Guest Post: Streaming and the Embarrassment of COVID Riches

By Chris Castle (first appeared on MusicTechPolicy)

We’re starting to see a narrative emerging from the digital music services in reaction to artists chafing under the misery of streaming royalties.  Streamers want lawmakers to focus attention on the allocation of current period revenue that they pay to creators and deflect attention from the company’s stock market valuation (or private company valuation).  That’s a grand deflection and misdirection away from the true value of artists, songwriters and their recorded music to streaming companies like Spotify.  But they can’t escape the embarrassment of riches by discounting the value of stock price through deflecting attention to loss-making revenues that companies like Spotify keep artificially low through a kind of Malthusian reverse pricing power to drive growth.  It may be rational for investors, but it’s not sustainable for the creators of the company’s sole or primary product.

We saw this with Pandora–lawmakers were told how much of Pandora’s monthly revenue the company paid out in royalties as though revenue was the primary metric.  The deflection worked until lawmakers started realizing that Tim Westergren was booking $1 million a month in stock sales.  Then it rang pretty hollow.  But the commoditizers are at it again.

No matter how much Big Tech tries to commoditize music, this is not about selling widgets at a deep discount–it’s about people’s lives.

“Get Big Fast”

Let’s be clear–companies like Spotify don’t get into business to eke out a profit.  They get into business to get their snouts into the trough of IPO stock as fast as possible and share that wealth with as few people as possible.  (And get out of corporate governance before the chickens come home to roost.)  So looking at revenue allocation without the accretive boost of stock market valuation is simply a grand deflection.  Abracadabra!

That deflection is particularly galling when the executives dip into current revenues to reward themselves like drunken sailors.  This is the profit fallacy—I would go so far as to say that in Silicon Valley, “profit motive” is very 1980 and long ago was replaced by the motive of  “get big fast.”  These companies seek to capture public stock market valuation, and share price valuation implies a belief in top line earnings and market share growth–not current period profit or–God forbid–dividends to shareholders.  And “get big fast” is working for Spotify.

share of streaming services

There is also controversy about a perceived “allocation” of music royalties payable by the streaming services particularly between record companies and recording artists or PROs and songwriters (especially the PROs and authors’ societies that Silicon Valley would dearly like to replace).  The allocation theory again focuses on revenue instead of the total value transfer. It goes something like this: Streaming services pay 69¢ of each dollar for royalties. When the artists or songwriters complain, it’s not because the saintly streaming services don’t pay enough, it’s because the greedy record companies or PROs take too much of that 69¢.

There is a lot that is not said with that fallacious allocation statement. I think a focus on revenue “allocation” is the wrong way to look at the royalty issue from a policy perspective.  The “allocation” focus presupposes there is an aggregate payment for music that is somehow misallocated.  

Pie-ism a la Mode

This allocation or “pie” fallacy is a very familiar argument in the U.S. It often comes from broadcasters fighting equitable remuneration for recording artists on terrestrial radio by attempting to limit their total payment for both sound recordings and songs to the amount that broadcasters historically have paid for songs only.  Instead of acknowledging the value of sound recordings, the platforms confound song performance royalties with “music”.  They say, “We pay $X for music, we don’t care how you allocate it between songs and recordings.”  This is like comparing apples to oranges and producing a pomegranate.

I call this thinking the fallacy of the pie, a derivative of the fallacy of composition.  It makes creative sectors fight each other in a kind of digital decimation.  

There is nothing particularly sophisticated about this strategy.  But the policy challenge for industrial strategists is to how to grow the pie, not to cut smaller pieces for everyone.  Growing the pie is particularly relevant when the platform seeks to monetize its valuation in the public financial markets. At that point, focusing solely on the allocation of revenue to the exclusion of the total valuation transfer is simply a kind of cruel joke.

Here’s the sad reality broken down to current per-stream rates that are entirely based on service revenue:

etude-ecoute-en-continu-streaming-montants-spotify-apple-music-google

This is front of mind as we see reports of Believe Digital (owner of the independent pre-pay distributor Tunecore) contemplating a €2 billion IPO drafting behind the reported COVID-fueled success of streaming and the Spotify public offering.  Government may play a role in requiring a share of riches transferred from the public financial markets to be shared by those artists and songwriters who gave the issuer its valuation, particularly when the issuer did not invest in the creative community.  

Get COVID Profitable Fast

If profit were really the target, one could make Spotify more profitable almost overnight by moving their U.S. headquarters to Syracuse, Cedar Rapids or even Austin rather than multiple floors of the World Trade Center in Manhattan.  One could cut executive compensation, one could do many things to reduce their Selling, General and Administrative costs.  But profit is not the issue for them.  Valuation is the issue and valuation is driven by bets on future growth.   In Spotify’s case, growth is often measured as subscriber growth and subscriber growth implies competing on price because Spotify offers more or less the same product as its competitors in a triumph of the commoditizer.  Which in turn implies keeping retail prices down (and Monthly Service Revenue) in a race to the bottom on subscription price and to the top on share price.  You may find that analyzing the economics of who wins in streaming is similar to who wins a gas war among price cutting petrol stations.

COVID has nearly destroyed the live music business that sustained the artists who previously tolerated their mils per stream Spotify royalties.  Far from being harmed by COVID, COVID has been rocket fuel for Spotify which adds to the unfairness of the “big pool” revenue share royalty system.  As the COVID Misery Index demonstrates, Spotify’s growth in valuation has outpaced its fellow oligopolists:

COVID Misery Index 1-8-21

Given the urgency of the COVID crisis, it is important to understand the difference between the creator community and other workers affected by COVID.  For example, restaurants are not failing while some other entity succeeds in extracting value from their customers.  As the COVID Misery Index demonstrates, Spotify’s stock price has more than doubled since the onset of COVID.

Again, Spotify’s success is largely predicated on keeping both royalties and prices low and bargaining for special royalty treatment.  I don’t object to the company’s pricing decisions so much as the complete failure of Spotify to share its success with independent artists who make up a significant amount of its offering but who are doomed to scrap at the decimal point in search of a positive integer.

Instead of launching billion-dollar stock buy-back programs to juice their share price, it would be a simple thing for Spotify to credit the royalty accounts of independent artists and songwriters with a cash infusion not connected to the revenue share deflection.  They have a direct billing relationship with thousands of artists and songwriters and they could simply deposit some thousands in these accounts which overnight would help balance the inequities and also provide an alternative to government support payments.  We have experienced government payments to creators in Austin, and one of the biggest problems was the mechanics of getting the money from the government’s account into the creator’s account. 

Spotify could just do it today as a thank you for doubling the value of their company while artists and songwriters suffered. Or perhaps Daniel Ek could just pay it out of his own pocket since he loves creators so damn much.

Whether it’s driven by the embarrassment of riches or a guilty conscience, the commoditizer’s grand deflection is back. Don’t let them fool you twice.

Optimism is Contagious, Too: @nivassoc’s #SaveOurStages Included in COVID Stimulus–Update

Guest post by Chris Castle

Thanks to the hard work of the National Independent Venue Association and their allies, it looks like some stimulus relief is finally coming to small venues, theater operators, bars and restaurants. The NIVA effort began with the  Save Our Stages Act that authorizes the Small Business Administration (SBA) to make grants to eligible live venue operators, producers, promoters, or talent representatives to address the economic effects of the pandemic on certain live venues. Save Our Stages will be included in the new COVID stimulus bill. The stimulus bill text was released yesterday (Dec 21) and was voted on last night by both the House of Representatives and the Senate in Washington, DC.

SOS Act authorizes the Small Business Administration to make (1) an initial grant of up to $12 million dollars to an eligible operator, promoter, producer, or talent representative; and (2) a supplemental grant that is equal to 50% of the initial grant. An initial grant must be used for costs incurred between March 1, 2020, and December 31, 2020, but a supplemental grant may be used for expenses incurred through June 30, 2021. I haven’t seen the final language of the COVID stimulus bill, but I would imagine it will be carried over.

Many people pulling together have helped to deliver a miraculous Christmas present for music cities like Austin, Texas and the country. The bi-partisan Save Our Stages Act was carried by two members of the huge Texas Congressional delegation, Senator John Cornyn and Austin Representative Roger Williams alongside their outstanding colleagues Senator Amy Klobuchar and Representative Peter Welch. As we saw in the CLASSICS Act and later in the Music Modernization Act, Senator Cornyn is a strong advocate for the Texas music industry which needs him more than ever.

We also have to thank Governor Greg Abbott and the Governor’s Texas Music Office for their efforts in getting SOS passed and in supporting the local music economy–tireless is an overused word, but the Governor has never forgotten Texas venues in the State’s plans to open in the middle of the 25/8 whole of government response to the pandemic. I’m sure there are many others to thank in many other states and cities, but I know these folks have been white-knuckling the express train for months.

The lobbying effort to pass SOS was a heartening example of our business pulling together with the artist community in the vanguard. That extensive lobbying effort led by NIVA highlighted the importance of live music and music tourism to the local economies of cities across the country. I don’t know if it’s even possible to measure the global economic impact of the lockdown approach on our business, but given the pre-COVID economic impact of the festival business alone, it’s got to be over a $1 trillion loss. As Universal’s Michael Nash said at the University of Georgia Artist Rights Symposium earlier this year, the label was very concerned about keeping live music alive even though labels might not be directly involved. According to MusicAlly, Nash said “The reality is that the health and welfare of our artists is central to everything we do, and so we do have a stake in what’s happening in the broader ecosystem.” That view was reflected in the broad support for SOS from RIAA and other industry groups as well as Universal’s commitment to major investments in live music destination hotels.

It appears that the limitation on liability for businesses like venues that reopen is not going to make it into the stimulus bill. That’s unfortunate because the liability issue is a critical piece, and the situation cries out for a federal solution when there’s a lawyer behind every cough. You may ask why such a crucial aspect of reopening is still a question mark at this late hour? Rep. Stephanie Murphy (D-Fla.), a member of the bipartisan Problem Solvers Caucus, summed it up: “I am frustrated to be part of an institution that is so dysfunctional that it doesn’t even work until the last minute.” Well, frankly, no surprise there. The liability issue will have to be dealt with in the new Congress.

The question has always been if you lock down the venues without protecting that investment, will we have an live music infrastructure to reopen? Austin is an all-too-perfect example. We have no idea what Austin will look like when we get past the pandemic. SOS is too late to save Margin Walker and many others. But with this cash infusion we have a better chance that post-pandemic Austin will bear some resemblance to what it was and can hopefully help get some people back on their feet in Austin and around the country, which is the point. The team is moving in the right direction and will attract others. Universal’s investment in the future is an example of leadership and optimism for the survival of our live music venues and all the wonderful people who run them. Optimism is also contagious, and is more likely to accelerate with Save Our Stages.

The good news is the bad news is wrong–our work is not over, but we live to fight another day–or another 300 days. And that is a Christmas miracle in many households.

Here is the press release from NIVA:

Save Our Stages Act just passed as part of the COVID-19 Relief Bill! 

Thank you for helping to #SaveOurStages! You responded in an overwhelming fashion. NIVA thanks those across the country who sent 2.1 million emails to their elected officials expressing their support for the Save Our Stages Act. All 535 Congresspeople heard from their constituents through SaveOurStages.comWithout your support and continued attention, we could not have accomplished this goal.

Our gratitude also extends to Sen. John Cornyn (R-TX) and Sen.Amy Klobuchar (D-MN) in the Senate, Rep. Peter Welch (D-VT) and Rep. Roger Williams (R-TX) in the House, champion leader Chuck Schumer (D-NY), and 230 bipartisan cosponsors in Congress.

The Save Our Stages Act will provide emergency relief to independent venues and promoters that have been devastated by the pandemic’s shutdown. This legislation will enable these mom-and-pop businesses to hold on until it’s safe to gather, reopen fully, and once again return to serving as the economic engines for their communities. Read NIVA’s full statement and thanks here

The legislation provides critical help to shuttered businesses by providing a grant equal to 45% of gross revenue from 2019, with a cap of $10 million per entity. This grant funding will ensure recipients can stay afloat until reopening by helping with expenses like payroll and benefits, rent and mortgage, utilities, insurance, PPE, and other ordinary and necessary business expenses.

WHAT’S NEXT

NIVA hopes to work with the Small Business Administration to ensure the emergency relief is dispersed as Congress intended, that the instructions and process to apply for grants ensure that the process is implemented accurately, fairly and as expediently as possible.

Since it could take many weeks, even months for the funding to flow, the NIVA Emergency Relief Fund, with The Giving Back Fund as its 501(c)3 fiscal sponsor, continues to raise money to assist the venues at greatest risk of permanently going under as we wait for the grants to be issued. Anyone wishing to donate can do so here.

Guest Post: Pandemic: @Music_Canada COVID Study Sets the Gold Standard for Reopening Data-Driven Policy

By Chris Castle

[This post originally appeared on MusicTechPolicy.]

MusicCanada commissioned an outstanding survey by Abacus Data using serious data-driven methodology to credibly measure the Canadian public’s experience with the COVID shut down of live music and expectation for reopening.  Instead of glorified “Who’s Hot”-level casual polls you see cropping up here and there, The Locked-Down Blues: Canadians, Live Music and the Pandemic sets the gold standard for the kind of data-driven serious national opinion study that policy makers can actually use to plan how to get out of this corner.

The study measures many different factors, including the more intangible questions of what trust level fans will require before they come back to live music.  Regardless of what distancing or contamination standards are imposed, none of that matters much if the fans don’t trust it enough to come out to hear live music in cities like Toronto and Austin.

For example, the study found this reaction:

DESPITE WANTING TO GO, CANADIANS, EVEN THOSE WHO LOVE LIVE MUSIC, SAY THEY WILL BE RELUCTANT TO GO BACK TO LIVE MUSIC EVENTS BEFORE A VACCINE FOR COVID IS FOUND.

Even if they are permitted to go to live music events, many Canadians, including those who love live music the most, will be reluctant to return for some time.

We asked respondents how soon they will feel comfortable enough doing several activities, once physical distancing restrictions are lifted. In almost all cases, fewer than 40% said they would feel comfortable in a few months or less. For most, the time horizon was much longer with many saying they may never feel comfortable again.

For example, 43% said it would take six months or more before they would feel comfortable going to a music festival or a concert in a large venue. Another quarter said they may never feel comfortable going to those types of events again.

I find it hard to believe that there’s going to be an appreciable geographical distinction between Canada and any other country on these issues.  But this study provides a gold standard for other studies in other countries, all of which should be done and done using a robust and defendable methodology.

So let’s be clear–this study is giving you the hard truth.  It is not some Chamber of Commerce hoorah or conclusion-driven clap trap.  It also tells us that the idea that you can just turn the lights back on and people will flock to the clubs may be looking at the wrong ball.  It has serious implications for the entire music industry across all genres.

But–it especially has serious implications for cities like Austin that get significant economic benefit from music tourism.  Given that the City of Austin commissioned the Austin Music Census in 2015, another robust data-driven study that produced  unwelcome dire conclusions,  it is astonishing that the blinking red light in the Census was completely ignored.  Not only were Austin musicians poorer than the City seemed to think they were, the entire local ecosystem was essentially dependent on live music.  For example, streaming was a negligible source of revenue for Austin musicians–think maybe someone would have wanted to look into that issue as a matter of industrial strategy?  And is there anything about the “Live Music Capitol of the World” that gives you a clue that maybe you might want to start thinking about why all the eggs were in that basket?  As Mark Twain said, if you’re going put all your eggs in one basket, watch that basket.  Or at least don’t ignore it.

Since the City did such a thorough job of ignoring the Census for so long, I wonder if they’re going to be able to figure out how to solve the current crisis.  Or if maybe somebody actually would like Austin to turn into just another college town with a Google campus, self-driving cars busily scraping rider data while stacked up on I-35 and Uber Eats Your Soul.

We can be grateful to Music Canada for commissioning this study and getting it out at the perfect time for policy makers to have some meaningful data driven reality conducted in a manner that could stand up to peer review like the Austin Music Census.  And show the world the gold standard for how to develop policies that actually solve a problem because you better know what the problem is you want to solve.

Here’s the survey:

 

 

Click to access Music-Canada-National-Survey-Interview-Schedule_Release.pdf

LEADING MUSIC AND FILM ORGANIZATIONS CALL ON CONGRESS TO FIX SAFETY NET IN NEW CARES ACT

[Editor Charlie sez:  Artist Rights Watch, Music Tech Policy and The Trichordist are pleased to support this effort.  Please let your representatives in Washington know that you do, too!]

PRESS RELEASE

WASHINGTON, D.C. (May 8, 2020) – Leading music and film organizations today sent a new letter to leaders of Congress that highlights the ways implementation of the CARES Act has fallen short in assisting workers in need in the entertainment community and requests that these flaws in implementation be remedied in a new CARES Act COVID relief package.

The organizations said in a joint statement: “While we appreciate the efforts of lawmakers to meet the challenges of this pandemic, we need to ensure that our community is getting the aid they need to survive. Musicians are struggling to access the basic financial resources available due to conflicting and burdensome requirements in relief programs. Simply, there is a hole in this safety net that Congress must fix in the next version of the CARES Act.”

The letter lays out in stark terms the crisis that the live entertainment industry is facing due to the pandemic.

“We need help that only [Congress] can provide, in a way that recognizes the particulars of our industry. On behalf of the hundreds of thousands of us across the country, thank you for your understanding and your action.”

In the letter, the organizations point out the implementation of the Pandemic Unemployment Assistance program (PUA) has overlooked workers who have mixed income and report it on W-2 and 1099 forms. “In almost all cases that we see in every state, a minimum amount of W-2 income disqualifies a self-employed individual for PUA and significantly lowers the amount of assistance they receive,” the letter states. “PUA must be updated to recognize these different income streams and allow individuals to show their mixed sources of revenue for a full accounting of their annual income.”

The letter also describes concerns about the Paycheck Protection Program and the Economic Injury Disaster Loan program that were included in the first CARES Act.

The organizations who signed include the Artist Rights Alliance (ARA), American Association of Independent Music (A2IM), American Society of Composers, Authors, and Publishers (ASCAP), Broadcast Music Inc. (BMI), the Future of Music Coalition, Global Music Rights (GMR), the Music Artists Coalition (MAC), the Music Business Association, National Music Publishers’ Association (NMPA), Nashville Songwriters Association International (NSAI), the Recording Academy, the Recording Industry Association of America (RIAA), the Screen Actors Guild-the American Federation of Television and Radio Artists (SAG-AFTRA), the Society of European Stage Authors and Composers (SESAC), the Songwriters Guild of America, the Songwriters of North America (SONA), SoundExchange and many more.

 The full text of the letter follows:

Honorable Nancy Pelosi                                                     Honorable Kevin McCarthy
Speaker                                                                                  Republican Leader
U.S. House of Representatives                                          U.S. House of Representatives
Washington, DC  20515                                                      Washington, DC  20515

Honorable Mitch McConnell                                             Honorable Charles Schumer
Majority Leader                                                                   Democratic Leader
U.S. Senate                                                                             U.S. Senate
Washington, DC  20510                                                       Washington, DC  20510

Dear Speaker Pelosi, Leader McConnell, Leader McCarthy, and Leader Schumer:

The broad and diverse American entertainment community would like to thank you for your continued efforts to provide assistance to those affected by the COVID-19 pandemic.  The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and the subsequent “Paycheck Protection Program and Health Care Enhancement Act” were sincerely welcomed programs, particularly their essential coverage of independent contractors, sole proprietors, and other self-employed individuals who make up so much of the live entertainment workforce.

As you know, many of our jobs have not only vanished, they will be gone for quite some time.  From on-set production to public performance, our work in the entertainment industry naturally requires close personal interaction and public gatherings.  Even when business restrictions are eased, it will take much longer to restore the social interaction inherently necessary for the creative industries to operate.

For those of us in the creative field to survive – and recover – after this crisis, we must be able to access the full support intended by Congress.  Thus, we would like to highlight a few ways that the CARES Act has fallen short in assisting those of us most in need and hope that it will be instructive in your continued discussions on any further federal funding assistance.

First, given the unique nature of our industry, many in our profession work from project to project and gig to gig, not only in multiple jobs but in various capacities.  As a result, creators often find themselves working as employees receiving W-2 wages and as independent contractors (or otherwise self-employed) receiving 1099 income for performances, royalties, and other services.  Unfortunately, implementation of the Pandemic Unemployment Assistance program (PUA) has overlooked workers with mixed income.  In almost all cases that we see in every state, a minimum amount of W-2 income disqualifies a self-employed individual for PUA and significantly lowers the amount of assistance they receive.  PUA must be updated to recognize these different income streams and allow individuals to show their mixed sources of revenue for a full accounting of their annual income.

In addition, those who work on location or perform on tour earn freelance income in multiple states, some of which does not come with a 1099.  While some state agencies allow for this type of reporting, some do not.  Congress’s intent is that such workers should be fully eligible for at least the minimum PUA amount, but state implementation does not fully reflect this intention.  PUA must be updated to recognize these unique circumstances.

Second, the CARES Act does not recognize the full scope of small business arrangements prevalent within our industry.  As the PUA mixed income issue and the actual operation of our industry make clear, the Paycheck Protection Program (PPP) should be sure to allow payments to self-employed individuals, including independent contractors.  The workers in our industry cannot afford to be shut out of federal assistance on such a technicality and any future plan should recognize self-employed individuals as eligible payroll participants.

Third, SBA’s PPP guidelines on eligibility criteria and requirements for the self-employed are overly burdensome and restrictive.  SBA requires a 2019 Schedule C as the principal document to determine eligibility and loan size, even though the IRS delayed the 2019 tax year filing deadline to July 15, 2020.  This puts a burden on smaller, independent creators who must now scramble to secure professional accounting services so they can supply a 2019 Schedule C.  More importantly, the SBA restricts self-employed applicants to loans that are sized according solely to net business income as reflected on a Schedule C.  Net business income does not reflect the fact that professionals have significant overhead costs – mortgages, studio rentals, equipment costs, health insurance premiums, and other expenses.

The SBA should allow the use of 1099-MISC forms and consideration of health insurance costs in the calculation of loan amounts, as well as the 2018 Schedule C when a 2019 form is not readily available. SBA should calculate loans consistent with the intent of the CARES Act, which allows for consideration of any compensation to a sole proprietor or independent contractor.

Finally, the SBA has limited the Economic Injury Disaster Loan (EIDL) grant of up to $10,000 to only $1,000 per employee.  This means self-employed individuals who do not have employees are unfairly penalized, even though they need immediate relief just as much as any other small business.  Congress clearly lays out in the CARES Act that funds from the EIDL advance may be used for many purposes other than payroll.

And when it’s time to once again open the doors to live music venues and recording studios, music will continue to need help.  The government must commit to provide adequate testing, contact tracing, viral treatments and a vaccine to ensure safety and restore public trust.  We will also need clear national guidelines to facilitate touring and live performances from musicians and entertainers in venues of all sizes.

There is no sugarcoating this: the entire live entertainment industry has been decimated.  We trade in imagination, but the reality of our situation is dire.  Today, we eagerly share our craft when we can – through video streams, on social media, or from apartment balconies.  But it is not a viable “work from home” solution and it will not sustain us.  We need help that only you can provide, in a way that recognizes the particulars of our industry.  On behalf of the hundreds of thousands of us across the country, thank you for your understanding and your action.

Sincerely,

Academy of Country Music (ACM)

Actors’ Equity Association

Alliance for Recorded Music (ARM)

American Association of Independent Music (A2IM)

American Federation of Musicians (AFM)

Americana Music Association

Artist Rights Alliance (ARA)

Artist Rights Watch

ASCAP

Association of Independent Music Publishers (AIMP)

BMI

California Arts Advocates

Christian Music Trade Association (CMTA)

Church Music Publishers Association (CMPA)

Country Music Association (CMA)

CreativeFuture

Digital Media Association (DiMA)

Folk Alliance International

Future of Music Coalition

Guild of Italian American Actors

Global Music Rights (GMR)

Gospel Music Association

The Harper Agency

International Bluegrass Music Association (IBMA)

Music Artists Coalition (MAC)

MusicAnswers

Music Business Association (MusicBiz)

Music Managers Forum – US

Musicians On Call

Music Technology Policy Blog

National Independent Venue Association

National Music Publishers’ Association (NMPA)

National Songwriters Association International

On Board Experiential

Paradigm Talent Agency

Recording Academy

Recording Industry Association of America (RIAA)

Reel Muzik Werks, LLC

Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA)

SESAC

Songwriters Guild of America

Songwriters of North America (SONA)

SoundExchange

Southern Gospel Music Guild

Trichordist

Writers’ Guild of America, East

 

Attention BrewBros: @SenThomTillis Asks Nicely That Internet Archive Stop the “National Emergency Library” Sham — Music Technology Policy

MTP readers will no doubt have been following the absurd “National Emergency Library” scam that anti-artist activist Brewster Kahle is pushing to the great satisfaction of the BrewBros.  BrewBros based the “National Emergency Library” on a “superpower” interpretation of fair use (no, that’s really what they said) that is yet another example of a very Googlely  weaponization of fair use.

The BrewBros have caught the attention of Senator Thom Tillis, chair of the U.S. Senate Judiciary Committee Subcommittee on Intellectual Property, who sent this letter into the heart of darkness today, which should finally provoke the Google lobbyists to come out into the daylight (looking at you, Matt):

Mr. Brewster Kahle
Founder and Digital Librarian
Internet Archive
300 Funston A venue
San Francisco, CA 94118

Dear Mr. Kahle:

I write to you as Chairman of the Senate Judiciary Committee Subcommittee on Intellectual Property, following the Internet Archive’s recent announcement of its National Emergency “Library” initiative amid the coronavirus pandemic. The Subcommittee has jurisdiction over our nation’s intellectual property laws, including copyright law. As you may know, in February my Subcommittee began a year-long review of the Digital Millennium Copyright Act with an eye toward reforming it for the twenty-first century.

I recognize the essential nature of books and publishing efforts during these challenging times. As schools, libraries, and bookstores have closed their physical locations across the nation, continued access to books is important to ensure that students and teachers have the materials they need for remote learning. It is also important that the general public has access to various types of books and written materials. I have been encouraged to see authors, publishers and other copyright owners ease these struggles of students, parents, educators, and the general public. Among other efforts, they are providing valuable content and online courses for free, providing flexible licenses for distance learning and enjoyment, and extending access to audiobooks and e­books. These voluntary efforts should be commended, not only because they are expanding access to copyrighted works, but also because they do not violate copyright law or harm creators. On the contrary, these times have shown the critical value of copyrighted works to the public interest.

As you can see, I deeply value access to copyrighted works, but that access must be provided within the bounds of the law-even during a national emergency. I understand that your “Library” will last until June 30, 2020 or the end of the coronavirus emergency in the United States, whichever is later, and that during this time, the Internet Archive will make 1.4 million books it has scanned available to an unlimited number of users. I am not aware of any measure under copyright law that permits a user of copyrighted works to unilaterally create an emergency copyright act. Indeed, I am deeply concerned that your “Library” is operating outside the boundaries of the copyright law that Congress has enacted and alone has jurisdiction to amend.

As I am sure you are aware, many authors and publishers are struggling during this pandemic. Just this past Monday, the president of the Authors Guild noted in the New York Times that: “Authors have been hit hard by the pandemic …. It could be a career-destroying time for some authors, many of whom are struggling to make a living.” At some point when the global pandemic is behind us, I would be happy to discuss ways to promote access to books in a manner that respects copyright law and the property interests of American authors and publishers.

Sincerely,

Thom Tillis
Chairman
Subcommittee on Intellectual Property

MUSICCOVIDRELIEF.COM EXPLAINS CARE ACT AND OTHER PANDEMIC RESOURCES FOR THE MUSIC BUSINESS

A host of organizations have come together to create MusicCovidRelief.com, a website that explains the ins and outs of the CARE Act, the pandemic relief bill.

Spend some time on the site and learn about the many cash resources made available by the historic legislation.  The good news is that self employed and small business can take advantage of funds, but move quickly because the funds are available on a first-come first-served basis.

Big thanks to RIAA for putting this together so quickly.  Visit  MusicCovidRelief.com to know what’s on offer.  You may also find the return of the Carte Musique to be of interest as in this post from Chris that is getting uptake in some policy circles it limits the purchasing power to tracks bought from a local retailer.  Again–Carte Musique cannot be used at Amazon but can be used to buy directly from a participating store.  The Carte could be cosponsored by big brands even for tours with tour branding.