the long, grim, global history of political violence against music creators and musical culture.  Shining a light just seems the better course.

Last year, it was NMC’s honor to host a series of discussions with several incredibly brave members of the international music community fighting to keep creators and their works safe from political harm.  One such hero of musical culture is Dr. Ahmad Sarmast, founder of the Afghanistan National Institute of Music currently in exile under the protection of the Government of Portugal.  Dr. Sarmast, who had nearly been beaten to death in previous run-ins with the ultra-rightist Taliban movement over his audacious teaching of young, female Afghani music students how to play musical instruments, was unsurprised that one of the first targets of the resurgent Taliban in 2021 was his world-renown music program. 

The group’s initial act in its renewed crackdown on infidelity was the burning not only the school’s instruments, but also of a large percentage of musical instruments throughout the entire country.  The teacher, his students and their families fled for their lives to Qatar and then Lisbon, where they remain two years later in defiant pursuit of musical creativity and freedom.  This week, meanwhile, the Taliban announced its intention to bar the artistic depiction “of any living thing” throughout Afghanistan pursuant to Sharia law.

The experiences of another international champion of artistic freedom NMC interviewed, Cambodian Living Arts organizational founder Arn Chorn Pond, serve as an even more fraught example of violent, music-related suppression and its horrific results.  Professor Pond, whose parents’ national opera company in Phenom Penh was one of the great gems of Southeast Asian musical culture, was a ten-year old flautist when ultra-leftist Khmer Rouge terrorists seized power in Cambodia during the mid-1970s.  The party’s first acts of cultural cleansing included the summary execution of most musicians and composers (including his parents and family), the destruction of virtually every traditional and modern musical instrument in the country, and the banning of all unapproved music on threat of death. 

The details of young Arn’s enslavement and unspeakable torture, even as he was relied upon as a resource for the creation and performance of new and “acceptable” Khmer musical works, are far too graphic to repeat here.  It has taken him a half-century following the defeat of the Khmer to rekindle the light of traditional Cambodian musical culture throughout his nation, all the while carrying scars that cannot possibly be fully healed even after a lifetime of fighting for greater protections for others.    

Other historical examples are legion.  In 1973, one of the first acts of the Pinochet military junta following its coup in Chile was the arrest of progressive singer-songwriter and nationally celebrated guitarist Victor Jara.  Rather than merely destroying his confiscated guitars, the regime mutilated both his hands prior to executing him at the National Soccer Stadium as a warning to others who might be contemplating musical protest.  Days later, the great Chilean poet Pablo Neruda was dead, as well.

Soviet dictator Joseph Stalin terrorized the towering composer Dimitri Shostakovich into an emotional wreck through political manipulation and death threats starting in the 1930s. Nazi Fuhrer Adolph Hitler launched an immediate program of terror against “degenerate art and artists” upon rising to power in 1933, culminating in the forced expatriation and eventually the execution of Germany’s greatest composers, conductors and performers (many of them Jewish victims of the Holocaust).  One such target, the poet and songwriter Ilse Weber, actually composed the famous lullaby “Wiegala” while imprisoned at Prague’s Terezin concentration to comfort the children in her care.  She later volunteered to accompany her physician-husband and those children to Auschwitz, where they were murdered in 1944 just as she expected they would be.  Only her music miraculously survived, attributable to the panic of the fleeing killers at war’s end.

And finally, in our own country the great jazz singer Billie Holiday was one among many American creators and artists with more than just a passing acquaintance with the travails of brutal, sometimes fatal repression.  Intimidation of music creators knows no geographical or political boundaries. 

As desperately uncomfortable as these past and continuing events may be to contemplate, the crucial reason to educate ourselves about them is their value as examples of exactly what must be avoided at all costs in the future.  Clearly throughout history, music creators and performers have not only been frequently subject to pressure to conform, or to participate in propaganda efforts by governments and extremist groups, but also victimized by repressive actions up to and including murder to enforce their silence. 

This depraved strategy often eliminates the most persuasive voices of protest, while at the same time setting an example of what happens to those less-visible citizens who choose dissent.  The threatening or carrying out of violent repression against outspoken music creators, performers and educators is simply one of the preferred means of warning everyday people in the bluntest possible terms, “if this is what we’ll do to them, imagine what we’ll do to you.” 

Nevertheless, even armed with such knowledge one might still legitimately ask in the current instance, “what has any of this really got to do with a laughing man in a cowboy hat destroying a celebrity’s former musical instrument?”  Well, probably nothing.  But potentially everything.

Visitors today to Berlin often wander over to the enormous square fronting the library at Humboldt University, a revered institution of learning whose alumnae include some of the greatest thinkers and artists in western history, from Mendelssohn and Heine to Planck and Einstein.  The empty cobblestoned plaza, restored after repeated wartime bombings some 80 years ago, remains completely devoid of any structures whatsoever.  There is only a barely discernable, rectangular glass plate embedded into the pavement in front of the library, allowing viewers to gaze downward into a room of empty bookshelves two stories below, and an equally flat plaque sunk into the ground next to it.  That view, gazing through the glass darkly into history, is why most visitors come. 

This is the very spot on which Joseph Goebbels lit the bonfire of books written by many of Humboldt’s most illustrious graduates, and where the people laughed and cheered as those works burned in 1933.  The empty shelves are self-explanatory, and the plaque has only one simple quote, written by Heinrich Heine fully one hundred years prior to the day that the Nazis struck their match. “Where they burn books,” it reads in German with extraordinary prescience, “they will eventually burn human beings.” 

As our own Mr. Twain was fond of reminding us, while history doesn’t actually repeat, it surely does rhyme.  Is a private citizen smacking a recently acquired guitar with a hammer for political effect the same as a government or terrorist group burning a book, banning a musical work for its content, or assaulting a creator?  No, probably not.  Was the destruction of the Waxahachie guitar a symbolic, political warning issued by an individual or group seeking power through intimidation, intended to be interpreted as a threat of actual violence to any one or all of us in the music community? 

That’s a harder question to answer.  We simply do not and cannot know the intent, effect, or seriousness of the action at this time, nor do we possess Heine’s cursed gift of farsighted genius. 

As a result, on the advice of the American bard of Hannibal, Missouri, we less-gifted prognosticators are left with just one inquiry that absolutely must be asked under this circumstance –and in every other instance like it– for the safety, security and freedom of everyone in our music community and in this country:

“Does the Waxahachie event, or any subsequent one, rhyme?” 

Whether it does or not, now or in the future, will in large part depend on us– not just on the folks with the hammers and the matches.

About the author: Attorney, historian and author Charles J. Sanders is outside counsel to the Songwriters Guild of America, chair of the National Music Council of the United States, and an adjunct professor of music business and its history at New York University.  For more information, visit https://www.musiccouncil.org/. All opinions are his own.

by thetrichordist

Save the Date!  4th Annual Artist Rights Symposium Nov. 20 in Washington, DC, hosted by American University’s Kogod School of Business and the Artist Rights Institute

We’re pleased to announce the 4th annual Artist Rights Symposium on November 20, this year hosted in Washington, DC, by American University’s Kogod School of Business at American’s Constitution Hall.  The symposium is supported by the Artist Rights Institute and was founded by Dr. David Lowery at the University of Georgia Terry College of Business.

The symposium panels currently are:

THE TROUBLE WITH TICKETS:  The Economics and Challenges of Ticket Resellers and Legislative Solutions, moderated by Austin music attorney Chris Castle.

SHOW ME THE CREATOR – Transparency Requirements for AI Technology, moderated by Linda Bloss-Baum, Director of the Kogod School of Business’s Business & Entertainment Program

CHICKEN AND EGG SANDWICH:  Bad Song Metadata, Unmatched Funds, KYC and What You Can Do About It, moderated by Chris Castle

NAME, IMAGE AND LIKENESS RIGHTS IN THE AGE OF AI:  Current initiatives to protect creator rights and attribution, moderated by John Simson, Program Director Emeritus, Business & Entertainment, Kogod School of Business, American University

Lunchtime keynote, panelists and program materials to be announced soon.

by thetrichordist

MIC Coalition Letter to @CopyrightOffice about @GMRO_PRO

Remember the “MIC Coaltion”? We haven’t heard from them in a while but they suddenly surfaced with a vengeance in the form of this letter to the Copyright Office under the guise of “PRO proliferation.”

MIC Coalition Letter to CO re GMRDownload

This is the MIC Coalition membership. The MIC Coalition is dedicated to one thing and one thing only–screwing songwriters as hard as they can. And frankly, anyone else who gets in their way. If you’re good with zeros, you can add up the total market capitalization of all the companies that these trade associations represent and you will be into the $50,000,000,000,000 range.

That’s right, $50 trillion–and all these companies are protected by the government through the longest running antitrust consent decrees in the history of the United States. And who are they protected against? Songwriters. Pullllleeeeeeze.

With one exception: Global Music Rights or “GMR”. And while the letter to the Copyright Office doesn’t come right out and say it, what these people hate the most about GMR is that these behemoths have to actually negotiate directly with GMR rather than hiding behind the government in the rate courts. That’s right, they truly hate that free market. While the MIC Coaltion’s letter raises issues about multiple PROs, the one they really have the wood for is GMR because GMR has an extremely valuable catalog. In fact, if you can judge by comparing private equity placements, GMR–based on true free market licensing–is about 3x more valuable than BMI–based on the government’s crap deals. Which also pisses them off.

You also have to understand that these MIC Coalition people are hugely pissed off about a recent BMI rate court case that applied GMR benchmarks–free market negotiations–to set the government’s consent decree rates. Rates that are supposed to approximate what a willing buyer would pay a willing seller in the government’s version of free enterprise. That case is on appeal right now. You can get a flavor of just how silly this argument is from a post on Artist Rights Watch that discusses the case in detail or read this revealing friend of the court brief from the BMI rate court appeal.

Amicus DiMADownload

The reason the trillionaires hate GMR so much is because songwriters got together and started their own PRO. Freedom of association, freedom of contract and free to bargain collectively, all quintessentially American values protected by the Constitution. Even though many radio stations settled an antitrust case with GMR resulting in a long-term license, they obviously haven’t given up sniping at the startup.

Unfortunately, the trillion-dollar soul crushers seem to have conned Congress into believing that Big Government is the way to go instead of protecting the free market. The plot sickens.

by thetrichordist

Are You Better Off Today Than You Were Five Years Ago? Selected comments on the MLC Redesignation: Abby North, North Music Group

The Copyright Office is soliciting public comments about how things are going with the MLC to help the Office decide whether to permit The MLC, Inc. to continue to operate the Collective (see this post for more details on the “redesignation” requirement). We are impressed with the quality of many of the comments filed in the “Initial Comments” at the Copyright Office. As there will be an opportunity to comment again, including to comment on the comments, we will be posting selected Initial Comments to call to your attention. You can read all the comments at this link. If you are hearing about this for the first time, you have until June 28 to file a “reply comment” with the Copyright Office at this link.

You will see that there is a recurring theme with the comments. Many commenters say that they wish for The MLC, Inc. to be redesignated BUT…. They then list a number of items that they object to about the way the Collective has been managed by The MLC, Inc. usually accompanied by a request the The MLC, Inc. change the way it operates.

That structure seems to be inconsistent with a blanket ask for redesignation. Rather, the commenters seem to be making an “if/then” proposal that if The MLC, Inc. improves its operations, including in some cases operating in an opposite manner to its current policies and practices, then The MLC, Inc. should be redesignated. Not wishing to speak for any commenter, let it just be said that this appears to be a conditional proposal for redesignation. Maybe that is not what the commenters were thinking, but it does appear to be what many of them are saying. Perhaps this conditional aspect will be refined in the Reply Comments.

For purposes of these posts, we may quote sections of comments out of sequence but in context. We recommend that you read the comments in their entirety. Today’s featured comment is by Abby North, who owns the independent music publisher and administrator North Music Group. Abby was kind enough to participate as a panelist at the 3rd Annual Artist Rights Symposium that David hosts at the University of Georgia Terry College of Business, and also testified at the House Judiciary Committee IP Subcommittee hearing held in Nashville to grade the MLC, Inc. (read Emmanuel Legrand’s reporting on that hearing at this link).

Abby has a number of ideas about meaningful changes that the MLC, Inc. ought to make to its operations and its approach to its fundamental job–timely and accurately accounting for all the money it receives.

Read Abby’s full comment at this link.

MLC BUSINESS RULES THAT CONTRADICT LAW
During the IP Subcommittee hearing held by Chairman Issa,6 the Chairman cautioned MLC, Inc. CEO Kris Ahrend, “…no question at all, what you’ve been making looks a lot like rules.”

The US copyright law permits authors or their heirs, under certain circumstances, to terminate the exclusive or non-exclusive grant of a transfer or license of an author’s copyright in a work. The ability to recapture rights via the United States copyright termination system truly provides
composers, songwriters and recording artists and their heirs, a “second bite of the apple.” Many of my clients exercise this right and subsequently become the original publisher in the United States.

The MLC had made a unilateral determination that rights held at the inception of the new blanket license might remain, in perpetuity, with the original copyright grantee. The MLC initially ignored that the derivative work exception does not apply in the context of the mechanical blanket license.

Fortunately, the US Copyright Office stepped in to clarify that the appropriate payee under the mechanical blanket license to whom the MLC must distribute royalties in connection with a statutory termination is the copyright owner at the time the work is used. When The MLC envisions a new policy, members should be provided a mechanism to provide input related to this policy, prior to it being adopted.

Members must be given a greater voice in business rules and operations of The MLC. Hands-on music publishing administrators have deep insights into workflows, efficiencies and UI/UX. Members need to be consulted with and given opportunities to drive the future of The MLC’s
website and technologies.

The MLC has made unilateral decisions regarding how it treats public domain works. It invoices the DSPs for streams of recordings that embody these public domain works, but no publisher is entitled to these royalties. That means the MLC may collect money it may not pay out. What rule gives The MLC the right to collect but not distribute?

COMMITMENT TO ISWC AS GLOBALLY UNIQUE IDENTIFIER FOR MUSICAL
WORK
Recently, the PRS (the UK-based Performance Rights Organization) completed a proof of concept that allowed record labels to request assignment of an ISWC to identify a musical work embedded in that label’s recording.

This proof of concept provides a necessary step in helping CMOs identify musical works, contributing parties and recordings of these works.

It also firmly demonstrates the global CMO ecosystem’s commitment to the ISWC as the globally unique identifier for the musical work. Every music publisher and every CMO…other than The MLC…relies on the ISWC to identify a musical work.

Instead, The MLC relies on the HFA Song Code, now also known as the MLC Song Code. The only societies in the world that use these codes are HFA and The MLC. Every other society identifies musical works with an ISWC, which unlike the HFA Song Code or MLC Song Code,
functionally acts as a bridge to the International Party Identifier (IPI) and now, the International Standard Recording Code (ISRC).

For The MLC to some day truly be the gold standard in CMOs, it must follow the rest of the world’s lead and require and include the ISWC whenever the ISWC exists. The MLC Song Code may be used as a disambiguator, but it must be used in conjunction with an ISWC. This is how the other societies work: they have their own proprietary identifier, which accompanies the ISWC to allow positive identification of works.

In addition to ISWC as the work identifier shared by the world’s music publishing and rights management community, IPI is the global identifier for the songwriter and publisher. The MLC must commit to including the IPI for any writer or publisher that has been assigned an IPI.

SPEED OF CLAIMING AND MATCHING
According to The MLC in its redesignation comments, “Finally, The MLC has already established itself as a leader in the industry, setting high standards for speed, volume, transparency, efficiency, outreach and member support.”

As of this writing, works I claimed manually in the claiming portal 73 days ago still have not been processed.

Unless I am misunderstanding the process, this means The MLC has already missed two distribution periods.

This is too much time. If there is an issue with the claims, there should be some human communication from The MLC explaining the issues.

If there are no issues, what could possibly be the cause of such a delay?

The oversight body must provide guidelines for The MLC regarding reasonable times from delivery of a match or claim by a member to processing by The MLC.

I also recommend the addition of an interface in the MLC portal for communication between The MLC and the member. For example, if every time I log in, I see a red flag in the interface indicating action is required on my part, I could potentially assist in speeding up the time The MLC takes to process my data. I also would be aware of any potential issues.

SONGWRITER PORTAL
The MLC’s website says it has distributed to “publishers and songwriters.” However, it must be clarified that the only songwriters that directly receive royalties from The MLC are selfpublished, self-administered songwriters that a) are aware of The MLC; b) have become members; and c) have delivered data to The MLC regarding their works and recordings of their works.

Songwriters that are either published or administered by a publisher have no mechanism with which to deliver corrections or missing data regarding their works. Instead, a songwriter that may have had one or many previous deals typically has no relationship with the previous publishers. Even songwriters in current publishing deals may not be able to get their calls returned much less convince their publishers to add or correct data in a timely manner.

Consequently, as many advocates have suggested since the roundtables that occurred prior to the inception of The MLC, The MLC must provide a portal within its website for published and/or administered songwriters to deliver data regarding their works. This data must then be reviewed by The MLC for accuracy, and then The MLC must communicate with the publishers to confirm
accuracy and add the missing or corrected data to the public portal.

It is simply unfair that songwriters have no way to guarantee The MLC has the necessary data to pay these songwriters’ publishers if they are willing to do the matching work at their own expense.

According to the USCO’s website FAQs regarding Title 1 of The Musical Works Modernization Act, “Once established, the MLC will establish and administer a process by which copyright owners can claim ownership of musical works (and shares of such works).” In fact, even though an administered songwriter is the legal copyright owner of his/her musical works, The MLC provides no process by which that songwriter/copyright owner can claim ownership of musical
works.

OVERCLAIMS TOOL
The MLC recently added an Overclaims Tool – only for registrations made within the last 90 days. If you submit a registration and it conflicts with a work that’s older than 90 days, that conflict will not appear in your portal.

According to The MLC:

“Please note: A work can only go into overclaim if shares are added to the
work within 90 days of the work’s registration, based on the “Creation Date”
in the work details.

If you are attempting to claim shares over 100% on a work that was created
more than 90 days prior, you will need to reach out to The MLC Support
team here.”

As a publisher/administrator of works registered decades ago, how would I know if someone has attempted to claim my legacy work and created an overclaim?

I do not recall receiving any announcement seeking publishers to participate in working groups to provide input related to the Overclaims Tool. Experienced hands-on administrators should be given the opportunity to provide insights into functionalities of proposed additions to the MLC portal prior to development of the technology.

by thetrichordist

Are You Better Off Today Than You Were Five Years Ago? Selected comments on the MLC Redesignation: American Association of Independent Music (A2IM)

The Copyright Office is soliciting public comments about how things are going with the MLC to help the Office decide whether to permit The MLC, Inc. to continue to operate the Collective (see this post for more details on the “redesignation” requirement). We are impressed with the quality of many of the comments filed in the “Initial Comments” at the Copyright Office. As there will be an opportunity to comment again, including to comment on the comments, we will be posting selected Initial Comments to call to your attention. You can read all the comments at this link. If you are hearing about this for the first time, you have until June 28 to file a “reply comment” with the Copyright Office at this link.

You will see that there is a recurring theme with the comments. Many commenters say that they wish for The MLC, Inc. to be redesignated BUT…. They then list a number of items that they object to about the way the Collective has been managed by The MLC, Inc. usually accompanied by a request the The MLC, Inc. change the way it operates.

That structure seems to be inconsistent with a blanket ask for redesignation. Rather, the commenters seem to be making an “if/then” proposal that if The MLC, Inc. improves its operations, including in some cases operating in an opposite manner to its current policies and practices, then The MLC, Inc. should be redesignated. Not wishing to speak for any commenter, let it just be said that this appears to be a conditional proposal for redesignation. Maybe that is not what the commenters were thinking, but it does appear to be what many of them are saying. Perhaps this conditional aspect will be refined in the Reply Comments.

For purposes of these posts, we may quote sections of comments out of sequence but in context. We recommend that you read the comments in their entirety.

Today’s featured comment is from A2IM, the American Association of Independent Music. You can read the entire comment here. A2IM raises some good points including suggesting that the redesignation be conditioned on The MLC, Inc. meeting beneficial targets. We have emphasized parts of the quote for impact but that emphasis is not in the original.

Distribution of Unmatched Royalties
A2IM is deeply concerned with the processes around the so-called royalty “black box” and finds the present searchability of unmatched royalty data to be insufficient. The Copyright Office should consider conditioning MLC redesignation on further delay in the distribution of these funds, presently estimated at over $300 million, until the MLC fully implements improvements to the system that result from this periodic review.

Under the Act and subsequent regulation, if the MLC is unable to locate the rightful copyright owner of a particular work, the MLC will deposit accrued but undistributed royalties in the black box, and after three years, the funds may be released to music publishers based on market share. A2IM strongly supports all efforts to fully distribute digital audio mechanical royalties to rights holders, and commends the MLC for seeking to improve the enormous amounts of unmatched royalties present at the time of the Act because the DSPs were not able to match and pay to the respective copyright owners.

The distribution of unmatched royalties, however, currently follows a dubious formula. This policy clearly benefits the major music publishers and penalizes smaller songwriters/publishers. Failure to match occurs for numerous reasons, but many are related to scale. Lesser-known songs from genres with less broad commercial appeal, songs with titles in foreign languages, and songs tied to digital files with less robust data all can lead to unmatched royalties, and all these factors are more likely to occur with musical works from the independent sector, and from publishers with smaller market share. At present, there remain too few options and too many hurdles for matching and claiming works, meaning that barriers to entry in freeing royalties from the black box pool persist to an unacceptable extent.

Furthermore, the current matching tool is not versatile enough to effectively match many titles, leaving a significant number of songs unmatched and contributing royalties to the black box. The present system fails to account well for partially matched songs, meaning instances of works authored by multiple songwriters represented by multiple publishers matched to one or more entities with royalty rights, but not to all such creators. The MLC often cites numbers of matched royalties without specifying the percentage of titles that are fully matched versus partially matched. It is crucial for the MLC to provide clear statistics on fully matched, partially matched, and unmatched titles to ensure transparency and build trust among rights holders.

There are also many instances of royalties being mismatched, and there is no easy recourse for rights holders to resolve these issues. The MLC must acknowledge this problem and establish a straightforward process for rights holders to report and correct mismatches. Moreso, the MLC must invest in improving the matching tool to enhance its accuracy, efficiency, and ease of use so that those most impacted (predominantly independent artists and writers) can claim their royalties.

Addressing unmatched royalties requires an all-hands-on-deck approach. Many legacy songwriters suffer because their publishers do not prioritize entering or updating relevant data. One easy improvement would be for the MLC to create a mechanism providing songwriters with recourse in this situation.

by thetrichordist

Dave Rowntree is Suing the UK Performing Rights Society Over Misallocation of Unmatched Royalties (Black Box)

According to press reports, Dave Rowntree of Blur filed the UK equivalent of a class action lawsuit against PRS (the UK version of ASCAP and BMI). The claim is a “collective proceeding” filed with the UK’s antitrust tribunal. The class action established a website to communicate about the claim with interested parties. The website says:

Collective Proceedings Against PRS for Music

If You Were a Writer Member of the Performing Right Society at Any Time Since 9 March 2017,
a Proposed Legal Claim Could Affect Your Rights

On 27 February 2024, the claim was brought against PRS that asks the Competition Appeal Tribunal for permission to go forward as an “opt-out collective action.”  The claim concerns the way in which PRS distributes, or permits to be distributed, certain royalty sums that are called in the PRS Rules and Regulations (“PRS Rules and Regulations”) and the PRS Distribution Policy Guide terms such as  “unmatchable” (including “copyright control”), “non-distributable”, and “unclaimed” and colloquially referred to within the music industry as “Black Box” royalties. The majority of Black Box royalties are royalties belonging to PRS writer members but when the Black Box royalties are distributed, the distribution is heavily skewed in favour of publishers who receive a large portion of the writer share. In other words, Black Box royalties are transferred from PRS writer members and given to PRS publisher members who have no right to those royalties.

David Rowntree seeks to represent the class of PRS writer members who have lost money arising from the proposed claim.

Of course, the Mechanical Licensing Collective is sitting on hundreds of millions of black box money for the US as well, and may end up being the defendant in a separate class action at some point in the future.

by thetrichordist