Are You Better Off Today Than You Were Five Years Ago? Selected comments on the MLC Redesignation: Gwendolyn Seale

The Copyright Office solicited 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 at the Copyright Office. While comments are now closed, you can read all the comments at this link.

For context, the “redesignation” is a process of review by the Copyright Office required every five years under the Music Modernization Act. Remember, the “mechanical licensing collective” is a statutory entity that requires someone to operate it. The MLC, Inc. is the current operator (which makes it confusing but there it is). If the Copyright Office finds the MLC, Inc. is not sufficiently fulfilling its role or is not up to the job of running the MLC, the head of the Copyright Office can “fire” the MLC, Inc. and find someone else to hopefully do a better job running the MLC. Given the millions upon millions that the music users have invested in the MLC, and the hundreds of millions of songwriter money held by the MLC in the black box, firing the MLC, Inc. will be a big deal. Given how many problems there are with the MLC, firing the MLC, Inc. that runs the collective

The next step in this important “redesignation” process is that The MLC, Inc. and the Digital Licensee Coordinator called “the DLC” (the MLC’s counterpart that represents the blanket license music users) will be making “reply comments” due on July 29. The Copyright Office will post these comments for the public shortly after the 29th. These reply comments will likely rebut previously filed public comments on the shortcomings of the MLC, Inc. or DLC (which were mostly directed at the MLC, Inc.) and expand upon comments each of the two orgs made in previous filings. If you’re interested in this drama, stay tuned, the Copyright Office will be posting them next week.

If you have been reading the comments we’ve posted on Trichordist (or if you have gone to the filings themselves which we recommend), 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 that 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.

Today’s comment is by music lawyer Gwendolyn Seale who makes a number of excellent points in her filing including questioning whether the compulsory license itself is fit for purpose and what might happen if the MLC, Inc. is not redesignated. In particular, she addresses an alarming trend in the MLC, Inc.’s public messaging about the black box that has grown more cloudy as the size of the black box at the MLC has grown into the hundreds of millions.

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. You can read Gwen Seale’s comment at this link.

Words Matter: The MLC Must Improve Its Presentation of Information

Confusion Regarding the Term, “Match Rate”

Upon reviewing the MLC’s 2021 Interim Annual Report in early 2022, I noticed reference to the
MLC having attained an 86% match rate. This metric seemed impressive, however, upon
learning the MLC’s definition of “match rate” (which I only learned by asking the MLC), I was
baffled. When the term, “match” is used alone, it refers to the matching of a sound recording
from a DSP report to a particular musical work. The Copyright Office’s NOI indicates the same
regarding the term, “match.”

Please describe how the Mechanical Licensing Collective has worked to improve automated and manual matching since the blanket license became available and plans to further enhance such matching over the next 5 years, including with respect to the matching of reported sound recordings to musical works as well as the matching of those musical works to identified and located copyright owners.

Being that a “match” constitutes pairing a sound recording with a particular musical work, it is
logical to deduce the “match rate” as being the percentage of sound recordings in DSP reports
which are matched to musical works registered at the MLC. However, that is not the case and
instead the term “match rate” as used by the MLC refers to the total amount of royalties matched
to musical works registered at the MLC over a given period. This definition was not provided to
the public so far as I can tell until June 30, 2022, in its final 2021 Annual Report.

As the most popular musical works are the ones generating the bulk of mechanical royalties over
a given month and are typically owned and/or controlled by the major music publishers with the
resources and capabilities to constantly monitor activities concerning their clients’ musical works
and engage in manual matching, the current definition of match rate (i.e., the royalty-based
definition) does not mean very much by itself. It would be useful for the MLC to also provide the
monthly match rate on a recordings-to-musical works-matched basis (hereinafter, “works-based
calculation”). Doing so would shine a light on the efficacy of the MLC’s and its vendors’
matching technology and would help to ensure the musical works of countless self-published
songwriters are being matched to reported sound recordings. I understand that there are issues
with catalog “fluff” and some sound recordings do not generate a single stream over a month’s
time. Thus, a works-based calculation could be tailored in a manner where recordings with less
than x streams per month or that generate less than x cents in mechanical royalties are omitted
from the calculation. Input from the Copyright Office regarding match rate terminology would
be helpful as well.

Historical Royalties: Eliminate  Illuminate = Obfuscate

The impetus behind establishing the MLC was to ensure that songwriters and publishers could
finally collect the nearly half billion dollars in historical royalties5 owed by the DSPs from the
early 2000s through the end of 2020. The task of the MLC was to eliminate the historical
royalties by ensuring that sound recordings could be matched to registered works in the MLC
database from this period. The MLC stated that eliminating these royalties was its goal:

The MLC cannot stress enough that its goal is to eliminate unclaimed accrued royalties, and that it has developed a realistic plan to pursue this goal.


Over time, the MLC shifted the language from eliminating to “illuminating” the historical royalties, beginning with the 2022 MLC Annual report:

Together, we will not only illuminate the “black box,” but also seek to eliminate it entirely!

At present, the MLC no longer references “elimination” of the historical royalties and purports
the job is done since the historical royalties have been “illuminated:”

Is there still a Black Box of Mechanical Royalties With The MLC?
No, the data on all unmatched uses is posted and available to be searched by Members. This includes all data for historical and blanket unmatched uses. All of these remaining unmatched uses are available to be searched by Members in The MLC’s Matching Tool. With this unprecedented transparency, The MLC has illuminated the so-called “black box” of streaming mechanical royalties for the first time.

The MLC started by moving the goalposts and concluded with eliminating them altogether. This
obfuscation of language is problematic. It misleads the public about the MLC’s performance and
gaslights those with knowledge about matching works and distributing royalties. Words matter.

This issue can be quickly solved by the MLC removing that particular FAQ above, and by providing monthly data regarding the total amount of unmatched, unclaimed, and on-hold
royalties (historical + blanket) in the MLC’s possession in a place that is easy to find on its
website.


.

by Trichordist Editor

No Bots, No Billionaires: StubHub’s Grotesque IPO Demonstrates Another Artist Ripoff By Our Tech Oligarchs

By Chris Castle

StubHub is one of the richest thieves in the live ticket arbitrage market. The company is also a direct beneficiary of the U.S. government’s abysmal failure to enforce the Better Online Ticket Sales (BOTS) Act. Just like Spotify, another Goldman Sachs’ grifter, StubHub’s main objective is about to be a reality–a $16.5 billion initial public offering that will make its executives even richer. In case you were wondering where the value of all that touring was going, now you know. And StubHub’s IPO is yet another slap in the face to artists, not to mention the fans exploited by this tech oligarch.

Given the government’s newly acquired interest in the ticketing business as measured by the Department of Justice antitrust lawsuit against Live Nation, you would think that the DOJ and FTC would also step up to their obligation to enforce the BOTS Act. Remember, The BOTS Act, signed into law by President Obama in 2016, was designed to curb the use of automated software (bots) that purchase large quantities of event tickets, often within seconds of their release, to resell them at inflated prices through market makers like StubHub. It is so under-enforced that StubHub will no doubt be able to sneak out an IPO and slurp up money from the pubic trough before anyone knows better.

BOTS-driven Risk Factors

If it were ever enforced, the BOTS Act could have a significant financial downside for StubHub. I can’t wait to see the risk factors about bots in their IPO prospectus because let’s face it–if there were no bots and no boiler room operations, StubHub probably wouldn’t have much of a business. No bots, no billionaires. This one is not a theoretical antitrust case, this one is dealing with real-time massive consumer fraud about to be perpetuated and funded by the public financial markets.

The government’s enforcement of the BOTS Act is so poor that Senator Marsha Blackburn, a gifted legislator and one of the law’s co-authors, found it necessary to introduce even more legislation to try to get the FTC to do their job. The Mitigating Automated Internet Networks for (MAIN) Event Ticketing Act is a bill introduced in 2023 by Senators Blackburn and Ben Ray Luján that aims to give the FTC even fewer excuses not to enforce the BOTS Act. It would further the FTC’s consumer protection mission against IPO-driven ticket scalping. 

The sad truth is that the FTC didn’t take its first action to enforce the 2016 law until 2021. And that’s the only action it has ever taken. Yet we live in hope.

When the drafting sessions get started for the StubHub IPO, the underwriters really need to ask themselves how big a hit the company’s valuation will take when prosecutors figure out how dependent reseller platforms are on bots and market manipulation to extract hard-earned dollars from enthusiastic fans.

And it isn’t just bots by the way. MTP readers will recall our discussions about speculative ticketing which turns live event tickets into commodities to be traded like pork bellies–minus the consumer protection of the securities laws. Speculative ticketing is when a market maker like StubHub allows shady operators to offer the public a ticket that the seller doesn’t actually own and may not even exist. This is what happens when an artist has publicly announced a concert tour but has not yet put the tickets on sale. Speculative ticketing lets a scalper offer a ticket that doesn’t exist without properly disclosing that the seller doesn’t own the ticket being sold.

Now that just sounds criminal, doesn’t it? Selling something you don’t own?

StubHub RICO Suave

And speaking of criminal, StubHub is currently defending a civil RICO case in New York, accused of making a market for tickets it is not able to sell. The Kaiser v. StubHub class action lawsuit, filed on January 3, 2024, in the Supreme Court of the State of New York, alleges fraudulent ticket sales by StubHub, Inc. The plaintiff, Daniel J. Kaiser, a resident of Brooklyn, New York, claims that StubHub knowingly and repeatedly advertised and sold fraudulent tickets, thereby defrauding consumers and violating the Racketeer Influenced and Corrupt Organizations Act. 

What’s RICO? Civil RICO can be brought by private plaintiffs like Mr. Kaiser, but criminal RICO has to be brought by the government. Criminal RICO cases are initiated by government prosecutors, who must first obtain an indictment from a grand jury, followed by a criminal trial. While both civil and criminal RICO cases address racketeering activity, criminal RICO focuses on punishing and deterring criminal behavior, requiring a high standard of proof and resulting in severe penalties. Now there’s a risk factor. How’s this sound:

Potential Liability Under the Racketeer Influenced and Corrupt Organizations Act (RICO)

We are currently under investigation for potential violations of the Racketeer Influenced and Corrupt Organizations Act (RICO). RICO is a federal law designed to combat organized crime by allowing for both criminal and civil penalties for acts performed as part of an ongoing criminal organization. The investigation is focused on allegations that certain activities conducted by our company and its affiliates may constitute a pattern of racketeering activity under RICO.

Uncertainty and Potential Impact on Business Operations

The outcome of this investigation is uncertain, and we cannot predict the timing, outcome, or potential impact on our business, financial condition, or results of operations. If we are found to have violated RICO, we could face severe penalties, including substantial fines, forfeiture of assets, and significant reputational damage. Additionally, a criminal conviction under RICO could result in imprisonment for our key executives, which would severely disrupt our management and operations.

Nothing says white collar crime like RICO. This kind of consumer fraud is happening on a massive scale, yet the FTC apparently doesn’t feel it rises to the level of an investigation priority. 

Making it Stop

In the face of this weak-kneed approach to law enforcement, artists could simply prohibit the resale of their concert tickets. If companies like StubHub keep trying, that very well may be the result, particularly with fan-to-fan solutions like Twickets competing with the likes of StubHub. How about this risk factor:

Restrictions on Ticket Resales Could Adversely Affect Our Business

Our business model relies significantly on the resale of concert tickets. However, many artists and event organizers have implemented policies that prohibit the resale of their tickets above the face price. These restrictions are designed to prevent ticket scalping and ensure that fans can purchase tickets at reasonable prices.

If artists or event organizers enforce these resale restrictions, it could limit our ability to sell tickets at a premium, which is a key component of our revenue generation. This could result in reduced profit margins and negatively impact our financial performance. Additionally, compliance with these restrictions may require us to implement new systems and processes, which could increase our operational costs.

Furthermore, any violation of these resale restrictions could lead to legal actions against us, including fines and penalties, and could damage our relationships with artists, event organizers, and customers. This could harm our reputation and result in a loss of business opportunities.

Investors should consider the potential impact of these resale restrictions on our business and financial condition before making an investment decision. There can be no assurance that we will not face additional restrictions or legal challenges related to ticket resales in the future, which could further adversely affect our business.

Underwriters be thinking, where do I sign up, right? Maybe not.

[This post previously appeared on MusicTechPolicy]

by Trichordist

@human_artistry Press Release: Senators Introduce COPIED Act to Combat AI Deepfakes

Senators Cantwell, Blackburn, and Heinrich introduce the Content Origin Protection and Integrity from Edited and Deepfaked Media Act (COPIED Act), Giving Artists New Tools to Protect Against Deepfakes
“Deepfakes pose an existential threat to our culture and society, making it hard to believe what we see and hear and leaving individual creators vulnerable as tech companies use our art without consent while AI-generated content leads to confusion about what is real. Requiring transparency is a meaningful step that will help protect us all – ensuring that nonconsensual, harmful content can be removed quickly and providing a clear origin when our life’s work has been used.” 
– Dr. Moiya McTier, Human Artistry Campaign Senior Advisor
With widespread creative community support from organizations including the Artist Rights Alliance, SAG-AFTRA, the Recording Academy, RIAA, NMPA, NSAI, and more, the bill would set new federal transparency guidelines for marking, authenticating and detecting AI-generated content, protect journalists, actors and artists against AI-driven theft, and hold violators accountable for abuses.  

Creates Transparency Standards: Requires the National Institute of Standards and Technology (NIST) to develop guidelines and standards for content provenance information, watermarking and synthetic content detection. These standards will promote transparency to identify if content has been generated or manipulated by AI, as well as where AI content originated. The bill also directs NIST to develop cybersecurity measures to prevent tampering with provenance and watermarking on AI content. 

Puts Journalists, Artists and Musicians in Control of Their Content: Requires providers of AI tools used to generate creative or journalistic content to allow owners of that content to attach provenance information to it and prohibits its removal. The bill prohibits the unauthorized use of content with provenance information to train AI models or generate AI content. These measures give content owners—journalists, newspapers, artists, songwriters, and others—the ability to protect their work and set the terms of use for their content, including compensation. 

Gives Individuals a Right to Sue Violators: Authorizes the Federal Trade Commission (FTC) and state attorneys general to enforce the bill’s requirements.  It also gives newspapers, broadcasters, artists, and other content owners the right to bring suit in court against platforms or others who use their content without permission.

Prohibits Tampering with or Disabling AI Provenance Information: Currently, there is no law that prohibits removing, disabling, or tampering with content provenance information. The bill prohibits anyone, including internet platforms, search engines and social media companies, from interfering with content provenance information in these ways.  
by Trichordist

Press Release: @RandyTravis and @MikeHuppe to Testify on Capitol Hill June 26th on Artist Pay for Radio Play #IRespectMusic

House IP Subcommittee slated to hold American Music Fairness Act hearing on Wednesday, June 26th, watch at this link.

WASHINGTON D.C. (June 20, 2024) – Country music icon Randy Travis and SoundExchange CEO and President Michael Huppe will testify before the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property, and the Internet, next Wednesday, June 26, for a hearing entitled, “Radio, Music, and Copyrights: 100 Years of Inequity for Recording Artists.” Travis and Huppe will take questions from lawmakers on the American Music Fairness Act (H.R. 791) – bipartisan, bicameral legislation that will close a century-old loophole and require AM/FM radio stations to pay artists royalties when their songs are played on the air. Travis will also be in Washington advocating for protecting music creators around the advancement of Artificial Intelligence (AI).

The two issues are especially relevant for Travis, who suffered a stroke in 2013 that has prevented him from continuing to keep up a rigorous touring schedule that had been a primary source of income for decades. Last month, Travis released his first new song since the stroke, “Where That Came From,” with the use of groundbreaking – and artist-sanctioned – AI tools.

“Royalties are critical for survival in today’s music industry, and that’s especially true for working class musicians and performers who are not able to tour,” said Travis. “The American Music Fairness Act will make a real difference in the lives of working musicians – not just big-name artists, but folks all around the country who play on albums or sing backup vocals on top of a nine-to-five job. I’m looking forward to this hearing and talking about the urgent need for Congress to pass this bill and level the playing field for creators.”

AM/FM radio remains the most popular music delivery platform in the U.S., reaching nearly 300 million people (88% of the country) each week while playing an estimated 967 million songs each year.

“I’m honored to testify alongside Randy Travis, a true legend in the history of American music,” added Huppe. “Randy has faced incredible challenges throughout his career, and his resilience in the face of adversity is a model to all of us. The American Music Fairness Act would end a 100 year era of unfair treatment to the creators of the music that feeds the most popular music delivery platform in our country.

The American Music Fairness Act was introduced in the U.S. House by U.S. Representatives Darrell Issa (R-CA) and Jerry Nadler (D-NY), and in the U.S. Senate by Senators Alex Padilla (D-CA) and Marsha Blackburn (R-TN). The legislation offers a balanced solution that ensures music creators are fairly compensated when their songs are played on AM/FM radio and that small, independent broadcasters are able to thrive. The legislation enjoys support from a diverse coalition of artists, broadcasters, labels, and music lovers:

• Broadcasters, such as the Alliance for Community Media, Common Frequency, Media Alliance, the National Federation of Community Broadcasters (NFCB), Prometheus Radio Project, and REC Networks – which represent a broad coalition of community broadcasters – also support AMFA.
• Artists from Gloria Estefan to Dionne Warwick to David Byrne to Common to Sammy Hagar – and thousands more – have voiced their support for AMFA.
• Every Democratic and Republican administration since President Carter has supported a performance right for sound recordings in the U.S.
• Americans support passing a law to give artists performance royalties for AM/FM radio plays by a 4:1 ratio.

by Trichordist

Are You Better Off Today Than You Were Five Years Ago? Selected comments on the MLC Redesignation: John Guertin of ClearRights

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 John Guertin, the highly knowledgeable independent publishing administrator who operates ClearRights in Austin, Texas. He works with many Texas artists whose music represents generations of Texas music vital to the Texas economy such as Marcia Ball, Guy Forsyth, Vallejo, Quiet Company and the South Austin Moonlighters.

Like other commenters, Mr. Guertin focuses on The MLC, Inc.’s failures to adopt world-class metadata standards. He offers insight to the Copyright Office similar to information the Office could get if they actually did a proactive deep dive on the MLC standards and practices rather than wait for commenters to get so disillusioned that they will sit down and write up their grievances when their frustration exceeds their fear of retaliation.

If Mr. Guertin is correct about bad old HFA data populating the MLC’s data, one consequence arises when the MLC, Inc. distributes its data feed to dozens of users. Does this mean that anyone who uses the MLC’s mediocre HFA data also has error-ridden data? What is the plan to unwind that one?

Lack of transparency
How does the automated matching process work and what is the logic for a match? We submit quite a bit of data to The MLC, yet titles go unmatched. It is hard to understand how a match does not happen when the system has been provided the song title, writers, isrc and supplementary data such as iswc, recording artist etc. It begs the question, what is the matching logic? If the song title, isrc and songwriter match 100%, how is a match not created? Having worked in the digital music space in the early 2000s at the onset of online digital subscription and download services, there was a fuzzy logic matching employed to help clear thousands of songs at a time. A fuzzy logic matching criteria would have to require a certain percentage of a given data field to match and thus enable matches to be made when there was punctuation or additional wording in the sound recording title such as “Live”. It’s hard to understand how so many line items go unmatched at The MLC when there are small variations in titles etc. Is a fuzzy logic protocol being employed, and if so, is it too tight?

New System , Same Old Player
The forward-facing organization we see is The MLC and its staff, however the vendor(s) used by the MLC is the same player, The Harry Fox Agency. The MLC data is often powered by and supplied by HFA. The HFA system, being a for profit, proprietary system, has been known for years to have old, outdated and/or incorrect data. One can often find the same song registered two, three or more times in the system. In most cases the publisher/owner is different or variant. This “bad data” has been allowed to proliferate the MLC system and has basically resulted in the same issues of old.

Having said vendor(s) also operating as match makers raises several concerns/questions, especially when incorrect matches are made based on this bad or outdated data. When an incorrect match is made (again how does this happen if the titles and songwriters don’t match yet publisher submitted data matches 100% and a match isn’t made?), the publisher is paid royalties.

The burden then falls upon the recipient to find the incorrect match, and then take action to remedy it by either returning monies to the MLC or having it deducted from future payments for other, non-related publishers and songs.

In some cases, the dollar amount of monies is significant and results in the publisher and/or songwriter being debited for the amount all at one time and unable to earn future royalties until the debited amount has been recouped. This can result in financial burden and distress for the publisher/songwriter. The publisher/songwriter may be dependent on these royalties to live on and due to no fault of their own, are subjected to a recoupment process for something they did not initiate. Why is this and why do we think this methodology works? Additionally, we are often told to contact the other party and get the money from them.

Lots of matches, yet even more unclaimed monies
An 80-85% match rate seems impressive until you look at the amount of money that remains unmatched each month. Approx $20 million in monies each month go unmatched and/or unclaimed. That’s over $200 million in a year. How and when is this going to be addressed? Yes, it’s much easier to ignore that and simply distribute that money via market share. But does artist/songwriter X really need more limos and vacation homes when the large majority of these royalties are indie songwriters that either don’t know about this, don’t understand it, or have been frustrated over the years and trained to think that they get micro-pennies for their efforts? We can’t blame this segment for not being totally engaged or not being educated on the complexities of the music industry. If we can put a man on the moon, why can’t we figure this out?

Lack of innovative strategy to clear the back-log of unmatched line items
What exactly is the process used to currently address this [old mediocre HFA data] and how is it being measured? We are told that outside vendors are contracted to perform this function, yet we see approx. $20 million each month in unmatched royalties. Clearly this strategy is not reducing the amount of “black box” monies at a fast enough rate and raises several concerns.

The first is that our senior songwriters and publishers are not getting younger by the day. They do not have time to wait 5 or 10 years for this to be straightened out. Many depend on the fruits of their past labor to live on. They deserve better.

With regard to the apparent inability to make matches and reduce the unmatched royalties, there seems to be other ways to approach this, which may currently be employed but we don’t really know due to the lack of transparency. Many of these unmatched recordings are songs that are registered at PROs. Those PROs have the songwriters and publishers, along with any recording data submitted by the songwriters and publishers. This is a good source of data which also has the contact info for those entities. A strategic partnership with other industry organizations, such as the PROs, should be made to help share and communicate data to bridge the gap with missing data which would allow matches to happen.

Also, where is the data that is being used to match coming from? Most indie artists use aggregators such as CD Baby, TuneCore, Distrokid etc. to distribute to dsps. This is the source of data that feeds to dsps. Such aggregators allow the input of inaccurate data without verification. All one must do is write something in the required data column (i.e. songwriters) and it goes through the system and starts populating everywhere. So bad data in results in bad data going out and reducing the likelihood matches can be made. Industry wide cooperation is required if we are to streamline these processes and make things efficient.

Read the entire comment at this link.

by theinvisiblestagehand

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: Spirit 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 from the well-regarded independent music publisher Spirit Music Group. Spirit makes a number of comments about important issues with the MLC, Inc.’s handling of metadata and other operational issues. If you are not immersed in metadata issues, it is easy to blow past these comments such as the MLC making data available in the common csv format (i.e., not only DDEX) is actually a serious complaint about a significant operational issue.

While you have to put Spirit down as an unambiguous supporter of redesignation, it is important to focus on how best to get the MLC, Inc. to implement the many commenters’ operational suggestions. We will see some of these comments confirmed with other commenters.

We would also point out a theme that will come up repeatedly–The MLC, Inc. knows who to take care of and who to respond to quickly. That is not the same thing as having methods and systems that take care of all members which the MLC can certainly afford given the tens of millions of dollars that the services spend on The MLC, Inc.

[T]he MLC has certainly met the minimum responsibilities under the MMA and has endeavored to provide additional functionality so rightsholders can receive their entitled royalties from DMS and has completed significant development in a short period. They are very receptive of our concerns and respond promptly and clearly. We look forward their continued development.

3:II.B. Member Tools
1. Development and Implementation of Tools and Functionality
The implementation of the Matching and Claiming tools and offering the bulk data (at a cost to the recipient) gives rightsholders the visibility to identify omissions in payments; These tools are the first offered by a CMO in the United States and should set an example to the others.

For publishers with large catalogs, who are not one of the majors like ourselves, have the greatest obstacles. We represent significant works by The Who, Chicago, Billy Squier, Salt N Peppa, and many others. While the Matching and Claiming tools are great for self-published writers and the bulk data for majors, indie publishers do not have the means to maximize the use of these resources. We hope the MLC offers improvements to extract data in csv format from the Matching and Claiming tools.

We would also like to see more details in Match History to understand why certain claims are rejected.

2. Matching Methodology
The MLC still uses the ISRC as the primary identify for matching. Expanding the identification process using song titles and CISAC codes, i.e., the IPI and ISWC can enhance matching, improve results, and reduce unmatched recordings.

Adjustments: The MLC’s adjustment policy does not allow for debits and credits of rightsholders in the event of an error. Additionally, credits to the entitled rightsholder are not delivered unless the funds are received from the party paid in error. CMOs around the world have policies in place to handle adjustments and the MLC should have similar procedures in place.

Criterion 3:IV. Investments in Resources and Vendor Engagement
3:IV.B. Subpplemental Matching Network
The USCO asks the MLC to “…provide additional information about these (Blokur, Jaxsta, Pex, Salt, SX Works) relationships, including the specific functions that they perform, or have been asked to perform, the vendors’ relevant experience with clients and projects involving similar scale and type, or their industry-specific knowledge.” The MLC only satisfies a portion of this request by providing details about each of these companies functions. However, it does not provide the tasks they have been asked to preform or how the MLC plans to use these companies to improve the royalties that will ultimately be paid to the rightsholders.

Read the entire comment at this link.

by Trichordist Editor

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

Are You Better off Today Than You Were Five Years Ago? Selected comments on the MLC Redesignation: Monica Corton

The Mechanical Licensing Collective has its operations and functions reviewed every five years by the Copyright Office. That review is required by Title I of the Music Modernization Act as written by the lobbyists. The Copyright Office noticed the first of these five year reviews on January 30.

The statutory purpose of the period review is so that Congress, in the person of the Copyright Office, can determine whether the operators of the Mechanical Licensing Collective who the Copyright Office appointed (or “designated”) should be permitted to continue for another five years. If the Copyright Office determines that the operators of the Collective will do a good job in the next five years, the head of the Office may reward them with the equivalent of a valuable new government contract or a “redesignation”.

The current operators of the Collective are The MLC, Inc., but there is nothing that requires the Office to allow The MLC, Inc. to continue being the mechanical licensing collective–the the Collective and The MLC, Inc. are not the same thing. Be clear that the entity that is being considered to be “redesignated” is The MLC, Inc., not the Collective. The Collective is a statutory entity and The MLC, Inc. is the organization that is permitted by the Copyright Office to operate as the Collective. (That’s confusing because someone allowed The MLC, Inc. to take the same corporate name as the statutory entity which was probably an oversight by the Delaware Secretary of State if not the Copyright Office itself.)

The five year review is important because it is the only chance for songwriters and publishers as well as the public to comment on whether they support rewarding The MLC, Inc. with another five years of operations and the tens and tens of millions of dollars in operating costs and high salaries paid for by the users of the blanket license–the services themselves–in the conflict ridden process imposed on songwriters and publishers by the government.

For reasons known only to them, the Copyright Office has chosen to conduct this five year review as though it were any other rulemaking rather than engaging independent experts to conduct a technology, financial, operational, and personnel audit of The MLC, Inc. from top to bottom. That choice is presumably based on some guidance from somewhere, but would seem to inevitably substitute opinions–however astute–for an empirical review using at least industry experts with the power to compel answers if not managerial science.

While this rulemaking approach has the benefit of allowing the public to comment, it fails to offer independent expert review of the very thing that the Office is being asked to approve. Instead, that “redesignation” decision will be based on whether or not the public caught the “right” issues, expressed them the “right” way, and were able to communicate their ideas persuasively. Assuming the public even knew of the opportunity in the first place.

It must be said that if we are going to solicit opinions, the first opinion we would be interested in hearing is from the Copyright Office itself. The Register, after all, is the one making the redesignation decision, not the MLC, the DLC, or any one commenter. It seems that comments would be more compelling if informed by the Copyright Offices own views, including the opportunity to comment on the Office’s methodology. It doesn’t look like we will know about that one until the next step in the rulemaking. A “proposed redesignation” does not seem particularly apt, so we will look forward to finding out after the fact how a large chunk of songwriter income is to be managed.

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 they 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.

The first comment is by Monica Corton, the highly experienced and respected publisher. You can read her comment at this link.

The Top Unmatched Recording List
While I believe this list exists, I have never received an email asking me to review such a list. I recently learned that you could ask for the list, but it comes in the DDEX format (like the unmatched songs list) and as an independent publisher, I do not have the capability to change this to a CSV format. As I explained before, it can easily be converted to a CSV file if you have the
right software. I think that conversion from the DDEX format to the CSV format should be a service done by The MLC. Otherwise, the only people who can benefit from the Top Unmatched Recording List are the largest companies with the resources to convert this list.

Investment Policy
Why isn’t the investment policy made public and fully transparent to the membership? It is our money that they are investing, and I’d like to know the details as would many other publishers. Why did the board decide to not make the policy documents regarding investments available to the public?

IPI Number Use Not Mandatory
The MLC doesn’t require publishers to use IPI numbers of songwriters in their registrations. As a result, there are a lot of duplicate registrations at The MLC/HFA that never get linked together because different registrants used different names for the same writer (e.g. Eminem, Marshall Mathers) which creates different registrations for the same song. If IPI numbers for songwriters
were mandatory, this would clear up this problem.

Royalty Adjustments at The MLC
The MLC will not credit or debit a publisher for an incorrect royalty payment due to a change in registration unless they are directly responsible for the error. If you missed the snapshot because The MLC didn’t process a Catalog Transfer Form on time, the new publisher will not be credited, and it is their responsibility to contact the old publisher and get the incorrect royalty
payment paid between them rather than through The MLC. The MLC doesn’t consider a bad registration at HFA as the cause of an incorrect payment even though it is the HFA data that caused the incorrect payment. Every other PRO and CMO does internal debits and credits for incorrect payments and adjustments, especially when there is a transfer of a new catalog. The
minute The MLC is served notice of via a Catalog Transfer Form, all royalties should be put on hold until the transfer is confirmed and set up by The MLC.

by Trichordist Editor