The Uniform Commercial Code defines “good faith” as “honesty in fact and the observance of reasonable commercial standards of fair dealing.”
Spotify was sued by Eight Mile Style and Martin Affiliated, two publishers that control rights in some of the early Eminem repertoire, including Lose Yourself. Remember that earlier this year, Spotify announced with great fanfare that Lose Yourself was streamed over 1 billion times on the platform. That’s just one measurement of Eminem’s dominance on Spotify. Turns out that Spotify had failed to license a good chunk of Eminem’s catalog.
The publishers eventually joined the Harry Fox Agency to the lawsuit as participating in the situation, adding claims of vicarious and contributory copyright infringement against the long-time publishing administrator to the industry. In fact, the Harry Fox Agency gave some people the impression that when it came to Section 115 of the Copyright Act, HFA thought they were the government. What ever is this venerable organization doing getting sued for copyright infringement instead of leading the charge against the infringer?
At one point a few years ago, quite a few years ago now, HFA decided to jump up on top of the wall. They started working for tech companies like Spotify and also administering publishing rights. That’s right–both sides. What could possibly go wrong?
Let me illustrate with an anecdote (one that does not involve HFA, or MRI for that matter). A highly ethical licensing administrator interviewed for a job handling music licensing for a big tech company. After several rounds of interviews, the administrator was told they weren’t getting the job. Asking for a reason, the tech company told the administrator that the company thought the administrator were likely going to flag and at least try to fix any problems they found in the tech company’s reporting. The administrator didn’t find this remarkable as this was the honest thing to do. The company said, we don’t want honesty when it’s not in our favor. The company hired someone else because they did not want “honesty in fact”.
There are serious allegations against the Harry Fox Agency in the Eight Mile Case. Remember, this is a defense motion to dismiss, so the plaintiff largely gets the benefit of the doubt in their favor. You may ask yourself what possible motivation could Spotify have for engaging in such risky behavior. In her order denying in part and granting in part HFA’s motion to dismiss, Judge Trauger puts her finger right on the most plausible explanation:
[I]t is undisputed that [Eminem, aka Marshall] Mathers is an artist who has enjoyed extraordinary commercial success and has built a large, dedicated fanbase, such that his omission from a major streaming platform might discourage some meaningful number of potential users from subscribing.
In other words, they did it for the subscribers, they did it for the growth and they did it for the money.
While Eight Mile alleged both vicarious and contributory infringement, Judge Trauger dismissed the claim for vicarious infringement on technical grounds (with leave to amend). Not so with the claim for contributory infringement, however:
HFA objects that it was under no obligation to police Spotify’s in-house decisions regarding infringement. Whether that is true or not, the plaintiffs have not merely alleged that HFA failed to affirmatively police Spotify’s conduct; they have alleged both that HFA knew and, through the ordinary fulfillment of its duties, should have known that the infringement was occurring and that HFA was helping to conceal it.…There is little doubt, moreover, that those allegations of knowledge were pleaded sufficiently. Even when a claim is governed by the heightened pleading requirements of Rule 9(b), “[m]alice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). The Supreme Court, moreover, has recognized a party’s “aiming to satisfy a known source of demand for copyright infringement” as evidence of an improper purpose in the contributory infringement analysis. Grokster, 545 U.S. at 939. That circumstantial evidence is only heightened when the defendant, knowing of the capacity for infringement, fails to take steps to avoid it.See id. (citing Groskter’s lack of “attempt[s] to develop filtering tools or other mechanisms to diminish the infringing activity using their software”).
The plaintiffs have plausibly alleged that HFA became aware of Spotify’s licensing predicament and offered services that directly filled its need to maintain an illusion of lawfulness while continuing to infringe.
If these allegations turn out to be proven true, songwriters (and the Copyright Office for that matter) may well ask themselves if there are implications for HFA’s continued role as a vendor for The MLC, if not why they were selected in the first place.
Ever heard the expression, “you’re making my argument?”
You may have seen the book reviews of “Spotify Untold” (or in Swedish “Spotify Inifrån”). The book is currently only available in Swedish and has not been released in the US, but in a new marketing twist the authors are on a book tour in the US promoting their book in Swedish to an English language audience. Must be nice.
The writers not only seemed to have missed the streaming gentrification part, which is of great consequence to artists, songwriters, and especially MP/TV composers–but those groups are pretty clearly not the authors’ audience. They are also peddling a ghoulish yarn about Steve Jobs that gives far more insight into Daniel Ek’s midnight of the soul than anything else. A simple fact check should have made one inquire further in my view.
If their interview with Variety is any indicator, the story line of “Spotify Untold” revolves around (1) music is a commodity (with no discussion of Spotify’s role in the commoditization of what is now openly called “streaming friendly music” not unlike “radio friendly” music–both equally loathed by artists whose name does not begin with “Justin”; and (2) Daniel Ek is a heroic genius (despite the resemblance to Damian in his teen pictures they are also handing out–he thankfully shaves his head).
But most importantly (3) Ek was pursued by Steve Jobs, the evil giant whose company he just happens to have filed a competition complaint against who was aided by the equally evil Sony and Universal as they were all in on it to keep our hero from entering the fabled land of Wall Street. Yes, a yarn straight out of Norse mythology as retold by Freud; perhaps a little too much so.
But the book may also be a corporatized version of Joseph Campbell’s hero’s journey from The Hero With A Thousand Faces aka Star Wars). You can plug Daniel Ek into the hero’s role pretty easily:
Barely a page into the book “Spotify Untold,” Swedish authors Jonas Leijonhufvud…and Sven Carlsson paint an odd scene. The year is 2010 and Spotify co-founder and CEO Daniel Ek [the hero] is facing a succession of obstacles [the Threshold Guardians] gaining entry into the U.S. market [the region of supernatural wonder] — or, more specifically, infiltrating the tightly-networked and often nepotistic to a fault music industry. [Unwelcoming of the stranger from Asgard, so unlike Silicon Valley.] As stress sets in [Challenges and Temptations], Ek becomes convinced that Apple’s Steve Jobs is calling his phone just to breathe deeply on the other end of the line, he purportedly confesses to a colleague[a Helper].
There’s a saying, “don’t speak ill of the dead.” That’s probably a bit superstitious for the authors, but is good advice. It’s unbecoming and Spotify should denounce it, although it’s highly unlikely that they will given their fatal attraction to PR disasters.
There’s also a saying, “don’t mock the afflicted,” so before you laugh hysterically at the story, realize that Steve Jobs caring enough about Daniel Ek to do such a thing (which assumes Steve knew Daniel Ek existed) was something that was very important to Daniel Ek. Or in a word–is Daniel Ek more Loki than Thor?
What is really objectively and factually odd about the authors’ 2010 Steve Jobs story about heavy breathing phone calls is that Steve got a liver transplant in 2009 and was very, very sick throughout 2010–the year they say these calls occurred.
Steve left Apple for good in August 2011 and passed in October 2011. It is implausible to me that he was even paying attention to Daniel Ek in 2010, assuming that Steve even knew or cared who Daniel Ek was. Aside from the fact that at that time Spotify was small potatoes, Steve had many more important things on his mind like staying alive. Plus, in my experience if Steve was going to leave you a testy voicemail or phone call, you knew exactly who it was. Exactly.
I for one think that the entire anecdote simply does not scan and is unsubstantiated by the authors’ own admission. Bizarre. Freudian. Not to mention a crass and thoughtless smear against a man who really did change the world. Who can’t defend himself because he is dead.
Variety reports that the authors were not able to confirm this rather insulting and perverse allegation. But don’t let that stop anyone from publishing gossip.
What Variety does report is this statement from the authors:
To us, Ek’s claim is as a reflection of how paranoid and anxious he must have felt in 2010, when Spotify was being denied access to the U.S. market, in large part due to pressure from Apple. The major record companies seem to have been quite loyal to the iTunes Music Store, and to Jobs personally….Because Spotify was hindered by Steve Jobs [it’s called competition], it forced the company to sweeten its deals with the record companies [also called competition]….Spotify is challenging Apple on a legal level right now.We address Spotify’s constant struggle with Apple in our book. If Ek were to talk about such sensitive topics in book form, [Spotify would] do it in their own way with full control.
The first thing I thought of when reading the story of “Spotify Untold” was that very competition claim that Spotify is pursuing in Europe right now. That claim appears to have been scripted–Spotify pursued it with the Obama competition authorities a few years ago. And then of course there was the New York and Connecticut state competition claim that curiously came out the same time as Apple Music launched in the US, apparently manipulated by Spotify’s very own Clintonista lobbying operative who was a political ally of Eric Schneiderman the former (ahem) New York Attorney General. (Spotify tried to drag Universal into that one, too–so this is a movie script that Spotify pulls down every so often for a polish and sometimes changes the supporting characters.)
While the authors claim that they spoke to many Spotify executives but not Ek, the book still has curious timing–as does the authors’ disclaimer that the book is not connected to Spotify directly, the plausible deniability that is the hallmark of black bag operations.
And if you believe as I do that Daniel Ek actually hates the major labels (read the Spotify DPO filing and you’ll get the idea), it’s only natural that he would try to twist Sony and Universal into the story. He just didn’t know that his major label negotiation experience was garden variety stuff and not unusual in any way. They didn’t get stock in iTunes so they damn well would in everything that came after iTunes. Daniel Ek was not singled out–rather, he opted in.
I would be very curious to know why the authors of “Spotify Inifrån” came away from their research thinking that the major labels were “quite loyal” to iTunes and to Steve Jobs. While that may have been true of certain executives, the reason that the labels required licensees to sell in Windows Media DRM (i.e., the format nobody wanted) was because they wanted to encourage competition with iTunes.
The labels eventually ended that failed policy after Steve called them out and suggested that they drop the DRM part (about which I strongly agreed in one of the first posts on MusicTechPolicy in 2006). Even after the labels dropped that failed idea, record companies large and small did not want a single digital retailer dominating the online market. So the idea that they colluded with Steve Jobs and Apple to make life difficult for a poor little hacker boy from Sweden is so inconsistent with reality to be laughable.
In fact, one could argue that were it not for Steve asking for more competition with iTunes Music Store (and in fairness, sell more iPods and later iPhones), there may never have been a Spotify at all. What that does not include is the accelerating failing belief in one of Spotify’s major selling point–the free service converts users from piracy to a paid service. That didn’t happen at anything like the rates that Spotify sold, nobody believes it anymore and it was unbelievable in the first place. But exactly what you’d expect a hacker to say.
So why would these authors be slinging this unlikely brew? It’s possible that the book is an answer to “Spotify Teardown,” funded by a grant and published (in English) earlier in 2019 with a much less mythological and much more recognizable approach to a Spotify reality according to an NPR review:
[“Spotify Teardown”] argues that Spotify isn’t a media company per se – and…asserts that it’s structurally much closer to a Facebook or Google, particularly in its digital business model. Indeed, Spotify was never really so much a music company as an Internet brand. “Spotify’s business model never benefited all musicians in the same manner but rather appeared — and still appears — highly skewed toward major stars and record labels, establishing a winner-takes-all market familiar from the traditional media industries.”
You won’t find that in a corporate bio. That sounds like the streaming gentrification reality and definitely wasn’t written by anyone named Justin. So while I don’t know what motivated the “Spotify Inifrån” authors, I do think that there’s a definite whiff of Astroturf in a book that tells a story that fits almost perfectly with the hero’s journey that Spotify would like to be telling competition authorities. I think the authors are aware of this, hence their disclaimers.
And I’m still waiting for the last leg of Daniel Ek’s hero’s arc, the transformation and atonement. Which is the part that makes the hero a hero. As the authors tell us, “[Spotify] would probably rather tell their story themselves than have us do it for them, but I think they understand our role as journalists.”
I just bet they do.
But look–credit where credit’s due. Ek used the music to make himself rich and he changed the economics of the music industry to keep making himself even richer. He gets million dollar performance bonuses when he doesn’t meet his performance targets. There are a growing number of niche and cultural artists who hate him. He’s also changed the way that fans interact with music online through the use of personality traits and data profiling instead of genre or artist based selection. And he invented “streaming friendly music” to the great joy of elevator operators everywhere.
For all his idiosyncrasies, Steve is largely revered and recognized as someone who really did change the world. Or as Daniel Ek tweeted when Jobs passed in 2011–after supposedly being harassed by Steve:
“Thank you Steve. You were a true inspiration in so many parts of my life, both personal and professional. My hat off to our time’s Da Vinci.”
Exactly. That Danny is a complex little man.
Remember those Mac/PC ads? You could just as easily run the same ad campaign for Spotify/Apple Music with only a few tweaks. And when it comes to marketing, what should be keeping Ek up at night is not devising sick stories he can tell about Steve Jobs but rather very justified fear of what will happen when Apple turns its marketing team loose on Spotify. He ain’t seen nothing yet.
If you think this is paranoid, watch this video from the distinguished journalist Sharyl Attkisson. Let’s just say I don’t put anything past these guys.
More skullduggery afoot from Google, this time in South Africa–and that’s the fact. Minister Rob Davies and the Chair of the Portfolio Committee of the National Assembly’s Department of Trade & Industry both need to be called out on exactly how this legislation came to so closely resemble Google’s marching orders on safe harbors and pirate utopias. As we’ve seen in Europe, Google has no respect for the nation state or local creators.
Sign the petition here and stand shoulder to shoulder with artists in South Africa against Big Tech’s lobbying onslaught.
You can’t make this up. Law 360 is reporting that the International Trade Commission (ITC) has been denied authority over digital goods.
The Federal Circuit said Thursday that it wouldn’t reconsider its decision that the International Trade Commission lacks the authority to block the import of digital files, drawing a lengthy dissent from one of its judges.
Keep in mind, the same people now opposed to the ITC having this authority are the same who argued in favor of the the ITC doing so as an alternative to SOPA called the Open Act.
When advocating for the OPEN Act as a good alternative to SOPA and the PROTECT IP Act, the bill’s sponsors touted the ITC as being a great venue for tackling the problems of foreign rogue sites. Among the claimed virtues were its vast experience, transparency, due process protection, consistency, and independence:
For well over 80 years, the independent International Trade Commission (ITC) has been the venue by which U.S. rightsholders have obtained relief from unfair imports, such as those that violate intellectual property rights. Under Section 337 of the Tariff Act of 1930 – which governs how the ITC investigates rightsholders’ request for relief – the agency already employs a transparent process that gives parties to the investigation, and third party interests, a chance to be heard. The ITC’s process and work is highly regarded as independent and free from political influence and the department already has a well recognized expertise in intellectual property and trade law that could be expanded to the import of digital goods.
The Commission already employs important safeguards to ensure that rightsholders do not abuse their right to request a Commission investigation and the Commission may self-initiate investigations. Keeping them in charge of determining whether unfair imports – like those that violate intellectual property rights – [sic] would ensure consistent enforcement of Intellectual Property rights and trade law.
Some of the groups now arguing that the ITC shouldn’t have jurisdiction over digital goods openly supported the OPEN Act. Back in late 2011, the EFF stated that it was “glad to learn that a bipartisan group of congressional representatives has come together to formulate a real alternative, called the OPEN Act.” The EFF liked the bill because the “ITC’s process . . . is transparent, quick, and effective” and “both parties would have the opportunity to participate and the record would be public.” It emphasized how the “process would include many important due process protections, such as effective notice to the site of the complaint and ensuing investigation.”
Google likewise thought that giving the ITC jurisdiction over digital goods was a great idea. In a letter posted to its blog in early 2012, Google claimed that “there are better ways to address piracy than to ask U.S. companies to censor the Internet,” and it explicitly stated that it “supports alternative approaches like the OPEN Act.” Google also signed onto a letter promoting the virtues of the ITC: “This approach targets foreign rogue sites without inflicting collateral damage on legitimate, law-abiding U.S. Internet companies by bringing well-established International trade remedies to bear on this problem.”
You can read the full post here (Strongly Recommended):
Musicians, know who your friends are and are not. Here is another example of big tech money, corporate astroturf, attempting to remove your rights. In the last hours of the submissions to the Copyright Office for comments on the DMCA a webform was introduced.
Note the fear-inducing reference to “robots”–“robots” must refer to the tools that Google itself gives to big companies to automate sending DMCA notices to Google for infringing links. So by definition, “corporations” use Google’s own “robots” at Google’s request. 80 million infringing links this month alone! (And remember, the Google “transparency report” does not include DMCA notices sent to YouTube, Blogger or any other Google property, it just covers Google search.) EEP! ROBOTS! DON’T BREAK THE INTERNET!
This letter is exceptionally misleading because Google doesn’t allow independent artists to use these tools. That means even the handful of artists who can monitor Google search 24/7 have to send manual notices. So what the astroturf group is really complaining about is that EVERYONE should have to send notices manually which would increase the amount of time that Google has to profit from links to infringing content by data profiling or advertising sold on pirate sites.
This webform did not even verify if those sending the automated letter to the US Copyright Office were actually US Residents or machines…or made an intelligible comment on the questions the Copyright Office asked for public comment. So, we had some fun with it, see bel0w.
David Newhoff at The Illusion Of More has an excellent piece looking much deeper at how these corporations and their funded organizations are working aggressively to take away the protections granted to individual creators in copyright.
Lenz is best thought of as a tactic in a larger strategy. Another victim-shaming tactic, used to confuse and intimidate individuals so they don’t claim their rights, is a Google-funded project called Chilling Effects. We can define “victim shaming” as where the process of seeking justice punishes the victim more than it hurts the perpetrator, and it relies on the fear of unknown reprisals.
Both Lenz and Chilling Effects have the same goal: to make you think twice about asserting your ownership of your own digital stuff. The Utopia envisaged by Silicon Valley’s current oligarchs does not have individual ownership of bits in it.
One of the mantra’s that we always hear about the internet and musicians is that the revenue has shifted from recording sales to live ticket sales. So the great accomplishment of the internet according to Silicon Valley wisdom (and Steven Johnson of the NY Times Mag) is that artists can hit the road. “The dream of the 90s is alive, the 1890s…”
Well, if you’re not an established hit artist, here’s how that is working out in the post-napster era. Oh, and by the way, songwriters don’t tour, record producers don’t tour, recording engineers don’t tour… well, you get the point. Here’s the stat as reported by Digital Music News.
Note that in 1982 almost 40% of the revenue was divided between the “bottom” 95% of artists, while in 2003 they received only 15% of all revenue.
Could it be that these top-grossing artists benefited from launching in an era when artists didn’t have to be in the top 1% to develop a healthy live following over years of touring?
If we strip away some of the color and simply look at the assertions being made, then the basic structure of the article reveals an important fallacy. First Johnson states that most of the evidence of harm done to creators in the digital age is anecdotal, and this is partly true — although anecdotes from professionals should not be misconstrued as mere random complaining. So, to get beyond the anecdotal, Johnson then cites macroeconomic data, compiled by the Labor Department, most of which suggests a big-picture view that creative people in all media are doing better than they were a decade ago. But, having previously scorned the anecdotal negative, Johnson then cherrypicks bits and pieces of the anecdotal positive — some of which he misrepresents — in order to support his interpretation of the economic data he cites.
This week’s apology episode from Johnson is entitled The Creative Apocalypse That Wasn’t — and its one of the most brain dead pieces that the New York Times Magazine has ever published. I’m shocked the Public Editor has not already taken Johnson to task. I won’t go into all the details because David Newhoff has already destroyed most of Johnson’s argument that the Internet monopolies have actually been a boon to the average artist. This is total nonsense as this chart shows.
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